CHINA'S GREAT PROBLEM 459 



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 grace- 

 fully 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 nego- 

 tiations 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 Egyptianiza- 

 tion, 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. 



