Australia looks only at the most obvious phase of the problem,--that certain people are not happy together. Whether or not she over-estimates her own strength against the pressure of changed conditions, remains to be seen, but she is pursuing her own course with a certain steadfastness that is at once a pathetic blindness and a courageous self-a.s.sertion. In a country whose political outlook is essentially generous, whose labor experiments have been extremely costly to her, it strikes one as a great contradiction of principle. How can a labor government be so utterly opposed to the extension of ideal opportunities to laborers from other lands seeking to enjoy them? How can she be so utterly capitalistic on a national scale when nearly everything within her own ken is laboristic? The explanation of this enigma lies in a certain measure in the manner in which Australia has set about making herself independent of her mother country and, while working indirectly for the break-up of the empire, is becoming imperial in her own small way. All these counter currents must be seen clearly before understanding can follow. They whirl about the pillar of imperialism--England--and have come out clearly since the war. They hinge upon the mandates over the South Sea Islands.

2

While, as has been shown, Australia has for twenty years pursued a course that threatens to lead toward separation from England, New Zealand has bound herself closer and closer. Australia, however, has been extremely shy of any semblance of rupture. She does not want to break away. She feels her isolation too much. But what she wants is in a sense the rights that American states have within the Union. She wants to be independent, to be able to develop in her own way, to expand, if necessary, without danger of attack. This spirit is inherent in the Australian temperament. When I told any Australian that I was traveling and tramping on "me own," he could not understand it. He could not go without a mate. He wanted to be sure that if he got into any sc.r.a.pe and was with his back to the wall, his mate was there to help him. Still, he wanted to fight alone. It did not seem to occur to any of these people that a civilized man might go the wild world over and not have occasion to fight. And this trait comes out in Australian international relations. She wants to pursue the White-Australia policy contrary to sentiment in England, to develop her own navy, to hold the whole continent against the time when full nationhood will have become a reality. But for the time at least she will not declare her independence of Great Britain. She will not even give Britain the imperial preference in trade which would compensate her for her trouble. But she did show in the last war that she realized her responsibilities. In the Boer War it was said that her a.s.sistance was merely for the sake of giving her men adventure and practice for possible later use in her own defense. And in this war conscription was defeated because, as it was openly declared, it was not certain what the turn of affairs in Europe might be. It was felt imperative that the men be not all gone and the continent left undefended. And that contingency was voiced by the Premier of Queensland as involving--j.a.pan. To the outsider, Australia's att.i.tude seems extremely selfish, but to enthusiastic young Australia, with the wide world before her, with a future that looks as promising as that of America, it seems the only logical one. And as long as her potential enemies do not take the trouble to show by deeds that they are not enemies, her reasoning is not unjustifiable.

But a strange thing has happened to Australia. She has got what she was after, and now she hardly wants it. She fought for the imperial conference method of settling imperial affairs. Australians have time and again declared that though an empire, they are a nation first and foremost. That the empire represented too heterogeneous a list of peoples for them to forget that an Indian, though part of the empire, is still an inferior as far as they are concerned. And Australia realized that the mother country could not see eye to eye with her on that score.

Yet she insists on the Anglo-j.a.panese Alliance remaining in some form acceptable to her and to America. How is that to be? What has happened since peace was declared?

Australia and New Zealand were loudest in the protest against the return of the South Sea Islands to the Germans. New Zealand soldiers had taken Samoa; the Australian navy--what there was of it--had cleared the neighboring seas of German raiders. But though they asked that Germany be deprived of the possessions, and though the leaders thundered for a New Zealand mandate over Samoa and an Australian mandate over New Guinea, the people realized that they did not particularly care for the burden of looking after these lands. Mr. Hughes of Australia urged annexation. The people as a whole preferred that Great Britain should annex them and guarantee the dominions against possible dangers from enemy control. They felt they could not stand the cost of governing them. They were even not averse to their being turned over to America.

They have come to realize that they were much better off before the war, when they merely contributed their small quota to the support of the navy; now Great Britain has intimated that she can no longer maintain that navy without their full share in its costs. Besides, the mandate over the islands is not going to be simple.

