Governor-General Harrison of the Philippine Islands spent a week in Peking, sightseeing, making many purchases of antiques and Peking products. He was much taken with the Chinese rugs and ordered a number of huge carpets to be made for the Malacañan Palace. We both strongly felt that something should be done to prevent the total disappearance of the American flag from the Pacific, and this we knew would occur if the existing companies carried out their threats of retrenchment and withdrawal. Had one been able to foresee the enormous demand for shipping which was soon to arise, he might have outdistanced the richest of existing millionaires. The Chinese Government did give to an American a contract to establish a Chino-American steamship line, with a government guarantee of $3,000,000; unfortunately, it shared the all-too-common fate of American undertakings in China and was not carried out.

The lunar New Year of the Chinese Calendar was changed to the Republican (Min Kuo) New Year. On January 1st Peking was given a festal aspect. The Central Park, a part of the old Imperial City, had been opened to the public, and under innumerable flags crowds streamed along the pathways, stopping at booths to buy souvenirs and toys, or entering the always popular eating places where both foreign and Chinese music is played by bands large and small. On various public places fairs were held; extensive settlements of booths built of bamboo poles and matting sprang up overnight. There, curios, pictures, brass utensils, wood carvings, gold fishes, ming eggs, birdcages, and other objects useful and ornamental were on sale. Wandering troops of actors and acrobats performed in enclosures to which the public was admitted for a small fee. Before one of these stockades I saw a large sign reading: "Chow and Chang—champion magicians educated from America." So, even here, American education was valued. The art collection in the Imperial City was open at half the usual admission fee; the grounds of the Temple of Agriculture and of the Temple of Heaven were crowded with holiday visitors, and at all theatres were special performances. For three or four days the city wore a holiday aspect.

But the old New Year was not abandoned. On the days before the lunar year ended the streets became alive with shoppers preparing for the grand annual feasting. Quantities of fattened ducks, pigs, chickens, and fishes, loads of baked things and sweets were transported in carts, rickshaws, and all sorts of vehicles or by hand, everyone chattering and smiling in happy anticipation. The Chinese New Year is the traditional time for settling all outstanding accounts. Slates are wiped clean, partnerships are wound up, and all balances settled. When New Year's eve comes, having strained themselves to meet their obligations, all cast dull care aside. Families and clans gather for a gargantuan feasting, the abundance and duration of which outdistances anything seen in the West.

The official celebration of the Republican New Year at the President's Palace had to be modified. Because of the war the diplomatic corps could not be received as a unit. It was therefore arranged that the President receive the foreign representatives in three groups: the Allies, the Neutrals, and the Central Powers. High Chinese officials and picturesque Mongolian dignitaries were received on the first day, the diplomatic representatives on the second. As the President chatted informally with each minister, Madam Yuan received in an adjoining apartment, talking quite naturally with the ladies of the party about such feminine matters as the size of families and the choice of dress materials.

A short time ago a young American teacher, Hicks, was murdered and his two companions seriously wounded while they were ascending the Yangtse River in a boat. The attack was at the dead of night; the survivors recalled only flaring torches and swarthy faces, although they believed that their assailants wore some sort of uniform. The Chinese Government disavowed responsibility, considering it an ordinary robbery, and asserting that if the assailants wore uniforms they must have been insurgents, as no regular troops were near that place. The crime was revolting, destructive of the sense of security of foreign travellers, and I insisted absolutely on payment of an indemnity. Money payment is by no means satisfactory; it does give the injured parties redress and testifies to the desire of the Central Government to protect foreigners, but does not bring the consequences of the crime home to the really guilty parties. I therefore always tried to have the personal responsibility in such matters followed up and specifically determined; in this case it was impossible. The Chinese Government finally agreed to the very handsome indemnity of $25,000 for the death of young Hicks, the largest pecuniary award for loss of life ever made in China. It was an ironical circumstance that just after this had been settled, an American driving his automobile at excessive speed in the Peking streets struck and killed an old Chinese woman. When I stated to the Minister for Foreign Affairs that I would ask this man to pay $300 to the relatives, he replied with a twinkle: "How much was it we paid you for the last American who was killed?"

However, he did not really intend to dispute the reasonableness of even so enormous a difference. Foreigners in China, on account of their employment as managers or head teachers, necessarily have to be considered, from a purely pecuniary point of view, to have a value far above the average. Moreover, should large indemnities be paid for the death of poor people among the Chinese, they would be constantly tempted to let themselves be injured or even killed, in order to provide for their families.

Among the Chinese who visited me during the first year of the war were the military and civil governors of Chekiang Province. Contrary to tradition, both were natives of the province they governed, and good governors, too. The civil governor, Mr. Chu Ying-kuang, who was under forty, was a man of great public spirit and wisdom, eager to discuss constructive ideas and effective methods in government and industry. Governor Chu wrote me a letter of thanks, which may be considered an example of Chinese epistolary style. It ran:

During my short stay in the Capital I hurriedly visited your Excellency and was so fortunate as to draw upon the stores of your magnificence and gain the advantage of your instruction. My appreciation cannot be expressed in words. You also treated me with extraordinary kindness in preparing for me an elaborate banquet. Your kindness and courtesy were heaped high and your treasures were lavishly displayed. My gratitude is graven on my heart and my hope and prayer is that the splendour of your merit may daily grow brighter and that your prosperity may mount as high as the clouds.

I, your younger brother, left Peking on the 29th of last month for the South, and on February 2nd arrived at Hangchou. The whole journey was peaceful so that your embroidered thoughts need not be exercised. I reflect fondly on your refined conversation and cannot forget it for an instant. I respectfully offer this inch-long casket to express my sincere gratitude and hope that you will favour it with a glance.

Respectfully wishing you daily blessings,

Your younger brother.

The new German minister, Admiral von Hintze, arrived shortly after the New Year. I saw him frequently after his first visit, as he had few colleagues with whom, under the conditions of war, he could meet. In order to avoid capture as an enemy, Admiral von Hintze had come from the United States incognito, as a supercargo on a Norwegian vessel. He had been minister in Mexico, and before that the Emperor's representative at the court of the Czar, and was a man of wide knowledge of European affairs and of diplomatic intrigue. For a man of his intelligence, he was inclined to give undue weight to rumours. Peking was amused shortly after his arrival when he sent orders to the Germans resident in all parts of the capital to hold themselves ready to come into the Legation Quarter immediately upon notice being given. He had read books on the troubles of 1900 and on the assassination of his predecessor, Baron Kettler; he therefore saw dire menaces where everything seemed quite normal to older residents. Especially, he imagined himself surrounded by emissaries and retainers of the enemy. Several times he would say to me: "My first 'boy' is excellent. He could not be better. The Japanese pay him well, so he has to do his best to hold his job."

Being himself a clever man and familiar with opinion outside of Germany, Admiral Hintze thoroughly disapproved of the acts of unnecessary violence by which the Germans had forfeited the good opinion of the world, especially the sinking of the Lusitania and the execution of Edith Cavell. "What a mistake," he exclaimed, "for the sake of one woman! Why not hold her in a prison somewhere in Germany until the war is over?" The stupidity of such acts deeply offended him. Had he become Minister for Foreign Affairs at an earlier date, some bad mistakes might have been avoided. When the first reports of the resumption of exacerbated submarine warfare were received, he remarked to me: "Do not believe these reports that Germany will resume unlimited submarine warfare. I can assure you that they will not be foolish enough to do such a thing."