being abolished. The same applied to
Austria. Russia, immediately after the setting up of the Soviet
government, had renounced all her rights under the Capitulations. This
was the first step in the gradual rescinding of the Capitulations; the
last of them went only in 1943, as a consequence of the difficult
situation of the Europeans and Americans in the Pacific produced by the
Second World War.

At the end of the first world war the foreign powers revised their
attitude towards China. The idea of territorial partitioning of the
country was replaced by an attempt at financial exploitation; military
friction between the Western powers and Japan was in this way to be
minimized. Financial control was to be exercised by an international
banking consortium (1920). It was necessary for political reasons that
this committee should be joined by Japan. After her Twenty-one Demands,
however, Japan was hated throughout China. During the world war she had
given loans to the various governments and rebels, and in this way had
secured one privilege after another. Consequently China declined the
banking consortium. She tried to secure capital from her own resources;
but in the existing political situation and the acute economic
depression internal loans had no success.

In an agreement between the United States and Japan in 1917, the United
States, in consequence of the war, had had to give their assent to
special rights for Japan in China. After the war the international
conference at Washington (November 1921-February 1922) tried to set
narrower limits to Japan's influence over China, and also to
re-determine the relative strength in the Pacific of the four great
powers (America, Britain, France, Japan). After the failure of the
banking plan this was the last means of preventing military conflicts
between the powers in the Far East. This brought some relief to China,
as Japan had to yield for the time to the pressure of the western
powers.

The years that followed until 1927 were those of the complete collapse
of the political power of the Peking government--years of entire
dissolution. In the south Sun Yat-sen had been elected generalissimo in
1921. In 1924 he was re-elected with a mandate for a campaign against
the north. In 1924 there also met in Canton the first general congress
of the Kuomintang ("People's Party"). The Kuomintang (in 1929 it had
653,000 members, or roughly 0.15 per cent of the population) is the
continuatio