3.'T 
 
 1 
 
 
 CHINA SOCIETY’S PAMPHLETS 
 
 SECOND SERIES 
 Number II 
 
 A Frank Discussion 
 
 of 
 
 China’s Present Problems 
 
 By 
 
 FREDERICK W. STEVENS _ 
 
 Representative in Peking 
 of the 
 
 American Croup of the China Consortium 
 from 1920 to 1923 
 
 Issued by 
 
 THE CHINA SOCIETY OF AMERICA (Inc.) 
 19 West 44lh Street, New York City 
 1923 
 
J\'o Rights Reserved 
 
 Rejjuhlication, Invited 
 
“If a man take no thought 
 about what is distant, he 
 will find sorrow near.” 
 
 The Confuciaii Analects, xv, xi. 
 
 3 
 
FOREWORD 
 
 This pamphlet presents the mature judgment of 
 a financial and business man who has just re- 
 turned from a mission of two and a half years 
 ill China, where it was his business to study 
 conditions having reference to the program of 
 the China Consortium. In its original form it 
 was an address delivered in New York City, at 
 a dinner given by The Honorable Charles R. 
 Crane, formerly American Minister to China, to 
 a group of about fifty men actively interested in 
 China, and especially in Peking Union University. 
 
 There may be those who will be inclined to 
 dissent from some of Mr. Stevens’ opinions, but 
 no one will question that he speaks out of full 
 knowledge. 
 
 Robert McElroy, 
 
 Managing Director of the China 
 Society of America. 
 
 4 
 
CHINA’S PRESENT PROBLEMS 
 
 Republics are governed by public opinion. This 
 need not, of necessity, control through the ballot, 
 but it must control, or the word republic is a 
 misnomer. Public opinion is the prevailing sen- 
 timent of the articulate portion of a given com- 
 munity. It is not, therefore, of necessity the 
 opinion of the majority of individuals. Every 
 republic has passed through, if indeed it does not 
 still remain in, the stage where ruling public 
 opinion represents not the numerical majority 
 but a numerical minority. A true republic, one 
 which has the really progressive tendency, must 
 look toward a day when the majority shall be 
 articulate, and therefore ruling; but it may fairly 
 claim the name republic long before that day is 
 reached. 
 
 A REPUBLIC ONLY IN NAME 
 
 Since the fall of the Manchu dynasty in 1911, 
 after a reign of about two hundred and fifty 
 years, and after a monarchical form of govern- 
 ment lasting for thousands of years, a so-called 
 republic was formed, and China is today called 
 a republic. But the Chinese people were not well 
 prepared for a republican form of government, 
 and few who are adequately informed will deny 
 that China is now a republic only in name. On 
 the other hand, she is no longer a monarchy, and 
 I believe she never will be again. She is ruled, 
 in fact, by military lords. Her so-called Central 
 or Peking Government is impotent in more than 
 half of the territory of China. Her so-called 
 parliament, lately reconvened at Peking, after 
 several years’ eclipse, is not representative, is not 
 respected, is openly charged with being governed 
 by selfish and corrupt motives, and is largely 
 powerless for good. 
 
 Her representatives are unable to bring about 
 disbandment of her armies, constituting a mill- 
 stone about the neck of each succeeding cabinet ; 
 and there has been a new cabinet every few 
 months. The armies are not national armies. 
 Her military lords, each independent of the other, 
 seize legitimate revenue when they can and levy 
 illicit revenue, to keep their armies together and 
 to maintain their individual power. The civil 
 wars of China are usually the result of personal 
 ambitions, not of national purposes. 
 
 5 
 
The only public revenue handled rightly is 
 that which is under foreign domination; and 
 such revenue is mortgaged beyond its capacity. 
 The so-called Central Government is bankrupt ; 
 it has been compelled to allow many millions of 
 foreign and domestic debts to go to default, and 
 the wages of its representatives and employees 
 in almost all branches are long unpaid. The 
 power of the provinces as independent political 
 units is growing, and in violation of treaties made 
 by the old Peking Government, these provinces 
 are levying taxes upon imported goods, while the 
 Peking Go\’ernment is powerless to stop these 
 violations. 
 
