# The Truth about China and Japan/Chapter 3

III
THE SETTLEMENT OF THE CHINESE QUESTION
In an initial essay the writer traced the general outline of the problem as it appeared to him from an intensive study conducted on the spot; and although exception may be taken to some of the conclusions he arrived at, it should be carefully noted that these conclusions are to-day the common possession of every unbiassed political student in Eastern Asia who is able to think of the Chinese as normal human beings and who does not deny that they are entitled to international justice.
Two grand facts should emerge from the analysis made; first, that although China has officially and publicly thrown overboard not only her ancient civilization but her system of government, she has not yet succeeded in substituting anything more solid than the theory of Western practice; secondly, that Japan, following the path of empire that other virile nations have pursued in the past, and believing that the World War has entitled her to a cer​tain local primacy, is pushing deeper and deeper into Continentalism and aspiring more and more openly to the political, commercial, industrial, and military hegemony of all Eastern Asia. The question which at once arises is—can these two facts be reconciled; that is, is it possible for the rebirth of China to be consummated in the face of the imperialistic ambitions of her neighbour? The answer is both yes and no: yes, if the dominant factor in the situation, the maritime Powers, adopt the right policy; no, if instead of enforcing an honest and well-balanced judgment on an admittedly complex and exasperating situation, they follow Pontius Pilate and wash their hands of the whole business.
We have said the maritime Powers—why the maritime Powers?
All the world knows that the British Treaty of Nanking of 1842 and the Perry expedition of 1853 broke up the ancient seclusion of China and Japan and introduced these two countries anew to one another, besides introducing them to Western civilization. But all the world does not know that, dating from this period of seventy years ago, the action of the whole group of maritime Powers, including even the smallest Western nations such as Portugal and ​Denmark, followed more or less consistent lines under British-American leadership, until the collapse of China in the Korean war destroyed what was sound and creditable in the past record; and by putting the maritime Powers ashore in leased territories and spheres of influence in a vain effort to combat Tsarism and Japanese imperialism, gave policy a wrong twist, and produced general disarray. The conditions which we now face have their origin, then, in events exactly twenty-five years old. They all come by direct descent from the Korean war of 1894-95; and if we are to find a radical and lasting solution for all the perplexing ills of the day it is from the Korean period that the work must commence.
Let it first be understood that the annexation of Korea by Japan in 1910 was an intolerable and unnecessary mistake. The acknowledged protectorate which had existed in that peninsula as a result of the Manchurian war of 1904-05 was all that was necessary to safeguard Japan's strategic interest: anything more than a protectorate inevitably constituted an international danger. For if England requires in Egypt no more than paramountcy to guarantee a vital waterway in her water-empire, certainly Japan has satisfied strategy when she has se​cured that no hostile forces can seize this hilly promontory which reaches out to within one hundred miles of her coasts. Had that unimaginative statesman Lord Lansdowne really known anything of the history of Asia, he would never have indited his famous dispatch to the Russian Government in 1905, in which he declared that Korea was a region which fell naturally under the sway of Japan—when there was voluminous history since the days of the T'ang dynasty (A.D. 600-900) to prove that Korea fell naturally under the sway of China, and that whenever another Power seized control, it was only to use it as a highway to attack Cathay. . . .
The annexation, we say, was an intolerable and unnecessary mistake because of its immediate non-Korean consequences. It made Japan formally and perpetually a Continental Power—that is, gave her an actual stake on the mainland of Asia, a state of affairs which had never previously existed. It committed her to maintaining a large garrison to overawe the Korean population, which was violently hostile. It incited her to extend this land-empire under thinly-concealed forms into Southern Manchuria, by giving the railway system which she had captured from Russia a special character, ​which later she further accentuated by uniting it with the Korean railway system, thus making a Chinese railway and a Japanese railway one and the same entity. It encouraged her to adopt, on the outbreak of the Chinese Revolution and the disappearance of the Manchu dynasty, the doctrine Germany had adopted regarding the Anglo-German understanding of 1900—because Germany had then a secret agreement with Russia—that Manchuria must be held as outside the scope of any agreement regarding China, China meaning China Proper, although this Western geographical distinction is unknown among the Chinese themselves, who for many hundreds of years have treated all Chinese-settled territory precisely on the same footing. Finally, with the outbreak of the European war, it awakened in her the ambition to acquire openly dominant rights northwards to the Amur River, and westwards to the Gobi Desert—the whole original empire of Manchus, which was a Manchu-Mongolian realm governed from Moukden and including by alliance all the banners or "hordes" of Tartary—a thing her military officers declared easy of accomplishment. The complications and irritations which have attended Japanese participation in the Allied intervention in the Russian ​Far East are the natural children of this strange mésalliance between an island-empire and the Asiatic mainland; and the almost savage manner in which Japan has tried to seize sole control of the Ussuri railway and the Chinese Eastern railway—deliberately wrecking for many months all American attempts under the Stevens Commission to better Russian communications, and starving millions of people in Siberia in consequence, form a sermon on political morality as eloquent as the Sermon on the Mount.
