The death of Yuan Shih-kai in the summer of 1916 radically altered the situation.  Powerful influences were again set to work to stamp out the German cult and to incline the minority of educated men who control the destinies of the country to see that their real interests could only lie with the Allies, who were beginning to export Chinese man-power as an auxiliary war-aid and who were very anxious to place the whole matter on a sounder footing.  Little real progress was, however, made in the face of the renewed German efforts to swamp the country with their propaganda.  By means of war-maps, printed in English and Chinese, and also by means of an exhaustive daily telegraphic service which hammered home every possible fact illustrative of German invincibility, the German position in China, so far from being weakened, was actually strengthened during the period when Rumania was being overrun.  By a singular destiny, any one advocating an alliance with the Allies was bitterly attacked not only by the Germans but by the Japanese as well—­this somewhat naive identification of Japan’s political interest with those of an enemy country being an unique feature of the situation worthy of permanent record.

It was not until President Wilson sent out his Peace offering of the 19th December, 1916, that a distinct change came.  On this document being formally communicated to the Chinese Government great interest was aroused, and the old hopes were revived that it would be somehow possible for China to gain entry at the definitive Peace Congress which would settle beyond repeal the question of the disposal of Kiaochow and the whole of German interests in Shantung Province,—­a subject of burning interest to the country not only because of the harsh treatment which had been experienced at the hands of Japan, but because the precedent established in 1905 at the Portsmouth Treaty was one which it was felt must be utterly shattered if China was not to abandon her claim of being considered a sovereign international State.  On that occasion Japan had simply negotiated direct with Russia concerning all matters affecting Manchuria, dispatching a Plenipotentiary to Peking, after the Treaty of Peace had been signed, to secure China’s adhesion to all clauses en bloc without discussion.  True enough, by filing the Twenty-one Demands on China in 1915—­when the war was hardly half-a-year old—­and by forcing China’s assent to all Shantung questions under the threat of an Ultimatum, Japan had reversed the Portsmouth Treaty procedure and apparently settled the issues at stake for all time; nevertheless the Chinese hoped when the facts were properly known to the world that this species of diplomacy would not be endorsed, and that indeed the Shantung question could be reopened.

Consequently great pains were taken at the Chinese Foreign Office to draft a reply to the Wilson Note which would tell its own story.  The authorized translation of the document handed to the American Legation on the 8th January has therefore a peculiar political interest.  It runs as follows:—­