Introduction
Before daybreak on the morning of 27 April 1913, at the Beijing office of the Hongkong and Shanghai Bank,Footnote 1 a loan contract of £25 million was signed between representatives of the provisional government of the Republic of China and representatives of a Five-Power Consortium, which consisted of British, French, German, Russian, and Japanese banking groups: this was the so-called ‘Reorganization Loan’ (Shanhou Dajiekuan). This large loan was of great importance to the politics of the early Republic of China, which had been established following the 1911 Revolution. It gave Provisional President Yuan Shikai the funds to put down a rebellion led by Sun Yat-sen. Yuan Shikai then established what is usually described as a ‘military dictatorship’, which eventually fell in 1916 at the hands of rebellious provincial military leaders. The Reorganization Loan also led to the administration of the Chinese salt tax, which was used as security for the loan, being placed under the control of an organization managed by a Briton. In this paper I will explore British policy towards the Reorganization Loan by focusing on the role of British diplomats and bankers who were resident in China, especially the British minister to China, John Jordan.
The Yuan Shikai government (1912–1916) of early Republican China has been condemned for a long time by both Chinese nationalist and communist historiography for its submission to Western and Japanese imperialism. The Reorganization Loan serves as one of the most striking examples of this. A classic work from the early People's Republic reads: ‘. . . when the loan agreement was concluded as late as the April of 1913. . . the conditions were totally in compliance to the great powers’ will. . . the Imperialists were relieved because they thought Yuan Shikai had become their agent. Yuan Shikai could do whatever he wanted because he thought Imperialism had become his patron.’Footnote 2 The overall perspectives of post-Second World War Japanese scholarship on this topic show a great similarity with Chinese historiography.Footnote 3 While English-language works have made less biased appraisals of Yuan Shikai's government, they have not paid much attention to its foreign relations.Footnote 4
Works on Western and Japanese imperialism have failed to refute Chinese historiography, as many of them have paid more attention to imperial metropoles such as London or Tokyo than to events in China.Footnote 5 On the Reorganization Loan, a magnificent London-centred synthesis of British imperial history shows some resemblance to Chinese communist historiography: ‘In 1912, the Foreign Office and the Hongkong and Shanghai Bank led the way. . . in backing the provisional government under Yuan, a former Ch'ing [Qing] general who had agreed to cooperate in maintaining the open door and in meeting China's external financial obligations. In the following year, the consortium issued a Reorganization Loan of £25m, which helped Yuan to gather support, become President of the Republic, and purge the democratic wing of the reform movement.’Footnote 6
In the last two decades, changes in the political atmosphere in both the People's Republic of China and Taiwan have brought about changes in Chinese historiography on early Republican China. In the field of diplomatic history, groundbreaking works were produced by historians in Taiwan and Japan who investigated the newly opened records of the Beijing government's foreign ministry in the Academia Sinica, Taipei. Many of these revisionist works stress Chinese diplomats’ efforts to resist foreign encroachments upon China.Footnote 7 The appraisal of Yuan Shikai is one of the crucial topics in this revisionist school of Chinese diplomatic history: now he emerges as a patriotic leader who stubbornly resisted Japan's notorious Twenty-One & Demands of 1915 with his brilliant diplomatic manoeuvres.Footnote 8 The Reorganization Loan, however, has only been partially explored in recent Chinese historiography.Footnote 9 Moreover, much of this revisionist scholarship has not engaged fully with Western and Japanese sources.
Chan Lau Kit-Ching has written on the subject of Sino-British diplomacy during Yuan Shikai's presidency, and although China's own diplomatic archives were unavailable when her work was done, there is little to dispute in her emphasis on the role of John Jordan, the British minister to China.Footnote 10 Unlike Chan's account, however, in this paper Jordan is depicted as more than merely a pro-Chinese, or pro-Yuan Shikai, diplomat by highlighting how he was connected both to Chinese politics and to the foreign community in China.
I argue that Jordan and the Britons who worked under him were Britain's ‘men on the spot’ in China. They were ‘men in the middle’ between the Chinese and the foreigners, between the periphery and the metropole, and between high politics and the economy.Footnote 11
In order to reveal the thoughts and behaviours of these border-crossing people, previously available sources have been scrutinized in combination with new sources and approached from a new perspective: English-language sources are supplemented by sources in other European, Chinese, and Japanese languages; Foreign Office records are cited with more emphasis on the legation and consular files than Whitehall minutes. By so doing, I aim to demonstrate how British imperialism worked on its Chinese periphery.
By drawing attention to ‘men in the middle’ like Jordan, I hope to depict the more nuanced features of Sino-British relations and to surpass the submission–resistance dichotomy that still prevails in otherwise outstanding work on Chinese diplomatic history. I also aim to synthesize British imperial history and modern Chinese history by reintegrating the British expatriates’ role into our understanding of China's foreign relations.Footnote 12
In the first section of this paper I describe the backgrounds of Britain's men on the spot, especially John Jordan. In the second and third sections we follow the role these men played in the Reorganization Loan negotiations (March 1912 to April 1913), focusing respectively upon their influence on the Foreign Office's decision-making and on their involvement with Chinese politics. In the final section I then discuss the limitations of Yuan Shikai's military dictatorship and the foreign presence within it.
Britain's men on the spot in China
In many cases, the policy-making of empires, both formal and informal, was heavily influenced by their expatriates on the imperial periphery, often referred to as ‘men on the spot’. John Galbraith argues that in India, Malaya, and South Africa the colonial governor—‘the man on the spot'—initiated expansionist policy: ‘Seldom did the London government initiate frontier policy, rather, it reacted to the policies of its governors.’Footnote 13 Alexander Scholch argues that British consuls and journalists, whom he refers to as ‘men on the spot’, played an important role in London's decision to occupy Egypt in 1882.Footnote 14 Much of the United States’ Cold War policy in Japan was made by the ‘Japan hands’ stationed at the American embassy in Tokyo.Footnote 15
In this paper, Britain's men on the spot in China are defined as those Britons who were resident in China and were regarded as having special knowledge of the country, and who had substantial influence on policy-makers in London. Mainly discussed are the British officials and bankers in China and, to a lesser extent, the merchants, journalists, and staff of the Chinese Maritime Customs. Despite being lower class members of the small circle of the British elite, these men on the spot had strong ties with both Chinese officials and British expatriates in China.
John Jordan among Chinese officials
Sir John Newell Jordan (1852–1925), who served as British minister to China from 1906 to 1920, was later remembered by an Italian diplomat as follows:
He [Jordan] came from the British Consular service in China and was not a diplomat in the sense that Cartier, or Ahlefeldt or I were. To him, China was not one post among many. It represented the beginning and the end of his career. . . it seemed to me that his world consisted of the British Empire and China, with Russia and Japan looming in the background. . .Footnote 16
Somehow, the man who represented the world's largest empire in the capital of the world's most populous country was not a typical diplomat of the day.
