No cause for apprehension existed. The talk of "pretensions" related to the Bethlehem Steel Company's contract, made five years earlier, which did not, however, touch Fukien, although a spurious version of the contract, circulated in Peking shortly before, gave this impression. An unfounded report spread by interested parties was thus made the basis for a demand against the Chinese Government.
Meanwhile, what the Japanese had put forth for foreign consumption in the way of news was being compared with what was actually done in Peking. This annoyed the Japanese press, not so much because its government had been caught in the act of trying to mislead its own allies, as because timely publicity and strong public opinion abroad were defeating the attempt to impose its demands on the Chinese. The Chinese relied on public opinion. It was their great desire, as they often said to me, that although the American people and its government might not furnish material assistance it should at least know the facts about the attack made on Chinese liberty; for they saw in the public opinion of the world, and especially of the United States, the force which would ultimately prevail. Even with Yuan Shih-kai, man of authority though he was, this hope existed. Mr. Lu, the Minister for Foreign Affairs, said to me: "All that China hopes is that America and the world may know and judge."
Finally the Japan Mail, a semi-official Tokyo paper, published on April 1st the full text of the Japanese demands in English. Thus was admitted as a matter of course what had been categorically denied upon "the highest authority." While the secret negotiations were going on there was a byplay on the part of many official and non-official Japanese, who were evidently trying to create an atmosphere of antagonism to the Western nations. I received daily reports of conversations in private interviews, at dinners, and on semi-public occasions, in which Japanese were reminding the Chinese of all possible grievances against the West, and picturing to them the strength and importance that a Chino-Japanese alliance would have. Thus it was said many times: "Think of all the places from which we are at present excluded. Should we stand together, who could close the door in our face?" Or again: "Are you not weary of the domineering attitude of the foreign ministers in Peking? They do not pound the table in Tokyo. They would be sent home if they did." It was constantly repeated that all would be well if only China would let Japan reorganize her material and military resources. Visions of millions under arms, splendidly drilled and equipped—an invincible Chinese army officered by Japanese—were conjured up. To all such siren songs, however, the Chinese remained deaf.
A complete deadlock developed toward the end of April. The Chinese desired to dispose of the grants concerning Manchuria. The Japanese would not agree to anything definite without including the demands under Group V. As a prelude to an ultimatum, the Japanese minister on April 26th presented "demands" with respect to Shantung and Mongolia, unchanged except for the wording of the preamble; this substituted the term "economic relations" for "special position." With respect to Hanyehping, they were softened to provide that the Chinese might not convert the company into a state-owned concern, nor cause it to borrow foreign capital other than Japanese. Certain railway concessions were to be granted, and the most important demands under Group V were to be embodied into a protocol statement by the Minister for Foreign Affairs.
Mr. Lu pointed out that the railway grants sought conflicted with the concessions already given to British interests; Mr. Hioki then proposed that China grant these same concessions to Japan, letting Japan "fight it out" with Great Britain. With respect to Fukien, China was to state, in an exchange of notes, that no foreign nation might build dockyards or naval bases there, nor should foreign capital be borrowed for that purpose. Japan, therefore, abandoned her attempt to secure preferential rights in Fukien Province.
The Minister for Foreign Affairs handed his answer to the Japanese minister on May 1st. The demands under Group V, Mr. Hioki was informed, could not possibly be accepted by a sovereign power. With respect to the other demands, a specific answer was given very closely approaching acceptance of the demands as revised by Japan. No railway concessions were made, however, and it included certain technical modifications with respect to the Manchurian demands. Everything asked with respect to Shantung was granted, with the counter-proposal that China take part in the negotiations between Japan and Germany.
This was conciliatory; nevertheless, the Japanese were moving their troops. Everything indicated extreme measures. Japan's reservists in Mukden had been ordered to their station, Japanese residents in Peking were warned to hold themselves ready. At Tsinanfu, new entrenchments were being built. When it was known that an ultimatum would be delivered, the Chinese officials were perplexed and undecided. Should they await its delivery, or try to placate the Japanese by further concessions? The Chinese find it hard to obey a demand backed by force; they are used to arrangements based on persuasion, reason, and custom. To submit to positive foreign dictation would be the greatest conceivable diminutio capitis for the Government. Chinese officials visited me frequently. They seemed comforted in discussing their difficulties and fears. I could not, of course, give them advice, but I expressed my personal conviction that Japan could hardly find it feasible to include Group V—which she had explained to the powers as suggestions of friendship—in an ultimatum.
The position of the American minister throughout these negotiations had not been easy. The United States was the only power that had its hands free. The Chinese expected its resentment and strong opposition to any arrangements conflicting with Chinese independence and the equal rights of Americans in China. I could reiterate our repeated declarations of policy and allow the Chinese to draw their own conclusions as to how far our national interests were involved. But when the minister I saw most frequently would ask: "But what will you do to maintain these rights you have so often asserted?" I had to be particularly careful not to express my own judgment as to what our course of action should be, in order not to arouse any hopes among the Chinese as to what my government would do. Instructions had been slow in coming.
It was my personal opinion that America had a sufficiently vital interest to insist on being consulted on every phase of these negotiations. The Chinese had hoped that America might lead Great Britain and France in a united, friendly, but positive insistence that the demands be settled only by common consent of all the powers concerned. But the situation was complex. The state of Europe was critical. The most I could do, and the least I owed the Chinese, was to give a sympathetic hearing to whatever they wished to discuss with me, and to give them my carefully weighed opinion. Our own national interests were closely involved. It was my positive duty to keep close watch of what was going on. While not taking the responsibility of giving advice to the Chinese, I could give them an idea as to how the tactical situation, as it developed from week to week, impressed me. Dr. Wellington Koo all through this time acted as liaison officer between the Minister for Foreign Affairs and myself, although I also saw many other members of the Ministry. In discussing the consecutive phases of the negotiations, as they developed, Doctor Koo and I had many interesting hours over diplomatic tactics and analysis, in which I admired his keenness of perception. Some objection was hinted by the Japanese Legation to Doctor Koo's frequent visits to my office and house, but his coming and going continued, as was proper.
Councils were held daily at the President's residence from May 1st on. Informally, the ministers of the Entente Powers advised the Chinese not to attempt armed resistance to Japan; I believe the Government never seriously contemplated this, although some military leaders talked about it. Indeed, violent scenes took place in the Council; it was urged that submission would mean national disintegration. It would rob the Government of all authority and public support, while resistance would rally the nation. The advance of Japan might be obstructed until the end of the Great War; then European help would come. They pressed the President with arguments that Japan might, indeed, occupy larger parts of China; but this would not create rights, it would expose Japan to universal condemnation. However, in the existing circumstances of World War, the Government feared that to defy Japan would mean dismemberment for China.