INTRODUCTORY

SOME OF THE ISSUES OF THE CONFLICT

The deeper significance of the present dramatic struggle between Russia and Japan over territories belonging to neither of the contestants cannot perhaps be understood, until we examine some of the issues at stake between them. The more fundamental of these issues, however, as in many another international crisis, seem to be oftener understood than expressed, and hence understood only vaguely, although it may fairly be said that they constitute the very forces which have with irresistible certainty brought the belligerents into collision. For Japan, the issues appear to be only partly political, but mainly economical; and perhaps no better clue to the understanding, not only of the present situation, but also, in general, of the activities at home and abroad of the Japanese people, could be found than in the study of these profound material interests.

Among the most remarkable tendencies of Japan’s economic life of recent years has been the enormous increase of her population, along with an immense growth of her trade and industries. The 2number of her inhabitants increased from 27,200,000, as estimated in 1828, to only 34,000,000 in 1875, but since that year it has risen so fast that it is to-day 46,305,000^[1]—exclusive of the 3,082,404^[1] in Formosa and the Pescadores—and is increasing now at the annual rate of nearly 600,000. At the same time, the foreign trade of Japan has grown from 49,742,831 yen in 1873 to 606,637,959 yen in 1903. Up to the end of May, 1904, the total amount showed 274,012,437 yen, as compared with the 248,506,103 yen of the same period of 1903.^[2] The significance of these figures must be seen in the light of the important fact that the bulk of the increase in population and trade has been due to the decisive change of the economic life of the nation from an agricultural to an industrial stage. The new population seems to increase far more rapidly in the urban than in the rural districts, for if we consider as urban the inhabitants of communities containing each more than three thousand people, the ratio of the urban population to the rural may be estimated as 1 to 3. If only towns of more than 10,000 inhabitants each are included in the urban class, it is seen that their population 3increases annually 5 or 6 per cent., while the corresponding rate with the rural communities never rises above 3 per cent. and is usually much lower.^[3] This comparatively rapid growth of the cities also indicates that the new population must be mainly supported by commerce and manufacture.

In 1903, 84.6 per cent. of the total export trade of Japan consisted of either wholly or partly manufactured articles.^[4] On the other hand, agriculture has progressed only slowly,^[5] and is no longer able either to support the increased population or to produce enough raw articles for the manufactures. The average annual crop of rice may be put at 210 million bushels, and that of 4barley, rye, and wheat, collectively called mugi, at 94.3 million bushels, while the average annual consumption of these cereals may safely be estimated, respectively, at 228.3 and 106.7 million bushels. In years of poor crops, the importation of rice, wheat, and flour amounts to large figures; as, for instance, in 1903, they together were imported to the value of about 67 million yen.^[6] Raw material and food-stuffs, consisting of cotton, wool, rice, flour and starch, beans and oil-cakes, the importation of all of which was next to nothing twenty years ago, were in 1903 supplied from abroad to the value of 169,600,000 yen, or 53.5 per cent. of the total imports of Japan.^[7] Japan will not only always have to rely upon foreign countries for the supply of these articles, but also have to import them in ever increasing quantities. Nor does agriculture occupy in the national finances the position it once did, for in 1875 the land tax, the incidence of which fell, as it still falls, very largely on the farmer, supplied 78 per cent. of the total revenue of the state, while the percentage fell, in the estimated budget for the fiscal year 1902–3, to 16, the actual amount also decreasing during the interval from 67.7 to 37 million yen, and the expenditures 5of the government, on the other hand, increasing from 73.4 million in 1874, to the enormous figure of 223.18 million yen in 1904–5.^[8]

No one can say a cheerful word about agriculture in Japan or the life of her farmer. Exclusive of Formosa, the development of which seems to lie in the direction of industry and trade rather than agriculture, less than 13,000,000 acres are under cultivation,^[9] or, about 13 per cent. of the extent of the country, while the arable area of the land cannot possibly be increased by more than 10,500,000 acres,^[10] so that the per capita share of arable land is less than one half of an acre,^[11] which is even below the corresponding rate in England and less 6than one half of that in China. Japan’s agricultural life can, however, be no more intensively improved than extensively enlarged. The sedimentary soil so well adapted to the rice cultivation and so abundantly blessed with moisture^[12] is too minutely and carefully tilled, the climate conditions are too cleverly made use of,^[13] and, above all, the lots of land are too diminutive,^[14] to make the importation of new machinery and methods always profitable or desirable.^[15] The day-laborers on the farm receive 7wages ranging between nine and fifteen cents, though the latter have risen more than 100 per cent. during the last fifteen years.^[16] With this meagre income, some of the laborers have to support their aged parents, wives, and children. The tenants, whose number bears the ratio of about two to one^[17] to that of the proprietors, live literally from hand to mouth, and cannot always afford even the necessary manure, and the proprietor’s profit hardly rises above 5 per cent., while the capital he employs pays an interest of 15 to 30 per cent.^[18] and his local and central taxes further reduce his income. The farmer would in many cases be unable to subsist, were it not possible for him, as it fortunately is, to try his hand at silk-culture or some other subsidiary occupation.

Japan’s agriculture, then, can neither be much extended nor be greatly improved, can neither satisfy the old population nor support the new, and, above all, can only produce smaller and smaller portion of the necessary raw material for her growing industries. 8Under these circumstances, it is becoming more evident every year that the time is forever past when the nation could rely solely upon agriculture for subsistence. It is hardly necessary to repeat the well-known law of population—which is at the root of our subject—that every advance in the economic life of a nation creates a situation which is capable of supporting a larger population than in the preceding stage. What agriculture cannot support, industry and trade may. Japan’s growing population may only be supported, as it has already begun to be, by an increased importation of raw material and food-stuffs and an increased exportation of manufactures. Trade statistics unmistakably show that such markets for her manufactures and such supply regions of her raw and food articles are found primarily in East Asia, with which the commercial relations of Japan have grown 543 per cent. since 1890, as compared with the 161 per cent.^[19] increase of the American and the 190 per cent. increase of the European trade,^[20] until the East Asiatic trade amounted in 1903 to 295,940,000 yen in value, or 48.7 per cent. of the entire foreign trade of Japan.^[21] The 9following table gives a comparison of the importation in the years 1882, 1902, and 1903, of what may be considered as primarily East Asiatic products:^[22]—

1882 1902 1903

Cotton 467,249 yen 79,784,772 yen 69,517,894 yen

Wool 3,397,564 4,811,811

Rice 134,838 17,750,817 51,960,033

Wheat 240,050 4,767,832

Flour 3,278,324 10,324,415

Beans 4,956,000 7,993,411

Oil-cakes 44,468 10,121,712 10,739,359

From these eloquent facts, the conclusion would seem tenable that, should the markets of East Asia be closed, Japan’s national life would be paralyzed, as her growing population would be largely deprived 10of its food and occupation. These markets, then, must be left as open as the circumstances permit, if Japan would exist as a growing nation. Observe here the tremendous significance for Japan of the principle of the “open door” as applied to East Asia—the principle, in a more accurate language, of the equal opportunity in East Asia for the economic enterprise of all foreign nations.^[23]

