“The consortium in China” (Publication, 1921.04.13)
Year
1921.04.13
Text
Dewey, John. The consortium in China. In : New Republic ; vol. 26, April 13 (1921). In : Dewey, John. The middle works. Vol. 13 : 1921-1922. Ed. by Jo Ann Boydston. (Carbondale, Ill. : Southern Illinois University Press, 1976-1983). (DewJ27)
Type
Publication
Contributors (1)
Dewey, John
(Burlington 1859-1952 New York, N.Y.) : Philosoph, Pädagoge, Psychologe
Subjects
History : China
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Periods : China : Republic (1912-1949)
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Philosophy : United States of America
Chronology Entries (1)
| # | Year | Text | Linked Data |
|---|---|---|---|
| 1 | 1921.04.13 |
Dewey, John. The consortium in China [ID D28483]. If anyone wants a picture in miniature of the difficulties in the way of a concert of nations or of any kind of cooperative inter-national relations, the Consortium to finance China will satisfy him up to the hilt. No one, prior to experience of it, could have believed that so many contradictory accounts of simple matters could get into circulation or so many cross-currents get into motion. No matter from what angle it is approached—and as time goes by it seems to be nothing but angles—there are opposite statements and opposite fears. Every day, for example, the American group in general and Mr. Lamont and Mr. Stevens in particular, are attacked by hostile interests in China, Chinese and foreign, for maintaining secrecy about its terms. Yet seemingly authentic reports state that the American group, backed by the American State Department, has pressed, from the day when the agreement was signed, for full publicity. This demand was checked first by the Japanese and then by the British. It was lately announced that the American demand had been sufficiently successful so that all the documents had been communicated to the Chinese government and made public. So they subsequently were. 'As might have been expected the terms of the agreement are so technical that its publication, while it blocks one source of hostile criticism, throws no great light upon the aims and methods of the Consortium'. For of course the terms form an agreement of the banking groups among themselves, not an agreement to which the Chinese government is a party. Only when—if ever—some actual agreement is made with the latter will there be adequate data for judgment. Meantime a statement of the cross-currents will be amusing if not enlightening. Reputable Japanese statesmen, as soon as the agreement was signed, stated that the Manchurian claims of Japan had been recognized by the other nations in the Consortium and her interests there safeguarded. Kokusai, the official Japanese news agency, gave to the press in both Japan and China a speech purporting to be by the leading Japanese banking partner, the President of the Yokohama Specie Bank, which gave a definite and almost circumstantial statement of the reservations secured by Japan. Weeks afterwards, the President of the bank completely repudiated the alleged speech. Kokusai never circulated the repudiation, and no explanation of the discrepancy has ever been made public. Meantime Mr. Lamont for the American group and Sir Charles Addis for the British have explicitly denied the report of assent to Japanese reservations, and have praised the wisdom of Japanese statesmen in yielding. The latter are chary in accepting the praise. Hara, the prime minister, and Uchida, the foreign minister, have both lately repeated, although in more guarded terms, the story of due satisfaction afforded Japan in respect to Manchuria. Meantime the Consortium is attacked in Japan as a piece of American capitalistic imperialism to circumvent legitimate Japanese aspirations in Asia, and in China it is denounced as a surrender by the United States to Japan. Why, it is asked, did the United States consent to Japan’s becoming a partner at all? Why did she not insist upon excluding Japan wholly? If she did admit Japan, why does she allow Japan to retain her railway rights in Manchuria while also permitting, by means of Consortium loans, the introduction of Japanese money into the interior, where so far Japanese money has not gone?—the reference being to the proposed railway into Szechuan. Thus the same scheme is both a checkmate to further Japanese conquest of China by means of railways and banks, and a means for extending Japanese influence in China with the complicity of the three other signatory Powers. The humor of the popular Chinese attitude of opposition is increased by the fact that the present Japanese hold upon China was secured by Chinese governmental acceptance of loans made by Japan individually, a kind of loan that would become impossible under the Consortium. The weighing of alternatives is not as yet a Chinese political habit. While some American liberals are denouncing the Consortium as financial imperialism, committing the United States to embark upon a career of foreign financial exploitation, it is attacked in China by business interests, including some American ones, as another piece of Wilsonian idealism, a Utopian scheme to save China from being any longer the happy hunting ground of international concessionaires. For in pledging the banks which enter the Consortium to make loans only through the international combination, and virtually pledging the American government to give its moral and political support only to this group, it restricts what is euphemistically termed (in China as