It is certain that by taking sides with Russia in a question of only secondary interest to herself France incurred the grave risk of a war not only with Japan, but with England, a war in which her stake was far greater than that of Russia or of Germany, and the consequences of which she would have been obliged to bear alone. Fortunately, the prudence of Admiral de Beaumont smoothed over the angry feeling of the Russian commanders, which, however, manifested itself once more on May 8, 1895, the date on which the ratifications of the treaty of peace between China and Japan were to have been exchanged. On that day the Russian fleet was stationed in the roads off the Chinese port of Chefoo, at the entrance to the Gulf of Pe-chi-li, opposite Port Arthur, where the exchange of ratifications was to have occurred, ready for fight in case Japan refused her acceptance, in which case it was agreed between the admirals to oppose the Japanese near Ta-ku, at the mouth of the Pei-ho, close to Wei-hai-Wei, where their fleet was anchored. Alongside of the Russian fleet were two German cruisers, representing the German navy in the Far East; but Admiral de Beaumont steamed away, leaving only at Wei-hai-Wei the Forfait, thereby showing very clearly that he had no intention of taking part in a superfluous demonstration, which would only have resulted in increasing the irritation of Japan against the three Powers.

These warlike demonstrations presented a singular contrast to the extremely courteous tone of the Notes presented to Japan by the Russian, French, and German ministers. They had the effect of convincing Japan that she had in the future to count with the lasting hostility of the Tsar, and that the secret desire of the Government of St. Petersburg was not only to prevent her establishing herself on the Asiatic Continent, but also eventually to completely annihilate her. By a curious right-about-face, Japan now turned towards China, who received her overtures favourably. The fact was that at Peking the pretensions of Russia had created great alarm, and Li Hung-chang opened his heart to the Japanese Consul at Tien-tsin, and begged the Cabinet of Tokio to give a conciliatory answer with respect to the question of Liao-tung, and solve it in a friendly manner, and thereby avoid increasing the responsibilities which weighed upon his shoulders. The Chinese Government, he added, was entirely at the mercy of the Russians, and could only be saved by Japan.

Was this intended on the part of the old diplomatist as a disguised offer of service? It is impossible to say. One thing only is certain—the Tsung-li-Yamen proposed that the Japanese minister, M. Hayashi, should negotiate directly, and offer as a compensation for Liao-tung not an indemnity, but an alliance with China and a concession for the railway to be built between Tien-tsin and Peking. The Government of the Mikado was inclined to accept this solution, but the three Continental Powers—that is to say, Russia—did not view the matter favourably. They wished, for better security—that Japan should not be bound to China only, but that the retrocession of Liao-tung should not be subjected to clauses calculated to prolong matters, and, above all, a cessation of the continuance of the Japanese occupation of Korea. They therefore insisted that the matter should be settled at once by the payment of a supplementary indemnity of 30,000,000 taels, or £4,500,000, payable on November 18th, 1895, the Japanese evacuation to take place within three months.

Japan was obliged to accept these propositions by an exchange of Notes signed on the 19th October, and she, moreover, agreed to withdraw her troops from Korea immediately. The attempt at a reconciliation and an alliance with the Celestial Empire had failed; but since then the language of the Japanese press and of many of her statesmen proves that at Tokio this idea has not been entirely abandoned, and if they have not been able to confiscate China to the advantage of the Mikado, the Japanese wish to see her placed in a position to resist the pressure of other Powers and to exist by her own resources. On the payment of the indemnity, Japan endeavoured to obtain from China a formal promise that she would never cede to any other Power the territories which she had been obliged to restore. But Russian influence was already too firmly established, and the promise was refused. The new political line of conduct which the European Powers and those which had at first come to her assistance were about to follow with respect to China was now openly developed. If the Setting Sun had more worshippers now than the Rising Sun, it is assuredly not the result of any sentiment of chivalrous disinterestedness—quite the contrary.

CHAPTER IX
RUSSIA, FRANCE, AND ENGLAND IN THE FAR EAST IN 1895–97

The immediate results of the war—Issue of an important Chinese loan—Russia becomes guarantee for China, and in return obtains the right to construct the Manchurian Railway—Ability of Russian diplomacy in Korea—Faults and abuses of the Japanese in that country—Revolution in the Korean palace at Seoul—The King of Korea under the protection of Russia—Preponderance of Muscovite influences in the Far East at the beginning of 1897—Important advantages obtained by the Tsar’s allies—Apparent disinterestedness of Germany—Treaty with France signed on June 20th, 1895—Energy of the French Minister—French protectorate over the Catholics of the East—Efforts made by England in 1896 to regain her influence at Peking—Anglo-Chinese Convention, February 4th, 1897—Opening of the West River to European navigation—A few fresh concessions granted to France in 1897.

In the events which have transpired in the Far East since the War, and which have led to the present situation, two distinct phases mark the violent aggression of Kiao-chau. The first extends from the spring of 1895 to the autumn of 1897, and is that in which the Powers, after having come to China’s assistance, obtained from her concessions in return for their good offices, whilst pretending moderation in their demands.

Altogether, the most important consequence of the War was the establishment of a heavy foreign debt. Hitherto China had only contracted in Europe insignificant loans of a few millions of francs. During hostilities her foreign indebtedness rose to £7,000,000, a mere trifle, and, moreover, the lenders were in possession of excellent security; but the War Indemnity and other urgent expenses necessary for the rehabilitation of the country mounted up to £48,000,000, so that now the interest on this debt, taking the rate at 5 per cent., would absorb £2,400,000, and, by adding the arrears of already existing loans, this figure would attain about £2,800,000, equivalent to nearly the whole of the Customs revenue. The Customs duties are paid in silver, but it would be absolutely necessary to stipulate, if a considerable loan is to be floated on the European market, that the interest should be paid in gold. The question, therefore, very naturally arises whether, in view of so small a margin, the fluctuations in the value of silver, which have already caused the hai-kwan taël to fall from 6s. 7d., its value a quarter of a century ago, to 2s. 10d., the average rate since 1897, will not sooner or later result in the Customs receipts proving insufficient to cover the payment of the arrears. Nobody in his senses would dream of lending money to China on the mere security of her general resources, and she would, consequently, be obliged to assign to her creditors new securities, and place in their hands the administration of new branches of revenue. On the other hand, stripped of about £2,800,000 from the total revenue, which the most optimistic estimate gives at £24,000,000, she would have to look for new channels to add to her income, either by increasing the taxes, or by permitting foreigners to exploit the resources of the country, conceding to them railway and mining concessions on the basis of leases or joint profits. The first proposal ran the risk of unpopularity; the second was more tempting, but it meant the introduction into the country of that very Western civilization which the Chinese Government had opposed with all its might for the last fifty years.

The monetary difficulties of the Celestial Empire brought about a renewed interference by Europeans in her affairs, if only in the collecting of the taxes, and, also, a sort of financial embargo, the dangers of which are sufficiently manifest in countries like Egypt. The Government of Peking was well aware of this, and, therefore, spared no effort in obtaining a reduction on the £34,500,000 War Indemnity, and even attempted to arrive at an understanding with Japan respecting the retrocession of Liao-tung without supplementary disbursement.

The great importance of this money question was nowhere better understood than at St. Petersburg, and one cannot help admiring the boldness and ability of the policy pursued by Russia. That countries like France and England, literally overflowing with money, should have ventured to secure a preponderating position in China by means of financial manœuvrings is not at all to be wondered at; but that Russia, already heavily indebted with a public foreign debt amounting to over £240,000,000, should have been shrewd enough to subject China to a sort of vassalage, through the pecuniary services she rendered her, was indeed a masterly achievement.