In this great problem Manchuria and Korea occupy, perhaps, the most important position, for they together receive a large portion of the cotton yarn and cotton textiles exported from Japan, besides several other manufactured goods and coal, and in return supply Japan with much of the wheat and rice, and practically all of the millet, beans, and oil-cakes, imported into the country. Let us briefly demonstrate these statements by figures. First, consider the exportation of cotton yarns and textiles from Japan to Manchuria and Korea. It is rather difficult from the material on hand to estimate the exact ratio which the import of these articles from Japan into Korea and Manchuria bears to the total import of the same articles from all nations. In the case of Korea, we can make an approximate estimate, as we possess both the export values in Japan and 11import values in Korea, but with regard to Manchuria, we know only the quantities, but not the values, of the cotton goods imported. By assuming, however, that 40 per cent. of these goods imported by the Chinese Empire from Japan go to North China (of which Manchuria is here considered by far the most important part), it may be said, roughly, that in 1903 about 6 per cent. of the cotton yarn exported from Japan went to Korea and perhaps 40 per cent. to North China. The average import of this article during the past two years was probably 1,200,000 yen in Korea and 8,000,000 yen in North China, making the total about 36 per cent. of the export value in Japan. On the same basis of calculation, the average importation of cotton textiles from Japan during the past three years was 3,190,000 yen in Korea and 765,000 yen in North China, or about 69.5 per cent. of the entire export of these articles from Japan. These figures are only tentative, but may serve to show that Manchuria receives comparatively much yarn and Korea much textiles, and that they together receive at least a large percentage of those articles exported by Japan, where their manufacture occupies an increasingly important place in her economic life.^[24] As to the exportation of agricultural products from Manchuria and 12Korea, it is seen that wheat is only beginning to be cultivated in Manchuria, while the rice cultivation is there practically unknown except in a few places near the Korean border, where during the campaign of 1894–5 the Japanese troops introduced it. The position which Korea occupies in the importation of wheat into Japan will be seen from the following table:—

Wheat imported into Japan, 1898–1902,^[25] kin = 1.325 lbs. av. yen = 49.8 cents.

From 1898 1899 1900 1901 1902

Australia 4,339,845 5,554,513 18,423

143,260 185,274 721

Korea 2,770,755 1,668,207 5,182,533 1,644,577 8,556,813

72,698 71,764 132,734 43,875 237,217

Great Britain 457,450

15,502

The United States. 2,039,371 395,009 12,370,022 1,388,372 864

71,173 14,697 400,829 43,720 43

Other countries. 1,560 990 547 77,343

41 27 14 2,069

Total 4,811,686 2,064,206 22,350,397 8,587,462 8,653,443

143,913 86,489 692,341 272,869 240,050

A glance at these figures will show that the import trade of wheat, like that of rice, is dependent on many fluctuating conditions at home and abroad. The poor crop in Japan caused an enormous importation of wheat in 1903 to the value of 4,767,000 yen. From the above table, it is seen that Korea supplied during the five years, respectively, 57.5, 80.7, 23.1, 19.1, and 98.8 per cent., in weight, of the wheat imported into Japan. As regards rice, the 13following table will show that in the five years between 1898 and 1902 Korea supplied, respectively, 5.5, 26.5, 49.4, 46.8, and 19.8 per cent. in weight of the cereal imported into Japan:—

Rice imported into Japan, 1898–1902,^[26] picul = 133⅓ lbs. av. yen = 49.8 cents.

From 1898 1899 1900 1901 1902

British India 2,663,087 53,827 249,344 220,650 1,793,362

11,642,416 174,507 973,747 876,057 7,530,356

China 967,216 60,323 83,998 227,234 90,401

3,989,422 231,625 327,673 867,272 341,689

Korea 649,570 436,716 1,131,787 1,456,661 891,186

2,704,887 1,689,909 4,694,166 6,009,641 3,961,312

Dutch Indies 403

1,816

French India 6,445,390 956,142 726,859 919,774 1,324,789

25,762,726 3,354,095 2,739,752 3,199,420 4,651,395

Siam 969,413 143,575 94,530 287,594 409,307

4,114,065 510,007 284,178 926,486 1,265,970

Other countries 1,576 9 58 25 27

6,290 21 200 82 94

Total 11,696,252 1,650,592 2,286,979 3,111,938 4,509,072

48,219,810 5,960,166 9,021,536 11,878,958 17,750,817

As will be seen in this table, much rice comes also from Saigon and Bangkok, to which, however, Japan hardly exports anything. In Korea, on the contrary, the greater her exportation of rice, the larger her purchasing power of the goods from the country to which the rice goes. In the case of beans and oil-cakes, Manchuria and Korea occupy in the list of the importation of these articles into Japan an even more important place than is the case with wheat or rice, as will be seen in the following table:—

14

Beans and oil-cakes imported into Japan in 1902,^[27] picul = 133⅓ lbs. av. yen = 49.8 cents.

From Beans, pease, and pulse Oil-cakes

China 1,306,103 4,064,198

3,524,138 8,656,775

Korea 777,151 5,671

2,254,899 12,331

Russian Asia 545 345,022

1,505 1,448,868

French India 742

2,178

The United States 281

2,405

Other countries 545 846

1,582 3,738

Total 2,086,367 4,415,737

5,786,707 10,121,712

An explanation is necessary that, to all probability, much of the oil-cakes from Russian Asia was reëxported from Manchuria. In 1903, beans and oil-cakes were imported to the value of, respectively, 7,993,000 and 10,739,000 yen. In considering all these facts as a whole, attention is called to a point of immense importance, that Manchuria and Korea supply Japan with necessaries of life, and receive in return, in the main, useful goods, instead of wares of luxury. We shall have occasion further to develop this point.

Let us now take a general survey of the position Japan holds in the trade relations of Korea and Manchuria. In Korea, whence the Chinese merchants withdrew during the China-Japan war of 1894–5 and were replaced by the Japanese traders,^[28] 15it is Japan alone of all trading nations which enjoys a large share both in the import and export trade, as is suggested in the following table:—

Japan’s export to Korea Total import of Korea Japan’s import from Korea Total export of Korea

1902 10,554,000 yen (13,823,000 yen) 7,958,000 yen (8,460,000 yen)

1903 11,764,000 (18,207,000) 8,912,000 (9,472,000)

while the grains exported from Korea go almost entirely to Japan, different ports of Korea present of course different characteristics in their trade with Japan: as, for instance, at Chemulpo the Chinese merchants still enjoy a considerable share in the import trade; at Seul nearly all the export consists of gold bullion, which is almost exclusively bought by the branch of the First Bank of Japan; while at Fusan and Mokpo the Japanese monopoly of trade is almost complete. With these variations, however, the Japanese merchants control the major part of the trade of each port, and consequently of the entire trade of Korea. They also carry a large amount of foreign goods to Korea, as seen in the following table:—

Japanese goods Foreign goods

1902 9,344,859 yen 1,209,332 yen

1901 10,410,563 961,897

1900 9,423,821 529,450^[29]

The shipping also is largely in the hands of the Japanese. In 1903, their share in the Korean shipping was as follows:^[30]—

16

Vessels Tonnage

Korean 25 per cent. 9+ per cent.