These things have a close and intimate connection with the Chinese question: they are in the nature of the necessary introduction to the settlement. For unless they are closely and intimately associated in the mind as a very large part of the reason why China makes no progress, it is impossible to convey to those who live far distant from these scenes an adequate appreciation of the reality of China's difficulties. The presence of Japan in Korea as lord of the soil; her holding of two fortified areas on the Chinese coast, with their connecting railway systems; her advance into Transbaikalia and inner Mongolia with important military forces, all these things are every whit as paralysing to Peking as the occupation of ​Belgium and the Northern French railways by the Germans was paralysing to Paris; and it is the refusal to recognize that there is absolute analogy in such matters which makes discussion of China's improvement so illusory.
The first and most essential step in the building-up of the new Chinese State, if that is really desired, is to have it accepted categorically by all the Powers alike that all railways on Chinese soil are a vital portion of Chinese sovereignty and must be directly controlled by the Chinese Government: that station-masters, personnel, and police-troops must be Chinese citizens, technical foreign help being limited to a set standard; and that all railway concessions within the territory of the Republic without exception, from the Amur River in the extreme North to the Red River in the extreme South, must henceforth be considered as Chinese national property to be handed over as soon as circumstances permit to the National Railway Board.
The test-case which will come immediately before the Peace Conferences is the German Shantung railway, a system of under five hun​dred kilometres, very valuable extensions of which Japan has claimed as an inheritance from the original German concessionaires. This state of affairs, if left untouched by an International Act such as has been proposed, will gradually create a railway enclave on the Manchurian model in the heart of old China. For along the course of such railways, new railway towns inevitably spring up, bringing all the complications which conflicting jurisdiction creates. To solve this conflict the stronger Power first employs force; then, to give its authority a deeper meaning, it sets up its own courts; administers so-called justice; and sends its police-officers far from the zone of the railway to satisfy its judgments. This is already what has happened in Shantung; infallibly it will happen wherever Japanese railways go.
Here, then, is international business of the first importance which cannot be brushed aside. It is absolutely essential that when this test-case comes up stout defenders be found who will realize that a drama as real to the Chinese people as Kaiserism has been to the European peoples is in process of being enacted; and that beneath the surface every principle for which ​the war has been fought is at stake—to be honoured or disavowed.
For in the economics of modern communities, communications have acquired such vast significance that it may be truly said that they constitute to-day the most tangible evidence of sovereignty; and that if they are left in the hands of aliens, surrounded by their own troops, what you have is a de facto military occupation, which can be followed only by more war or by open annexation. No one with any acquaintance with recent history can deny this elementary proposition; and all arguments that the Chinese administration is unfitted to assume control are placed out of court, seeing that the number of foreign railway experts employed in the National Railway Board is constantly growing and that British-constructed railways in China have for a generation been peacefully administered on a system which has never brought the conflict which is inevitable whenever Japanese interests are involved. No matter what attitude is officially adopted by the Great Powers at the Peace Conference—no matter how much they may wish to avoid any discussion at all, the Chinese railway issue will be irrevocably forced on the world's attention in the near future, as there are ten thousand ​miles of delayed railways to be built, and ten thousand troubles will spring from them unless obscurity and obscurantism are forthwith banished.