In 1843, shortly after the Opium War, the Foreign Office launched the China Consular Service, a system to train a body of Chinese-speaking officials. Those youths who entered the Service first undertook intensive language training as ‘student-interpreters’. In the 1860s, arrangements were made to bring all the new & student-interpreters together for a preliminary two-year period of full-time language study at the British legation in Beijing. Young China consuls then began working at British consulates in various places.Footnote 17
John Jordan was the second son of a Presbyterian farming family from Northern Ireland. He attended Queen's College, Belfast (now the Queen's University of Belfast), where he achieved good results in classics. At 21, for unknown reasons, he set his sights on the Japan Consular Service and wrote to the Foreign Office to enquire about recruitment. In the examination two years later, he was placed second to another Irishman who took the only placement for Japan, and was forced to content himself with China. Thus he came to China in 1876 as a young student-interpreter.Footnote 18
Through his work as a consul, Jordan developed ideas about China that were common among the majority of the British there at the time. In an article in a British magazine, he described the difficulties the China consuls faced in their work: the difficult language, the strange customs, the corruption of the Chinese officials, and so on. He also stressed the autocratic nature of the Chinese government: ‘The highest Viceroy in the Empire may rise one morning and find that his imperial master has decreed his removal from office’; ‘It would be hard to find anywhere a more submissive subject or a more thoroughly good-natured being than the Chinese peasant.’ He also asserted that Chinese society was too conservative to accept things European.Footnote 19
In 1886 Jordan was transferred to the Beijing legation and in 1891 he was promoted to Chinese secretary there. This was an important post, for since 1883 diplomats with little experience & in China, rather than staff from the China Consular Service, had been chosen to be British minister in Beijing. These ministers were not trained in the Chinese language, nor were they familiar with Chinese officials. Although China had set up a government department for foreign affairs in 1861—the Zongli Yamen—its staff were selected by exams based on Confucian texts and they had little knowledge of European languages.Footnote 20 Therefore, British ministers relied heavily on their Chinese secretaries. Minister N. R. O'Conor praised ‘our excellent Chinese Secy Jordan’:Footnote 21
. . . about half the work of the Legation is in great measure dependent upon the efficient manner in which the Chinese Secretary carries out his duties, and upon his proficiency in the colloquial language in which he serves as interpreter to the Minister. . . I have found Mr. Jordan discharging his duties not only with untiring assiduity, but with an ability which has. . . proved of signal service to the public interest.Footnote 22
Jordan's appointment as minister in Beijing had a lot to do with his background as a China consul. After working in Beijing, he was transferred to Korea in 1896. In 1906, Ernest Satow, British minister to China, expressed his desire to retire. The problem of Satow's successor caused a heated debate within both the British government and the British community in China.Footnote 23 An Australian journalist, George Ernest Morrison, lobbied the Foreign Office for Jordan's appointment, writing ‘[i]t is of the highest importance that our next minister here should be a Chinese scholar. . . He [Jordan] is persona gratissima with the Chinese and he is liked and respected by the Chinese in a way that few Englishmen can hope for.’Footnote 24
In the autumn of 1906, Jordan returned to China to become the first Chinese-speaking British minister for two decades.
John Jordan among British expatriates
Foreigners living in China, especially Britons, had a very different status to that enjoyed by foreigners in other Western countries, because China was not yet treated as a full member of the international community of sovereign states. Expatriate businessmen or small settlers lived in autonomous ‘concessions’, enjoyed the privilege of ‘extraterritoriality’ (exemption from Chinese legal jurisdiction), and were protected by British gunboats in the Yangtze River and the Royal Navy's China station on the coast. In Shanghai, they even established the almost-autonomous Shanghai Municipal Council, which was not under Chinese, British consular nor diplomatic authority.Footnote 25
Though often in dispute, the position of Britons in China was ultimately defined and defended by the British state via China consuls. They had limited contact with their Chinese neighbours, and their knowledge of Chinese society and language was poor: ‘Learning and speaking Chinese was unpopular. . . The need to communicate so intimately with Chinese labelled the speaker as either a “poor white” or else as the lowest in Shanghailander status.’Footnote 26 Thus, the knowledge and experience of China consuls were essential to British activities in China. Jordan described a typical case:
The Chinese employé of a British firm has absconded with a lot of dollars, and you go to demand his arrest. The man's name is Chang, and he belongs to the district of Lo. There are in all probability half-a-dozen places in the district called Lo, and after a careful scrutiny, in which the Chinese official gives little help, you find the identical one to which the guilty Chang belonged. . . you will find that there are at least a dozen Changs in the place, all of whom, according to their own account, have led highly respectable lives from their youth upwards. . . you may find at last the real and veritable Chang, but not the dollars, for these have been spent in bribing the officials to screen him so long from punishment.Footnote 27
China consuls like Jordan ‘acted as judges, governors, and guardian angels over British subjects. . .’.Footnote 28
When the question of Minister Satow's successor was discussed among British expatriates, their hope was to see a China consul become the new minister. The North China Herald, the pre-eminent British-run English-language newspaper published in Shanghai, contended that ‘considering the importance of the post [of Minister in China] at the present time, it should certainly be filled by a hardworking man familiar with China, not by a Secretary of Legation from a European capital. . . who would regard the post merely as a step to something better’.Footnote 29
Britain's collaboration policy and Yuan Shikai
The late nineteenth century saw the diminishing of the Qing central government's control over the provinces, especially in financial and military terms. Though the Qing empire survived the rebellions of the mid-nineteenth century, state control over the provinces was much weakened.Footnote 30 A series of military defeats by Japan and Western powers in the years 1895–1900 made the Qing a large debtor to foreign, especially British, financial interests, which were backed up by their governments.Footnote 31
The impact of foreign debt on China's public finances was immense. More than half the tax that the Qing demanded from its provinces and Maritime Customs was consumed by repayments to foreign creditors, in particular the Hongkong Bank.Footnote 32
British policy towards China after 1900 followed what I shall call ‘the collaboration policy’.Footnote 33 Britain hoped to see its indigenous collaborators establish a strong central government in Beijing that would keep a firm grip on the provinces, making China safer for British financial interests. If Beijing had lost control over the provinces, it would have been difficult for British bankers and merchants to maintain the potential for profit.Footnote 34
In the last decade of the Qing, the Chinese leader that Britain chose as its potential collaborator was Yuan Shikai (1859–1916). Yuan had entered Li Hongzhang's Huai Army and played a major role in the Qing's consolidation of power in Korea in the 1880s and 1890s. After returning to China, he became a principal figure in the Qing's construction of the New Army (Xinjun). Meanwhile, he was appointed to prominent posts such as governor of Shandong, viceroy of Zhili, and director of the Bureau of Foreign Affairs. As early as 1898, Lord Beresford was so convinced that Yuan was pro-British that he telegraphed Premier Salisbury to say, ‘I could reach Beijing in one day with Yuan's troops. Through him I should be able to maintain order in the capital, support the reigning dynasty, and control the Government’, to which the premier answered that ‘the idea would have been attractive in the beginning of the century, but it would now be too exhausting’.Footnote 35 Although often described as a military dictator, Yuan's involvement in reformist policy in the late Qing period covered a range of modernizing projects, such as policing, railways, and industrial enterprises.Footnote 36
Yuan Shikai's position in the Qing bureaucracy was, however, an unstable one. In November 1908, empress dowager Cixi and the Guangxu emperor both passed away, and the three-year-old Xuantong emperor inherited the throne, with Prince Chun, Xuantong's father and Guangxu's younger brother, as regent. In January 1909, Yuan Shikai was abruptly dismissed, probably for his disloyalty to the late Guangxu emperor. Jordan tried to persuade other foreign ministers in Beijing to warn the Qing government that ‘China's foreign relations would suffer severely by the dismissal of a statesman who was universally considered the guarantee of his country's political stability’, although he failed to do so because of Japan's opposition.Footnote 37
What worried British policy-makers after Yuan Shikai's forced retirement was the Qing's further loss of control over the provinces. Prince Chun soon proved to lack Yuan's talent in statecraft: in an age of unprecedented Han Chinese nationalism he created a cabinet composed almost solely of Manchu nobles. Worried and irritated, British Foreign Secretary Edward Grey was heard to say that, ‘. . . it would be very desirable to have a better Government in China. . . It was [is] a great pity that Yuan-Shi-Kai and friends of his, such as Tong-Shao-Yi, had [have] not come back to office.’Footnote 38
Grey was right to be anxious. The Qing's policy of railway nationalization led to widespread rioting in Sichuan, and subsequently to the onset of the 1911 Revolution.
