CHINA OF MERCHANT-ADVENTURERS
The past may become in the human present more alive than ever. John
Richard Green finds in the old records of the guilds of Berwick an
enactment "that where many bodies are found side by side in one place
they may become one, and have one will, and in the dealings of one
with another have a strong and hearty love." In the history of the
Saxons, Edwin of Northumbria "caused stakes to be fixed in the highways
where he had seen a clear spring," and "brazen dishes were chained to
them, to refresh the weary sojourner, whose fatigues Edwin had himself
experienced." These things shine with the sun, and enlighten our work
to-day. The Maine woodsman sits on a stump whose rings number centuries
of growth. When Chinese children came to play with our children at the
Legation, I was always impressed by their dignity of demeanour and
their observance of the courtesies while their elders were present.
On the faces of these little heirs of the Holy Duke the composure of
eighty generations of culture and traditions sat freshly; and it by no
means alloyed their delight, which was unstinted, in American toys and
dolls.
This transmutation of the old into new life is seen everywhere in
China. The day comes every morning fresh as a flower. But we know it
is old; it is an ancient day, white-clad and beautiful as the stars.
The Chinese peasant thrusts his stick of a plough many eons deep into
his ancestral soil. In north China it is loess soil, the most fertile
on the globe, brought down from the mountains for millenniums and
deposited to depths of from twenty to thirty feet. When there are no
floods the rain sinks deeply into this porous soil, meets the moisture
retained below, and draws up therefrom the inorganic salts that are
held dissolved. So its fertility is inexhaustible.
But floods do come, as they have come unchecked for ages. In the Hwai
River region, with all this natural richness underfoot, the people are
poor, weak, famine-stricken, living in aggregations of shabby hovels
that are periodically swept away. Its crops, which should normally
be six in three years, average but two and three. This region is
only one example of several prodigious and extensive valleys choked
with fertility, yet with famine and pestilence raging through them,
cursed as they are by inundations that might be completely checked
at little engineering cost. With these regions reclaimed and the
border provinces colonized, China's crops alone would support double
her present population. The people of the Hwai region, secure and
affluent, might be easily increased by twenty million living heirs
of a fifty-centuries-old civilization. Indeed, a little vision and
scientific application would transform China.
With what the ages have produced for the West--the old guild spirit
reviving, if you please, in the modern trust--the West can meet
the East. The true ministers and ambassadors to China are the
merchant-adventurers of the Western nations, bearing their goods, their
steel and tools, their unique engineering skill and works. It was not
for what the _entrepreneurs_ "could get out of" China, nor yet for
what China could get out of us, that my policy as American minister
was directed to this complementary meeting of two civilizations. It
was because I saw millions perishing wretchedly whose birthright in
the higher arts and amenities of living is at least as rich as our
own--perishing for lack of an organizing skill which it is the province
of the Western peoples to supply. It was because I knew, with their
admirable family life and local democratic institutions, it needed
only trunk-line railways to link together these close-set communities,
comprising one quarter of the earth's population, into as admirable a
central democracy.
But how the West was then meeting the East came home to me on the
second morning of my stay in Peking. I entered the breakfast room,
where I found Doctor Hornbeck in a state of annoyance. He handed me the
morning copy of the _Journal de Peking_, a sheet published in French
and known to be subservient to Russian and French political interests
from which it got subventions. The article in question was a scurrilous
attack on me personally, and on American action in China generally.
A Chinese journal in Shanghai had published a laudatory article
in which had been cited extracts from my published books. One of
these, taken from "World Politics," had happened to speak of French
subserviency to Russian policy in the Far East. The French journal
repeated these expressions as if they had been given out by me in an
interview upon arriving in China. As they were in fact taken from books
published more than ten years before, which had run the gauntlet of
French critical journals without ever having been taken as hostile to
France, I did not have any reason to worry, and the fume and fury of
the local journal rather amused me than otherwise. I could, however,
not help noting the temper of these attacks, their bitterness and the
utter rashness and lack of inquiry with which the charges were made.
