In that first period China, having been rudely handled by Japan, recovered herself only by indulging in the sort of diplomacy which had become traditional under the Manchus.  Thankful for any help in her distress, she invited and welcomed the intervention of Russia, which gave her back the Liaotung Peninsula and preserved for her the shadow of her power when the substance had already been so sensationally lost.  Men are apt to forget to-day that the financial accommodation which allowed China to liquidate the Japanese war-debt was a remarkable transaction in which Russia formed the controlling element.  In 1895 the Tsar’s Government had intervened for precisely the same motives that animate every State at critical times in history, that is, for reasons of self-interest.  The rapid victory which Japan had won had revived in an acute form the whole question of the future of the vast block of territory which lies south of the Amur regions and is bathed by the Yellow Sea.  Russian statesmen suddenly became conscious that the policy of which Muravieff-Amurski in the middle of the nineteenth century had been the most brilliant exponent—­the policy of reaching “warm water”—­was in danger of being crucified, and the work of many years thrown away.  Action on Russia’s part was imperative; she was great enough to see that; and so that it should not be said that she was merely depriving a gallant nation of the fruits of victory and thereby issuing to her a direct challenge, she invited the chief Powers in Treaty relations with China to co-operate with her in readjusting what she described as the threatened balance.  France and Germany responded to that invitation; England demurred.  France did so because she was already the devoted Ally of a nation that was a guarantee for the security of her European frontiers:  Germany because she was anxious to see that Russia should be pushed into Asiatic commitments and drawn away from the problems of the Near East.  England on her part very prudently declined to be associated with a transaction which, while not opposed to her interests, was filled with many dubious elements.

It was in Petrograd that this account was liquidated.  The extraordinary 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.