The 1911 Revolution and Britain's men on the spot
The outcomes of the 1911 Revolution were, on the whole, favourable to British interests. The work of John Jordan and other British men on the spot was not inconsiderable to achieving this outcome.
First, Yuan Shikai returned to the centre of power as provisional president of the Republic of China. On 26 November 1911, Jordan informed Yuan Shikai of his anxiety over fighting in Hankou between Qing and revolutionary forces, and Yuan suggested that hostilities might be suspended if they could agree on terms. Jordan then telegraphed British Consul-General Goffe in Hankou, telling him to inform the revolutionary leaders verbally of Yuan's proposal. Talks via telegram between the British legation at Beijing and the British consul-general in Hankou led to the signing of a peace agreement between the revolutionary leader, the Qing general, and Consul-General Goffe.Footnote 39 All this was done at the initiative of the men on the spot in China. Jordan reported to the Foreign Office only after the agreement was signed, saying: ‘I had no time to consult you in regard to it.’ While Sir Arthur Nicolson, the permanent under-secretary, worried about the actions of the minister and the consuls, Grey commented: ‘Sir J. Jordan acted quite rightly.’Footnote 40 In December, peace talks between the revolutionary leaders and the Qing officials got underway in the Town Hall, which was offered by Shanghai Municipal Council.Footnote 41 On 1 January 1912, the establishment of the Republic of China was proclaimed in Nanjing by its first provisional president, Sun Yat-sen. Following secret negotiations, the Xuantong emperor abdicated in February and Yuan Shikai became the second provisional president of the republic. Jordan expressed his hope that the leaders of the new Chinese republic would ‘work together’ and ‘form a very strong administration’.Footnote 42
Secondly, foreign control of the Chinese Maritime Customs was strengthened during the Revolution. Prior to this, the foreign-staffed Maritime Customs only evaluated the tax on international trade and Qing officials collected the money. During the Revolution, however, foreign customs staff kept the money themselves for fear of it being spent on the military. They could do this because they had ‘the backing of the Consul—and of the ex-Taotai—though the latter does not count for much’, as one of them put it.Footnote 43 Jordan ‘told Aglen [the Briton who was then the inspector-general of the Maritime Customs] that he cannot expect to run the Customs as Sir R. Hart did’. Aglen then drew up the proposal for a new system.Footnote 44 In the end, the Qing government and the foreign powers agreed that the inspector-general of Customs should handle the customs revenue, and this was later approved by the Republican government.Footnote 45 In the words of Aglen, ‘[t]he important part which the Service has played in maintaining national credit. . . and the services rendered by Commissioners of Customs in the general interest have. . . been publicly recognised’.Footnote 46
The Reorganization Loan negotiations (I): Britain's men on the spot in British policy
In 1910 British, French, German, and American financial groups, known as the Four-Power Consortium, formed a united front in loan negotiations with China. Shortly after the 1911 Revolution, Japan decided to join the consortium.Footnote 47 Russian policy-makers also came to realize that the competition between Russian financial groups and the Four-Power Consortium would ‘lead to the deepening of the struggle amongst the powers owing to the China questions, from which the Chinese, not we, would gain the profit. . .’.Footnote 48 With the addition of these two militant but less industrialized powers the Six-Power Consortium came into being in June 1912. Thus an extended united front was maintained among the major foreign powers during the Reorganization Loan negotiations of 1912–13.Footnote 49
This section investigates the role of Britain's men on the spot in the policy-making of Britain and other powers during the negotiations.
Britain's collaboration policy in the Reorganization Loan
The records of the Reorganization Loan negotiations make it clear that most of the British diplomats and bankers had three basic assumptions in common, and that these assumptions were shared by many of their counterparts from other industrialized nations such as France.
First, British policy-makers recognized that a strong central administration in China was necessary for the sake of British political, financial, and mercantile interests. The Foreign Office wrote in a memorandum that the British government's goal was ‘the establishment of a central Government sufficiently stable to maintain the integrity of China which is the guarantee that Chinese credit will be maintained and British political and commercial interests in the Chinese Empire effectually safeguarded’.Footnote 50 A memorandum by the French Ministry of Foreign Affairs said that ‘in the present state of disorganization in China, in order to re-establish a central government capable of integrating the provinces and representing China towards respectable foreigners, it is necessary to reorganize the finance, disband the battalions, pay the army and the marine. . . etc, all these things need money, that is, one or several loans of a great amount’.Footnote 51
Second, British policy-makers aimed to impose some form of foreign control on China's public finances. The Foreign Office memorandum above also stated that, ‘It is of the first political importance that money given to China shall not be squandered by her or used to our disadvantage.’Footnote 52 The French foreign minister also remarked that ‘the plan for the reorganisation of China’ was aimed at ‘providing China, in a primitive form, with principal organs of a modern state. . .’ and that ‘A strict control is expected to let the Powers supervise and follow how the funds will be used.’Footnote 53 This kind of desire on the side of the foreign powers was the foundation of the Six-Power Consortium's original plan for the loan terms.
Third, the British needed to be alert lest Yuan Shikai's government be overthrown by his political adversaries. If the acceptance of loan terms overtly damaged China's sovereignty, it would strengthen domestic opposition to Yuan Shikai's government. While discussing the loan terms, Charles Addis, the Hongkong Bank's London manager, said: ‘[t]he Chinese are a proud people, and, in my opinion, are even less likely under a republic than under a monarchy to submit, except under duress, to international financial tutelage. Even if we succeeded in imposing the terms proposed by our representatives upon the Central Government, our victory might be dearly purchased by a rising of the southern provinces against submission to conditions considered humiliating to the national pride.’Footnote 54
Thus, the insights of Britain's men on the spot were greatly influential on London's policy. All three assumptions above, especially the third, focused on China's domestic politics rather than its international position. The details of Britain's and other foreign power's policy had to be modified cautiously in accordance with the attitudes of Chinese negotiators and changes in their domestic political position.
Refining the terms of the loan: March–December 1912
The Hongkong Bank's Beijing representative, Edward Hillier (1857–1924), was also a Chinese-speaking Briton. After studying Chinese at Cambridge University, he worked first for Jardine Matheson & Co. in Hong Kong, and for the Hongkong Bank from 1883 onwards. He had been the Bank's Beijing representative since 1891 and had created a strong network in the British community in China. By the time the Reorganization Loan was being negotiated, he had lost his sight.Footnote 55 While the Bank's London manager, Charles Addis (1861–1945), tended to think and act ‘as a National leader’ of the British financial sector,Footnote 56 Hillier was thinking and acting as the Bank's man on the spot in China.
The men on the spot's influence on London's China policy first became evident during discussions about the terms of the Reorganization Loan, especially those relating to China's public finances.
