;

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Mr. Chirol, it will be seen, advocated the employment of foreign technical advisers, and Na had sufficient Manchu politeness to acquiesce in the suggestion. It met, however, with a different reception in an after-dinner talk with Liang Tun-yen, who bridled up at once and resented, after the approved Cantonese fashion, the idea that the Chinese were incapable of working out their own salvation.

I should add that the Wai-wa Pu paid Mr. Chirol the very unusual compliment of entertaining him at dinner in the new Foreign Office.

(Copy to Tokyo.)

Inclosure in No. 1.

I have, &c.

J. N. JORDAN,

Account by Mr. Campbell of Mr. Chirol's interview with No-tung.

THE Grand Secretary Na-tung received Mr. Chirol by appointment at his private house on the 24th June at 3 o'clock. There were present at the interview Mr. Liu Yuk-lin, of the Wai-wu Pu, and myself.

Mr. Chirol, in reply to questions, said that this was his fourth visit to China. He was greatly interested in the political problems which were unfolding themselves, and commented on the changes which had taken place, and especially upon the remarkable alteration in the relations between the provinces and the Central Govern- ment. The increased authority of the provincial governments and corresponding diminution of the central control were signs of the times which much impressed him.

The Grand Secretary agreed that the central authority was not what it was. Since 1900 there had been a change, and the provinces were more independent in their attitude and less disposed to take their orders from Peking. That was the great difficulty of the Chinese Government at the moment.

Mr. Chirol mentioned that he had just come from Japan, where the problem of reform had not been the same. There reform had come from above; here it was coming rather from below. The absence of a middle class in Old Japan facilitated matters at the beginning, but it had no doubt made them more difficult later on While the initial difficulties in China were greater because of the numbers and importance of the middle classes, it was probable that the path of reform would be the smoother in the future because of their presence.

His Excellency demurred to the statement that reform in China was coming from below. The Court took the greatest interest in reforms generally, and parliamentary reform in particular, and there had been numerous decrces of the late and present reign which proved that change was being directed from above. He asked Mr. Chirol, as an expert in political affairs, what particular steps he would advise China to take at the present juncture in the direction of reform.

Mr. Chirol said that he could have no hesitation in answering such a question. It was quite clear that a reform of the currency and finance of the Empire must precede all others, and must form the foundation of effective progress. If there was any one lesson that Western experience had taught us it was that. And finance had the advantage of being an exact science which, in the hands of experts, was capable of mathematical results. The benefits to be derived from financial reform were as certain as that two and two made four, and he had been unable to understand why it was that the Chinese Government had not thought of enlisting the services of foreign experts for the purpose of securing these benefits as soon as possible.

His Excellency agreed that financial reform was the first essential. Everybody in China recognised that it was, but there was a strong party against the employment of foreign experts, who raised the objection that such agents would gradually acquire power and become a serious political danger. Of course well-informed persons were not apprehensive of any such result.

Mr. Chirol enquired whether this apprehension arose from the precedent of the abnormal position of the Imperial maritime customs in China, and Na Chung-tang said he did not think so. The opinion was held, as regards experts, in all matters, but he repeated that it was not held by the well-informed, and arose in the main from ignorance.

To show how unnecessary such apprehensions were, Mr. Chirol mentioned the example of Japan in the matter of experts. Japan had gone to Western countries,

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bad engaged the best she could find, had assigned them suitable positions, had kept them until everything they could teach had been learnt, and, when the terms of their engagements expired, parted with them in a friendly manner which did honour to both parties. He saw no reason why China could not follow Japan's example.

The Grand Secretary acquiesced generally. He had been to Japan in 1901, and had been told then what had been done. The Japanese Government began by sending 500 selected men abroad to study modern institutions, and when the successful of these returned-some 250 or so-foreign experts were invited with them to collaborate in reforming Japan.

Asked what was actually being done at the present time in China as regards finance, he said he understood that the Board of Finance was investigating the conditions throughout the Empire and obtaining reports, and that no decision would be taken until the facts were ascertained.

In reply to an observation of the Grand Secretary, Mr. Chirol said that for many years he had taken a deep interest in the political evolution of Eastern countries. East and West were as two rivers which had been flowing far apart in parallel directions for ages, but the waters of which were now mingling, and the problems arising were of absorbing interest to him as a student of the history of the human

race.

His Excellency expressed himself as highly honoured and pleased to have had the opportunity of a conversation with such a renowned authority on the politics of the Far East as Mr. Chirol.

C. W. CAMPBELL.`

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