for the bare war-expenses. The Japanese war indemnity raised in
three successive issues--from 1895 to 1898--of 16,000,000 pounds
each, added 48,000,000 pounds. Thus the Korean imbroglio cost
China nearly 55 millions sterling. As the purchasing power of the
sovereign is eight times larger in China than in Europe, this debt
economically would mean 440 millions in England--say nearly double
what the ruinous South African war cost. It is by such methods of
comparison that the vital nature of the economic factor in recent
Chinese history is made clear.]

Little attention was attracted to what is a turning-point in
Chinese history. There cannot be the slightest doubt that in 1894
the Manchus wrote the first sentences of an abdication which was
only formally pronounced in 1912: they had inaugurated the
financial thraldom under which China still languishes. Within a
period of forty months, in order to settle the disastrous Japanese
war, foreign loans amounting to nearly fifty-five million pounds
were completed. This indebtedness, amounting to nearly three times
the "visible" annual revenues of the country--that is, the
revenues actually accounted for to Peking--was unparalleled in
Chinese history. It was a gold indebtedness subject to all sorts
of manipulations which no Chinese properly understood. It had
special political meaning and special political consequences
because the loans were virtually guaranteed by the Powers. It was
a long-drawn coup d'etat of a nature that all foreigners
understood because it forged external chains.

The internal significance was even greater than the external. The
loans were secured on the most important "direct" revenues
reaching Peking--the Customs receipts, which were concerned with