For lagging not far behind the urgency of this railway matter, is the whole question of Chinese trade taxation—a question which has never been more than hastily touched upon and as hastily dropped by foreign negotiators because it has hitherto been beyond their ability and vision to deal with it. Viscount Grey, in a recent speech which referred to the League of Nations and the good one nation can do another, instanced the Chinese Maritime Customs as an example of successful alien administration, showing by his citation that he was ignorant of the facts. The late Sir Robert Hart, the originator and organizer of this system, which in the popular imagination is supposed to insure the merchant and the manufacturer a successful entry into China, was something of a philosopher and a good deal of a diplomatist; and consequently he was discreet enough not to reveal to the world that he was not doing what he was supposed to be doing. The administration which he erected was simply an accountancy, which was able to justify itself because it was dealing with a foreign ​thing—the steamer—and which was acclaimed as model and perfect when loans were secured on its receipts, because it made bondholders believe that their interest-coupons were in charge of an institution as solid and as permanent as the Bank of England.
Yet as a matter of fact the Maritime Customs has never touched Chinese life or economics in the slightest, nor has it greatly facilitated trade, which should be its chief function. True, it has enabled merchants to load and unload their cargoes on a water-front against a fixed tariff; but ten minutes beyond that waterfront barriers as high as mountains may and do exist,—with the markets irrevocably hidden behind them. To those who know that China's foreign trade still only amounts to four silver dollars per annum per head of population (the lowest percentage in the world for the greatest nation of small dealers that has ever existed) the Chinese Maritime Customs is a mere makeshift; a monument to the fierce fight which the maritime nations carried on in the early part of the nineteenth century regarding their inherent right to ports of entry along river and coast; a record of the fact that the Dying God—the Emperor—could not find officers to collect his duties during the great Taiping Rebel​lion: a proof that the foreign consulates were honest enough to do it for him.
For at the same time that the Maritime Customs came into being as a quasi-foreign creation, the Taiping Rebellion and the loss of great revenues created likin, a system of petty levies carried out by means of barriers placed wherever trade passes, which because it accentuates provincialism undoes all the good the Maritime Customs should do with its fixed tariff. Until some Power does for all China what Prussia, in spite of her sins, once did for all Germany—that is, creates a Chinese Zollverein, or Customs Union, making absolute Free Trade within the territories of the Republic a fact—commerce in China will continue to be a medieval enterprise, inviting medieval diplomacy suitable to the courts of petty princes and amounting in the gross to little more than the trade of Switzerland.
Sixeen years ago—to be exact, in 1902—England attempted to be that Power and in the Mackay Treaty, signed by Lord Inchcape in Shanghai, she agreed to a large tariff increase, abolishing likin in the famous Article VIII, on the strict understanding that the treaty was to be inoperative until all the Treaty Powers had signed identical instruments. In 1903, largely ​because Russia in Manchuria was then such an international peril, America and Japan followed suit—making the same reservations whilst they introduced the same clauses, thus securing that one more pious hope was enshrined in the dust of Chinese archives, to be left there indefinitely like an Egyptian mummy. Since then nothing has been done—nothing for sixteen years; and in the routine decennial tariff revision which has just taken place in Shanghai, Japan, until the Armistice in Europe of the 11th November, placed every obstacle in the way of China, even acquiring an effective five per cent. levy which has been her treaty right for sixty years.
As in railways so in Customs matters, it is once again Japan that renders so difficult the task of real reform, not only in the matter of treaties but in the matter of the daily routine. At all ports where Japanese commissioners of Maritime Customs hold office, it is undeniable that centres of the contraband trade have been established, opium and its derivatives being so openly smuggled that the annual net import of Japanese morphia into China (although this trade is forbidden by International Convention) is now said to be twenty tons a year—an amount sufficient to poison a whole nation. ​In the case of Tsingtao it has been proved beyond a doubt that, since the Japanese military occupation, opium has been introduced as military stores on such an immense scale as to give the authorities a royalty of several million pounds sterling with which immense tracts of land round Kiaochow Bay have been purchased, so that no matter what the Peace Treaty may say regarding evacuation and handing back to China the German lease, Japan will absolutely control this outlet to a crowded hinterland, and thus do much to secure her commercial supremacy for all time.