3

Before giving consideration to the developments which not even the Australasians had antic.i.p.ated, let us look upon the gains they have made. They have acquired some new possessions which make of them an empire within the empire, as it were. The islands of the south Pacific are to be ruled as though they were an integral part of New Zealand and Australia, yet they have their own facets just as the Dominions had their own problems within the empire. They afford them certain commercial advantages: copra and cocoa from Samoa, phosphate from Nauru, which alone has an estimated deposit amounting to forty-two million tons. Nauru is of utmost importance to them because they are extensive agricultural countries. It has been agreed that Great Britain take 42%, Australia 42%, and New Zealand 16% of the export. The South Seas as a whole supply 14.7% of the world's copra supply, and this may yet be greatly increased. But this is nothing compared with the advantages they afford as ports of call. Further, if the plan of linking the islands together by wireless is effected, they will become an outer frontier for the Antipodes of inestimable value. There is even a faint suggestion of binding them together into one separate governmental ent.i.ty,--a buffer state, as it were, between the big powers in the Pacific.

But what are these few a.s.sets compared with the greatly extended line of defense now left to the Dominion to keep up? What is that to the great problem of how to develop the native races? Australia is interested in developing Queensland, a tropical region, not the distant island beyond.

The question of labor is bad enough for themselves, without having added regions to worry about. Throughout the Pacific the problem of where to secure man-power is pressing. Hawaii cries for labor; Samoa is in a similar state; Fiji is troubled with the indentured Indians now there.

Go where one will, the islands would yield readily enough if cheap labor were available. But Australia and New Zealand are not willing to exploit these islands at the expense of cheap Asiatic labor which evolves into a racial problem as soon as its returns become adequate. As for the mandates both labor and capital in the South Seas are not keen about these war orphans. A further problem is, what will happen when the policy applied to island possessions conflicts with the course permitted by the law of the mandate? What is worse yet, the mandate over the South Seas has brought j.a.pan closer by hundreds of miles to both New Zealand and Australia, and has thrown open the question of admission of Asiatic people to these islands. The Australasians feel that they are obliged to protect not only themselves from Asiatic compet.i.tion, but the native races as well. If they are to carry out the provisions of the mandate to rule the islands for the good of the natives, they feel that they cannot introduce Asiatic labor, which undermines the natives economically and morally every time it is attempted. These are some of the problems Australasia inherited from the Peace Conference.

How have they affected the relations of New Zealand and the Commonwealth of Australia with Great Britain? They have put a new strain upon the empire as such; they have put an added strain upon the relations between j.a.pan and Great Britain; they have driven a wedge into the Anglo-j.a.panese Alliance.

Further, the whole question of mandates as it pertains to the Pacific has completely opened new sores. The island of Yap, which has been in the press so much of late, is an example. A blow at so vital a factor in world relations as cables would be like a blow on the medulla oblongata.

Yet under that new and misleading term, "mandate," Yap became j.a.panese, and the near future is not likely to know just what was done when Germany's colonies were apportioned under its ruling. Yet what is fair for Great Britain and the Dominions should be fair for j.a.pan, and if mandate means possession for one it ought to mean it for the other. But where do we come in and where the peace of the Pacific? Already, as stated elsewhere, j.a.pan has had in mind the fortification of the Marshall Islands. She is proceeding to fortify the Bonin Islands and the Pescadores. She is, according to a very recent rumor,--and rumors are really the only things one can secure in such matters,--establishing an airship station on the southeast coast of Formosa,--not on the west, which would shorten her distance to China, but on the east, cutting down mileage to the Philippines. And we? Well, we know what we are about, too. Hence, the sooner such matters as mandates are defined, the better for the world.

4

How would these things work out with the new British arrangement as to the control of the Dominions? We have seen that behind the whole struggle for the development of an Australian navy was the desire for greater independence. As long as the war lasted, no troublesome topics were broached. Now that the war is over, one may expect the feathers to begin to fly. The Dominions are not stifling their desire for greater and greater freedom. They were involved in a colossal war without ever having been consulted. They feel that now they have earned their right to express judgment on international affairs. They realize that nothing could be done effectively if Downing Street were hampered by several wills at work at the same time. Yet it is obvious that the people of the Dominions are concerned first with their own affairs, as nations, and are devoted to Britain only in a secondary manner. They are now conscious of their power, and are determined to wield it. They have made and are doing everything to continue to make friends on their own, by whom they mean to stand through thick and thin. At the Peace Conference they were not inferior to any of the deliberators, and signed the Peace Treaty as virtual members of the League of Nations.

"But," asks the Wellington "Evening Post," "are the Dominions ever to cast an international vote against the Mother Country on a question relating, say, to the future of the Pacific regarding which their interests and wishes might rather harmonize with those of the United States?"

Mr. Ma.s.sey, the Prime Minister of New Zealand, on the other hand, held "that the Dominions had signed the Treaty not as independent nations in the ordinary sense, but as nations within the Empire or partners in the Empire."

