To describe briefly and intelligibly the series of transactions from the 1st January, 1912, when the Republic was proclaimed at Nanking by a handful of provincial delegates, and Dr. Sun Yat Sen elected Provisional President, to the _coup d'état_ of 4th November, 1913, when Yuan Shih-kai, elected full President a few weeks previously, after having acted as Chief Executive for twenty months, boldly broke up Parliament and made himself _de facto_ Dictator of China, is a matter of extraordinary difficulty. All through this important period of Chinese history one has the impression that one is in dreamland and that fleeting emotions take the place of more solid things. Plot and counter-plot follow one another so rapidly that an accurate record of them all would be as wearisome as the Book of Chronicles itself; whilst the amazing web of financial intrigue which binds the whole together is so complex--and at the same time so antithetical to the political struggle--that the two stories seem to run counter to one another, although they are as closely united as two assassins pledged to carry through in common a dread adventure. A huge agglomeration of people estimated to number four hundred millions, being left without qualified leaders and told that the system of government, which had been laid down by the Nanking Provisional Constitution and endorsed by the Abdication Edicts, was a system in which every man was as good as neighbour, swayed meaninglessly to and fro, vainly seeking to regain the equilibrium which had been so sensationally lost. A litigious spirit became so universal that all authority was openly derided, crimes of every description being so common as to force most respectable men to withdraw from public affairs and leave a bare rump of desperadoes in power. Long embarrassed by the struggle to pay her foreign loans and indemnities, China was also virtually penniless. The impossibility of arranging large borrowings on foreign markets without the open support of foreign governments--a support which was hedged round with conditions--made necessary a system of petty expedients under which practically every provincial administration hypothecated every liquid asset it could lay hands upon in order to pay the inordinate number of undisciplined soldiery who littered the countryside. The issue of unguaranteed paper-money soon reached such an immense figure that the market was flooded with a worthless currency which it was unable to absorb. The Provincial leaders, being powerless to introduce improvement, exclaimed that it was the business of the Central Government as representative of the sovereign people to find solutions; and so long as they maintained themselves in office they went their respective ways with a sublime contempt for the chaos around them. What was this Central Government? In order successfully to understand an unparalleled situation we must indicate its nature.