xtraordinary
chapter which only closed with the disastrous Peace of Portsmouth opened
for Russia in a very brilliant way. The presence in Moscow of the
veteran statesman Li Hung-chang on the occasion of the Tsar's Coronation
afforded an opportunity for exhaustively discussing the whole problem of
the Far East. China required money: Russia required the acceptance of
plans which ultimately proved so disastrous to her. Under Article IV of
the Treaty of Shimonoseki (April, 1895) China had agreed to pay Japan as
a war-indemnity 200 million Treasury taels in eight instalments: that is
50 million taels within six months, a further 50 millions within twelve
months, and the remaining 100 millions in six equal instalments spread
over seven years, as well as an additional sum of 50 millions for the
retrocession of the Liaotung Peninsula.

China, therefore, needed at once 80 million taels. Russia undertook to
lend her at the phenomenally low rate of 4 per cent. the sum of
L16,000,000 sterling--the interest and capital of which the Tsar's
Government guaranteed to the French bankers undertaking the flotation.
In return for this accommodation, the well known Russo-Chinese
Declaration of the 24th June (6th July), 1895, was made in which the
vital article IX states that--"In consideration of this Loan the Chinese
Government declares that it will not grant to any foreign Power any
right or privilege of no matter what description touching the control or
administration of the revenues of the Chinese Empire. Should, however,
the Chinese Government grant to any foreign Power rights of this nature,
it is understood that the mere fact of having done so will extend those
rights to the Russian Government."

This clause has a monumental significance: it started the scramble in
China: and all the history of the past 22 years is piled like a pyramid
on top of it. Now that the Romanoffs have been hurled from the throne,
Russia must prove eager to reverse the policy which brought Japan to her
Siberian frontiers and which pinned a brother democracy to the ground.

For China, instead of being nearly bankrupt as so many have asserted,
has, thanks to the new scale of indebtedness which the war has
established, become one of the most debt-free countries in the world,
her entire national debt (exclusive of railway debt) amounting to less
than 150 millions sterling, or seven shillings per head of population,
which is certainly not very terrible. No studen