But to show how complicated the whole position was, a Mr. W. Downie Stewart, M.P., pointed out that

When New Zealand signed the Peace Treaty ... she took upon herself the status of a power involving herself in all the rights and obligations of one of the signatories.... That means that she may have created for herself a new status altogether in the world of foreign affairs, and instead of being an act to bring together more closely the component parts of the Empire, it may be that it was the first and most serious step toward obtaining our independence and treating ourselves as a sovereign power.

And in connection with Samoa he says the time may come when, having been recognized as an independent power, they will be told "we look to you in future, whenever a question of internal affairs arises, to act as an independent power, making peace or war on your own initiative."

Prime Minister Hughes, of Australia, however, has been steering a middle course. He points to the dangers lying ahead, and to the absolute necessity of keeping close to Britain. He urges that the alliance with j.a.pan be renewed, but in such a way as to leave no danger of losing America's friendship. But he shows that the spirit of independence is still uppermost in Australia. Declaring that "The June Conference has not been called to even consider Const.i.tutional changes," he adds: "It it is painfully evident from articles which have appeared in the press and in magazines ... that to a certain type of mind, the Const.i.tution of the British Empire is far from what it should be."

But though Hughes is to-day the leader of Australia, it is not because he has the country back of him. It is rather because there is unfortunately no better man on hand. He has never cared much for consistency, and even in the matter of the Anglo-j.a.panese Alliance there is a suggestion of yielding that makes one feel uncertain. He has declared that at the present conference the question of a reorganization of the Government so as to give the Dominions a direct share in the control of imperial affairs is not even being thought of, but it is evident in his speech that that question is going to be delayed only because more pressing matters, such as the Anglo-j.a.panese Alliance and Imperial Naval Defense, must be dealt with first. In other words, as spokesman he realizes that "little" Australia, with its five million people and its vast continent has asked too much of its parent to be allowed to stand alone. So he is pouring oil on the troubled waters by trying to devise an Anglo-j.a.panese Treaty "in such form, modified, if that should be deemed proper, as will be acceptable to Britain, to America, to j.a.pan, and to ourselves."

But there is a third consideration in this whole question, and that is j.a.pan. What is j.a.pan going to say about it all? For some time j.a.panese have been rather cool in their enthusiasm over the alliance, because it seems to them to have outlived its usefulness and because Article 4 absolves Great Britain from a.s.sisting j.a.pan in the event of war with America. The "Osaka Asahi," one of the most influential of j.a.panese journals, has boldly advocated its abrogation. The reason for both British and j.a.panese indifference is obvious. Russia and Germany are out of the way. British mercantile interests are not at all satisfied with j.a.panese methods in China. The alliance has been disregarded twice,--when the Sino-j.a.panese Military Agreement was signed, and when the Twenty-one Demands were made. Furthermore, the alliance never protected j.a.panese interests when they came in conflict with the interests of the colonies, nor has it prevented British interests from suffering in the Far East. As a protective alliance it has little more to do except to guarantee Great Britain against j.a.pan and j.a.pan against Great Britain. China is extremely antagonistic, because she deems herself to be the worst sufferer. She is the main point under consideration, yet she has not been consulted. Hence she has done everything in her power to arouse public opinion against its renewal.

Nevertheless, j.a.pan has been concerned enough for the renewal of the alliance to make a departure from her age-long att.i.tude toward the imperial family that is extremely interesting if not illuminating. The recent visit to England of Prince Hirohito, heir to the throne, while meant to widen his grasp of world affairs, was certainly intended also to arouse public feeling there in favor of j.a.pan and the alliance. This was the first time that any j.a.panese prince of the blood had left j.a.pan.

He hobn.o.bbed with the common people, a thing unheard of in j.a.pan. But if he succeeded in winning popular approval for the alliance, it was doubtless worth while from the j.a.panese point of view. Otherwise the risk would not have been justified, for such visits are not without their dangers. It is interesting to recall that when Nicholas, Czarevitch of Russia, made a tour of the world upon the completion of the Siberian Railway, in 1891, he pa.s.sed through j.a.pan. An attack upon his person by a j.a.panese policeman nearly brought down the wrath of the czar upon j.a.pan, and there was much explanation.

While j.a.pan was anxious to have the alliance renewed, she argued that England was more in need of it than she. America, she said, had somewhat eclipsed England. j.a.panese feel that England must now lean on j.a.pan as never before. They felt this when the alliance was formed. Count Hayashi, in his "Secret Memoirs," quotes a statement attributed to Marquis Ito, as follows:

It is difficult to understand why England has broken her record in foreign politics and has decided to enter into an alliance with us; the mere fact that England has adopted this att.i.tude shows that she is in dire need, and she therefore wants to use us in order to make us bear some of her burdens.

