The Problem of China

The Far Eastern situation is so complex that it is very difficult to guess what will be the ultimate outcome of the Washington Conference, and still more difficult to know what outcome we ought to desire. I will endeavour to set forth the various factors each in turn, not simplifying the issues, but rather aiming at producing a certain hesitancy which I regard as desirable in dealing with China. I shall consider successively the interests and desires of America, Japan, Russia and China, with an attempt, in each case, to gauge what parts of these various interests and desires are compatible with the welfare of mankind as a whole.[86] I begin with America, as the leading spirit in the Conference and the dominant Power in the world. American public opinion is in favour of peace, and at the same time profoundly persuaded that America is wise and virtuous while all other Powers are foolish and wicked. The pessimistic half of this opinion I do not desire to dispute, but the optimistic half is more open to question. Apart from peace, American public opinion believes in commerce and industry, Protestant morality, athletics, hygiene, and hypocrisy, which may be taken as the main ingredients of American and English Kultur. Every American I met in the Far East, with one exception, was a missionary for American Kultur, whether nominally connected with Christian Missions or not. I ought to explain that when I speak of hypocrisy I do not mean the conscious hypocrisy practised by Japanese diplomats in their dealings with Western Powers, but that deeper, unconscious kind which forms the chief strength of the Anglo-Saxons. Everybody knows Labouchere's comment on Mr. Gladstone, that like other politicians he always had a card up his sleeve, but, unlike the others, he thought the Lord had put it there. This attitude, which has been characteristic of England, has been somewhat chastened among ourselves by the satire of men like Bernard Shaw; but in America it is still just as prevalent and self-confident as it was with us fifty years ago. There is much justification for such an attitude. Gladstonian England was more of a moral force than the England of the present day; and America is more of a moral force at this moment than any other Power (except Russia). But the development from Gladstone's moral fervour to the cynical imperialism of his successors is one which we can now see to be inevitable; and a similar development is bound to take place in the United States. Therefore, when we wish to estimate the desirability of extending the influence of the United States, we have to take account of this almost certain future loss of idealism. Nor is idealism in itself always an unmixed blessing to its victims. It is apt to be incompatible with tolerance, with the practice of live-and-let-live, which alone can make the world endurable for its less pugnacious and energetic inhabitants. It is difficult for art or the contemplative outlook to exist in an atmosphere of bustling practical philanthropy, as difficult as it would be to write a book in the middle of a spring cleaning. The ideals which inspire a spring-cleaning are useful and valuable in their place, but when they are not enriched by any others they are apt to produce a rather bleak and uncomfortable sort of world. All this may seem, at first sight, somewhat remote from the Washington Conference, but it is essential if we are to take a just view of the friction between America and Japan. I wish to admit at once that, hitherto, America has been the best friend of China, and Japan the worst enemy. It is also true that America is doing more than any other Power to promote peace in the world, while Japan would probably favour war if there were a good prospect of victory. On these grounds, I am glad to see our Government making friends with America and abandoning the militaristic Anglo-Japanese Alliance. But I do not wish this to be done in a spirit of hostility to Japan, or in a blind reliance upon the future good intentions of America. I shall therefore try to state Japan's case, although, for the present, I think it weaker than America's. It should be observed, in the first place, that the present American policy, both in regard to China and in regard to naval armaments, while clearly good for the world, is quite as clearly in line with American interests. To take the naval question first: America, with a navy equal to our own, will be quite strong enough to make our Admiralty understand that it is out of the question to go to war with America, so that America will have as much control of the seas as there is any point in having.[87] The Americans are adamant about the Japanese Navy, but very pliant about French submarines, which only threaten us. Control of the seas being secured, limitation of naval armaments merely decreases the cost, and is an equal gain to all parties, involving no sacrifice of American interests. To take next the question of China: American ambitions in China are economic, and require only that the whole country should be open to the commerce and industry of the United States. The policy of spheres of influence is obviously less advantageous, to so rich and economically strong a country as America, than the policy of the universal Open Door. We cannot therefore regard America's liberal policy as regards China and naval armaments as any reason for expecting a liberal policy when it goes against self-interest. In fact, there is evidence that when American interests or prejudices are involved liberal and humanitarian principles have no weight whatever. I will cite two instances: Panama tolls, and Russian trade. In the matter of the Panama canal, America is bound by treaty not to discriminate against our shipping; nevertheless a Bill has been passed by a two-thirds majority of the House of Representatives, making a discrimination in favour of American shipping. Even if the President ultimately vetoes