The consortium's initial proposal for the loan terms was decided at a bankers’ conference in Paris on 15 May 1912. It made three heavy demands on the Chinese government: first, the management of China's salt tax, as security for the loan, should be put under control of the Chinese Maritime Customs; second, the Chinese government should appoint foreign officials who would have strong powers to audit the uses of the loan; third, the bank groups represented in the Six-Power Consortium should be designated as the Chinese government's ‘financial agents’ with a wide-ranging mandate.Footnote 57
The Chinese government persistently opposed this initial proposal. At a meeting on 24 June 1912, Xiong Xiling, the Chinese finance minister, rejected it. On 9 July, the six governments had their ministers in Beijing verbally inform the Chinese government that ‘the general lines’ of the loan terms could not be changed.Footnote 58 Xiong Xiling thought that, ‘The Maritime Customs has been managed by foreigners for decades, never by us. . . When Inspector-General Hart resigned, the British government demanded that a Briton succeed him, which means they see the post as hereditarily British. Our rights to employ foreigners are now impaired. How can we make the same mistake again?’Footnote 59 The Chinese government sought to make loan contracts with other foreign financial groups through its legations in Europe.Footnote 60 The Chinese minister in London succeeded in agreeing a £10 million loan contact with a British investor, C. Birch Crisp.Footnote 61
This stalemate forced the Foreign Office to reconsider its loan policy in China: they began to consider abandoning their policy of exclusive support for the Hongkong Bank and the Six-Power Consortium. The Foreign Office's Far Eastern Department wrote a long memorandum proposing that they should permit other British banks to make government loans to China if the Six-Power Consortium's approach to the Chinese failed again.Footnote 62 Sir Edward Grey instructed his subordinates to ask for John Jordan's opinion.Footnote 63 The Foreign Office sent an extraordinarily lengthy telegram to the legation in Beijing and informed them of the new policy.Footnote 64
Jordan, however, strongly opposed the Foreign Office's plan and argued for continued support for the Hongkong Bank-led Reorganization Loan. He stated that the Foreign Office's new policy ‘would probably in practice tend to encourage competition and produce financial confusion’.Footnote 65 In reply, the Foreign Office instructed Jordan to resume the Reorganization Loan negotiations with the Chinese government.Footnote 66
Even before the Chinese government had expressed its opposition, Inspector-General Aglen of the Maritime Customs considered it unfeasible that the Chinese salt tax could be managed by an administration modelled on his service.Footnote 67 Jordan also expressed his opinion that the original proposals by the consortium ‘never stood much chance of acceptance by the Chinese’.Footnote 68 Jordan and other men on the spot began to argue more strongly for moderating the terms of the loan in order to come to an agreement with the Chinese government.Footnote 69 When his subordinate at the legation, Beilby Alston, was transferred to London, Jordan asked him to deliver a private letter which stated that ‘a solution lies rather in such a relaxation of the terms as China can accept than in a rupture. . . & consequent confusion’. Alston circulated an extract from the letter among Foreign Office officials, including Arthur Nicolson and Grey.Footnote 70
Convinced by Jordan to modify the loan terms, the Foreign Office in turn tried to persuade other foreign powers to follow suit. The Chinese government had by then presented its counter-proposal to foreign bank representatives in Beijing. On 27 September, the Foreign Office recommended that the other five governments comprising the & Six-Power Consortium ‘reopen discussion at Peking at once on the basis of the Chinese proposals’.Footnote 71 By late October the other governments had changed their positions, not least because of Japan's support for the British proposals.Footnote 72
Early in November, the Hongkong Bank's London manager, Addis, telegraphed the consortium's representatives in Beijing ordering them to modify their position so that they could reopen negotiations with the Chinese government and to keep in close contact with the ministers of the six powers.Footnote 73
Thus, the final terms of the Reorganization Loan were actually closer to the Chinese counter-proposal of 21 September 1912 than to the consortium's original plan. First, as to the reform of salt tax, which was the crux of the disputes, the counter-proposal suggested that ‘China herself reorganize the salt gabelle’ but that it ‘may consider the advisability of employing foreigners herself to assist Chinese in the administration’. Second, the mandate of the foreign auditor of the loan funding was rather nominal. Third, it omitted the foreign proposal for appointing foreign banks as the Chinese government's ‘financial agents’.Footnote 74 The Reorganization Loan contract, which was signed in April 1913, stipulated that the Chinese government should establish a Chief Inspectorate of Salt Revenues under the control of the minister of finance and that the Inspectorate should be managed by both a Chinese and a foreign associate chief inspector. The mandate of the foreign auditor was a formality, and there was no mention of the Chinese government's ‘financial agents’.Footnote 75
Signing the loan agreement: January–April 1913
Even after reaching consensus on the terms of the loan, negotiations came to a halt again in early 1913 when the Chinese government and the six powers disagreed on the matter of the nationality of the foreign associate chief inspector of salt revenues. Although the loan contract stipulated that the Chinese government should appoint the foreign official, the six powers, in order to exert informal influence, demanded that China should appoint a Briton to the post.Footnote 76 The Chinese government, however, wanted to appoint Oiesen, a Danish employee of the Maritime Customs, in the hope that this would weaken the influence of the six powers.Footnote 77 The negotiations again reached an impasse: on 4 April the Hongkong Bank drew up a memorandum to consider their options in the event of failure to sign the Reorganization Loan contract.Footnote 78
This problem, however, suddenly lessened in importance due to a more serious issue: the increased antagonism between Yuan Shikai's government and Sun Yat-sen's Guomindang (National People's Party) after the assassination of a Guomindang leader, Song Jiaoren. By the early April of 1913, Yuan Shikai's government had changed its attitude towards the Reorganization Loan. They secretly proposed to the five powers (the United States had withdrawn in March 1913) that they quickly sign the loan contract without the Chinese parliament's consent and that in return the Yuan Shikai government would appoint a British national as the associate chief inspector of salt revenues.Footnote 79
Thus, in April 1913 Britain and the other powers faced a difficult choice: whether to sign the Reorganization Loan contract with the Yuan Shikai government without the parliament's approval. There was a sharp divergence of opinion between Britain's men on the spot and the bankers in London. Worried about the security of the loan in the case of civil war, Charles Addis, the Hongkong Bank's London manager, was reluctant to lend money to Yuan Shikai: on 14 April he telegraphed Hillier in Beijing telling him to sign the contract ‘. . . on condition that the provisions of the Loan contract including undertaking to make advances come into operation only on receiving prompt ratification by National Assembly’.Footnote 80 The men on the spot, however, supported the idea of providing the loan immediately. On the very day when Addis telegraphed Hillier, John Jordan informed the Foreign Office that there was no need for the Chinese parliament's ratification.Footnote 81 On obtaining Jordan's consent, Hillier replied to Addis: ‘we strongly recommend groups withdraw stipulation regarding ratification’.Footnote 82
Over this divergence of opinion, the opinions of the men on the spot prevailed over those of the London financiers. After a Foreign Office official told Addis that they were in agreement with Jordan's opinion,Footnote 83 he was forced to omit the clause on parliamentary ratification from the loan contract.Footnote 84
On 25 April, Sun Yat-sen warned the Hongkong Bank's Shanghai branch that if they provided the loan to Yuan Shikai without the endorsement of the parliament, the southern provinces would launch an armed rebellion against Yuan's government.Footnote 85 Addis was informed of Sun Yat-sen's words through the Bank's Hong Kong head office and apparently took them very seriously: he made a detailed description of Sun Yat-sen's warning in his own diary.Footnote 86 Minister Jordan was, on the contrary, of the opinion that Sun Yat-sen's warnings could be ignored. Consequently, Foreign Office officials judged that, ‘If Sir J. Jordan, who is aware of Sun Yat-Sen's warning, had thought that the signature should not take place, he would have so informed Mr. Hillier and telegraphed to us’ and therefore it was decided that the loan contract should be signed immediately.Footnote 87
At half past one in the morning of 27 April 1913, Jordan telegraphed the Foreign Office: ‘Loan agreement [was] signed early this morning.’Footnote 88 The Foreign Office official who first saw this telegram commented that, ‘The consequences may be far-reaching, but we have now, in every sense, put our money on Yuan Shih-kai and in so doing have doubtless gone a long way to secure his victory. But there are evidently delicate, if not anxious, times ahead and they will require careful handling on everyone's part.’Footnote 89
Britain's men on the spot were able to exercise strong influence over London's policy during the loan negotiations. They successfully persuaded the Foreign Office to modify the terms of the Reorganization Loan in order to reach agreement with the Chinese government. The signing of the loan contract was more of a last-minute rescue of the Yuan Shikai government than the result of well-planned intrigue by foreign financiers and diplomats. How then did these men on the spot develop their attitudes and what were the motives behind their actions?
