The defeat of the National Banking project owed its origin to the thoroughly corrupt condition of the administrative system of China. From the Dowager Empress down to the lowest and most petty underling in the Empire, the whole political fabric was honeycombed with what Americans characterize as graft—a species of political barnacles, if I may be allowed to call it that, which, when once allowed to fasten their hold upon the bottom of the ship of State were sure to work havoc and ruination; in other words, with money one could get anything done in China. Everything was for barter; the highest bid got the prize. The two wars—the one with Japan in 1894–5 and the other, the Japan and Russian War in 1904–5—have in some measure purified the Eastern atmosphere, and the Chinese have finally awakened to their senses and have come to some sane consciousness of their actual condition.
After the defeat of the national banking project at the hands of Shing Taotai, I went right to work to secure a railroad concession from the government. The railroad I had in mind was one between the two ports of Tientsin and Chinkiang; one in the north, the other in the south near the mouth of the Yangtze River. The distance between these ports in a bee line is about five hundred miles; by a circuitous route going around the province of Shan Tung and crossing the Yellow River into the province of Hunan through Anwhui, the distance would be about seven hundred miles. The German government objected to having this railroad cross Shan Tung province, as they claimed they had the monopoly of building railroads throughout the province, and would not allow another party to build a railroad across Shan Tung. This was a preposterous and absurd pretension and could not be supported either by the international laws or the sovereign laws of China. At that time, China was too feeble and weak to take up the question and assert her