 The continued recognition of the Peking Gov- 
 ernment by the foreign Powers, which I do not 
 criticise, is the chief reason for its retaining the 
 semblance of power. The unification of the 
 provinces, the creation, in Peking, or elsewhere, 
 of a central power recognized by all China, seem 
 a long way off. International control by the 
 Powers, advocated by many, would, in my opinion, 
 end in a huge failure, and it will probably never 
 he attempted. China must and will work out 
 her own political salvation. And in China, as in 
 every republic, real or nominal, the basis of suc- 
 cess must be an informed, enlightened and moral 
 public opinion. It is only righteous and aggres- 
 sive public opinion that frightens bad rulers, that 
 restrains wicked officials, that produces a good 
 government, that secures even-handed justice to 
 all. 
 
 CHINA A PRETTY SAFE PLACE 
 
 Against this array of unhappy facts, we may 
 set the fact that persons and property are per- 
 haps on the w’hole as safe from violent seizure in 
 China as in our own States. There are roving 
 bandits in some parts of China, and foreigners 
 are sometimes seized for ransom, as we know 
 by recent reports, but, when I read of assaults 
 and robberies in our own States, I think China 
 a pretty safe place. There personal assaults and 
 robberies, burglaries and street brawls are rare. 
 
 A FICTION UNMASKED 
 
 I promised myself recently to take advantage 
 of an early opportunity to denounce publicly a 
 story that seems to have reached every man and 
 woman in the United States. I have scarcely 
 6 
 
ever conversed as much as ten minutes with any- 
 one who has not visited the Orient, without being 
 asked, “Are the Japanese and Chinese honest?” 
 And when I say “Which ones?” I am always met 
 with something like this : “Well, I understand 
 that the Japanese bankers cannot trust their own 
 people and have to engage Chinese to run their 
 banks.” 
 
 There is no truth in the story, and there never 
 has been. The Japanese banks have rarely, if 
 ever, had Chinese in their employ. The story 
 ought to be widely denounced in this country, 
 for it does an injustice to the Japanese; and the 
 Chinese, who, as a people, are doubtless as honest 
 as any other people, do not need this false testi- 
 mony as to their integrity. The story probably 
 originated from the circumstance that when two 
 British banks, which had long operated in China, 
 opened branches in two cities of Japan, their 
 leading comprador in China installed Chinese 
 employees in these branches. 
 
 THE QUESTION OF POPULATION 
 
 There has never been a reliable census of 
 China. It has been a habit of writers and speak- 
 ers about China, during the last forty years or 
 more, invariably to refer to her 400,000,000 people, 
 an unchangeable figure despite the great number 
 of births and the mortality in China. Although 
 skeptical about even the approximate accuracy of 
 the figure, I find it difficult to make myself such 
 a heretic as would be involved in using some 
 other figure. I assume that there are about 
 
 400.000. 000 people in China. 
 
 CHINA A FARMER NATION 
 
 According to those well qualified to make the 
 estimate, about eighty per cent of all the people 
 of China — which means, let us say, upwards of 
 
 300.000. 000 people — get their living from labor 
 connected quite directly with the cultivation of the 
 soil. There is a very wide distribution of the 
 ownership of land. There are said to be in China 
 about fifty million distinct land holdings, — owner- 
 ships in fee. This fact is considered by many as 
 insurance against Bolshevism, the advocates of 
 which are said to be distributing large quantities 
 of Bolshevistic literature in China. In Southern 
 China, a plot of ground approximately the size 
 
 7 
 
of an ordinary city residence lot here, is a “farm,” 
 and its products keep a family alive. In Northern 
 China, the units are often much larger. 
 
 THE POVERTY OF CHINA 
 
 “Keep it alive,” is what I say, and is all I 
 mean. It seems to be true that a large part of 
 these millions live year after year on the edge of 
 starvation, seldom or never having enough food 
 to satisfy hunger, much less to provide a reserve 
 supply to meet the contingencies of famine, due 
 to flood or drought or other cause, that frequently 
 arise. Too much is demanded of the land. It is 
 a constant fight, by those who get their food 
 from it, to obtain material necessary to produce 
 the requisite soil fertility. 
 