The Reorganization Loan negotiations (II): Britain's men on the spot in Chinese politics
This section examines the Reorganization Loan negotiations between 1912 and 1913 from another perspective: namely, how the attitudes of Britain's men on the spot towards the Reorganization Loan were influenced both by China's domestic politics and by the British community in China.
Loan policy and power struggle in China: March–December 1912
Shortly after the foundation of the Republic, Yuan Shikai's government had not yet established itself as a military dictatorship. The Provisional Constitution (linshi yuefa) especially strictly restricted Yuan's position.Footnote 90 Yuan's government was rather vulnerable with regard to domestic opposition, and he found it especially difficult to manage relations with Sun Yat-sen's Tongmenghui (later the Guomindang).
The Reorganization Loan negotiations became a big issue in the power struggle between political factions in China. The Russian minister in Beijing observed:
The hostile attitude which emerged in the parliament against the foreign loan caused a wide echo in the whole country. These days the president of the Republic, the members of the cabinet and the chairman of the parliament all received from everywhere in China numerous telegrams, which were protesting against the conclusion of the loan with the foreigners and accusing the government of lacking patriotism and of conducting the financial negotiations ineptly.Footnote 91
Both Yuan Shikai's government and Britain's men on the spot had to be alert to the response of other Chinese political leaders towards the Reorganization Loan negotiations.
During Tang Shaoyi's premiership (March–June 1912), the cabinet consisted of a coalition of different political factions, including the Tongmenghui. Tang, who had studied in the United States, was a long-time associate of Yuan Shikai, but had also become the Tongmenghui's political ally during the 1911 Revolution. The Reorganization Loan negotiations were initially conducted by the premier himself, but his attitude as a negotiator was uncompromising: he told Jordan that he ‘would rather blow out his brains than commit his country to foreign supervision’.Footnote 92 Tang's stubborn approach led the negotiations to a standstill. Then, Finance Minister Xiong Xiling persuaded Yuan Shikai to alter Tang's approach, and negotiations were resumed with Xiong as the Chinese negotiator.Footnote 93 While Xiong was conducting the negotiations, the Tongmenghui, especially its military leader Huang Xing, bitterly accused Xiong of conceding to some of the consortium's demands.Footnote 94
After the coalition government under Tang's premiership collapsed in June, Foreign Minister Lu Zhengxiang, an experienced career diplomat, was appointed as the new premier. Opposition members, however, submitted a motion for his impeachment at the end of July, and Lu was subsequently hospitalized, claiming serious illness.
Despite the political turmoil, loan policy remained in the hands of Xiong Xiling into mid-September, even after he resigned his post as finance minister.Footnote 95 Xiong was the real author of the documents that were handed to the Six-Power Consortium by Zhou Xuexi, the new finance minister. Zhou was even ignorant of Xiong Xiling's secret negotiations with C. Birch Crisp through the Chinese legation in London.Footnote 96
In the autumn of 1912 Yuan Shikai and the Tongmenghui leaders reached a surprising reconciliation. Sun Yat-sen and Huang Xing visited Beijing and held meetings with Yuan in August and September. After that, the Tongmenghui ceased its harsh criticism of Yuan's policy.Footnote 97 When Yuan's long-time subordinate Zhao Bingjun became premier in late September, the Guomindang (which had amalgamated with the Tongmenghui and other smaller parties) was the Zhao cabinet's main supporter: a majority of cabinet members, including Premier Zhao, had joined the Guomindang.Footnote 98 At the general assembly of the Guomindang, Sun declared: ‘Now. . . the cabinet members have already entered our party, which means the cabinet of today has already become the Guomindang's cabinet. . . From now on, the comrades of the Guomindang must support the government and President Yuan with all their strength.’Footnote 99
The reconciliation between Yuan Shikai and the Guomindang temporarily smoothed the Reorganization Loan negotiations. Finance Minister Zhou Xuexi, who had been Yuan Shikai's subordinate from the late Qing period, took the lead in deciding loan policy from late September, after some disputes with Xiong Xiling.Footnote 100 He even leaked information to the foreign bankers telling them that the Crisp loan was being pushed by Xiong.Footnote 101 As a result, Hillier and other foreign bank representatives in Beijing demanded that the Chinese government formally declare that Zhou Xuexi was endowed with the ‘sole powers’ to conduct loan negotiations.Footnote 102 Yuan Shikai did so in the form of a provisional president's ordinance.Footnote 103 Excluded from the loan policy, Xiong Xiling, together with associates such as Liang Qichao, began criticizing the government and the Guomindang for their concessions to the Six-Power Consortium.Footnote 104 The Guomindang leaders supported the government's loan policy:Footnote 105 in an informal meeting with the Japanese minister, Guomindang leaders such as Huang Xing and Song Jiaoren ‘repeatedly supported the government's position’.Footnote 106
On 27 December, in a secret session, the provisional assembly accepted the loan terms that Zhou Xuexi had agreed with the Six-Power Consortium.Footnote 107
Yuan Shikai, the men on the spot, and the terms of the loan: & March–December 1912
The troubled relationships between Yuan Shikai and his political rivals affected the attitudes of the men on the spot, first of all through the information provided by the Chinese leaders in the loan negotiations. The Chinese negotiators were especially concerned that the acceptance of harsh terms would weaken their domestic position. An American diplomat recorded Jordan's conversation with Finance Minister Xiong Xiling:
He [Xiong Xiling] referred to Prince Ch'ing [Qing], who made a railroad contract contrary to the wishes of the people, and the result was a revolution. The same fate, he said, will attend the present Government if it disregards the will of the people. . . the Minister of Finance turned to the British minister and asked him personally to use his influence to induce the bankers to relax their terms. He said the British minister had been influential in bringing about peace between the north and the south [during the 1911 Revolution]. . . Sir John Jordan said he had no authority to do so.Footnote 108
Such remarks by the Chinese leaders can also be found in newly opened Chinese records. In his meeting with John Jordan, Yuan Shikai remarked:
There is no implementing the method [that the six-power consortium demands] of supervising the public finances and managing the salt revenue. Even if the government should accept it, the assembly wouldn't approve it. Even if the assembly should approve it, the government would be overthrown.Footnote 109
In all likelihood Yuan was using the foreign diplomats’ and bankers’ fear of his government collapsing as diplomatic leverage.
