On the 12th May it became necessary to suspend specie payment in Peking, the government banks having scarcely a dollar of silver left, a last attempt to negotiate a loan in America having failed.  Meanwhile under inspiration of General Feng Kuo-chang, a conference to deal with the situation was assembling at Nanking; but on the 11th May, the Canton Military Government, representing the Southern Confederacy, had already unanimously elected Vice-President Li Yuan Hung as president of the Republic, it being held that legally Yuan Shih-kai had ceased to be President when he had accepted the Throne on the previous 13th December.  The Vice-President, who had managed to remove his residence outside the Palace, had already received friendly offers of protection from certain Powers which he declined, showing courage to the end.  Even the Nanking Conference, though composed of trimmers and wobblers, decided that the retirement of Yuan Shih-kai was a political necessity, General Feng Kuo-chang as chairman of the Conference producing at the last moment a telegram from the fallen Dictator declaring that he was willing to go if his life and property were guaranteed.

A more dramatic collapse was, however, in store.  As May drew to an end it was plain that there was no government at all left in Peking.  The last phase had been truly reached.  Yuan Shih-kai’s nervous collapse was known to all the Legations which were exceedingly anxious about the possibility of a soldiers’ revolt in the capital.  The arrival of a first detachment of the savage hordes of General Chang Hsun added Byzantine touches to a picture already lurid with a sickened ruler and the Mephistophelian figure of that ruler’s ame damnee, the Secretary Liang Shih-yi, vainly striving to transmute paper into silver, and find the wherewithal to prevent a sack of the capital.  It was said at the time that Liang Shih-yi had won over his master to trying one last throw of the dice.  The troops of the remaining loyal Generals, such as Ni Shih-chung of Anhui, were transported up the Yangtsze in an attempt to restore the situation by a savage display,—­but that effort came to nought.

The situation had become truly appalling in Peking.  It was even said that the neighbouring province of Shantung was to become a separate state under Japanese protection.  Although the Peking administration was still nominally the Central Government of China, it was amply clear to observers on the spot that by a process of successive collapses all that was left of government was simply that pertaining to a city-state of the antique Greek type—­a mal-administration dominated by the enigmatic personality of Liang Shih-yi.  The writ of the capital no longer ran more than ten miles beyond the city walls.  The very Government Departments, disgusted with, and distrustful of, the many hidden influences at work, had virtually declared their independence and went their own way, demanding foreign dollars and foreign banknotes from the public,