 The lack of demand for labor, to which I shall 
 refer later, forces resort to the soil by more 
 people than the soil can well support. Govern- 
 ment provides little in the way of drainage or 
 other artificial aids. The farming methods of 
 thousands of years ago are generally followed, 
 yet practically nothing in the way of advice and 
 assistance as to modern methods of farming is 
 furnished by any governmental agency. Prac- 
 tically all that is done in this direction, — instruc- 
 tion in soil fertility, plant diseases, seed selection, 
 animal husbandry, etc.,— is by the Christian mis- 
 sionary colleges. 
 
 THE LABOR PROBLEM 
 
 Another ten per cent, perhaps fifteen per cent, 
 of the Chinese people, which means in the neigh- 
 borhood of fifty million people, constitute the 
 laboring class, other than those engaged in agri- 
 cultural work. These are the artizans, the factory 
 laborers (there are only a small number of the 
 latter), the coolies, servants and manual workers 
 of all classes. These millions as a rule do not 
 own the hovels they occupy, and they also live 
 on the edge of starvation. Their pitifully small 
 earnings seldom allow them to feed themselves 
 well, to say nothing about saving up anything 
 to meet the needs of worse days than the com- 
 mon run. Life for them has no luxuries and 
 few comforts, and, in our sense of that word, 
 none. “Home” to them means squalid, almost 
 bare quarters, with little or no heat in cold 
 weather. Hot water is a luxury. Cold water is 
 8 
 
not carried to them by pipes, but is bought in 
 small quantities, out of their pitifully small sup- 
 ply of coppers, from the carts of the water ven- 
 ders; and to make hot water requires fuel, which 
 for them is very scarce and costly, often to a 
 prohibitive extent, and always to an extent which 
 limits its use to the very minimum. Clothing 
 from head to foot is the simplest imaginable by 
 anyone, and probably more simple than can be 
 imagined by those who have not visited Oriental 
 or tropical countries. Those who know only 
 poverty as it exists in this country have little 
 idea of poverty as it may be. Within a few 
 steps of any place in any city of China, you can 
 be shown poverty of a depth quite beyond your 
 previous imagination. 
 
 THE PROBLEM OF ILLITERACY 
 
 I have been speaking of the two classes who 
 with their families constitute a total of about 
 ninety per cent of the Chinese people, perhaps 
 more. These people are nearly all illiterate. By 
 well informed people, those who can read and 
 write are estimated for all China at not more 
 than ten per cent of all the people, and often 
 at only five per cent. It should be remembered, 
 however, that illiteracy does not of necessity 
 connate lack of intelligence. The court of the 
 Emperor Charlemagne was illiterate, as was the 
 Emperor himself, but this condition was due to 
 circumstances, and has never been understood to 
 show a lack of intellectual ability. The Chinese 
 have great ability in the direction of learning what 
 is taught them. 
 
 It can hardly be expected, however, thal people 
 who can neither read nor write can have much 
 part, if any, in the creation of that righteous 
 and aggressive public opinion that will smash 
 public evils. Indeed these illiterates naturally 
 know little or nothing about the political con- 
 ditions and developments that surround them, 
 however much they may be unknowingly inter- 
 ested in them. Public opinion is the product of 
 the articulate classes, the educated classes. 
 
 NATIVE BUOYANCY 
 
 Despite all the poverty existing among the peas- 
 ants and the laboring classes of China, the limited 
 9 
 
possibility there to find enjoyment in life accord- 
 ing to our view, these people as a rule are a 
 good-natured people, a peaceable people, a temper- 
 ate people, a law-abiding people, a people who 
 endure their lot with wonderful patience and 
 fortitude. Indeed, they know no other life, these 
 sturdy, industrious people, who are as willing to 
 work long hours as laborers anywhere and who, 
 according to American engineers speaking from 
 large experience with Chinese laborers and with 
 laborers in other parts of the world, make as 
 good laborers as any people in the world. 
 