elsewhere) free competition and private enterprise. In other words, there are some American business interests which have become aware of the willingness of Chinese officials to give away their nation’s assets in return for loans with which to line their own pockets, and who, accordingly, find any scheme idealistic and impracticable which would limit their predatory activities. It is fair to add that their opposition seems to be somewhat 'accelerated' by support from Chinese officialdom. Another humor of the situation is that while Chinese officialdom is practically a unit in opposing the Consortium, the press is reporting meetings and processions of Chinese in America opposing the Consortium, on the ground that it is going to make loans to the Chinese government which will be used for political purposes. And this attitude of the Chinese in America, while accentuated by the fact that they are mostly Cantonese and southern sympathizers, reflects the popular attitude in China. The opposition of the officials to the Consortium is easily understood. It has been stated over and over again—and by Mr. Stevens, the representative in China of the American banking group,—that no loans would be made for administrative or political purposes but only for constructive purposes, such as building railways. It has also been made clear that all such loans will be carefully supervised and audited to see that they actually go for the purposes designated. The opposition of the Chinese people is accounted for by the fact that their fear and suspicion of their own government officials is second only to their fear and suspicion of Japan. In passing, it may be remarked that it would have had a happy psychological effect if the Consortium had been called by some other name. For the term Consortium is associated in the Chinese mind with the Consortium which made the so-called Reorganization Loan which was the means of consolidating the power of Yuan Shih Kai. That the United States government refused to permit American bankers to become partners in that Consortium, while it has taken the lead in forming a new one, is of little moment in comparison with the dreaded name, Consortium. Even the more thoughtful Chinese believe in the good intentions of America rather than in her wisdom and skill and freely anticipate that, when it comes to doing business, the other national partners, with their greater experience and their greater political stakes, will put it all over American plans. Illumination upon the political-financial situation came when the subject of exclusion of Chinese bankers from membership in the Consortium was under discussion. In conversation with representative Chinese I expressed, in common with other Americans, regret for the failure to include native banks. The reply was most enlightening. Liberal Chinese said that such inclusion would be the finishing touch to confirm their fears. For the banking group which would be most naturally included were the 'political bankers'. Chinese officials long ago learned the way of making one hand wash the other. Money extracted from the government was used to found banks, which then made loans to the government at exorbitant rates, and so on around the circle. In addition, these banks naturally exercised great influence in support of the government. They brought about an alliance between powerful financial influences and the corrupt and semi-militaristic officialdom which is the political curse of China. The rates at which foreign loans are made to the Chinese government often seem unjust. Eight and ten per cent interest with ten to fifteen per cent discount on the face of the loan, hardly seems equitable. But these rates pale by the side of those of domestic loans, where twenty to thirty per cent interest is not uncommon. If, the Chinese liberals added, there was any likelihood that the bankers, known indifferently as the Shanghai or industrial bankers, were to be included, the case would be quite different, but of that there seemed no likelihood in the present condition of affairs. Space remains for one more touch to the picture. While the opponents of the Consortium have represented it as most anxious to make loans, almost to force loans upon China, its American representatives, ever since Mr. Lamont visited the country, have disclaimed any great desire to do so. They have said that they would await specific proposals from the Chinese government; they have asserted that if China could finance herself, and never call upon the Consortium for funds, the American bankers would be more than satisfied. These statements have been received with incredulity. They have been the occasion of much sarcasm about the unusual and suddenly displayed philanthropy of bankers. Some newspapers supposed to represent American interests in China have been foremost in these ironical expressions. The statements of American representatives of the Consortium that there was plenty of demand for surplus capital at home, that investments in China at the present time were not particularly at-tractive, that the banks had no funds of their own to put permanently into China but would have to pass on their investments to the general public, that the American bankers were mainly animated by a desire to get China on its feet industrially as a customer and to put an end to the partition of China through special concessions to special nations, have been received in apathetic silence when they were not met with open derision. So far, I have confined myself to reporting the way in