It gave me early warning, considering its gross lack of courtesy to a
newcomer, who had entered the field in a spirit friendly to all, as to
what might be expected from some of our friendly rivals. When several
years later one of the ministers whose legation stood sponsor for this
sheet approached me with a request to use my influence to suppress a
Chinese paper which had attacked him, I regretted that it was not in my
power to be of assistance.
The significance of the article lay of course in its attack upon
American policy, which was characterized as one of "bluff", and which
charged the United States with assuming a tone of superior virtue
in criticising others, and, while loudly professing friendship for
the Chinese, failing to shoulder any part of the responsibility in
actual affairs. The Y.M.C.A. and the Standard Oil Company were coupled
together as twin instruments of a nefarious and hypocritical policy.
The _China Press_, the American newspaper of Shanghai, pointed out that
the attack of the French paper indicated what the American minister
would have to face, and observed that the success or failure of his
diplomatic mission must depend upon the readiness of the American
Government to take an active part in the rehabilitation of China.
Should America play the rôle of an altruistic but impotent friend,
and of a captious critic of the other powers, it could gain neither
sympathy nor respect.
The American Government was at this time severely criticised for
its failure to endorse the Six-Power Consortium; it was urged that
the Administration had sacrificed the best opportunity for bringing
American goodwill to bear on Chinese public affairs, by exercising
a moderating and friendly influence in the council of the great
powers. On the other hand, it ought to be considered that a new
administration, when confronted with the sudden proposal that it
give _exclusive_ support to one special group of banks, might well
hesitate, particularly in view of the fact that the group in this case
consisted of only four New York houses. An earlier administration had
answered such an inquiry in a similar way. Considering the merits
of the question from the point of view of China, the action might
present itself in the light of a refusal to join with others in placing
upon the young republic the fetters of foreign financial control.
Moreover, the proceeds of the Reorganization Loan were actually not
used for the benefit of the Chinese people, but on the contrary this
financial support fastened the personal authority of Yuan Shih-kai
on the country and enabled him to carry on a successful fight against
parliament. That body never gave its approval to the loan.
From my conversations with President Wilson before departing for my
post I had formed the conclusion that the President realized that
as America had withdrawn from a coöperative effort to assist in the
development of China, it was incumbent upon her to do her share
independently and to give specific moral and financial assistance;
in fact, I received the President's assurance of active support for
constructive work in China. In his conversation he dwelt, however,
more on the educational side and on political example and moral
encouragement, than on the matter of finance and commerce.
It cannot be doubted that in China the withdrawal of the United
States from the Consortium was interpreted as an act of friendship
by all groups with the exception of that which was in control of the
Government at the time, which would have preferred to have the United
States at the council table of the Consortium Powers. Those opposed
to the Government were particularly strong in their commendation of
our refusal to join in an agreement which to them seemed far from
beneficial to China. But all parties without exception drew the
conclusion that the friendly action of the United States, which had
now rejected the method of international coöperation, would continue
independently of the others. In view of the power and resources of the
United States, it was hoped that there would be a greater participation
by the United States in Chinese industrial and commercial affairs, as
well as in administrative loans, than had hitherto existed.
It is apparent from all this that the American position in China
was not free from difficulties. The covert antagonism of the five
Consortium Powers was continuous. We were isolated, and would be judged
by what we could do by ourselves. Should it turn out that we had
nothing to offer but sage advice, the strictures of our rivals might
in time come to carry a certain amount of conviction.