 THE CHINESE DESERVE A GOOD 
 GOVERNMENT 
 
 Such a people deserve a good government, one 
 that will bring them more of the comforts of 
 life; and some day good government, and more 
 comforts, will come. 
 
 Despite the unhappy political conditions, the 
 good qualities possessed by the masses of the 
 Chinese people, inspire hope among China’s for- 
 eign friends, and create the belief that a better 
 day is coming. I share in that hope and that 
 belief. The responsibility of the educated classes 
 to see that that day is hastened, is immense, but 
 is not, I fear, commonly accepted by them. If it 
 be possible to weld into a real Republic, a nation 
 of 400,000,000 people, largely illiterate, spread 
 over an area approximating that of the United 
 States, speaking many dialects not commonly un- 
 derstood, and with no history or background to 
 fit them for the republican form of government, 
 the Chinese will some time accomplish it, but 
 perhaps only when an entirely new generation 
 has come, a generation governed by new princi- 
 ples, and creating righteous and aggressive pub- 
 lic opinion, overcoming the selfishness, the cor- 
 ruption that now governs so large a percentage 
 of the educated class in China’s political affairs. 
 The best men in China, both Chinese and for- 
 eign, look to such public opinion for relief, partial 
 or complete, sooner or later, from the curses that 
 now beset her. 
 
 CHINA’S THREE GREAT CURSES 
 
 There are three great curses which I would 
 mention. One is found in the worse than use- 
 
 10 
 
less armies of a million or more men, which keep 
 China in turmoil. There is grave need of a 
 public opinion strong enough to compel the dis- 
 bandment of a large part of them, and intelli- 
 gent enough to devise an elfective method for 
 accomplishing such a disbandment, itself a difficult 
 task. 
 
 Another is the growing use of narcotics en- 
 couraged by at least some of the military lords 
 because of the illicit revenue it provides them. 
 China has lost much ground in recent years in 
 dealing with this evil. 
 
 The third is the prevailing corruption among 
 the officials, made up altogether of the educated 
 classes. Mention of it cannot be avoided in a 
 statement of the true situation, but I pass over 
 the harrowing details. This evil will never be 
 done away with, except as the result of educa- 
 tion that breeds character, that results in right- 
 eous, aggressive public opinion so widespread 
 that it will break up this deep-seated evil. You 
 may say we live in a glass house ourselves, on 
 this subject; but, as I know our history, we 
 have never suffered with this evil as China 
 suffers. 
 
 Of course, I need hardly say that there have 
 been and still are notable, honorable and high- 
 minded men in Chinese public office, men far 
 above the practices I refer to, who deplore the 
 evil. 
 
 THE CAUSE OF CHINA’S POVERTY 
 
 Why is it that in China, a very large part of 
 whose people are ready, willing and anxious to 
 work and capable of doing good work, there is 
 so much poverty? 
 
 It is because there is little demand for labor 
 in China. I often think it a pity that the demand 
 for labor, particularly domestic labor, which is 
 so great in this countrj', and the supply of such 
 labor, which is so abundant in China, cannot be 
 allowed to meet, to the advantage of the people 
 of both countries. The supply of labor is so 
 great in all parts of China, and the demand so 
 small, that a Chinese laborer who receives on 
 an average per day an equivalent of ten cents in 
 our money, is among the very fortunate ; and with 
 that pittance he often clothes and feeds, to the 
 11 
 
limited extent I have mentioned, several people, 
 old and young. 
 
 WHY IS THERE SO LITTLE DEMAND FOR 
 LABOR? 
 
 Largely because China lacks a government that 
 protects Chinese in the establishment and opera- 
 tion of industrial enterprises, — enterprises that 
 would produce an ever increasing demand for 
 Chinese labor and lessen the poverty that is so 
 general. Instead of governmental protection of 
 those who attempt to conduct manufacturing and 
 other industrial enterprises, there is, too often if 
 not generally, official extortion practised upon 
 them; and consequently there is little extension 
 of industrial enterprises in China, outside the 
 limited areas which have some measure of for- 
 eign protection, such as the so-called “conces- 
 sions” in Shanghai and Tientsin. 
 
