ies demanded a republic, but the imperial house was only
ready to grant a constitutional monarchy.

Meanwhile the revolutionaries set up a provisional government at Nanking
(December 29th, 1911), with Sun Yat-sen as president and Li Yuean-hung as
vice-president. Yuean Shih-k'ai now declared to the imperial house that
the monarchy could no longer be defended, as his troops were too
unreliable, and he induced the Manchu government to issue an edict on
February 12th, 1912, in which they renounced the throne of China and
declared the Republic to be the constitutional form of state. The young
emperor of the Hsuean-t'ung period, after the Japanese conquest of
Manchuria in 1931, was installed there. He was, however, entirely
without power during the melancholy years of his nominal rule, which
lasted until 1945.

In 1912 the Manchu dynasty came in reality to its end. On the news of
the abdication of the imperial house, Sun Yat-sen resigned in Nanking,
and recommended Yuean Shih-k'ai as president.

Chapter Eleven

THE REPUBLIC (1912-1948)

1 _Social and intellectual position_

In order to understand the period that now followed, let us first
consider the social and intellectual position in China in the period
between 1911 and 1927. The Manchu dynasty was no longer there, nor were
there any remaining real supporters of the old dynasty. The gentry,
however, still existed. Alongside it was a still numerically small
middle class, with little political education or enlightenment.

The political interests of these two groups were obviously in conflict.
But after 1912 there had been big changes. The gentry were largely in a
process of decomposition. They still possessed the basis of their
existence, their land, but the land was falling in value, as there were
now other opportunities of capital investment, such as export-import,
shareholding in foreign enterprises, or industrial undertakings. It is
important to note, however, that there was not much fluid capital at
their disposal. In addition to this, cheaper rice and other foodstuffs
were streaming from abroad into China, bringing the prices for Chinese
foodstuffs down to the world market prices, another painful business
blow to the gentry. Silk had to meet the competition of Japanese silk
and especially of rayon; the Chinese silk was of very unequal quality
and sold with difficulty. On the other hand, through the influence of
the Western capitalistic system, which was