M. de Witte, the Tsar’s Minister of Finance, who devised this remarkable scheme and conducted it to a triumphant issue over the head of the Minister for Foreign Affairs, exhibited throughout the rarest political ability and foresight combined with business acumen. Russia was unable to lend China money, but she was willing to become her guarantor, and thus enable the Celestial Empire, backed by the principal banks of Paris, where Russian funds were at their height, to float a loan of £16,000,000 at 4 per cent. issued at ninety-four—that is to say, at the same issue price at which, before this security was granted, the French and German financial houses had offered to raise a loan at 5 per cent. The annual interest to be paid by China, thanks to Russian intervention, was thus reduced by a fifth, whereby the Celestials, although they obtained a bargain, at the same time committed a grave political error.
In accepting a foreign Power as guarantor, the Chinese Government rendered itself responsible to that Power only, and placed her financial and, above all, her political independence in far greater peril than she could have done had she negotiated directly with individual capitalists of various nationalities, whose pressure, in case of non-payment, would have been considerably weakened by the inevitable differences which would subsist between their Governments. This danger seems to have been thoroughly understood at Peking, where the necessary documents were not signed until the expiration of the last day’s delay granted by Russia, and then only under extreme pressure, because the Chinese Government had evidently failed to find assistance elsewhere.
The Government of St. Petersburg, well pleased with this success, proceeded to strengthen its policy in China by further financial operations, and with the assistance of the Bank of Russia next created the Russo-Chinese Bank, Parisian financiers supplying the greater part of the capital, but leaving the direction of affairs almost exclusively in Russian hands. The Comptoir d’Escompte transferred its agencies in China to Russia, and the new bank established at the same time branches at Peking, Tien-tsin, Shanghai, and Hankow. Since then this bank has continued to be the principal agent of Russian influence in China, and undoubtedly it was at first almost entirely through its mediation that Russia negotiated the concession of the East Chinese Railway, which enabled her to continue her Trans-Siberian Railway southward through Manchuria, thus shortening the original line by several hundred miles, and enabling it to pass within 350 miles of the Gulf of Pe-chi-li. Russia, moreover, obtained the authorization to protect the works by her own troops, whereby she made herself mistress of Manchuria, whence she was able to dominate Peking until events allowed her to occupy Liao-tung.
Whilst she was amply paid for her services by China, Russia made herself no less active in Korea. The Japanese, who had occupied that country, perpetrated error on error. They had attempted to impose upon the Koreans with great abruptness the most varied and radical reforms. Many of these were possibly useful enough, but they ought to have been introduced with discretion; others were unnecessary, and greatly irritated the people by wounding their most cherished customs and traditions. The Koreans, although not particularly clean in their habits, are invariably clad in white, are, moreover, addicted to smoking very long pipes, and to rolling their hair up into a huge chignon, which they surmount by an enormously broad-brimmed hat, whose crown is so small that they are obliged to fasten it to their heads by a long string. The Mikado issued a sumptuary law against long pipes, chignons, and wide-brimmed hats, and, moreover, ordered that the traditional white robe should henceforth be replaced by the dark-blue one usually worn by the Japanese. It is said that this unfortunate incident was the result of a conviction that Koreans, being obliged to hold their pipe with one hand, and to balance their enormous hats with the other, could never become hard workers. Be this as it may, the Japanese sentinels at the gates of Seoul made life unendurable to the unfortunate Koreans. Armed with a big pair of scissors, they pounced upon the unfortunate peasants as they entered the town on their way to market, and cut not only the strings of their monumental hats, but severed their beloved chignons, and shortened by at least three-quarters of their length the stems of their pipes—arbitrary measures well calculated to break their hearts with mortification and vexation of spirit. It is not to be wondered at that such impolitic conduct, added to occasional acts of violence, soon roused the indignation and hatred of the natives, otherwise a very inoffensive and peaceable people. On October 7, 1895, the Korean Queen was murdered in her palace by assassins in the pay of the Japanese, and with the complicity of the Legation. King Li-Hsi, a very poor creature at the best, whose reign has been one tissue of Court intrigue and palace revolution, after the assassination of the Queen, fell into a consternation of abject terror, completely abdicating his regal authority, and became so degraded that he even consented to sign an edict insulting the memory of the late Queen, and accusing her of shameful crimes. Innocent persons were now executed at Seoul as guilty of the murder, whereas the actual assassins were acquitted by a self-constituted Japanese tribunal.
In the meantime Russia very ably exploited the general discontent, and in an underhand manner offered her services to the timid King, who was not only terribly afraid of the Japanese, but also of his father, the Tai-wen-kun, a ferocious old gentleman, whose ambition had disturbed Korea for over twenty years, and who had been raised to power by the natives. His Majesty seemed disposed to accept the Russian proposal, but dared not leave his palace, in which he was kept a close prisoner. A riot ensued, whether spontaneous or provoked has never been divulged, which, on the night of February 11, 1896, offered him a chance of escape. The Tai-wen-kun was killed, and Li-Hsi obtained shelter at the Russian Legation, then guarded by a detachment of sailors fresh landed at Chemulpo, the port of Seoul, without any attempt on the part of the Japanese to prevent them. Li-Hsi, once safe in the house of the Russian Minister, where all the members of the Korean Government had found shelter, acted like a King in a comic opera, and became the plaything of Russia, precisely as he had recently been of Japan. He forthwith revoked all the reforming edicts he had previously signed, and annulled the decree degrading the memory of the unfortunate Queen, the trial of whose assassins took place in a High Court presided over by judges selected from various European nationalities, with the result that the responsibility for her murder was thrown on the Japanese.