Now if the free nations of the world desire that a vastly increased Chinese trade shall assist in wiping-out the ill-effects of the European cataclysm which has destroyed the accumulated wealth of half a century, the establishment of a Chinese Zollverein—that is, complete Free Trade within the limits of Chinese territory, with a complete abolition of all provincial and coastwise duties and a complete checking of present abuses—must be secured. At a time when Japanese trade, in spite of a heavy Protectionist tariff, has risen to nearly two thousand million gold dollars a year, or more than thirty gold dollars per head of population, it is monstrous that Chinese trade should amount ​to little more than three dollars gold per head of population. That the Japanese people on a per capita basis should have a commerce a thousand per cent. larger than the commerce of the Chinese people—born traders, be it remembered—proves conclusively that the whole Chinese fiscal system is radically wrong; and as the commercial nations hold China in thraldom with their commercial treaties, it is they who must make the first move to liberate the purchasing-power of the Chinese people. Statisticians are agreed that a legitimate basis of calculation is to assume that China could immediately do a trade per head of population amounting to half the amount of the Japanese trade per person, if all obstructions were cleared away. On this assumption, a China liberated from provincialism and militarism should have an annual turn-over of six billion gold dollars, (1,200 millions sterling,) an amount which would place her in the front rank of trading nations, and (assuming that imports and exports roughly balanced and that the twelve and one-half per cent. Mackay Import Tariff was the average levy) would give her an annual revenue of 375 million gold dollars from import duties alone. This sum would provide interest and sinking-fund on four times ​the present amount of the national indebtedness, adding in every loan made for no matter what purpose during the past thirty years, and including all the reckless borrowing of the past quinquennium.
If and when this matter of Chinese trade comes up for consideration, another matter which is closely allied to it should not be forgotten.
This is the question of exterritoriality.
To most people who have lived under their own laws and accepted such a condition as natural all the world over, the idea of exterritoriality—that is, that in a given territory you are not liable to the jurisdiction of the local authority, but come under jurisdiction exercised by officers of your own country—must be surprising.
The origin of exterritoriality is to be sought on the shores of the Mediterranean, where in the period of transition from the age of Rome's universal empire to that of independent territorial sovereignties, it was held necessary by the maritime cities and republics to appoint officers to take charge of the depositaries of merchandise and exercise jurisdiction over their citizens. This practice, which was well-established by the eleventh century, received ​a great impetus when the Near East fell under the domination of the Mahommedans. The Christian nations, who then entered into relations with the Turkish authority, were careful in their treaties to provide for the establishment of consulates; and the administration of the law of the nation represented was admitted to form an essential part of the consular functions.
It was on this Turkish precedent, then, that practice in the Far East was based. In the first commercial treaty ever entered into between China and a Western Power—the British Treaty of Nanking of 1842—the word exterritoriality, however, does not occur and no provision was made for the exercise of jurisdiction by consular officers. In a supplementary treaty for the regulation of trade signed the following year exterritoriality, however, begins to take shape. It was agreed, for instance, that British merchants and others residing at, or resorting to, the Five Ports opened to trade "shall not go into the surrounding country beyond certain short distances to be named by the local authorities in concert with the British consul and on no pretence for purpose of traffic"; whilst as for seamen and persons belonging to the ships they shall only be allowed ​to land under special rules. Another clause in the same treaty provides that at each of the five ports opened to trade "one English cruiser will be stationed to enforce good order and discipline amongst the crews of merchant-shipping and to support the necessary authority of the consul over British subjects".
Here exterritorial jurisdiction emerges, not as it has developed, but as then seemed necessary. It was a police-authority over unruly persons of alien race who had forced their way into Chinese anchorages and were so determined to trade that the right to do so had been granted them by the Emperor. All the rough-and-tumble history of the Canton delta during the generation preceding these formal treaties looms up from these clauses; drunken English seamen rowing off from their sailing-ships and indulging in riotous conduct; opium-dealers slipping away in fast boats to hidden creeks where their traffic could be carried on concealed; the Chinese authority, unable to cope with these heavy-fisted men, and only occasionally, when murder or manslaughter was involved, getting hold of the culprit, who was strangled in accordance with the lex loci.
Nearly twenty years pass with practice in this inchoate state, the more precise American ​Treaty of 1844 being generally used as a guide to consular authority. But in the Treaty of Tientsin of 1858—which was not ratified until Peking had been captured in 1860 and the Son of Heaven had sought safety in flight—Article XVI lays down specifically and absolutely that British subjects guilty of crimes "shall be tried and punished according to the Laws of Great Britain"; and similar clauses being almost immediately inserted in all the treaties with the Powers, exterritoriality was fully enthroned.