Japanese 61+ 78+

Russian 2+ 9+

Others 11+ 4–

Turning to Manchuria, it is found that Japan controlled in 1902 more than 44 per cent. of the shipping tonnage,^[31] besides 40 per cent. of the direct import trade and over 90 per cent. of the export trade, as is shown below:^[32]—

Exports (Japan) Imports (Japan)

1901 1,080,345l. ( 970,663l.) 635,085l. (247,624l.)

1902 1,130,429l. (1,041,395l.) 695,020l. (280,843l.)

Average five years, 1896–99 and 1891 965,553l. ( 880,917l.) 433,811l. (131,143l.)

at Niu-chwang, which was then the only important port in Manchuria open to foreign trade under the ordinary customs rules.^[33]

17In this connection, it should be remembered that both the Korean and Manchurian trade are of recent origin. Niu-chwang was opened as a treaty port in 1858, but its commercial importance may be said to date from 1899. Korea’s foreign trade did not begin till 1884, and it exceeded 10,000,000 yen for the first time in 1895. The rapid growth of the trade of these places has been largely due to the increasing trade activity of Japan. In the case of Niu-chwang, it is true the development of its import trade has been as much owing to the energy of the Americans as to that of the Japanese, but its export business would be meagre, and would consequently reduce the imports also, but for Japanese activity. The recent increase in the production of millet in Manchuria, for instance, may be said to be entirely due to Japanese trade at Niu-chwang. Of the three staple products of Western Manchuria, tall millet is consumed by the natives, and beans are partly consumed and partly exported, while millet is cultivated purely for the purpose of exportation. 18It began to be exported to Korea in August, 1901, and to Japan in 1902. Since the latter year, Japan’s demand for millet has steadily increased, and has caused a considerable rise in its price at Niu-chwang. The cultivation of millet, therefore, is a pure gain that has been created by the trade relations of Manchuria with Japan.^[34] Far more important than millet as articles for exportation are beans and bean-cakes. The entire trade conditions at Niu-chwang may be said to depend upon the amount of the sale of these articles. The more they are sold, the greater is the importing capacity of the people of Manchuria. The nation which buys beans and bean-cakes in the largest quantities naturally commands the greatest facility in pushing their imports into Niu-chwang. The exportation of these goods doubled during the ten years between 1889 and 1898, while the amount of the bean production in Manchuria for 1900 was estimated at between 1,930,000 and 2,450,000 koku. Both the production and the exportation must now be much greater. The increase was due in the main to the growing demand in Japan for beans and bean-cakes, as witness the following ratios of exports to China and Japan from Niu-chwang:—

Beans Bean-cakes

To China To Japan To China To Japan

1889 98.0% 2.0% 95.8% 4.2%

1893 67.5% 32.5% 68.3% 31.7%

1897 60.7% 39.3% 50.2% 49.8%

In 1903, the ratios must have been much greater 19for Japan than for China. The increasing demand for these products has induced many Chinese to migrate from Shan-tung to Southern and Western Manchuria and cultivate beans.^[35] As regards the Korean trade, the following table will speak for itself:—

Korean trade in merchandise Korean export of gold Total Japan-Korea trade

1897 19,041,000 yen 2,034,000 yen 21,075,000 yen 14,061,000 yen

1898 17,527,000 2,375,000 19,902,000 10,641,000

1899 15,225,000 2,933,000 18,158,000 11,972,000

1900 20,380,000 3,633,000 24,013,000 18,759,000

1901 23,158,000 4,993,000 28,151,000 21,425,000

1902 (22,280,000) 5,064,000 (27,344,000) 18,512,000

1903 27,679,000 5,456,000 33,135,000 20,676,000

If we examine the causes of the growth of individual open ports in Korea, nothing can be plainer than that it has almost entirely resulted from the increasing trade relations between Korea and Japan. It is needless to mention Fusan, for its trade is nearly synonymous with its Japanese trade. Kunsan was opened on May 1, 1899, and its population was only 300 till two years ago, but the great demand by Japan for the rice coming through this port has already tended to enlarge the number of its inhabitants up to 2000 or more.^[36] Similar remarks may be made of Mokpo, Chinnampo, and other ports.^[37] Most conspicuous, however, is the case of Chemulpo. In 1883, when it was opened as a treaty port, it contained only a few fishers’ houses, but now it holds a population of 15,000, and occupies a position in 20Korea similar to that of Shanghai in China. Of the inhabitants of the ports, 8000, or more than a half, are Japanese. Streams of Koreans also have flowed hither from inland towns, for there the officials oppress people, while here they are so constantly viewed by the foreigners that undue exactions are impossible.^[38] We have already noted the important fact that Korea and Manchuria on the one hand and Japan on the other exchange, not wares of luxury, but useful and necessary articles. We have now come to another equally important fact, that the growth of the Manchurian and Korean trade depends largely upon the commercial activity of Japan. From these considerations, it would seem safe to say that the trade interests of the three countries are largely common, for the more Korea and Manchuria export to Japan, the greater will be their purchasing power of Japanese goods, and, also, the larger the exportation from Japan to Manchuria and Korea, the more readily they will dispose of their products to her. On the one hand, Korea and Manchuria encourage the growth of Japan’s manufacture, and supply her with food and manure; on the other hand, the economic development and prosperity of Korea and Manchuria must be largely determined by the increasing demand for their products by Japan, and the easy supply of their wants from Japan. The future growth of the three nations, then, must in a large measure depend upon the intimate progress, of their trade interests, which, therefore, not only 21are common, but should be increasingly common. If the history of the past suggests the probable development in the future, there is every reason to believe that, with reformed systems of currency and improved and extended cultivation of land and means of transportation, the trade of Manchuria and Korea will show a tremendous increase, and then the community of interest between them and Japan will be most profound.

