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 opening 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 made 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 under 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, so 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 sea.[[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 every 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]] Vastly 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, the 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 tariff.[[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 in 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 the 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 means 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 been 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 economic 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 would 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 northern 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 complete 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, both 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 are 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.