which the Consortium has been received. I now venture to express my own opinion. I am credulous enough to take these statements at their face value. In fact I believe they give the key to the situation. The Consortium was not initiated by American bankers. It is matter of record that the first move came while the war was still on, from the State Department under Mr. Lansing—who is presumably familiar with the Chinese policy of John Hay and interested in its becoming an actuality, instead of, as is largely the case, a scrap of paper. In short, as far as the American government’s side is concerned, the move is political rather than financial. And the politics involved are not imperialistic but are in behalf of the principle which comes so readily to the lips of all diplomats of all nations: the maintenance of the Open Door and the preservation of the territorial integrity of China. It is evident that the chief opposition to this policy lies in separate nationalistic loans made for 'administrative purposes' and leading to concessions which partition China. The fact that Japan, Great Britain, France and England were allies in the war, that Germany and Russia were automatically out of it, gave an opportunity for making the professed policy a reality instead of a pious phrase. Mr. Lansing grasped the opportunity. In short, the Consortium policy exists between two stools, the political and the financial. It is subject to all the dangers which attend such a position. This fact is well known to Japanese, French and British political and financial interests, even if it is ignored by Chinese sentiment and by American public opinion. The United States is thus playing a lone hand in what is ironically called a Consortium. Its policy meets with active, though generally secret, opposition from the officials of the nation it is intended to benefit and with apathy and suspicion from the people. It is not likely that either France or Great Britain will be able to supply their portion of any loans made by the Consortium. Their share will have to come from the American investor. The American investor has no concealed political ambitions to compensate for unwillingness to make investments that are more or less risky from a strictly economic standpoint. The term of the Consortium is five years. If its operations can be stalled for five years, France and Great Britain will perhaps be in a condition to resume business on their own account. Meantime our late 'associate', Great Britain, is anything but anxious to see American prestige and influence increased in the Far East. If her dislike is not so openly proclaimed to the four heavens as that of Japan, it does not follow that her opposition is less efficacious. Incidentally, there are some signs that a drive will be made upon the new administration, partly from sources professing to speak for the interests of China but really speaking for its officials, and partly from some other nations in the Consortium, to make it modify its terms as part of what will be called a 'permanent settlement' of the problem of the Pacific. The renewal of the British- Japanese Alliance promises to be an accomplished fact. Japan has the right to expect something from her ally. If a political, or reorganization, or administrative loan could be arranged, active Chinese opposition would melt away; the people would still be opposed and would cherish resentment against America, but they would doubtless acquiesce as they acquiesce in so many things which they hate. Such a loan could be presented to the American public as a wise and kind concession to Chinese needs, and an improvement upon the hard terms of the present Consortium policy. Incidentally, problems of Manchuria, Shantung and Siberia would come up for discussion, and a plea be made for a magnanimous recognition, in the interests of peace, of Japan's need for economic expansion. It will be gathered from what has been said that the prospects for the Consortium are not bright. Its apparent failure, however, may mark a real success, provided the present policy remains unmodified. If a blockade or embargo can be established for even five years upon predatory foreign loans to China, the Consortium meantime doing nothing, a precedent may be established which will make such loans difficult, if not impossible, in the future. The effect may be to throw China back upon her own resources. The best thing that could happen to China would be for her to be put on a starvation diet for a while and to have to face her own problems with her own capacities. A few weeks ago, a native banking group not composed of political banks made a loan for the purchase of railway rolling stock. It was accompanied by conditions of supervision of expenditures more drastic than a foreign group could exact. It was also accompanied by an open threat of political action against the government if the funds loaned were not used honestly. It is perhaps too much to say that the loan could never have taken this form if the Consortium were not the only alternative in sight. But the existence of the Consortium certainly facilitated the creation of an honest domestic loan. It is an indication of the way the Consortium may succeed even if it fails,—fails, that is, to make a loan. |
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Cited by (1)
| # | Year | Bibliographical Data | Type / Abbreviation | Linked Data |
|---|---|---|---|---|
| 1 | 2012 | Ethik-Zentrum Universität Zürich | Organisation / EZ |
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