is its immense, majestic, abiding common-sense." At a recent dinner in Shanghai given by the American Consul General, which was attended by prominent Chinese and Americans, the Honourable Victor Murdoch spoke as follows:

"The Republic is here to stay in China; the same brand of democracy which has built up the United States can build up China. . . . I have observed a great deal of this spirit while I have been here in China.... Here is a wonderful people, industrious beyond any other people, sober beyond others, goodhumoured, and law-abiding. . . . No one can reach the limits of China. China is the place of the future. I have been impressed by everything I have seen in this country, with its promise of future development, but one thought that lingers longest in my mind is this: China's future development and prosperity lie in her form of government. It must be a republic to obtain results. What the old flag has done for America, the Chinese flag can do for the Chinese people. It is a banner of no dynasty but a people's flag, and people who are industrious and sober and selfgoverning, can endure for ever and so can the United States and China."

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This was the situation in China when the announcement of Germany's unrestricted submarine warfare

was made to the World. That policy irrevocably changed the course of the Nations, and brought the American Republic to the brink of war; the great Republic in the Orient was not to escape similar effects.

CHAPTER IV

CHINA'S SEVERANCE OF DIPLOMATIC RELATIONS WITH THE CENTRAL POWERS

AT the outbreak of the World War, as has been related, China declared its neutrality, and bent all its energies to the building up of its newly-founded republic. But before the middle of the third year of the war had passed, it became apparent that the Republic must take some stand in relation to the issues of the great struggle. Four conditions, influenced it in this regard. The Republic seemed at last to be making headway toward stability and permanence, and with the new national consciousness came a clearer realization of the principles at stake in the war. Secondly, China desired a place at the Peace Conference which would settle the question of the disposal of Kiaochow and the German interests in Shantung and, as she hoped, would review the Twenty-one Demands. In 1905 in the Portsmouth Treaty, Japan had negotiated directly with Russia concerning Manchuria, although it was a province of China, and China was not admitted until the final decisions were reached. This was a

precedent which China could not afford to see repeated in Shantung, if she were to continue as a sovereign state; and so she was ready to make any effort to gain a voice in the eventual international conference. In the third place, America seemed to be more and more turning toward some sort of active participation in the conflict, and China desired to keep its foreign policy close in accord with that of the nation which it regarded as its best friend. Finally, two incidents in its foreign relations in the latter part of 1917 had aroused China afresh to a consciousness of its weakness and its lack of international standing. These two events were the Chengchiatun dispute with Japan in Manchuria, and the Lao-hsi-kai incident in Tientsin with the French Government.

Chengchiatun was a Manchurian market-town situated near the Mongolian border. It was of some importance as a trade centre and had been menaced by one of the Mongol brigands at the time of the Manchu restoration. The Twenty-eighth Division of the Chinese army had been stationed there to protect the town and preserve order. In August a detachment of Japanese troops was sent there to carry out manœuvres. Their presence in that portion of Manchuria could be justified only by a most liberal interpretation of Japanese treaty-rights. On August 13,

a dispute arose between a Japanese merchant named Yoshimoto and a Chinese fish-pedlar; the Japanese attempted to punish the pedlar; a Chinese soldier interfered; other soldiers of both nationalities came up; and a mêlée resulted, in which several Japanese and Chinese were wounded and killed. Exaggerated reports were published in the Japanese press and its Government at once took up the matter and demanded a series of privileges and concessions in that region and the neighbouring territory. The first demands

were:

1. Punishment of the General commanding the Twenty-eighth Division.

2. The dismissal of officers at Chengchiatun responsible for the occurrence as well as the severe punishment of those who took direct part in the fracas.

3. Proclamations to be posted ordering all Chinese soldiers and civilians in South Manchuria and Eastern Inner Mongolia to refrain from any act calculated to provoke a breach of the peace with Japanese soldiers or civilians.

4. China to agree to the stationing of Japanese police officers in places in South Manchuria and Eastern Inner Mongolia where their presence was considered necessary for the protection of Japanese subjects. China also to agree to the engagement by the