An American Diplomat in China

by Paul S. Reinsch

But that was the method of diplomacy—to hunt about for some ground of protest to the Chinese Government, in order to obtain from it a few counterbalancing advantages. The American policy of equal opportunity had the verbal agreement of the other important powers, but we had to be vigilant if Americans were to be protected in their right to do business in various parts of China on the basis of this policy. Everywhere we met attempts to solidify the inchoate desires and lusts to secure exclusive rights, until the "spheres of influence" should be firmly outlined.

I always took the position with the Russian minister that the American concession in this case did not conflict with any promise given to Russia. He spoke to me about the wish of Russia to use Mongolia as a protective barrier. If Mongolia were to be developed through railways and colonization, he felt that friction between Russia and China might come about through this mutual approach of large populations. To keep so vast a territory barren and unproductive just to serve as frontier marches seemed to me unjustifiable. But I did not dispute the policy, rather insisting that a railway that connected one of the eighteen provinces of China with another could have but remote bearing on the fears expressed by my Russian colleague. I told him the survey would go on, but whether the road would be built would depend upon the judgment of the engineers as to whether it would be commercially profitable. The conversations were very leisurely. He did not say so, but I could see that the minister fully expected the Americans to go ahead, while he would use his protests as a means of getting some "compensation" out of the Chinese.

I was therefore not a little surprised when on one of my visits to him the Russian minister met me with a quizzical smile, and handed me a telegram which he had just received from Washington. The dispatch was from the Russian ambassador, and read in substance as follows:

A representative of the American International Corporation has just called on me. He stated that the corporation regretted beyond measure that the impression had been given that it might contemplate undertakings in China which would be unwelcome to the Russian Government, and to which the latter would object. He stated that it was far from the intention of the corporation to do anything in China that would thus be objectionable to the Russian Government.

Never was the ground cut from under any one exerting himself to safeguard the interests of others as was done in this case. There was nothing to do but to say: "They are very courteous, and wish to save your susceptibility. They would probably not ask for any branches in the direction of Urga, and confine themselves just to building the main line to Kansu." The Russian minister did not take an undue advantage of me.

The next protest came from the French Legation. They had dug up a note sent them on September 26, 1914, by the Minister for Foreign Affairs of that time. This note, conveying an entirely unnecessary gift by that good-natured minister, had been kept secret; it acknowledged the handsome manner assumed by the French minister during the negotiations about a small frontier incident. Just to show absence of ill feeling, the Foreign Minister assured the French minister that in case in future any mining or railway enterprises were to be undertaken in the Province of Kwangsi, French capital would be consulted first. It was a grim joke that an official should thus light-heartedly and without quid pro quo sign away important rights in contravention to all the announced policies of his and other governments, including that to which the grant was made. The French protest related to the southern part of the line from Chuchow in Honan, to Chinchow, on the coast of Kwangsi.

I took the stand that the note which had turned up was contrary to the expressed policy of the various governments concerned, and could have no bearing on the relations of American citizens with China; moreover, it had been secret, and neither the public nor any other government knew about it. As the French minister whom the Chinese had asked the French Government to withdraw because of his domineering attitude was not at this time complacent in this or any other matter, I suggested that the Department of State take up this question directly with the French Minister for Foreign Affairs. I expressed the hope that the French, our military and diplomatic associates, would wish particularly to adhere "to the letter and the spirit of the declarations of equal commercial opportunities."

The Continental Commercial Bank Loan had been announced in November, 1916. I was happy that this result had been achieved. An advance of only $5,000,000 was made, but even that small sum was an important aid to the Chinese Government. The fact that a big Western financial institution had taken up relations with China was promising. What foreign banking there was in New York was tangled up with European interests, followed the lead of London, and had not manifested much readiness to exert itself for the development of American interests abroad.

The French protested this loan because it carried the security of the tobacco and wine tax which had been assigned to some previous French loans. I saw Doctor Chen, and Count Martel called on me. I took the position that as the French loan—which was small in amount and would require only a very minor portion of the proceeds of the tax—remained entitled to be the first lien, the French interests were in no way prejudiced. I imagine, what they really objected to was the eventual appointment of an American auditor or co-inspector for this revenue. As this, however, would go to strengthen the security for their loan, I do not see that they had any reason for complaint. The representative of the French bank which was interested saw me and made a tentative suggestion that if adviserships were established the French might take the wine tax, and the Americans the tobacco tax. I felt, however, that the hands of the Chinese were perfectly free when the loan was made; there could be no objection, except on the supposition that wherever the Chinese do business, no matter how small, with respect to any subject matter, they impliedly give a lien on all future dealings. To the general suggestion of American-French coöperation in matters for which both parties could find capital, I was by no means averse.