it, its present position shows that at least two-thirds of the House of Representatives share Bethmann-Hollweg's view of treaty obligations. And as for trade with Russia, England led the way, while American hostility to the Bolsheviks remained implacable, and to this day Gompers, in the name of American labour, thunders against "shaking hands with murder." It cannot therefore be said that America is always honourable or humanitarian or liberal. The evidence is that America adopts these virtues when they suit national or rather financial interests, but fails to perceive their applicability in other cases. I could of course have given many other instances, but I content myself with one, because it especially concerns China. I quote from an American weekly, The Freeman (November 23, 1921, p. 244):— On November 1st, the Chinese Government failed to meet an obligation of $5,600,000, due and payable to a large banking-house in Chicago. The State Department had facilitated the negotiation of this loan in the first instance; and now, in fulfilment of the promise of Governmental support in an emergency, an official cablegram was launched upon Peking, with intimations that continued defalcation might have a most serious effect upon the financial and political rating of the Chinese Republic. In the meantime, the American bankers of the new international consortium had offered to advance to the Chinese Government an amount which would cover the loan in default, together with other obligations already in arrears, and still others which will fall due on December 1st; and this proposal had also received the full and energetic support of the Department of State. That is to say, American financiers and politicians were at one and the same time the heroes and villains of the piece; having co-operated in the creation of a dangerous situation, they came forward handsomely in the hour of trial with an offer to save China from themselves as it were, if the Chinese Government would only enter into relations with the consortium, and thus prepare the way for the eventual establishment of an American financial protectorate. It should be added that the Peking Government, after repeated negotiations, had decided not to accept loans from the consortium on the terms on which they were offered. In my opinion, there were very adequate grounds for this decision. As the same article in the Freeman concludes:— If this plan is put through, it will make the bankers of the consortium the virtual owners of China; and among these bankers, those of the United States are the only ones who are prepared to take full advantage of the situation. There is some reason to think that, at the beginning of the Washington Conference, an attempt was made by the consortium banks, with the connivance of the British but not of the American Government, to establish, by means of the Conference, some measure of international control over China. In the Japan Weekly Chronicle for November 17, 1921 (p. 725), in a telegram headed "International Control of China," I find it reported that America is thought to be seeking to establish international control, and that Mr. Wellington Koo told the Philadelphia Public Ledger: "We suspect the motives which led to the suggestion and we thoroughly doubt its feasibility. China will bitterly oppose any Conference plan to offer China international aid." He adds: "International control will not do. China must be given time and opportunity to find herself. The world should not misinterpret or exaggerate the meaning of the convulsion which China is now passing through." These are wise words, with which every true friend of China must agree. In the same issue of the Japan Weekly Chronicle—which, by the way, I consider the best weekly paper in the world—I find the following (p. 728):— Mr. Lennox Simpson [Putnam Weale] is quoted as saying: "The international bankers have a scheme for the international control of China. Mr. Lamont, representing the consortium, offered a sixteen-million-dollar loan to China, which the Chinese Government refused to accept because Mr. Lamont insisted that the Hukuang bonds, German issue, which had been acquired by the Morgan Company, should be paid out of it." Mr. Lamont, on hearing this charge, made an emphatic denial, saying: "Simpson's statement is unqualifiedly false. When this man Simpson talks about resisting the control of the international banks he is fantastic. We don't want control. We are anxious that the Conference result in such a solution as will furnish full opportunity to China to fulfil her own destiny." Sagacious people will be inclined to conclude that so much anger must be due to being touched on the raw, and that Mr. Lamont, if he had had nothing to conceal, would not have spoken of a distinguished writer and one of China's best friends as "this man Simpson." I do not pretend that the evidence against the consortium is conclusive, and I have not space here to set it all forth. But to any European radical Mr. Lamont's statement that the consortium does not want control reads like a contradiction in terms. Those who wish to lend to a Government which is on the verge of bankruptcy, must aim at control, for, even if there were not the incident of the Chicago Bank, it would be impossible to believe that Messrs. Morgan are so purely philanthropic as not to care whether they get any interest on their money or not, although emissaries of the consortium in China have spoken as though this were the case, thereby greatly increasing the suspicions of the Chinese. In the New Republic for November 30, 1921, there is an article by Mr. Brailsford entitled "A New Technique of Peace," which I fear is prophetic even if not wholly applicable at the moment when it was written. I expect to see, if the Americans are successful in the Far East, China compelled to be orderly so as to afford a field for foreign commerce and industry; a government which the West will consider good