So far as the Americans themselves were concerned, they were thoroughly
discouraged, and everywhere talked as if it were all up with American
enterprise in China. When I said: "No, it is only just beginning,"
polite incredulity was the best I could expect. It is very probable
that the Americans who were so downcast saw in the appointment of
a literary and university man as minister to China an additional
indication that there was to be no special encouragement given to
American economic enterprise. Having long been familiar with the
underlying facts of the Far Eastern situation, I had entirely made
up my mind on the primary importance of American participation in
the industrial and economic development of China. No one could have
appreciated more highly than I did the important work done by American
missionaries, teachers, and medical men, in bringing to China a
conception of Western learning and life. But if China should have
to rely entirely on other nations for active support in the modern
development of her industries and resources, then our position in the
eyes of the Chinese nation could never come up to the opportunities
which Nature had given us through our geographic position and our
industrial strength.
I had long discarded any narrow interpretation of diplomacy, but even
if I had adhered to the principle that the diplomat must busy himself
only with political matters, I should have had to admit that in China
political matters included commerce, finance, and industry. I did not,
of course, intend that the Legation should enter into a scramble for
concessions, but it was my purpose that it should maintain sympathetic
contact with Americans active in the economic life of China, and should
see to it that the desire of the Chinese to give them fair treatment
should not be defeated from any other source.
When I thought of American enterprise in China I had less in mind the
making of government contracts, than the gaining of the confidence of
the Chinese people in the various provincial centres of enterprise
by extensive business undertakings, resting on a sound and broad
foundation. In China the people are vastly more important than the
Government, so that it is necessary to make up one's mind from the
start not to regard Peking as the end-all and be-all of one's activity,
but to interest one's self deeply in what is going on in all of those
important interior centres where the real power of government over the
people is exercised, and where the active organizations of the people
are located.
The universal knowledge that America has no political aims in China, of
itself gives Americans the confidence of the Chinese and predisposes
the latter to favour intimate coöperation. Our policy is known to be
constructive and not to imply insidious dangers to their national life.
It would be discouraging to the Chinese, should Americans fail to take
a prominent part in the development of Chinese resources. To Americans
the idea of securing preëminence or predominance is foreign, but from
the very nature of their purely economic interest they have to resist
any attempt on the part of others to get exclusive rights or a position
of predominance, which could be utilized to restrict, or entirely to
extinguish, American opportunities.
I was therefore resolved to give every legitimate encouragement to
constructive enterprise, whether it were in education, finance,
commerce, or industry.[1] Fully a year before going to China I had
expressed my view of the nature of American policy there, saying that
a united China, master of its own land, developing its resources, open
to all nations of the world equally for commercial and industrial
activity, should be the chief desideratum.
Among the specific American interests already existing in China, that
of missionary and educational work had at this time to be given the
first rank. There are two factors which have made it possible for this
work to achieve a really notable influence. The one is that it is
plainly the result of individual impulse on the part of a great many
people animated by friendly motives, and not the result of a concerted
plan of propaganda. The second factor is the spirit of helpfulness and
coöperation which permeates this work. There is no trace of a desire to
establish a permanent tutelage. An institution like the Y.M.C.A. acts
with the sole thought of helping the Chinese to a better organization
of their own social and educational life. The sooner they are able
to manage for themselves, the better it seems to please the American
teachers, who may remain for a while as friendly counsellors, but who
make no effort to set up a permanent hierarchy of supervision. The
Chinese have an intense respect for their educators, and it has been
the good fortune of many Americans--men like Dr. W.A.P. Martin and Dr.
Chas. D. Tenney--to win the devoted loyalty of innumerable Chinese
through their activity as teachers.
Among commercial enterprises the Standard Oil Company was carrying
petroleum to all parts of China. It had introduced the use of the
petroleum lamp, had extended the length of the day to the hundreds
of millions of Chinese, and even its emptied tin cans had become
ubiquitous in town and country, because of the manifold uses to which
these receptacles could be put. For efficiency and close contact with
the people, the Chinese organization of this great company was indeed
admirable.
A similar result had been obtained by the British-American Tobacco
Company, which, although organized in England under British law, is
American by majority ownership, business methods, and personnel.