The fragility of the Chinese Republican state was also confirmed by reports from men on the spot in other parts of China. For example, the British consul-general in Nanjing frequently reported on disorder caused by the lack of state authority: ‘The troops at Pukow [Pukou] gave some trouble early in the week. They notified the gentry that, unless they were paid within five days, they would loot the town and the railway.’Footnote 110 The Customs staff in Guangzhou reported that: ‘. . . the present situations are therefore not unlike those existing here this time last year. . . and law and order in the Province appear to be as far distant as ever’.Footnote 111
As a result of what they heard from both their Chinese counterparts and their British subordinates, Britain's men on the spot became more and more worried about China's domestic politics, and this made them call for modification of the loan terms. According to Hillier, proposals for financial and administrative reform under the tutelage of the Six-Power Consortium needed to be modified, for ‘all that they will succeed in forcing China into is another revolution, with a strong anti-foreign movement thrown in; in the present temper of the country the Government could not, even if they would, accept the demands of the groups, and any guarantee from them to this effect would be so much waste paper’.Footnote 112 Jordan was also of the opinion that Yuan Shikai's acceptance of the bankers’ demands ‘may raise a storm of opposition which will sweep away all semblance of government, and again throw the country into complete disorder’.Footnote 113 The French minister in Beijing also suggested that, ‘If Yuan Shikai should accept the organisation [that the six-power consortium demands] he would take the risk of bringing arms to his political adversaries.’Footnote 114
Thus, the claims of Britain's men on the spot that the consortium should make concessions and agree to alter the terms of the Reorganization Loan, which played a decisive role in the foreign powers’ policy-making (as shown in the second part of the previous section), were caused at least in part by their fear of the Yuan Shikai government's vulnerability with regard to its political rivals. Their fear escalated into obsession in early 1913.
Signing the loan agreement: the inside story in Beijing, January–April 1913
Although the Guomindang and Yuan Shikai came to terms in late 1912, political upheavals occurred again in early 1913. At the end of 1912 and the beginning of 1913 the first nationwide election took place in China. The Guomindang, now under the leadership of Song Jiaoren, won a big victory, further strengthening its position with the Yuan Shikai government. On the night of 20 March 1913, however, Song Jiaoren was shot in the back at Shanghai railway station and died three days later. After it was revealed that his assassination was a plot by Premier Zhao Bingjun's secretary, it soon became widely believed that Zhao Bingjun and Yuan Shikai had planned it.
It was a turning point in the relationship between Yuan and the Guomindang: from then on, the latter once more became the former's biggest political enemy. Jordan remarked that, ‘Public attention is concentrated upon the Shanghai murder case. . . There is a strong and growing impression here that Yuan Shih-k'ai indirectly instigated the crime. . .’Footnote 115 In the French minister's words, ‘the situation of the parliament is still very precarious to the President, but he has gathered major military forces in Beijing and he is the master in the North’.Footnote 116
Sun Yat-sen even asked Japanese officials for foreign assistance against Yuan, with words that might have become better known if they had been uttered by Yuan, rather than by Sun. In his meeting with the Japanese consul-general in Shanghai, Sun expressed his desire for foreign powers to pressure Yuan into giving away his power. To the Japanese consul-general's question of ‘whether it means that he [Sun] hopes for the powers’ interference in domestic politics’, Sun replied that, ‘given that China almost looks like a half-independent country, this kind of interference seldom matters’ and again argued that Yuan should leave office.Footnote 117
Mainly drawing on the records of the Foreign Office, in the second part of this paper I argue that the signing of the Reorganization Loan agreement was due to the opinions of the men on the spot prevailing over those of the London financiers. The records of the British legation in Beijing and French-, Japanese-, and Chinese-language sources reveal more about the inside story of the involvement of Britain's men on the spot in Chinese politics.
What the men on the spot did first was to try to keep the Guomindang leaders ignorant of the resumption of the loan negotiations. On 16 April, Hillier learned ‘[f]rom private information’ that the Guomindang leaders might have discovered that the Reorganization Loan negotiations had started up again. That very day, he wrote to the Beijing representatives of other foreign banks: ‘it points to the danger likely to attend any publicity given to the negotiations at the present juncture, or their discussion by the foreign or Chinese press; in view of which I would suggest to the Groups’ Representatives the importance of special precautions for securing secrecy and preventing any possible leakage of information to outside parties’.Footnote 118 In response to Hillier's letter, the Japanese minister in Beijing asked the Ministry of Foreign Affairs in Tokyo to keep the Japanese media ignorant of the loan negotiations.Footnote 119
After the failure of endeavours to keep the loan negotiations secret from the Guomindang, Britain's men on the spot then made every effort to keep Foreign Office unaware of the seriousness of the Guomindang's opposition to the Reorganization Loan. On 25 April, Sun Yat-sen warned the manager of the Hongkong Bank's Shanghai branch: ‘if Reorganisation Loan [is] now concluded without sanction of National Assembly it will be repudiated by all Provinces south of the Yangtsze as well as Shansi and Shensi. . . (if?) [sic] Yuan Shih-kai obtains money now he will use force maintain [sic] his position and Provinces referred to are determined not to submit without armed resistance’. The Shanghai branch of the Bank soon informed Hillier of this, saying, ‘We leave you to advise London by wire.’Footnote 120 To this, Hillier replied that both he and John Jordan believed that the ‘risks pointed out by Sun-yat-sen are less serious than possible consequences to [the] country of Yuan Shih-kai's retirement, and we cannot take notice of irresponsible threats of political party leaders’.Footnote 121 Jordan did not inform the Foreign Office of this either. While Addis knew about Sun Yat-sen's warning—thanks to the Bank's head office in Hong Kong—and he did worry about it, Jordan's inaction persuaded the Foreign Office that they did not need to, as shown above. That very day, Jordan sanctioned Hillier to sign the Reorganization Loan contract and then successfully requested the other four legations to likewise sanction their bank representatives.Footnote 122
On the morning of 26 April, Zhang Ji and Wang Zhengting, the Guomindang leaders who were the president and the vice-president of the senate, visited the French minister to convey their opposition to the signing of the Reorganization Loan without the consent of parliament. The French minister, however, advised them to be calm, for he regarded them as merely ‘very young politicians who argue for applying to their country the formulas they recently learned in far-off universities’.Footnote 123 Wang Zhengting then paid two visits to the Hongkong Bank's Beijing office with other Guomindang members in the hope of persuading Hillier to refrain from funding Yuan Shikai: he was refused a meeting with Hillier, first by a member of the Bank's staff and then by a Sikh guard at the gate.Footnote 124 Shortly after midnight, the Reorganization Loan agreement was & concluded.
At this point, in the event of a civil war the men on the spot would not have hesitated to support Yuan Shikai. The French minister reported to Paris: ‘Secret deal or action by military force: in any case, money is needed here.’Footnote 125 With the loan agreement signed, the Beijing representatives of the Five-Power Consortium, led by Hillier, telegraphed to their home countries:
Situation fully known to present Chinese Government and signatories of loan agreement who alone possess the power and resources necessary to maintain order in the country. If exercise of this power means possible civil war, retirement of Yuan Shih-kai and dominance of Young China Party means certain chaos.Footnote 126
Such ideas influenced the policy of both Britain and other major foreign powers towards China via Britain's men on the spot.
