The Chinese are an eminently reasonable people; their natural motto is to suit themselves to circumstances. When it became clear that the revolutionists could not secure funds to put themselves in control of the country, and that the Peking government, while it could secure funds upon evidencing an ability to tranquillize the country, could not do so as long as the Manchus remained in nominal control, the inevitable followed. The Manchu emperor and his associates gracefully abdicated, announcing that the will of Heaven, speaking through the voice of the people, desired the institution of a republican form of government, and the revolution was fait accompli.
In the months which have since elapsed China has been crowded from the stage of international attention by other affairs, yet the negotiations which have been going on are of even greater importance than the more spectacular events of the war. The banker powers are good business men, and, having an opportunity to make China "pay through the nose," were not unlikely to underestimate it. The Chinese are business men, too, and struggled to secure as favorable terms as possible. The difficulty was a complex one—China wished to avoid Egyptianization, while the powers wished to be sure that their money would be well spent, and reasonably secure, while inextricably interwoven were the political aspects of the loan. The Chinese played their ancient game of pitting one interest against another. Many loans were proposed, a loan of $30,000,000 from Baron Cottu was seriously considered, and part of an Anglo-Belgian loan was paid over. The four powers which had been in negotiation for the past two years were increased to six by the addition of Eussia and Japan, and finally to seven by the addition of Austria before it was agreed that all other loans should be abandoned and $300,000,000 advanced to China by this septuple syndicate in a series of instalments.
The problem has not been solved, however; only expanded. Soon China will be indebted to foreign nations by nearly $1,100,000,000, a greater sum than the national debt of the United States. This calls for an annual interest payment of over $50,000,000, over and above the expenses of government. Her total annual income has so far apparently been about $180,000,000 or about one fourth that of the United States. In other words, to an already large annual deficit she has added an annual interest charge of over $15,000,000. Can she increase her income to meet it? A corporation in such a precarious situation would procure the services of the ablest business manager whom money could secure. China's problems are fit tasks for supermen; will the supermen be forthcoming?
- Since this article was written the republican government has refused to accept this loan on the terms proposed. The fundamental problem means essentially the same.