10. Provision is to be made for future conferences to be held from time to time for the discussion of international questions relative to the Pacific and the Far East, as a basis for determination of common policies of the signatory powers in relation thereto.

COLLECTION

CHAPTER XIV

CHINA AT HOME AND AT WASHINGTON

Washington, November 18, 1921: The more closely one studies the Chinese "Bill of Rights" and the utterances of the Chinese delegates, the more apprehensive one becomes of their ability to "put it over" at this Conference. One cannot but fear that their pretentions may in the end alienate the sympathy of the well-informed, who, however friendly towards China, can not close their eyes to the unhappy condition prevailing in that country. Indeed one feels that China has hitched her wagon to a star, utterly ignoring its rickety condition. Whether this fear is justified we shall know before the Conference comes to an end.

Critics certainly are not lacking who think China's case is hopeless. Keen observers like J. O. P. Bland are dead sure about it. Such extreme views can not be shared by sympathetic critics. We think that China, in spite of many discouraging symptoms, is not hopelessly sick. With the sympathetic assistance of friendly nations, of which America must be the leader, China may turn a new leaf and become a united, orderly and organized nation.

China herself must admit that foreign assistance is absolutely necessary for her regeneration. Her memorandum intimates abhorrence of anything that savors of foreign interference. But she must know that foreign supervision in some of her administrative departments has conferred a great material benefit.

One of the most difficult problems for China is the readjustment of her finances. It is a matter of common knowledge that the Government at Peking has for years been upon the verge of bankruptcy. Today the monthly deficit of the Chinese Government amounts to $9,000,000. Its foreign debts, making due allowance for the recent fall in foreign exchange, exceed $2,000,000,000.

With a deficit of $9,000,000 every month, how does the Chinese Government manage to continue its existence? In the past it has existed mainly, almost entirely, by borrowing foreign cash in the most reckless manner. It has been ready to offer almost any concession for ready cash, for that has been the only means by which the Government could eke out an existence. Foreign money-lenders, including Japanese, have vied with one another in taking advantage of this condition, and offered money for railway or mining concessions.

One often hears superficial critics accuse Japan of taking undue advantage of China's financial chaos. But we must sympathize with Japan for her peculiarly difficult position in dealing with China. China sorely needs money, and she does not care where she gets it. Various factions-those in power at Peking as well as those opposing them-would say to Japan: "We want you to lend us money. You cannot afford to refuse. If you do not accommodate us, we will borrow from some other nation, and that would be detrimental to your prestige and influence in our country."

I know for one thing that the anti-Japanese policy of the Provisional Government at Canton is due to the fact that Japan does not advance any loan to it. The Japanese Government, having recognized Peking as the only legitimate government of China, does not care to carry water upon both shoulders. I know that the Sun Yatsen Government at Canton, while spreading

anti-Japanese propaganda, has at various times sent emissaries to Tokyo for the purpose of exacting money from the Japanese Treasury. I am absolutely sure that if Tokyo allowed herself to be coaxed, not to say blackmailed, to lend money, the anti-Japanese vociferations of the Canton Government will cease as if by magic.

Fortunately or unfortunately for China, the advent of the new International Consortium has put an end to reckless money-borrowing on the part of the Chinese Government. The interested Powers have agreed not to compete with one another in advancing loans to China. The international bankers think it unwise, under the present chaotic conditions in China, to make loans to Peking. The result is that the Chinese Government is at its wit's end.

I have before me the China Year Book for 1921-22.

It says:

"The reorganization of the whole financial system of China, admitted by common consent to be a pressing necessity, still meets with insuperable difficulties, of which the unsettled condition of the country is not the least. Ever since the Chang Hsun coup in 1917, the authority of the Central Government has been merely nominal, even in those provinces which still recognize their allegiance to Peking. Little or no revenue, other than that under foreign control, ever finds its way from the provinces to Peking. On the contrary, the Government is constantly blackmailed by Tuchuns [military governors] and militarists for funds with which to pacify their huge standing armies, the pay of which is always in arrears.

This is the financial condition which confronts China as the representatives of the interested nations sit at the conference table at Washington and listen to the

high aspirations voiced by China's delegates. How are the friendly Powers going to meet that condition? It must be met somehow if their professed desire to help China means anything.

One thing the nations may do for China at this Conference is the cancellation of the balance of the Boxer indemnity. This will relieve China of a yearly payment of some $8,877,000 Mexican.

Another thing the Conference may do is to raise the customs tariff. China's annual receipts from import duties amount to some $60,000,000 Mexican, almost all of which is devoted to payments on foreign loans. If the present tariff, which was fixed more than twenty years ago, is revised equitably, this revenue will increase at least to some $100,000,000.

I wish Japan were in a position to propose at this Conference the cancellation of the Boxer indemnity and the revision of the tariff. Due to her delicate relations with China, Japan would hesitate to offer such proposals, for she is afraid of those ill-advised men who would impute ulterior motives to every movement Japan may make. These men may interpret such proposals, if made by Japan, as a sop to placate China. In the opinion of authoritative Japanese, the United States should assume leadership in finding means for the alleviation of China's financial strain.

Granted that the Conference agrees upon the cancellation of the Boxer indemnity and the increase of the tariff, will China rise to the occasion and make honest endeavor to set her finances aright? That is the big eternal question.