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 While Russia and France were profiting by what they were pleased to call the generosity of China, Germany alone had so far received no reward for her share in compelling the retrocession of Liao-tung; but, in November 1897, she proceeded to help herself by seizing the Bay of

Kiaochow in the province of Shan-tung. The act was done ostensibly in order to compel satisfaction for the murder of two German missionaries. A cession was ultimately made by way of a lease for a term of ninety-nine years—Germany to have full territorial jurisdiction during the continuance of the lease, with liberty to erect fortifications, build docks, and exercise all the rights of sovereignty. In December the Russian fleet was sent to winter in Port Arthur, and though this was at first described as a temporary measure, its object was speedily disclosed by a request made, in January 1898, by the Russian ambassador in London that two British cruisers, then also anchored at Port Arthur, should be withdrawn “in order to avoid friction in the Russian sphere of influence.” They left shortly afterwards, and their departure in the circumstances was regarded as a blow to Great Britain’s prestige in the Far East. In March the Russian government peremptorily demanded a lease of Port Arthur and the adjoining anchorage of Talienwan—a demand which China could not resist without foreign support. After an acrimonious correspondence with the Russian government Great Britain acquiesced in the fait accompli. The Russian occupation of Port Arthur was immediately followed by a concession to build a line of railway from that point northwards to connect with the Siberian trunk line in north Manchuria. As a counterpoise to the growth of Russian influence in the north, Great Britain obtained a lease of Wei-hai-wei, and formally took possession of it on its evacuation by the Japanese troops in May 1898.

After much hesitation the Chinese government had at last resolved to permit the construction of railways with foreign capital. An influential official named Sheng Hsuan-hwai was appointed director-general of railways, and empowered to enter into negotiations with foreign capitalists for that purpose. A keen competition thereupon ensued between syndicates of different nationalities, and their claims being espoused by their various governments, an equally keen international rivalry was set up. Great Britain, though intimating her preference for the “open door” policy, meaning equal opportunity for

all, yet found herself compelled to fall in with the general movement towards what became known as the “spheres of influence” policy, and claimed the Yangtsze valley as her particular sphere. This she did by the somewhat negative method of obtaining from the Chinese government a declaration that no part of the Yangtsze valley should be alienated to any foreign power. A more formal recognition of the claim, as far as railway enterprise was concerned, was embodied in an agreement (28th of April 1899) between Great Britain and Russia, and communicated to the Chinese government, whereby the Russian government agreed not to seek for any concessions within the Yangtsze valley, including all the provinces bordering on the great river, together with Cheh-kiang and Ho-nan, the British government entering into a similar undertaking in regard to the Chinese dominions north of the Great Wall.

In 1899 Talienwan and Kiaochow were respectively thrown open by Russia and Germany to foreign trade, and, encouraged by these measures, the United States government initiated in September of the same year a correspondence with the great European powers and Japan, with a view to securing their definite adhesion to the “open door” policy. The British government gave an unqualified approval to the American proposal, and the replies of the other powers, though more guarded, were accepted at Washington as satisfactory. A further and more definite step towards securing the maintenance of the “open door” in China was the agreement concluded in October 1900 between the British and German governments. The signatories, by the first two articles, agreed to endeavour to keep the ports on the rivers and littoral free and open to international trade and economic activity, and to uphold this rule for all Chinese territory as far as (wo in the German counterpart) they could exercise influence; not to use the existing complications to obtain territorial advantages in Chinese dominions, and to seek to maintain undiminished the territorial condition of the Chinese empire. By a third article they reserved their right to come to a preliminary understanding for the protection of their interests in China, should any other power use those complications to obtain such territorial advantages under any form whatever. On the submission of the agreement to the powers interested, Austria, France, Italy and Japan accepted its principles without express reservation—Japan first obtaining assurances that she signed on the same footing as an original signatory. The United States accepted the first two articles, but expressed no opinion on the third. Russia construed the first as limited to ports actually open in regions where the two signatories exercise “their” influence, and favourably entertained it in that sense, ignoring the reference to other forms of economic activity. She fully accepted the second, and observed that in the contingency contemplated by the third, she would modify her attitude according to circumstances.

Meanwhile, negotiations carried on by the British minister at Peking during 1898 resulted in the grant of very important privileges to foreign commerce. The payment of the second instalment of the Japanese indemnity was becoming due, and it was much discussed how and on what terms China would be able to raise the amount. The Russian government, as has been stated, had made China a loan of the sum required for the first portion of the indemnity, viz. £15,000,000, taking a charge on the customs revenue as security. The British government was urged to make a like loan of £16,000,000 both as a matter of friendship to China and as a counterpoise to the Russian influence. An arrangement was come to accordingly, on very favourable terms financially to the Chinese, but at the last moment they drew back, being overawed, as they said, by the threatening attitude of Russia. Taking advantage of the position which this refusal gave him, the British minister obtained from the Tsung-Li-Yamen, besides the declaration as to the non-alienation of the Yangtsze valley above mentioned, an undertaking to throw the whole of the inland waterways open to steam traffic. The Chinese government at the same time undertook that the post of inspector-general of customs (then held by Sir Robert Hart) should always be held by an Englishman so long as the trade of Great Britain was greater than that of any other nation. Minor concessions were also made, but the opening of the waterways was by far the greatest advance that had been made since 1860.

Of still greater importance were the railway and mining concessions granted during the same year (1898). The Chinese government had been generally disposed to railway construction since the conclusion of the Japanese War, but hoped to be able to retain the control in their own hands. The masterful methods of Russia and Germany had obliged them to surrender this control so far as concerned Manchuria and Shan-tung. In the Yangtsze valley, Sheng, the director-general of railways, had been negotiating with several competing syndicates. One of these was a Franco-Belgian syndicate, which was endeavouring to obtain the trunk line from Hankow to Peking. A British company was tendering for the same work, and as the line lay mainly within the British sphere it was considered not unreasonable to expect it should be given to the latter. At a critical moment, however, the French and Russian ministers intervened, and practically forced the Yamen to grant a contract in favour of the Franco-Belgian company. The Yamen had a few days before explicitly promised the British minister that the contract should not be ratified without his having an opportunity of seeing it. As a penalty for this breach of faith, and as a set-off to the Franco-Belgian line, the British minister required the immediate grant of all the railway concessions for which British syndicates were then negotiating, and on terms not inferior to those granted to the Belgian line. In this way all the lines in the lower Yangtsze, as also the Shan-si Mining Companies’ lines, were secured. A contract for a trunk line from Canton to Hankow was negotiated in the latter part of 1898 by an American company.

There can be little doubt that the powers, engrossed in the diplomatic conflicts of which Peking was the centre, had entirely underrated the reactionary forces gradually mustering for a struggle against the aggressive spirit of Western civilization. The lamentable consequences of administrative corruption and incompetence, and the superiority of foreign methods which had been amply illustrated by the Japanese War, had at first produced a considerable impression, not only upon the more enlightened commercial classes, but even upon many of the younger members of the official classes in China. The dowager-empress, who, in spite of the emperor Kwang-su having nominally attained his majority, had retained practical control of the supreme power until the conflict with Japan, had been held, not unjustly, to blame for the disasters of the war, and even before its conclusion the young emperor was adjured by some of the most responsible among his own subjects to shake himself free from the baneful restraint of “petticoat government,”