The reactionary movement now became violent, and many useful reforms had perforce to disappear. A committee, composed of the highest native functionaries, the British Controller of Customs, and a few Americans, was appointed to study measures of reform, but they only met two or three times, and nothing came of it, so that in a few months all the old abuses reappeared. Nevertheless, by her sagacious conduct, Russia had the ability to win over the foreign representatives in Korea to her side, and Japan, in order to preserve the remnant of her influence in a country whose commerce was mainly in her hands, and where not less than 10,000 of her subjects resided, was now obliged to arrive at an understanding with Russia. The Convention of Seoul, signed May 14th, 1896, by the representatives of the two Powers, completed by that of July 29th, concluded at Moscow at the time of the coronation of Nicholas II., and drawn up by Prince Lobanof and Marshal Yamagata, accorded Japan merely the right to keep 1,000 troops in Korea for the protection of the Japanese telegraph wires between Fusan and Seoul and of her subjects settled in the capital and in the open ports of Fusan and Gensan. Russia also obtained the same rights, and, moreover, a concession to construct a telegraphic line from Seoul to the Siberian frontier.
The two Powers further agreed to lend the Korean Government their support for the reorganization of its finances and a sufficient police force to maintain order, and to permit, as soon as possible, of the withdrawal of their garrisons. In appearance it was a sort of Russo-Japanese condominium that was established in Korea; but Russian influence, now all-powerful with the King, met with no further obstacle after the restoration of that Sovereign to his palace in February, 1897. A decree, ordering that all railways to be constructed in Korea should have the same gauge as that of the Trans-Siberian Railway, and that the debt of £300,000 contracted by Korea with Japan should be repaid, and, moreover, that none but Russian instructors should be engaged in reorganizing the Korean army, was also issued, which Japan considered a distinct breach of the Treaty of Moscow.
Russian influence was therefore, at the beginning of the year 1897, absolutely preponderant in Korea as well as in China. In both countries the Tsar’s Government had played, with extraordinary ability, the part of protector of the conquered against the abuses of the conqueror, and also that of a redresser of wrongs, whereby it won universal approbation throughout the Far East. The Japanese victories now appeared only to have been obtained for the benefit of Russia, who substituted herself everywhere for Japan, in Manchuria as well as in Korea, and thus profited very considerably by the War without having to pay any of its expenses. If at its close Russia had the discretion to perceive the advantages which she might derive from intervention, and if she acted with energy and decision, she also knew how to curb the impetuosity of her admirals, who were eager to commit those very faults into which Japan had fallen, which undoubtedly would have brought about very serious European complications. She therefore at first abstained from annexing the peninsula of Liao-tung and the important stations of Port Arthur and Talien-wan, which she had compelled the Japanese to evacuate, and officially she made no annexations in Korea; but, possessing the right to construct a railway through Central Manchuria and to protect its works by her own troops, and being at one and the same time mistress of the situation at Seoul, Russia was able at the right moment to annex either Korea or Liao-tung, and bring the Trans-Siberian to the open sea through one or the other of these two peninsulas. She hesitated as to which she should select; the first was nearer Peking, the second brought her more directly to the Pacific, whence she could menace simultaneously the mouth of the Yang-tsze and the South-east of Japan. At St Petersburg, however, it seemed that the Government was waiting for the completion of the Trans-Siberian Railway, which was proceeding in hot haste, and which it was expected would reach the Amur in the first months of 1900, ere the psychological moment should arrive to strike a decisive blow.
Side by side with immense advantages acquired by Russia, those obtained by her allies seemed insignificant. Germany had not shown herself exacting; all she asked was a few acres of land at Tien-tsin and other naval ports where she might establish independent concessions intended to satisfy her sense of dignity. The absence of special concessions had not hitherto prevented Germany from achieving an extraordinary commercial success in China, but the future will prove that the German Empire entertains great designs in the Far East, the realization of which are merely postponed.
As to France, she got in return for her services the two Conventions signed at Peking by her Minister, M. Gérard, on June 20th, 1895. The first of these documents accords divers facilities to the extension of her commerce on the frontier between China and Indo-China; the second ratifies, to her advantage, the frontier limits. A new market—Semao, in the Yunnan—was now added to the towns of Mong-Tze and Lung-Chau, opened to Franco-Annamite commerce in 1887. The customs on goods entering or leaving these markets and passing through Tongking, already reduced to three-quarters of the maritime Custom-house tariff of 1887, were again lowered to about two-fifths of the general tariff, so far as concerned products exported from any other Chinese port, or intended to be re-imported into any one of these said ports. In Article 5 of this Convention the following passage occurs: ‘It is understood that China, in the exploitation of mines situated in the provinces of Yunnan, Kuang-si, and Kuang-Tung, may apply, in the first place, to French merchants and engineers, the exploitation remaining subject to the rules laid down by the Imperial Government in all that concerns national industry. It is agreed that the railways already existing, or to be constructed in Annam, may, after a mutual understanding, be extended on Chinese territory.’ Finally, it was further stipulated that the French and Chinese telegraph lines should be combined. The Convention respecting the frontier definitely extended the French possessions to the eastern shore of the upper Mekong, thereby giving France the territory situated on the border of the Shan State of Xieng-hong. England in 1894 had admitted the right of suzerainty of China over this little principality, as well as over one or two others, thereby creating a sort of neutral zone between her Indian Empire and French Indo-China.