The cigarette had been made of universal use, and had been adapted
to the taste and purchasing ability of the masses. Though there
were several American commission firms of good standing, none had
the extensive trade and financial importance of the great British
houses. Several American firm names established in China early in the
nineteenth century, like that of Frazar & Company, had become British
in ownership. The only American bank was the International Banking
Corporation, which at this time confined itself to exchange business
and did not differ in its policy or operations from the common run of
treaty port banks.
If national standing in China were to be determined by the holding
of government concessions, America was at this time, indeed, poorly
equipped. The Bethlehem Steel Corporation had in 1910 concluded a
contract with the Imperial Government for the construction of vessels
to the value of $20,000,000. When I came to China, a vice-president
of the corporation, Mr. Archibald Johnston, was in Peking, ready
to arrange with the republican government for a continuance of the
contract. The American banking group was a partner in the Hukuang
Railways, in which it shared with the British, French, and German
groups. An American engineer was employed at the time in making a
survey of a portion of the proposed line along the Yangtse River. The
American group also held the concession for the Chinchow-Aigun Railway
in Manchuria, the execution of which had been blocked by Russia and
Japan. The group further participated with the three other groups above
mentioned in the option for a currency loan. The only activity going on
at this time in connection with these various contracts, on the part of
America, was the survey of the Hukuang railway line west of Ichang.
For some time the practice had grown up, on the part of European
powers, to urge the Chinese to employ, as advisers, men reputed to have
expert knowledge in certain fields. The most noted adviser at this time
was Dr. George Morrison, who had gained a reputation in interpreting
Far Eastern affairs as Peking correspondent for the London _Times_
during and after the critical period of 1900. A fresh group of advisers
had just been added under the terms of the Reorganization Loan. Each
power therein represented had insisted that the Chinese appoint at
least one of its nationals as an adviser. The American Government had
never urged China to make such an appointment. But when President Eliot
visited China in 1913, Chinese officials expressed to him the wish
that a prominent American should be retained as adviser to the Chinese
Government. President Eliot suggested that the Carnegie Endowment might
propose certain experts from whom the Chinese Government could then
make a selection. This method was actually followed, and as a result
Prof. F.J. Goodnow of Columbia University, a recognized authority
on constitutional law, had been retained by the Chinese Government
and was at this time already in residence at Peking. The Ministry of
Communications on its part had sought a man familiar with railway
accounting, and had called upon the late Prof. Henry C. Adams, the
noted economist and railway expert of Michigan University.
The important administrative positions of Inspector General of Customs
and of Foreign Inspector of the Salt Revenue were held by two British
officials. The salt administration had come within the purview of
international supervision through the Reorganization Loan agreement;
and, as America was not a party to that loan, the appointment of
Americans to any positions in this service was frowned upon by several
of the partners. The Inspector, Sir Richard Dane, an official of long
experience in India, however, adopted the policy of not confining the
appointments to subjects of the Consortium Powers. He had retained
several Americans, in whom he seemed to place great confidence. In the
Customs Service, Americans did not hold the number of positions to
which they were relatively entitled. This was undoubtedly due to the
fact that very few people in the United States knew that such positions
in China are open to Americans; moreover, many of those Americans
who were actually appointed had become impatient with the relatively
slow advancement in this service and had been attracted by other
opportunities. There were, however, a number of highly reputed and
efficient American officials in the Customs Service.
FOOTNOTES:
[Footnote 1: The leading British paper of China had this to say
concerning the modern functions of diplomacy: "It is characteristic of
Doctor Reinsch and his outlook upon China that he should mark a point
of progress in the fact that the legations are ceasing to be merely
political centres, and that, instead of politics being the one and only
object of their existence, they are now establishing relations of all
kinds of mutual helpfulness in vital phases of national reorganization.
In this connection, we may see an increase in the number of experts
who will come, unofficially for the most part, to study conditions and
gather data which may be available as a sure foundation for progress."
I may say in passing that the British papers in China, throughout the
period of my work there, were almost uniformly fair and friendly, and
gave credit for honest efforts to improve conditions.]