 With the political conditions such as I have 
 outlined, it is not remarkable that the pending 
 industrial revolution progresses slowly, so far as 
 purely Chinese enterprises are concerned. But, 
 despite these conditions, enterprises under proper 
 protection are making surprising headway. 
 
 HOW CAN CHINA’S AMERICAN FRIENDS 
 HELP? 
 
 What can the foreign friends of China, those 
 who believe in the brotherhood of man, who be- 
 lieve that a bad condition such as exists in China 
 is harmful to the whole world, — what can they 
 do to help? 
 
 1. Open Opportunities for Practical Business 
 Experience to the Chinese Students 
 in America 
 
 By the return of the surplus from our share 
 of the Boxer Indemnity, we have brought to our 
 shores for education thousands of the young men 
 and young women of China. We have generously 
 opened to them all the facilities of our institu- 
 tions of learning; but this is not enough. They 
 need in addition the practical contacts with busi- 
 ness and industry which alone can fit them for 
 the tasks which await them. Given these con- 
 tacts, they should be ready to lead in the diffi- 
 12 
 
cult work of developing China’s great, natural 
 resources — but without the practical knowledge 
 which only such contacts can give, it is vain to 
 expect of them the certain touch which means 
 success. China’s problems are practical prob- 
 lems, and in the presence among us of over 2,000 
 Chinese students we have an opportunity to serve 
 China, and at the same time to serve our own 
 interests. We should at once take steps to insure 
 to every Chinese student of serious purpose a 
 chance to learn, by practice, how practical men 
 meet practical problems. This can be best ac- 
 complished by taking them into our industries. 
 Our own rewards will be practical rewards; for 
 we shall then have in the expanding markets of 
 China men who appreciate the essential sound- 
 ness of American business and American busi- 
 ness methods. 
 
 2. Get Behind American AIissionary 
 Educators 
 
 I know of no better way for individuals to 
 help China than by helping to increase the oppor- 
 tunities of the arising generation of Chinese to 
 obtain education of the right kind — the kind that 
 takes into account the moral side of life, — the 
 kind that breeds character, the kind that teaches 
 that citizenship carries with it public duties as 
 well as personal advantages, and what those 
 duties are; the kind that will produce a deter- 
 mination on the part of the educated classes to 
 see that corruption in the government service 
 is smashed ; that armies are disbanded and that 
 the government is run for the benefit of the 
 masses ; the kind of education that is being of- 
 fered in the primary schools, the middle schools, 
 the colleges and universities, carried on under 
 missionary auspices, in charge of as unselfish a 
 lot of people as can be found anywhere In the 
 world. These institutions are all to limited in 
 their physical ability to reach the Chinese who 
 need their help, and are eager to have it. 
 
 I have come to believe that America’s greatest 
 contribution to China, greater even than Amer- 
 ica’s political friendship, is the work of the 
 American Christian missionaries in China. This 
 statement may indicate the importance I attach 
 to the need of moral regeneration which must 
 13 
 
precede any great political and industrial im- 
 provement. In all China there is not a single 
 organization, on a scale of importance, that aims 
 at moral improvement, or that is calculated to 
 bring it about, that is not traceable In its origin 
 to the Christian missions. I have inquired among 
 all kinds of people from all parts of China for 
 such an activity of non-Christian origin, without 
 finding one. 
 
 One who engages in an effort to learn what 
 is the matter with China, and what is the remedy, 
 whatever may have been his former attitude 
 toward religion, cannot fail to become interested 
 in religion as a factor in China. The Chinese 
 are a non-religious, not an anti-religious, people. 
 Neither Buddhism nor Confucianism nor any 
 other of the Oriental religions is any longer a 
 motive force in China. A distinguished scholar, 
 who spent a long period in China, has recently 
 declared : 
 
 “Instead of carping at missionaries, we should 
 remember that they have been almost the only 
 ones in the past with a motive force strong 
 enough to lead them to take an active interest 
 in Chinese education.” 
 