That was exactly sixty years ago, and in sixty years there has been no change save to scatter exterritorialized persons by the thousand over the length and breadth of the land, often without any consular authority within a week's journey. For the right of residence in the interior, which all missionaries possess by virtue of the French Treaty of Tientsin, and the most-favoured nation clause which is found in all similar instruments, having long ago been annexed not only by countless Japanese but by many other foreigners as well, an entirely new situation exists which urgently calls for reform. Since the Revolution of 1911 and the proclamation of the Republic, China has indeed tacitly accepted this condition of affairs only because she believes that when her case is ​properly presented no reasonable person will deny that she is entitled to justice.
That is why Young China demands the summary abolition of exterritoriality, and cries aloud that inasmuch as in the inoperative Shanghai treaties of sixteen years ago it was specifically stated that so soon as a reform of the judicial system was accomplished this foreign jurisdiction would be relinquished, the hour has come for the pledge to be redeemed. For a new code has been adopted under the Republic and a new system of courts; and although there is more theory than practice, the independence of the judiciary forms an integral part of the draft Constitution.
Now, as no questions are so thorny as questions of law and jurisdiction, it is obvious that if this one matter is to be handled successfully it will require a special conference of all the Treaty Powers. The vast and complicated interests which have grown up in China since the Boxer period necessitate a special practice being grafted on to the Chinese administration step by step, rather than any dramatic relinquishment of old rights. It is not possible to refuse to deal with this matter, any more than it is not possible to refuse to deal with the railway question. For since her declaration of ​war against Germany and Austria, China has had charge of all persons of German and Austrian nationality, in spite of the efforts of the Dutch diplomatic and consular representatives (temporarily in charge of German and Austrian interests) to assume jurisdiction. A number of important Germans and Austrians are at the moment of writing held interned by China in special camps; and that China in the treaties of peace with the enemy Powers will insist on retaining at least police jurisdiction over citizens of these nations is quite certain. The Chinese police-system has made such advances during the past decennium that there can be little doubt that so long as appellate courts, with foreign assessors, are provided for, it should be possible to erect a system which will be a half-way house to the total abolition of exterritoriality.
The precise methods are already matters of dispute and can certainly not be settled in any casual manner. Some have proposed that there shall be a probationary ten-year period during which China shall be given a trial. Others have declared that the only method is an extension of the mixed court system, although this system in Shanghai is a lamentable failure. Yet another class declare that no modification is pos​sible until conditions throughout the land have been entirely revolutionized. But it is obvious that the complete throwing-open of China, with the universal right of trade and residence freely conceded, cannot be satisfactorily arranged if a favoured class is removed from police control—particularly such men as Japanese peddlers, who in hundreds and thousands roam the land retailing great and increasing quantities of morphia and opium in defiance of the law of the land.
Tariff and judicial autonomy go hand in hand; they are the necessary prerogatives of the sovereign State. Until this dual problem is settled in accordance with ordinary world-practice China will be an international cripple.
In this discussion we have travelled the whole road which it is possible to travel in one stage. To proceed further, would entangle issues in the minds of even those who are anxious to understand. Chinese currency; the Chinese debt; the Chinese civil and military administration; and the question of parliamentary government, are best considered separately as the Problem of Peking. They belong to a different category from the semi-foreign issues which we have just discussed, because they are of a different ancestry.
​For the moment what should be seized upon as the kernel of the imbroglio is that it is necessary to hark back to 1895 and the Korean war, and deal with the four big questions of leased territories and spheres of influence; railways; tariff reform; and judicial reform, from the point of view that Russian imperialism having been perpetually eliminated from Eastern Asia, the maritime nations can push off from the land and settle the issue on the basis of sea-power; since it has been Russian action—and not German, as in Europe—which has been the terror and the threat, and to which must be primarily traced present Japanese continentalism.
* ↑ The reader is invited to study carefully the two Shantung Railway Agreements in the Appendix, forced through just prior to the Armistice and never ratified.
* ↑ Regarding this railway question, see the remarkable facts disclosed in the secret agreement, Document I, in the Appendix.