This theme of the community of interest may further be elaborated. Korea and Manchuria may with profit remain open, not only for the trade, but also for the emigration and industrial enterprise, of the Japanese people. Since 1902 no passports have been required for travelers from Japan to Korea, whither, in spite of the occasional obstacles placed in their way by Korean officials, the emigrants have proceeded, now for years, in increasing numbers, until there resided in 1903 nearly thirty thousand Japanese in the Peninsula.^[39] It takes only thirteen hours on sea from Bakan in Japan to Fusan in Korea, and the cost is even less than that of sailing to the Japanese colony of Formosa, the former being 22fifteen yen and the latter twenty. It seems easier to go from Bakan to Fusan than it is from Osaka to the Hokkaidō within Japan proper.^[40] The expense of living in Korea is also as low as one third the corresponding figure in Japan, a monthly income of ten or thirteen yen being considered sufficient to support a family of three persons in a rented house.^[41] It is not strange, under these conditions, that the Japanese migrate to Korea, not always singly, like the Chinese, but often in families,^[42] so that their settlements assume there a normal and permanent character unseen even in Japan’s own island of Formosa. Nor are all these colonists mere laborers like their brethren in Manchuria and the Hawaiian Islands, but many are independent men of business. They also naturally manifest a stronger sense of kinship and coöperation in Korea than the merchants and capitalists do in Japan. In several Korean towns these Japanese settlers have established their own municipalities, with modern improvements, chambers of commerce, police, and public schools, all of which compare favorably with those of the larger cities in Japan, and the advantages of which are 23enjoyed by native Koreans and resident Chinese. It is said that in some places the influx of the Japanese and their investments have caused a rise in the price of land and house rent.^[43] In Fusan, the port nearest to Japan, the 10,000 Japanese who live there own large tracts of land and occupy the main sections of the city. Here and everywhere else the Japanese colonists seem to hold a position similar to that of the foreigners living in the so-called settlements in the larger treaty ports of China. Tourists are wont to contrast the clean and well-ordered streets and the general energetic appearance of the Japanese quarters in Korean cities with the comparatively filthy and slothful Korean quarters. The branches of the First Bank of Japan have been issuing recently one-, five-, and ten-yen bank-notes,^[44] which have been of immense value to the foreign trade in Korea, the native currency of which is in a deplorable condition.^[45] The coasting and river navigation, so far as it concerns foreign trade, is largely controlled by the Japanese, who, besides, own the 24only railway line in operation in Korea, twenty-six miles long, running between the capital, Seul, and its port Chemulpo.^[46] They are also building,^[47] under the management of substantially the same company, another and longer line—two hundred and eighty-seven miles—between Seul and the port of Fusan, which passes through the richer and economically by far the more important half of the Peninsula.^[48] It is 25not impossible to suppose that the Japanese people will succeed in their efforts to secure the right of extending this line beyond Seul up to Wiju on the northern border,^[49] and thence ultimately connecting it with the Eastern Chinese and the Peking-Shanghaikwan-Sinminting Railways, so as to render the connection by rail between Fusan and China and Europe complete.^[50] The Mitsui Produce Company, another Japanese concern, monopolized the export of Korean ginseng, and, in 1903, despite the competition of the Russian Baron Gunzburg,^[51] succeeded 26in extending the term of the monopoly for five years. Twenty to forty thousand Japanese fishermen along the Korean coast report an annual catch amounting sometimes to large figures.

No part of Korea’s economic life, however, would seem to be of greater importance to her own future, or to depend more closely upon the enterprise of the Japanese settlers, than her agriculture. If it is remembered that nearly all her exports consist of agricultural products, and also that they largely supply the needs of Japan, we can readily comprehend the great community of interest felt by both countries in the agriculture of the Peninsula. It is remarkable to note, to take a single instance, that the production of cereals and beans (respectively about eight and four million koku) in Korea has grown to its present dimensions largely owing to the stimulus given to it by the increased demand for these articles in Japan.^[52] We shall presently note also that, owing to the peculiar circumstances prevailing in Korea, her purchasing power and general commercial activity are so completely ruled by the conditions of her weather and crops as is seldom the case with other agricultural nations. The Koreans are comparatively happy in good years, while in bad years they are reduced to great miseries and bandits infest all parts of the country. Upon the state of her agriculture, then, must depend the trade conditions of Korea, as well as most of her material strength and much of that of Japan. From this it 27is plain that the profound community of interest of the two nations calls for both the extension and the improvement of the agriculture of Korea. It is estimated that the extent of her land under cultivation is hardly more than 3,185,000 acres, or about 6.3 per cent. of the 82,000 square miles known as the total area of the country,^[53] and that there exist at least 3,500,000 more acres of arable land, which would be fully capable of sustaining five or six millions of new population, and of increasing the annual crops of the land by not less than 150,000,000 yen.^[54] Unfortunately, however, the Koreans lack energy to cultivate those three and a half million acres of waste land. For it is well known that the irregular but exhaustive exactions of the Korean officials have bred a conviction in the mind of the peasant that it is unwise to bestir himself and earn surplus wealth only to be fleeced by the officials. His idleness has now for centuries been forced, until it has become an agreeable habit. It is in this state of things that is has often been suggested that the cultivation of the waste lands may most naturally 28be begun by the superior energy of the Japanese settlers.^[55] Not less important than the cultivation of new land is the improvement of old land in Korea, where the art of husbandry is far less advanced than in either China or Japan. Lots are marked out carelessly, improvements are crude, and the manure most universally used is dried grass. The great rivers with all their numerous ramifications are hardly utilized for the purpose of irrigation, and the forests have been mercilessly denuded for fuel and in order to forestall the requisition of the government,—which formerly used to order without compensation the cutting and transporting of trees by their owners,—so that a slight drought or excess of rain works frightful disasters upon agriculture. Another serious effect of the absence of a good system of irrigation is the comparative want of rice land, which always requires a most careful use of water.^[56] These conditions are all the more to be regretted, when it is seen that the soil is generally fair and the climate favorable. The cultivation of rice is said to have been first taught by the Japanese invaders toward the end of the sixteenth century, and yet, with all their primitive method, the Koreans 29are already exporting rice to the value of four million yen or more. Sericulture is still in its infancy, while tea, cotton, hemp, sugar, and various fruits are all declared to be tolerably well suited to the soil. The Japanese farmer finds here, particularly in the south, a climate and general surroundings very similar to his own, and otherwise eminently agreeable to his habits, and, along with the application of his superior methods of cultivation, irrigation, and forestry, the common interests of his country and Korea are bound to develop with great rapidity. The progress of agriculture would also gradually lead the Koreans into the beginnings of an industrial life, while the expanding systems of railways and banking would be at once cause and effect of the industrial growth of the nation. Another inevitable result would be the development of the economic sense and the saving capacity of the Korean, the latter of which has had little opportunity to grow, not so much because of his small wage and high rent and interest, as because of the onerous, irregular local dues and the systematic exactions in various forms by the official.^[57] An advanced 30economic life, itself necessitating a reform of the official organization, would at least make it possible for the peasant to work, earn, and save. Simultaneously and in increasing degree would his wants, as well as his purchasing power, increase. Around the progress of Korea’s agriculture, then, must be built all other measures of her growth and power, as, for instance, transportation, industries, trade and commerce, finance, political reform, and military strength. In no other way can we conceive of the possibility of her effective independence, the cause of which has cost Japan, and is now costing her, so dearly. In no other light can we interpret the Korean sovereignty under the assistance of Japan.

In regard to Manchuria, where the chances for development are far vaster, the Japanese people do not possess there as large vested interests, but entertain as great expectations for its future settlement and industry as in Korea. It was estimated before the present war that there resided more than ten thousand Japanese in Manchuria, who were either under the employment of Russian authorities 31in public works along the railway, or engaged in such small occupations as laundry work, carpentry, restaurant-keeping, photographing, and hair-dressing,^[58] while many of the Japanese women, whose numbers in many a town preponderated over those of men, had been allured by unscrupulous parties, who consigned them to disreputable occupations. Merchants and business men of greater capital and resources would be, as they often have been, attracted to Manchuria, were it not for the exclusive, and in the hands of some of their officials, arbitrary, measures of the Russians.^[59] Under normal conditions of peace and “open door,” the immensely greater resources of Manchuria and the much greater productiveness of its people^[60] would seem to promise even a more important economic future than in Korea.