The pro-Yuan Shikai and anti-Guomindang attitudes of Britain's men on the spot were heavily influenced by British expatriates in China. A few days prior to the signing of the loan agreement, a British businessman told the British consul-general in Shanghai that, ‘Merchants foreign and native foresaw anarchy if Yuan Shih-kai (were) ousted but home financiers would not undertake loan if serious trouble likely.’Footnote 127 The opinions of Britons in China were expressed more directly by their own newspaper:
The men who are squabbling over pitiful trivialities of precedence in the National Assembly are not representative of the nation and never have been. They have pushed themselves into prominence, and so long as they are allowed to remain there, China will continue to drift as she is drifting to-day. . . The question is whether that sterling mass of common sense and shrewd practical ability which resides in China's mercantile community will assert itself to save the country from the professional politician. . . We believe that President Yuan enjoys the confidence of the merchants; certainly he does so in Shanghai.Footnote 128
To Britons in China, Yuan Shikai represented order and his political adversaries, chaos. The signing of the loan agreement before daylight on 27 April 1913 translated those expatriates’ anxieties into a concerted policy on the part of the five major powers.
‘La Cavalerie de Saint-Georges’
Yuan Shikai's consolidation of power
In June 1913, Yuan Shikai successively dismissed three provincial military governors who were associated with the Guomindang, namely Li Liejun of Jiangxi, Hu Hanmin of Guangdong, and Bo Wenwei of Anhui. In July, the Guomindang leaders of the southern provinces launched the so-called ‘Second Revolution’ against Yuan Shikai, proclaiming independence from his government. By September Yuan had defeated them, and many of the Guomindang leaders, including SunYat-sen and Huang Xing, fled to Japan.
One of the major contributors to Yuan's victory was the Reorganization Loan. Shortly after the outbreak of the civil war, a Chinese admiral in Shanghai told William Ferdinand Tyler, a British employee of the Chinese Maritime Customs, that his men, who had been unpaid for two months, were now threatening to carry the fleet over to the Guomindang and that the only solution was to pay them at once. Tyler immediately called on the Hongkong Bank's Shanghai office. As a result, the five ministers of the Five-Power Consortium decided to sanction the immediate advancement of the Reorganization Loan to the Chinese admirals in Shanghai.Footnote 129 The Reorganization Loan was also used to bribe many of the Guomindang leaders to stay out of the conflict. In addition, the British consul in Canton ordered the customs house there to prevent the import of arms that had no sign of sanction from China's Ministry of War.Footnote 130 Witnessing the activities of ‘le Capitaine Tyler’, the French consul-general in Shanghai observed: ‘it was not the discipline of Yuan Shikai's soldiers, nor was it the competence of the canons of the Chinese naval division, that brought about the failure of the Revolutionaries. It was the forces of British finance (la Cavalerie de Saint-Georges).’Footnote 131
In October of 1913, Yuan Shikai, who had been provisional president, was elected as the first full president of the Republic of China and his government was recognized by the major foreign powers. With the onset of the First World War in Europe, Yuan abandoned the provisional constitution created by the southern revolutionaries and abolished parliament. At first sight it would seem that the Japanese minister in Beijing was right when he predicted that the Reorganization Loan would realize a situation where ‘the five governments help him [Yuan Shikai] maintain order in China when necessary’.Footnote 132
Yuan's government was also financially backed by a new British-led mechanism of collecting salt tax. The salt revenue served as security for the Reorganization Loan and, according to the loan contract, the Chinese government had to set up a Chief Inspectorate of Salt Revenues and hire a Briton as its foreign associate chief inspector.Footnote 133 Richard Dane, a retired member of the Indian Civil Service, assumed that post and contributed to the strengthening of the government's control of salt tax collection from the provinces. When designing his reform plan and seeking the Chinese government's acceptance of it, Dane frequently relied on the British and other foreign governments and he regularly consulted with the Hongkong Bank.Footnote 134 As was the case with Robert Hart's Maritime Customs, the results of Dane's salt tax reform were excellent: of the central government's total revenue (255 million tael) for the year 1914, some 33 per cent (85 million tael) derived from salt tax and some 31 per cent (79 million tael) from customs revenue.Footnote 135 Unlike the customs revenue, all of which was paid to foreign creditors, the salt revenue exceeded the amount needed for repaying the Reorganization Loan; the excess became the best source of revenue for Yuan Shikai's government from the very first fiscal year.Footnote 136
There is no doubt that the success of the foreign-managed salt tax collection meant that the ‘military dictatorship’ of Yuan Shikai's government was based on its collaboration with foreign powers. In an interview in 1915, a Chinese government official stated that when he learned about the signing of the Reorganization Loan he had been worried about the loss of China's sovereignty, but now he greatly admired Dane's contribution to China.Footnote 137 John Jordan proudly wrote ‘. . . the success of the Salt Administration has simply saved China and incidentally raised our prestige as a race of administrators far beyond even what Sir R. Hart had attained in the past’.Footnote 138
The weakness behind
The truth was, however, that both foreign influence and Yuan Shikai's consolidation of power were limited, despite their apparent & strength.
The foreign influence on Chinese salt tax collection was actually far more limited than that on the Maritime Customs. As Okamoto Takashi has pointed out, what Dane's ‘reform’ actually did was to restore to the central government the salt revenue that provincial governments had kept to themselves since the 1911 Revolution; therefore it would be more aptly called a ‘restoration’ of the late Qing system rather than a ‘reform’.Footnote 139 Moreover, there were only 12 foreign staff in the Salt Inspectorate, including Dane himself, which made it necessary for them to rely on their Chinese subordinates more than the foreign staff of the Maritime Customs did. As a retired member of the Indian Civil Service, Dane was fully aware of the limits of what foreigners could do: ‘[i]n large and thickly populated countries, like China and India, a less rigid system has many administrative advantages; and in introducing reforms it is very important to make as little alteration as possible in the conditions to which the people are accustomed’.Footnote 140
For all its appearance as a strong military dictatorship, Yuan's government failed to solve the problems of financial and military decentralization that it had inherited from the Qing. Although Yuan successfully broke the military power of Sun Yat-sen's revolutionaries, many other regional military leaders strengthened their positions, including Cai E in Yunnan, whose anti-Yuan military campaign at the end of 1915 was to deliver a fatal blow to the government. Yuan also made various attempts to unify the decentralized financial system, which he had inherited from the late Qing government, but his achievements were very limited.Footnote 141
It seems to me that the French minister in Beijing was right in his description of Yuan's military dictatorship: ‘the present authority founded on the debris of the Manchu empire (le pouvoir aujourd'hui fondé sur les débris de l'empire mandchou) does not enjoy the universal popularity. . . Unpredictable events might happen, which go against all the expectations. . .’.Footnote 142
Conclusion: between British imperialism and Chinese politics
In the early twentieth century, British policy-makers regarded the Beijing government as Britain's collaborator and hoped to see the latter strengthen its control over China's provinces. Since this goal was relevant to China's domestic politics rather than to its foreign relations, the Foreign Office relied heavily on Britain's men on the spot in China, especially the British minister in Beijing, to determine its China policy. The attitudes of those Chinese-speaking men on the spot were, in turn, more or less influenced by China's changing political situation: it seems they were even manipulated by Chinese political figures and by the British community in China. I think two further points can be inferred.