 I regard the Christian universities, colleges, 
 academies, middle schools and primaries, with 
 their nearly 250,000 Chinese students, as most 
 potent factors in fitting China for taking her 
 proper place in the world drama. 
 
 At one of the leading play houses in New York 
 City, in a play that has had a long run to 
 crowded houses, there is a character supposed to 
 represent a Christian missionary in one of the 
 South Seas, and I suppose it is accepted by many 
 who see the play as representing the missionary 
 type. By chance, I saw the play a few nights 
 ago. According to my knowledge of mission- 
 aries in China and Japan (and I have seen much 
 of them, and learned much of their methods 
 and their work), the portrayal in this play is a 
 scandalously false one. I believe that with the 
 most diligent search, extending over any length 
 of time, carried on by those most eager to find 
 justification for the portrayal, no such character 
 w'ould be found in all China, nor in Japan, nor 
 in the South Seas. 
 
 14 
 
The men and women engaged in Christian 
 missionary work in China and Japan are well 
 educated, mostly college graduates, well-bred, 
 high-minded, very sensible and practical-minded 
 people, as I believe any fair-minded man, reli- 
 gious or otherwise, with knowledge of the mis- 
 sionaries and of their methods and work, will 
 say. They are doing a work of far-reaching and 
 vital importance, and with an unselfish devotion 
 far above praise. Sometimes I wonder if there 
 may not some time travel up and down this great 
 land a Chinese John Wesley, or better still a 
 hundred of them, arousing to a high pitch the 
 moral sense of the people, as John Wesley 
 aroused the English people long ago. 
 
 If China’s educated men as a class have not 
 the inclination and the courage to stand for the 
 right, there is not much hope for her; if, because 
 of fear of personal harm or personal disadvan- 
 tage or because their moral sense is weak, they 
 withhold support from men who are trying to 
 do China good service, and with creditable suc- 
 cess, then the worst has not yet come to China. 
 And if the people of the United States do not 
 realize the immense value of the work which 
 their missionary educators are doing in China, 
 they should be made to realize it ; for China’s 
 problems are, to a large extent, the problems of 
 the world in general, and of the United States 
 in particular. 
 
 For two and a half years, I have watched in 
 China for signs of hope, signs of the coming of 
 that all-important righteous, aggressive public 
 opinion upon which depends China’s future, and 
 the future of liberal government in Asia, for 
 China is the test case. I have been often dis- 
 couraged, disappointed ; but I have never lost 
 hope. I believe in the future of the Chinese 
 people because 1 know what they are; and, despite 
 their errors and their inevitable failures, I desire 
 to help them, and to see my country help them. 
 Therefore, I face the facts, the evil with the 
 good, and desire my fellow-countrymen to know 
 both. If they are enabled to understand China 
 as she is, they will then be the better able to 
 help her to become what she should be, politically, 
 economically and spiritually a great republic. 
 
 15 
 
THE CHINA SOCIETY OE AMERICA 
 (Inc.) 
 
 19 West 44th Sertet 
 New York City 
 
 An organization supported entirely by member- 
 ship fees and personal contributions. 
 
 Its aim is the promotion of friendship, peace 
 and commercial intercourse between China and 
 the United States of America. 
 
 W. Cameron Forbes Honorary President 
 
 James G. Harbord President 
 
 Edward C. Delafield Treasurer 
 
 Robert McElroy' Managing Director 
 
 CHINA SOCIETY PAMPHLETS 
 First Series 
 
 I. Aims and Organization. 
 
 H. The American Constitution and the Chi- 
 nese Republic. By Robert McElroy. 
 
 HI. Contemporary Chinese Leaders ; Brief 
 Sketches. By Merle R. Walker. 
 
 Etc., Etc. 
 
 Second Series. 
 
 1. Salient Facts Regarding China’s Trade. 
 By Julean Arnold. 
 
 16