32In summing up our preceding discussion, it may be stated that the natural growth or unnatural decay of the Japanese nation will greatly depend—ever more greatly than it now does—upon whether Manchuria and Korea remain open or are closed to its trade, colonization, and economic enterprise; and that, in her imperative desire for the open door, Japan’s wish largely coincides with that of the European and American countries, except Russia, whose over-production calls for an open market in the East.

Thus far we have discussed only Japan’s side of the economic problem in Manchuria and Korea. Passing to Russia’s side, it is seen that her vested interests in Manchuria are as enormous as her commercial success there has been small. The building of the Eastern Chinese Railway has cost the incredible sum of 270,000,000 rubles, making the average cost per verst more than 113,000 rubles,^[61] or over $87,000 per mile, besides 70,000,000 rubles lost and expended during the Boxer outrages and Manchuria 33campaign of 1900,^[62] to say nothing of the normal annual cost of guarding the railway by soldiers, estimated at 24,000,000 rubles.^[63] The investments in permanent properties alone, besides the railway, are moderately valued at 500,000,000 rubles.^[64] In return for these heavy outlays, the trade relations between Russia and Manchuria have been most disappointing. Though it is not possible to obtain the exact figures of the actual trade between Manchuria and European Russia, we can establish approximate estimates in the following manner. According to official returns, exports from Russia to her Far Eastern Possessions were as follows:—

1900 56,000,000 rubles

1901 51,000,000

1902 38,000,000

The decline must be largely due to the decreased demand for military and railway supplies, for it is seen that the falling-off has been most conspicuous in iron and steel wares and machinery.^[65] At the same time there was little or no import trade from the Russian possessions in the East into Russia, for the native products sent out from the former never passed beyond Eastern Siberia. It would be 34interesting if we could find out how much of these Russian exports went to Manchuria. The figures for the Pacific ports are given as follows:^[66]—

1900 51,157,000 rubles

1901 49,827,000

1902 37,704,000

If these figures are reliable, the difference between them and those given above, namely:—

1900 less than 5,000,000 rubles

1901 more than 1,000,000

1902 less than 300,000

might be considered an approximate amount of the export trade from Russia to Manchuria (and Mongolia, which imports very little from Russia), for, of the Pacific ports, no other port but Vladivostok reëxports Russian goods into Manchuria, which reëxportation seems to be slight enough to be ignored. The approximate correctness of the figures is further seen from the fact that of the total 8,193,000 rubles of the Manchurian trade at Blagovestchensk, Habarofsk, and the South Ussuri region—the three main points of transit trade with Manchuria—only one half showed exports to Manchuria, and again, of this one half, only a portion consisted of reëxported Russian goods. The South Ussuri district, for instance, sent only 130,800 and 206,000 rubles’ worth of Russian and foreign goods to Manchuria, out of the total export trade of 799,500 and 2,221,300 rubles, respectively, in 1898 and 1899.^[67] On the other hand, before the 35opening of the Manchurian Railway (which took place in February, 1903), the direct trade between Russia and the interior of Manchuria must have been so slight as not to materially affect the sum-total of the Russian-Manchurian trade.

This remarkably unfavorable trade between Manchuria and Russia was probably due to a decreased demand for military supplies since 1900 (for Russia has little to export from Manchuria, and Chinese teas have largely gone through Kiakhta or by the Amur, rather than by the Manchurian Railway), and also to the difficulty of further reducing the freight rates on the railway,^[68] and of competing successfully with the American and Japanese traders in certain articles for importation.^[69] In spite of all the effort 36made by the late Finance Minister, M. Witte, Russia is not yet primarily a manufacturing country, her exportation of manufactured goods forming in fact only 2.5 per cent. of her entire export trade, and at best remaining stationary during the three years 1900–2, as will be seen below:—

1900 1901 1902

Rubles Rubles Rubles

Total exports from Russia 688,435,000 729,815,000 825,277,000

Exports of manufacturers 19,553,000 21,039,000 19,263,000^[70]

Russia’s commercial failure in Manchuria in the past would, however, in no way justify the inference that the future will be as disappointing. All competent observers seem to agree that the undeveloped resources of the 364,000 square miles of Manchuria are enormous.^[71] Its unknown mineral wealth, its thousands of square miles of land now 37under the bean and millet cultivation, but beginning to yield to the wheat culture and producing wheat at a market price of not more than forty cents per bushel, and its extensive lumber districts, as well as its millions of cheap and most reliable Chinese laborers,^[72] would before long enable the Russians successfully to convert Manchuria into one of the richest parts of China and one of the richest countries in the world. A success of such magnitude must, however, largely depend upon a systematically protective and exclusive policy on the part of Russia, or, in other words, upon the completeness with which Russia transfers the bulk of the Manchurian trade from the treaty port of Niu-chwang, and, so far as the Russian import from China is concerned, even from the once important Russian port of Vladivostok, to the commercial terminus of the Manchurian Railway—Dalny. Particularly in order to capture the import trade into Manchuria of cotton goods and kerosene oil, in the face of the great advantages enjoyed by American and Japanese competitors, Russia must at all costs make Dalny overshadow Niu-chwang, 38so as to bring the trade under her complete control. Nothing but a highly artificial system could accomplish such wonders, for, under normal conditions, teas for Russia would go by the less costly routes through Kiakhta, or up the Amur, or by sea to Odessa; the native products of Manchuria for exportation to Japan would be sent to Niu-chwang by the nearest, cheapest, and most natural channel, the Liao River, and, when the latter freezes between the end of November and March, by the Shan-hai-kwan Railway; and, finally, the smaller cost of production and lower rates of freight of the American and Japanese cotton fabrics would completely outdistance the Russian. Let us observe with what artificial measures the Russians have been meeting this situation. With a view to diverting the tea trade from Vladivostok to Dalny, Russia imposed an import duty of 3 rubles per pood from August, 1902, and increased it in May, 1903, to 25.50 rubles,^[73] which with other measures dealt a crushing blow to the prosperity of Vladivostok.^[74] This must at least have stifled the transportation of tea up the Amur, without, perhaps, affecting the inroad of teas through the old Kiakhta and by 39sea.^[75] As regards the export trade at Niu-chwang, the Russians took advantage of the important fact that the Shan-hai-kwan Railway did not penetrate sufficiently north to reach some producing centres of Western Manchuria, while the waters of the Liao were navigable only 200 miles from the mouth, and were, together with the harbor itself, ice-bound from November till March. Dalny was nearly ice-free, and the Manchurian Railway was available through all seasons. The only competitors of the railroad would seem to be the small bean-carrying junks plying down the Liao, which were both owned and loaded by the same Chinese merchants. This competition the Russians met by greatly reduced freight rates of the railway, which made it possible for 40every 100 poods of Manchurian grain and beans to be carried 600 miles between Harbin and Dalny for about fifty-seven cents gold, or $10 per ton.^[76] From Dalny, heavily subsidized Russian boats transported Manchurian exports to Japan at a freight rate which, in conjunction with railway rates, amounted to the saving by the shipper of 4.50 yen per ton, as compared with the railway-rates plus the freight-rates of non-Russian vessels.^[77] When the flour industry of the Russian towns in Manchuria is developed, Russian steamers may be seen carrying flour from Dalny, not only to Japan, but to Chinese and Eastern Siberian ports. As for the import trade of Manchuria, the Russians, who have ousted American importers of kerosene oil at Vladivostok, seem to be now by energetic methods slowly driving away the same rivals from Chemulpo and from Dalny.^[78] 41Vastly more important as articles for importation than kerosene oil are cotton yarn and textiles, which are annually supplied from abroad to the value of over 12,000,000 taels. By far the greater part of sheetings, drills, and jeans comes from America. The Russians were not unable to produce cotton fabrics almost as good as the American goods, but the trans-Siberian freight was twice as expensive as the Pacific transportation, and could not be expected to be further reduced without great difficulty.^[79] It was not impossible to suppose that the Russian Government might ultimately apply to Manchuria the system of granting a premium and an additional drawback on textiles made from imported cotton, which had been in successful operation in Persia. There was no question but that, together with the development of Manchuria under Russian control, foreigners would lose most of their import trade in lumber, butter, and flour, and here again the Russian success must depend on the exclusiveness of their policy.^[80] Mr. H. B. Miller, 42the United States Consul at Niu-chwang, seems to have made a delicate reference to this point when he said, in his report dated December 5, 1903: “The United States trade in Manchuria with the Chinese amounted to several millions of dollars per year, and was almost entirely imports. It had grown very fast, and would have had an extended and most substantial increase without the Russian development, for the country was being improved and extensively developed with a continual immigration from other provinces in China, before the railway construction began.”^[81] Much has been said regarding the oft-reiterated wish of Russia to keep Dalny as a free port, but it is well known that it has recently been placed under a protective 43tariff.^[82] We are not in possession of the details of this tariff, but its general significance can hardly be mistaken when we see how the Russians have been reducing freight rates to the utmost, subsidizing their own steamers, and pooling together their great banking and railway facilities, all for the purpose, on the one hand, of developing Russian industries in Manchuria, and on the other, of monopolizing the bulk of its trade.