First, British imperial policy in early twentieth-century China was influenced more by political events in China than is usually assumed. Ever since John Gallagher and Ronald Robinson's renowned article, it has been common for historians of empire to treat China as a part of Britain's ‘informal empire’.Footnote 143 In their influential work on ‘gentlemanly capitalism’, P. J. Cain and A. G. Hopkins argue that the agenda of British policy in China before the First World War was to promote British financial interests by ‘maintaining the credit-worthiness of the Chinese Government’.Footnote 144 Recent scholarship on British imperial history has modified this thesis, showing that ‘maintaining the credit-worthiness of the Chinese Government’ was more an assertion than an action. Examining the financial negotiations between Britain, France, and Germany in China, Niels Petersson argued that this thesis is only applicable to the period 1905 to 1911. Even in these years, according to Ian Phimister, the applicability of ‘gentlemanly capitalism’ to such businesses as mining is questionable.Footnote 145 I think that Cain and Hopkins’ thesis should also be limited from the perspective of the influence of Chinese politics on British policy. Their thesis emphasizes the plans of government officials and financiers in London, but the political situation in China never allowed these plans to come to fruition in their original form. The planners always had to adapt to the upheavals of Chinese politics in order to see their collaborators in power. The story of the men on the spot reveals the ambiguity and nuances with which British imperialism in China worked.
Second, a more balanced assessment of Yuan Shikai's foreign policy seems necessary. In the past, historians, especially those from China, Taiwan, and Japan, often regarded Yuan as a collaborator with Western and Japanese imperialism, who betrayed his country. Recently, some historians have reappraised him as a patriot who made every effort to defend his country from foreign aggression. To me, both the conventional and revisionist assessments seem one-sided: I suggest that Yuan Shikai is best thought of as both collaborator and patriot at the same time. It would have been unrealistic for Yuan's China to take a firm line against foreign aggression and to seek the status of a great power. This was to become possible only after the Great War, which ‘made China a player in a reorganizing, multi-polar, international system’.Footnote 146 What Yuan Shikai did was to use China's domestic disorder to negotiate the best terms possible with foreign imperialism and then to use that foreign imperialism to reunite China as a centralized bureaucratic empire. In one sense, he ‘invited’ foreign imperialism in order to maintain order in China. He was a national leader who faced extremely difficult choices and who did all he could both for his own and China's interests.
This ambiguous relationship between a cautious and frustrated power and its disobedient and precariously positioned collaborator was personified in John Jordan, the chief of Britain's men on the spot. On 29 October 1913, the China Association held its annual dinner in London. One of the two main guests was Jordan, on temporary leave from Beijing. Much flattered by the audience, he talked about how he witnessed Yuan Shikai save China from disorder. At the very end of his speech, however, he remarked ‘. . . until the provinces reorganized in a practical way their obligations to the Central Government there was [is] very little prospect of seeing a strong and united China, which was [is] the main object of British policy’. Then, he wished ‘them [the Chinese] God-speed in their great task of national regeneration’.Footnote 147 God blessed neither Jordan nor Yuan in the end.
Epilogue
Yuan Shikai's fall was, just like his consolidation of power, much influenced by men on the spot. This time, however, the men on the spot with the most influence were not from Britain, but from its disobedient junior ally in the Far East, Japan.Footnote 148 In spite of its long history of learning the Confucian classics, written in literary Chinese, Japan was a newcomer to the study of contemporary Chinese language and society. It was quite a new phenomenon for the Japanese to learn colloquial Chinese and to travel in China: one of the earliest textbooks on colloquial Chinese published in Japan was a translation of Thomas Wade's.Footnote 149 In the early Meiji period, the scarcity of officials who understood Mandarin was a constant headache for Japan's Ministry of Foreign Affairs.Footnote 150 Their solution was the model provided by the China Consular Service of Britain: they decided to send students to China and train them in colloquial and literary Chinese under the direction of the Japanese legation in Beijing. The Ministry sent their first three students to Hong Kong to learn English; one of them was Odagiri Masunosuke, who was to act as Japan's bank representative in the Reorganization Loan negotiations of & 1912–13.Footnote 151
Unlike Britain, however, Japan's pre-eminent China specialists were not officials from the foreign ministry, but military officers.Footnote 152 By educating its own China specialists and funding those from other institutions, the Japanese Army's efforts to gather information and produce knowledge about China were the most systematic and intensive in Japan, and perhaps even in the world.Footnote 153 Their published and unpublished material on China provides a wealth of information for scholars, even today.Footnote 154
Even at the apex of Yuan Shikai's power and British interests, the Japanese military's men on the spot were becoming a new worry. During the Second Revolution of 1913, many noted the involvement of Japanese individuals in the fighting, working with the Guomindang troops. The French consul-general in Shanghai claimed that the Japanese were participating in the battle on the Guomindang's side, some of them driving Red Cross cars.Footnote 155
Japanese soldiers and adventurers certainly participated in the Chinese Civil War of 1913, but they did so independently of the Tokyo government: the Ministry of Foreign Affairs could not even identify some of these Japanese subjects. Irritated by the individual actions of these Japanese soldiers and their associated vagabonds, Japanese Minister Ijuin in Beijing telegrammed to Tokyo: ‘[i]t is regrettable. . . that certain Japanese officials (not to mention private activists) hope to see local disturbances in China and are very possibly framing small plots. . . Given the present conditions of China, it is appropriate to support its central government and to develop our interests by utilising it.’ The Japanese officers and consuls in China then received a warning from Tokyo that they should not get involved with the Chinese revolutionaries.Footnote 156
Matters worsened after the outbreak of the First World War. In December 1915 Yuan Shikai proclaimed himself emperor, and the opposing military leaders in the south, most of whom had graduated from Japanese military schools, launched the so-called ‘Third Revolution’. The Japanese government was initially undecided in its attitude to the civil war in China. However, many, if not all, of the Japanese army officers in China advocated for intervention in favour of the southern rebels. One of them wrote to his superior in Tokyo: ‘. . . somehow Yuan is the kind of man I hate. Had he overthrown the Qing dynasty fairly and like a man, I would have no bad feeling. But he gets rid of his opponents by the sly and nasty means of poisoning, and he manipulates the foreign powers to balance the Japanese influence. This man is definitely harmful to Japan.’ Then he described his close camaraderie with one of the Chinese rebel leaders in Yunnan, who had studied in the Japanese Army Academy, and he strongly urged the Japanese government to support the southern rebels.Footnote 157 China specialists in the Japanese Army changed the Army's attitude and the Army changed the Japanese government's attitude. In March 1916, the Japanese cabinet passed a secret resolution stating that, ‘Mr. Yuan's loss of power is important for our Empire's policy. Whoever will replace Mr. Yuan no doubt will be much more beneficial to our Empire's policy.’Footnote 158 The Japanese government, especially the General Staff of the Army, then launched a secret campaign to provide the southern rebels with money and weapons, which was probably the & most militant policy Japan had adopted towards China between & the Boxer War and the invasion of Manchuria.Footnote 159 As well as supporting the south, the Japanese government prevented Salt Inspector Dane from remitting salt revenue to Yuan Shikai's government, which was a fatal blow, given that the salt revenue was its single largest financial resource and that it had little chance of raising a loan from Europe after the outbreak of the First World War.Footnote 160
John Jordan's dream of ‘a strong and united China’ was finally destroyed on 6 June 1916, when Yuan Shikai died without defeating or paying off the rebellious provincial leaders. The great dictator's fall, which would soon lead to the so-called ‘warlord’ decade, was a grave blow to China's national integrity, a serious setback to British policy, and a great personal loss to Jordan, who wrote in a private letter: ‘As to Yuan Shih-kai, you will not expect a balanced opinion from me at this moment. I had a great liking for the man and feel both his loss and the manner of it acutely. The appreciation contained in my official despatch is a very imperfect estimate of the loss we have sustained by his death. During his early life. . . he formed friendships with a number of Englishmen. . . and to his last day he remained a firm friend of Great Britain.’Footnote 161
