[ [29] ] We need only give a single example of what we mean. If, in the matter of the reform of the currency, instead of authorizing trade-agencies, i.e. the foreign Exchange Banks, to make a loan to China, which is necessarily hedged round with conditions favourable to such trade-agencies, the Powers took the matter directly in their own hands; and selecting the Bank of China—the national fiscal agent—as the instrument of reform agreed to advance all the sums necessary, provided a Banking Law was passed by the Parliament of China of a satisfying nature, and the necessary guarantees were forthcoming, it would soon be possible to have a uniform National Currency which would be everywhere accepted and lead to a phenomenal trade expansion. It should be noted that China is still on a Copper Standard basis,—the people's buying and selling being conducted in multiples of copper cent-pieces of which there has been an immense over-issue, the latest figures showing that there are no less than 22,000,000,000 1-cent, ten cash pieces in circulation or 62 coins per head of population—roughly twenty-five millions sterling in value,—or 160,000 tons of copper! The number of silver dollars and subsidiary silver coins is not accurately known,—nor is the value of the silver bullion; but it certainly cannot greatly exceed this sum. In addition there is about £15,000,000 of paper money. A comprehensive scheme of reform, placed in the hands of the Bank of China, would require at least £15,000,000; but this sum would be sufficient to modernize the currency and establish a universal silver dollar standard.
The Bank of China requires at least 600 branches throughout the country to become a true fiscal agent. It has to-day one-tenth of this number.
[ [30] ] It should be carefully noted that not only has Japan no unfriendly feelings for Germany but that German Professors have been appointed to office during the war. In the matter of enemy trading Japan's policy has been even more extraordinary. Until there was a popular outcry among the Entente Allies, German merchants were allowed to trade more or less as usual. They were not denied the use of Japanese steamers, shipping companies being simply "advised" not to deal with them, the two German banks in Yokohama and Kobe being closed only in the Autumn of 1916. It was not until April, 1917, that Enemy Trading Regulations were formally promulgated and enforced,—that is when the war was very far advanced—the action of China against Germany being no doubt largely responsible for this step.
That the Japanese nation greatly admires the German system of government and is in the main indifferent to the results of the war has long been evident to observers on the spot.
[ [31] ] A very remarkable confirmation of these statements is afforded in the latest Japanese decision regarding Manchuria which will be immediately enforced. The experience of the past three years having proved conclusively that the Chinese, in spite of their internal strife, are united to a man in their determination to prevent Japan from tightening her hold on Manchuria and instituting an open Protectorate, the Tokio Government has now drawn up a subtle scheme which it is believed will be effective. A Bill for the unification of administration in South Manchuria has passed the Japanese Cabinet Conference and will soon be formally promulgated. Under the provisions of this Bill, the Manchuria Railway Company will become the actual organ of Japanese administration in South Manchuria; the Japanese Consular Service will be subordinate to the administration of the Railway; and all the powers hitherto vested in the Consular Service, political, commercial, judicial and administrative, will be made part of the organization of the South Manchuria Railway. This is not all. From another Japanese source we learn that a law is about to take effect by which the administration of the South Manchuria Railway will be transferred directly to the control of the Government-General of Korea, thus making the Railway at once an apparently commercial but really political organization. In future the revenues of the South Manchuria Railway are to be paid direct to the Government-General of Korea; and the yearly appropriation for the upkeep and administration of the Railway is to be fixed at Yen 12,000,000. These arrangements, especially the amalgamation of the South Manchuria Railway, are to take effect from the 1st July, 1917, and are an attempt to do in the dark what Japan dares not yet attempt in the open.
APPENDIX
DOCUMENTS IN GROUP I
(1) The so-called Nineteen Articles, being the grant made by the Throne after the outbreak of the Wuchang Rebellion in 1911 in a vain attempt to satisfy the nation.