Not only in trade, but in colonization also, the Russians have been building up new cities and developing old ones under their exclusive policy with an unheard-of rapidity. Dalny is a good example of the former class. Still more conspicuous is the city of Harbin, the so-called Moscow of Asia, the geographical and commercial centre and headquarters of the railway work in Manchuria, which is said to have consisted of a single Chinese house in 1898,^[83] but now contains 50,000 people.^[84] Well might Count Cassini, as he did, refer, not only to the colonization, but to the general civilizing influence of the Russians in Manchuria in the following language:^[85] “Through the pacific channels of diplomacy my government acquired privileges which, accepted in good faith, have been exercised 44in a spirit of true modern progressiveness, until now the flower of enlightened civilization blooms throughout a land that a few years ago was a wild, and in many parts a desolate, seemingly unproductive waste. Before the signing of the treaty which I had the honor to negotiate in behalf of my Sovereign, giving to Russia railroad and other concessions in Manchuria, no white man could have ventured into that province without danger to his life.... Upon the basis of the rights to commercial exploitation thus peaceably obtained, Russia built a railway into and through Manchuria. She built bridges, roads, and canals. She has built cities whose rapid construction and wonderful strides in population and industry have no parallel, certainly in Europe and Asia, perhaps even in America. Harbin and Dalny are monuments to Russian progressiveness and civilization. These great undertakings, wonderful even in a day of marvelous human accomplishment, have cost Russia more than 300,000,000 dollars.” Without stopping either to dispute the historical accuracy of Count Cassini’s statement or to deny the wonderful work the Russians have accomplished in Manchurian cities, it seems pertinent to call our attention to the exclusive side of the Russian enterprise in this vast territory. Harbin is one of the so-called “depots,” over eighty in number, which are found along the whole length of the Manchurian Railway, each one of which extends over several square miles, within which none but 45the Russians and Chinese have the right of permanent settlement.^[86] Russia would not consent to the opening of Harbin (and, presumably, all other cities within the “depots” of the Manchurian Railway) to foreign trade. Even outside of these cities, the Russian Government appeared to be opposed to the opening of new ports, and when it was no longer politic to continue the opposition, Russia informed other Powers in 1903 that she had no intention of objecting to the opening of new treaty ports “without foreign settlements” in Manchuria.^[87]

The meaning of all these protective and exclusive measures becomes plain, when it is seen that the complete control of the economic resources of Manchuria would give Russia, not only sufficient 46means to support Eastern Siberia, but also a great command over the trade of China and Japan. The latter country Russia might be able to reduce to dire distress, when necessary, by closing the supplies coming from Manchuria, upon which Japan will have to depend every year more closely than before.^[88] The success of these great designs on the part of Russia would depend upon how completely protective and exclusive her Manchurian policy can be made.

Coming from Manchuria to Korea, we find the economic position of the Russians in a totally different situation, for either their vested or even their potential interests in the Peninsula were slight, excepting, perhaps, their already acquired timber concessions^[89] on the northern frontier and the Kaiserling whale fishery on the northeastern coast.^[90] It has 47been pointed out, however, that the fact that Dalny was not altogether ice-free made Russia covet Chemulpo or some other trade port on the western coast of Korea.^[91] However that may be, it is safe to say that Russia’s interests in Korea are slightly economic, but almost wholly strategic and political.

Let us sum up our discussion at this point, and compare the economic interests of Russia and Japan in Manchuria and Korea. In Manchuria, both Powers seek trade and colonization, with the important difference that Japan’s interests are actually great and potentially greater, while those of Russia are both actually and potentially preponderant. A difference of greater moment lies, however, in the fact that, so far as her trade and industry are concerned, Japan’s interests call for an equal opportunity there for all industrial nations, while Russia’s interests may be maintained and developed only by a highly exclusive policy. In Korea, its opening for the trade, settlement, and enterprise of the Japanese is not only the most natural method of strengthening Korea herself, but also a primary condition for the life and growth of Japan. Russia’s 48economic interests there, on the other hand, may be measured by the number of her resident subjects and the extent of their enterprise, which are, outside of Yong-am-po, next to nothing. Her interests, being, as we shall soon see, mainly strategic and political, demand here also a policy directly opposed to the open door. If we now consider Manchuria and Korea together, it may be said that Russia’s economic interests are, even in Manchuria, rather for her glory as a great, expanding empire than for any imperative need of trade and emigration in that particular part of her Asiatic dominion, while similar interests of Japan, primarily in Korea and secondarily in Manchuria, are vital, as they are essential for her own life and development as a nation. The case for Russia can, perhaps, never be understood until her political issues are examined.