Ito was then playing Russia against England. To-day England is being played against America, and the colonies are eager to utilize the feelings of j.a.pan and America for a greater Pacific fleet and for their own augmented freedom within the empire. There is much talk of a secret agreement existing between j.a.pan and Great Britain. Even if there were, Great Britain would be able to live up to it, in the event of war between j.a.pan and America, only at the risk of losing her colonies.

However, that need not be taken as a serious check, for though Great Britain wants her colonies, she does not want them enough to forego all other considerations. On the other hand, a good deal of the pro-American feeling in the colonies cannot be accepted too easily, for, as we have seen, when America remained neutral they forgot blood relationship in their criticism. To-day there are interpretations of the alliance which would put Great Britain in exactly the same position toward her younger "daughters" for which Australasia condemned America in 1914-17. But both the psychological and material elements in the situation point to an absolutely united front in Australasia for America in event of all the talk about war with j.a.pan coming to a head. That is best ill.u.s.trated by a statement in the "j.a.pan Chronicle." The editor says: "As we have repeatedly pointed out, it is unthinkable that Britain should join j.a.pan in actual warfare with America. No Ministry in England which deliberately adopted such a policy would live for a single day." And the colonies, from Canada to Australia, will echo that sentiment, as they did boldly at the Conference.

But it seems that with so much of the world vitally interested in maintaining peace in the Pacific there should be no difficulty at all in so doing. The colonies are sincere in their desire for amity with America; nor is it merely a matter of common language. No one who has taken the trouble to inquire into Far Eastern affairs finds the handicap of language even the remotest cause of misunderstanding. Actions speak louder than words, and none but the ignorant can now misread what is going on in Asia. Let but those actions coincide with the promises made, with the spirit of the alliance and with the constant expression of amity and good-will, and we shall see the mist of war in the Pacific clear as before the glories of the morning sun.

There seems, therefore, no justification for the renewal of the Anglo-j.a.panese Alliance. It is to all intents and purposes virtually dead. Alliances on the whole have proved themselves treacherous safeguards. Is there not something which can be subst.i.tuted for them?

Cannot cooperation among nations replace intriguing misalliances, with their vicious secret diplomacy? One way has been launched, and in the succeeding chapter its character will be a.n.a.lyzed.

CHAPTER XXIII

THE CONSORTIUM FOR FINANCING CHINA

1

If all goes well, the open shop in international finance is a thing of the past; at least so far as China goes. On May 11, 1920, exactly eighteen months after the signing of the armistice, j.a.pan formally declared her willingness to enter the new consortium for lending money to China, and on October 15, following, representatives of the British, French, j.a.panese, and American banking-groups met in New York and there signed the provisions by which they are for the next five years going to finance China under what is known as the Consortium Agreement.

For a full year after the signing of the armistice, Great Britain, France, and America had been ready to act in consort in the matter of future loans to China, but j.a.pan insisted on excluding from the terms of the agreement international activity in Manchuria and Eastern Inner Mongolia. These two provinces have virtually become j.a.panese territory.

Into these she has extended her railroads or added to those built by Russia, and over these she watched as a hen over ducklings. And because she strenuously sought to manoeuver the Allies into admitting her prior rights to these regions, the consummation of the Consortium Agreement was delayed and delayed. j.a.pan finally yielded, at the same time claiming that the powers conceded her special interests; while they, through their chief representative, Mr. Thomas W. Lamont, claimed that j.a.pan waived these interests. We shall presently see what happened, but in the meantime it is obvious that both yielded and both won out,--and that no nation is to-day sufficiently powerful and self-contained to be able to stand apart from the rest of the world. The closed shop in international finance has been ushered in, and the union of world bankers is now known as the Consortium.

In a chapter it is hardly possible to make more than a hasty survey of so intricate a stretch of history. China before the war with j.a.pan was free from debt, but in order to meet the indemnity demanded by j.a.pan she was compelled to raise money abroad. The scramble among the foreign powers to advance this money gave China certain advantages. Her own capitalists had money enough to pay off this indemnity immediately, but they did not trust their government and h.o.a.rded their funds. They knew that with the Oriental system of "squeeze" only a fraction of it would succeed in freeing their country.