Politically, also, the interests of the two Powers are found to be directly opposed to one another. It has been rightly said that Manchuria is the keynote of the Eastern policy of Russia. Besides its immense wealth still unexploited, Manchuria possesses the great Port Arthur, which is the only nearly ice-free naval outlet for Russia in her vast dominion in Asia, while the 1500 miles of the Manchurian Railway, together with the Great Siberian Railway, connect this important naval station with the army bases in Siberia and European Russia, so that Manchuria alone would seem to be politically more valuable for Russia than the rest of her Asiatic territories. Without Manchuria, Russia 49would be left inclosed in the ice-bound Siberia, with no naval or commercial outlet during nearly five months of each year. With Manchuria, Russia’s traditional policy, which has repeatedly failed since Peter the Great on the Baltic Sea and other European waters, as also on the Persian Gulf,—the policy of becoming the dominant naval power of the world,—would at last begin to be realized. The very importance of Manchuria for Russia, however, constitutes a serious menace to Japan and to the general peace of the Far East. In the first place, the Russian control of Port Arthur gives her a large measure of control over the water approaches to Peking, while the Mongolian Railway now reported to be in contemplation would bring Russian land forces directly upon the capital of the Chinese Empire. The very integrity of China is threatened, and a more serious disturbance of the peace of the world could hardly be imagined than the general partition and internal outbreaks in China which would follow the fall of Peking under the pressure of Russia from Manchuria and Mongolia. Not less grave is the fact that Manchuria is geographically and historically connected with the Peninsula of Korea,^[92] which makes Russia’s occupation of Korea a necessary adjunct of her possession of Manchuria. Geographically considered, there exists no abrupt change from the eastern part of Manchuria to the 50northern half of Korea,^[93] which fact goes far to explain the Russian solicitude to obtain railway and other concessions between the frontier and Seul. Even more serious conditions exist on the southern coast of Korea, which contains the magnificent harbor of Masampo, which constitutes the Gibraltar between the Russian fleets at the ice-bound and remote Vladivostok and the incommodious and not altogether ice-free Port Arthur, with no effective means of connecting them. By controlling this coast, Russia would not merely possess a truly ice-free, and the best naval port to be found in East Asia,^[94] but also at last feel secure in Manchuria and 51complete her Far Eastern design of absorbing Korea and China and pressing down toward India. If, on the contrary, another Power should control Masampo, it would be able to watch the movement of the Russian fleets in their attempts to unite with one another, and also seriously impede the greatest hopes of Russia’s Eastern expansion. From Japan’s standpoint, the Russian occupation of this section of Korea would not only possibly close Korea against her trade and enterprise, but also threaten her own integrity. Only fifty miles away lie the Japanese islands of Tsushima, which Russia has always coveted, and which would have been hers had it not been for the shrewd diplomacy of the late Count Katsu.^[95] From Tsushima the mainland of Japan is visible on the eastern horizon, so that the presence of Russia at Masampo would arouse in the heart of Japan the most profound feeling of unrest. Russia must have Masampo, and Japan must not let her have it.

In concluding our discussion of the vital issues, 52both economical and political, which are at stake, it would seem that Manchuria is for Japan a great market as well as an increasingly important supply region of raw and food products and a field for emigration, while for Russia it is the keynote of her Eastern policy, and economically the most promising of all her Asiatic possessions. On the other hand, Korea is essential for Russia for the completion of her Manchurian policy,^[96] and for strengthening enormously her general position in the East. For Japan, Korea is nothing short of one half of her vitality. By the opening or closing, strength or weakness, independence or fall, of Korea, would Japan’s fate as a nation be decided. On the contrary, Russia, with Manchuria and ultimately Korea in her hands, would be able, on the one hand, to build up under her exclusive policy a naval and commercial influence strong enough to enable her to dominate the East, and, on the other, to cripple forever Japan’s ambition as a nation, slowly drive her to starvation and decay, and even politically annex her. From Japan’s point of view, Korea and China must be left open freely to the economic enterprise of herself and others alike, and, in order to effect that end, they must remain independent and become stronger by their internal development and reform.^[97] Russia’s interests are intelligible, as 53are Japan’s, but unfortunately their desires are antagonistic to each other, so that a conflict between an open and an exclusive policy is rendered inevitable. The series of events during the past decades, particularly since 1895, which we shall narrate in this volume, has only served to bring this conflict into a sharp clash in arms.

In closing, it may not be entirely out of place to attempt a speculation upon the significance of the conflict, not to the belligerents, but to the world at large. From the latter’s point of view, the contest may fairly be regarded as a dramatic struggle between two civilizations, old and new, Russia representing the old civilization and Japan the new. 54Two dominant features, among others, seem to characterize the opposition of the contending nations: namely, first, that Russia’s economics are essentially agricultural, while those of Japan are largely and increasingly industrial; and, secondly, that Japan’s strength lies more on sea than on land, while Russia represents an enormous contiguous expansion on land. It is evident that the wealth of a nation and its earning capacity cannot grow fast under a trade system under which it imports many and exports few manufactures.^[98] The commercial prosperity of Russia depended formerly upon its nearness, first to the trade route with the Levant, 55and then to the free cities of Germany, but with the fall of Constantinople and the decline of the Hansa towns the business activity of Southern and Baltic Russia has in turn passed away. Then, from the time of Ivan the Terrible, she unified her European territory, and expanded eastward on land, until she had embraced within her dominion much of Central and all of Northern Asia. For such an expansion Russia seems to have been particularly fitted, for her primitive economic organization suffers little from external disturbances, while the autocratic form of her government enables her to maintain and execute her traditional policy of expansion. But the real importance of her expansion appears to be more territorial than commercial, for the days of the land trade with the Orient are numbered. Even the great Siberian Railway would not successfully divert the Eastern trade landward.^[99] If Russia would be prosperous she must control the Eastern sea by occupying northeast China and Korea. Here she comes in conflict with Japan, the champion in the East of the rising civilization. The economic centre of the world has been fast passing to America, where cotton, wheat, coal, and iron abound, the people excel in energy and intelligence, and the government is servant to the welfare and progress of the people. Japan has joined the circle of this civilization, ever since the influence of the youthful nation of America was extended 56to her through Commodore Perry^[100] and Townsend Harris, and the spirit of national progress through industry and education was eagerly adopted by her. To-day, Japan stands within the range of the interests of the British and American sea-power over the Pacific, Atlantic, and Indian oceans, while Russia, on the other hand, represents a vast expansion on land.

The historical bearing of the effects of the old civilization to the world may, perhaps, be best characterized by the one word—unnatural. Observe, first, the effect of the policy of land aggression on the internal affairs of Russia. The policy is costly. Hence the great incongruity between the economics of the people, which are agricultural, and the finance of her government, which would be too expensive even for the most highly advanced industrial nation. Hence, also, it is, perhaps, that the richer and more powerful her government becomes, the poorer and more discontented her people seem to grow. Her administration must naturally be maintained by the suspicion of her people and the suppression of their freedom,^[101] and the suspicion and suppression must 57become more exhaustive as the disparity widens between rulers and ruled.^[102] Under these circumstances, a constitutional régime would not be possible, for a free expression of the popular will would be hardly compatible with a form of government which seeks to strengthen the state at the expense of the nation. Again, consider the unnatural situation of an agricultural nation competing in the world’s market with industrial, trading nations which command a higher and more effective economic organization. If Russia would sell her goods, her markets abroad must be created and maintained by artificial means:^[103] protective and exclusive measures 58must be pushed to such an extent as to distance all foreign competition, the interests of the consumer must be disregarded,^[104] and those of the growing industrial nations must be sacrificed,^[105] all for the sake of artificially promoting the belated manufactures in Russia.^[106] From this unnatural state of things would seem to follow the Russian policy of territorial occupation and commercial exclusion in the East, and also her free use of the old-time intrigue in diplomacy; for it is Russia’s fortune that she would not be able to compete freely with the new, growing civilization, whose open arts she cannot employ to her advantage, but to whose advanced standard of international morals she must appear to conform. Her position forbids her to 59have recourse to an open policy and fair play, and yet she cannot afford to overtly uphold the opposite principles.^[107] On the other hand, the new civilization, represented in the present contest by Japan, relies more largely upon the energy and resources of the individual person, whose rights it respects, and upon an upright treatment by the nations of one another.

What is the goal of the warfare of these two civilizations? It is, it may be said, the immensely rich and yet undeveloped North China, of which Manchuria is a part, and to which Korea is an appendix. Over this territory, the interests of Russia and Japan have come to a clear and sharp clash, those of the former demanding the subjection and closure of this great portion of the earth’s surface, and those of the latter imperatively calling for its independence and progress.

Whoever wins, the issues are momentous. If Russia should win, not only Korea and Manchuria, but also Mongolia would be either annexed by Russia or placed under her protection, and Japan’s progress would be checked and her life would begin to fail. Russia would assume a commanding position over all the Powers in the East, while the trading nations of the world would be either largely or completely 60excluded from an important economic section of Asia. The Siberian railway system might at last be made to pay, and Russia’s exclusive policy would enable her and her ally France to divide the profit of the Eastern trade with the more active industrial nations. The old civilization would enjoy an artificial revival, under the influence of which China and Korea would be exploited by the victors and, for the most part,^[108] closed against reformatory influences from abroad. All these momentous results would be in the interest of an exclusive policy incorporating principles which are generally regarded as inimical to freedom and progress. If, on the contrary, Japan should win, the doubtful importance of the Siberian Railroad as a carrier of the Eastern trade would in the mean time be further overshadowed by the Panama Canal, and it would be compelled to perform its perhaps proper function of developing the vast resources of Siberia and Manchuria. The Oriental commerce would be equally free and open to all; the Empires of China and Korea would not only remain independent, but, under the influence of the new civilization, their enormous resources would be developed and their national institutions reformed, the immense advantages of which would be enjoyed by all the nations 61which are interested in the East. There would naturally result a lasting peace in the East and the general uplifting of one third of the human race. Japan’s growth and progress after the war would be even more remarkable than in the past. In short, East Asia would be forcibly brought under the influence of the new civilization, the effect of which would not be without a profound reaction upon Russia herself. Humanity at large, including the Russians, would thereby be the gainer. The difference in the effects of the outcome of the war, according to who is the victor, would be tremendous. Which will win, the old civilization or the new? The world at this moment stands at the parting of the ways.

SUPPLEMENTARY NOTE ON THE SIBERIAN RAILWAY^[109]

According to an estimate made by a Russian expert of the carrying capacity of the great Siberian railway system,^[110] the Siberian section alone will carry at least 190 million poods, and the Manchurian section from 100 to 150 million poods, making a total of 300 to 350 million poods, approximately. It is contended, however, that, while the present conditions of the inhabitants of Siberia and Manchuria make it possible for the railway to carry only raw and crudely manufactured goods, these are the very articles whose cost would easily be raised by the long distance over which they have to be carried by rail. In Europe, it never pays to carry these articles for a 62longer distance than 2000 miles. Nor would it in Siberia, unless abnormal reductions are made in freight rates, or unless commerce and manufacture are artificially fostered in Siberia and Manchuria. It is supposed, therefore, that it would always be unprofitable to carry bulky, cheap goods between Europe and the East on the Siberian Railway. China’s exports to Russia consist of such costly goods as teas and silks, which may be profitably transported by rail, but thus far even teas have only begun to be so transported under more or less artificial measures in favor of the railway traffic at the expense of the routes through Kiakhta, up the Amur, and by sea to Odessa. As to Russian imports into China, cotton and woolen goods and metals would never be carried by rail under normal circumstances.^[111] The benefit of the eight thousand versts of the railway from Moscow to Dalny may be safely said to be as slight to the carrying trade as it is great to the travelers and postal service between Europe and the East.

The statistics for 1899 and 1900 show that the bulk of the Russian trade with China was carried on land, but that the land trade was decreasing and sea trade increasing. See the following table (unit 1000 rubles):^[112]—

Export Import Total Ratio

1899 Land 7,522 30,007 37,520 74%

Sea 4 13,508 13,512 26%

1900 Land 6,678 29,779 36,457 69%

Sea 24 16,166 16,190 31%

It should be noted, however, that the period covered by the table is not only too short, but also precedes the opening of the Manchurian Railroad to trade, which took place only in 1903. Nor should it be overlooked that the figures indicate the China trade of Russia alone.

63Regarding the European trade with China in general, M. Sorokin, Assistant Director of Customs at Niu-chwang, is reported to have remarked that the freight per pood from Europe to the East was five rubles on land and 1.50 on sea.^[113] Certain articles, such as glassware, tobacco, and the like, seem to be carried from Russia to China at two rubles by rail and one ruble by ships.^[114] The sea route consumes nearly two months, but, for bulky merchandise, it would be impossible for the railway to compete with it.

It is interesting, in this connection, to remember that, from America, the freight between San Francisco and the Eastern ports has been reduced repeatedly during the last year, owing to the competition among the shipping companies, so that the charge for flour does not seem to be more than one mill per ton-mile, or forty cents a hundred pounds for 8000 miles.

During 1901, according to the latest statistics available, the deficit of the Ussuri branch of the Siberian Railway is said to have amounted to $435,162, and that of the entire railway to $11,330,000.^[115]

In this connection, it is interesting to note that this view is further confirmed by no less authority than Count Cassini, the present Russian Minister at Washington, who, in his statement given on April 9, and published in the North American Review for May, 1904, said:

“... Consider Russia’s position commercially toward Manchuria with that of the United States. In this country [the United States] are made not only the very materials that would find a sale among the people of the 64province, but with American goods shipped by an all-water route, the cost of transportation would be much lower than the cost of carrying on the all-land routes to which Russia would be confined. Should Russia ship by water to Manchuria from Odessa, the distance would still be too great to make competition with the United States successful. From Moscow to Port Arthur the distance by rail is 5000 miles. It is therefore easy to realize the privileged position of the United States in competing over an all-water route from the Pacific coast, with Russia over an all-rail route.”^[116]

65