Another factor conspired to introduce alien domination over China,--her lack of railroads and modern industries. She had wealth, man-power, everything that an isolated nation could possibly desire, but she was no longer an isolated nation, and she had nothing that an active nation among nations needed for its very existence. Instantly, along with the loans, came concessions for railroad-building, and the development of China began. So deeply was China getting embroiled in alien machinations that five years later, seeing that the young emperor himself, Huang-Hsu, was head-over-heels in love with Western ways, the reactionaries precipitated the Boxer Uprising in 1900. This only resulted in another overwhelming indemnity, which China has not yet succeeded in paying off.

Consequently, more loans had to be made, and more urgent still became the necessity for means of transportation and for the modernization of industry.

The Russo-j.a.panese War, which ordinarily might have meant a modic.u.m of relief to China, only succeeded in entrenching her enemy much more securely at her very door, and another period of alien scrambling over Chinese loans set in. Cooperation among various groups of foreign bankers regardless of nationality was not unknown, for absolute compet.i.tion would most likely have been fatal. But thoroughly thought-out getting together was, in view of the existing jealousy among nations, inconceivable. Still, to such a pa.s.s had this suicidal compet.i.tion come that by 1909 a consortium was proposed which aimed to include Russia, j.a.pan, Germany, France, England, and America. It began to work, but Secretary of State Knox made a proposal for the neutralization and internationalization of the Manchurian railway system which met with a cold no from j.a.pan. Shortly afterward j.a.pan made an agreement with Russia which completely frustrated Knox's proposals, and the thing virtually fell through.

In 1913, President Wilson took the matter in hand. He refused to become a party to a scheme which, in his estimation, instead of working for the rehabilitation of China and the Open Door bound her helplessly. And ever since China has been getting "the crumby side" of every deal. For the plan as it then existed had no provisions against the pernicious practice of marrying China to one power after another with concessions, without giving any guaranty of the preservation of her dower rights,--freedom in her industrial and political affairs.

Russia then was j.a.pan's "natural" enemy. Russia was threatening the "very existence" of j.a.pan. Yet when Knox's proposal came up, j.a.pan was ready to unite with Russia in order to keep the others out of Manchuria.

She had to use that argument to save her face. Bear this in mind, for we shall presently see that a second time j.a.pan used this argument in order to keep the consummation of the consortium in abeyance. It was more than a plea for special interests because of propinquity; it was a plea that the peace and safety of the empire demanded it.

Propinquity! The pin in that word has p.r.i.c.ked nearly every one who has shown any interest in China, no matter where. j.a.pan used propinquity as a justification of her annexation of Korea, breaking her word to that kingdom in so doing. Yet j.a.pan contends that she never has broken her word. j.a.pan is a nation true to her word, but, like many another nation, is loose in her wording. She has guaranteed the Open Door in Manchuria and Mongolia,--and Korea. In Korea the door is shut, and j.a.pan has made entrance to the other spheres of little advantage. Ill-content with penetration of these regions, she has, by means of her railroads there, sought to divert the course of Chinese trade from Shanghai through Manchuria and Korea and j.a.pan. In this there is nothing intrinsically wrong. But she goes farther and tries to exclude consortium activity in other fields in these two provinces. But that these are not the only slices of China she is after,--that they are, in fact, only stepping-stones for the final domination of the great republic,--is attested to by certain well-known facts in Far Eastern affairs.

j.a.pan and her friends a.s.sert she never has broken her word; her enemies declare she is sinister and not to be trusted. Neither statement is correct. Her methods may sometimes be sinister, but no one who follows events in the Far East is unaware of them, and j.a.pan has taken no pains to conceal them. Actions speak louder than words. But has j.a.pan actually never broken her word? We have already referred to Korea, whose independence j.a.pan has guaranteed by published treaty. During the war j.a.pan carried out the requirements of the Anglo-j.a.panese Alliance, but Article V reads:

The High Contracting Parties agree that neither of them will, without consulting the other, enter into separate arrangements with another Power to the prejudice of the objects described in the Preamble of this Agreement.

Notwithstanding this clear stipulation, j.a.pan immediately after capturing Kiao-chau from Germany, without consulting Great Britain as herein provided, issued the Twenty-one Demands on China. Of these Group V alone would have made a va.s.sal state of China had she accepted them.

Knowledge of these were kept from Britain completely, but when they finally leaked out, j.a.pan vociferously denied them. Downing Street was not pleased, but there was much to be done in Europe just then. In 1918, j.a.pan a second time made an arrangement with China without consulting her ally, Great Britain. This time it was the Sino-j.a.panese Military Agreement. At the moment Russia withdrew from the war and released the German prisoners, and that was the excuse for imposing combined military action under j.a.panese officers.