America and the Far Eastern question; an examination of modern phases of the Far Eastern question, including the new activities and policy of Japan, the situation of China, and the relation of the United States of America to the problems involved

Front matter

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Introduction

Since the publication in March, 1906, of THE NEW FAR EAST, I have again twice visited the regions included in the scope of the Far Eastern Question, and have further observed and studied conditions there. The present work takes up the situation where my previous book quitted it; brings it forward, extends its prospect, and criticizes some results which have become apparent.

I have avoided extensive use of statistics, and when any views and conclusions are based upon them I have exercised my own judgment in accepting or rejecting figures presented by governments and individuals. . In the East, in perhaps a greater degree than elsewhere, statistics often are prepared to sustain! an hypothesis. This is especially true, at the present time, of some statistics which relate to the economic and fiscal situation of Japan.

I expect that some persons will profess to find in this, as many did of my previous work, an anti-Japanese Q preachment. This it is not, in the sense that a desire to

X injure Japan is among its objects. I wish the Japanese

\N nation and people success in aspirations which do not tend

;^ to cause international dissension and strife by impairing interests of other nations. That the present policy of Japan has this tendency is a conclusion I have reached after closely observing its trend for several years, and from studying its practical effects in localities where it is directly applied. Having formed this opinion, I express it without hesitation, and endeavor to present facts and conditions upon which it is founded. To those who may

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INTRODUCTION

think that in considering the activities of modern Japan I dwell on unfavorable phases, and ignore favorable ones, I will say that it is with the more significant aspects of Japan^s policy that this discussion attempts to deal, and that admirable traits of Japanese character are not often mentioned does not mean that I am ignorant of them. These characteristics are in a large sense common to all peoples, and it is only by possessing them to a considerable degree that any people can make its activities widely felt; moreover, favorable aspects of Japan have been presented by a thousand writers, and are kept before the world by an organized publicity with which no individual can compete. In juxtaposition with what I consider to be disturbing and probably unattainable ambitions of militant Japanese statesmen, I have tried to show counterbalancing interests and forces which are involved.

To the extent that I have approached the subject especially from the point of view of the interest of the United States of America, and in this only, the discussion is partisan ; and this will, I hope, be excused when it is remembered how little American interests are considered in the extensive literature of this question. While I hope that the book will have some effect upon the solution of problems which are reviewed, by bringing to bear upon them enlightened public opinion and advanced statesmanship in America and elsewhere, I have not had effect only in mind when writing it.

I thank the publishers of The New York Times, Scribtier's Magazine, and Appleton's Magazine for their permission to reproduce matter previously printed in those publications.

Thomas F. Millard.

New York, February i, 1909.

Contents

I.— THE WAKING ORIENT i

The Greatest International Question — Issues Involved — Rapid Evolution of Conditions — Sentimen* tal Influences at Work in the East — Effects in India and China — The Lesson of Japan's Victory — Effects Upon the Anglo- Japanese Alliance — New International Agreements — Realignment of Interests — France's Attitude — Germany's Policy — New Balance Wheel Needed — Position of the United States — Turning Point in American Diplomacy — Importance of Relations With China — Oriental Checks on Pan-Orientalism — A Disturbing Factor.

II.— JAPAN'S NEW ECONOMIC REGIME . 15

Chapter I

The Greatest International Question — Issues Involved— Rapid Evolution of Conditions — Sentimental Influences at Work in the East — Effects in India and China — The Lesson of Japan's Victory — Effects Upon the Anglo- Japanese Alliance — New International Agreements — Realignment of Interests — France's Attitude — Germany's Policy — New Balance Wheel Needed — Position of the United States — Turning Point in American Diplomacy — Importance of Relations With China — Oriental Checks on Pan-Orientalism — A Disturbing Factor.

It is conceded by many students of greater affairs that the Far Eastern Question presents the most important international issue with which the world now has to deal. No other question covers so broad a field, includes forces so complex and diverse, has such inherent power. Its solution cannot fail materially to affect the future of all nations, and to influence the destiny of the entire human race.

If these premises are granted, it seems difficult to exaggerate the importance of events which mark progress of the situation in the East, which give it direction, and which determine the course of policies in evolution. That the international situation there is being radically re-shaped, as a result of the Russo-Japanese war, is evident. Condi-

I tions arc changing with almost bewildering rapidity, altering the relations of governments, undermining treaties and comities upon which such relations have been founded. New international agreements follow each other in rapid succession ; others are proposed. Former friendly nations now regard each other askance; presently allied ones are reconsidering the bases of their alliances. Everywhere is uncertainty, and in some quarters apprehension. New ideas, new ideals, new purposes and new methods fill the Oriental mind, are being translated into action, and presently will be felt in the West. It is no longer possible to doubt that the East is waking.

Manifestations of this waking Orient are expressed In many phases, which may be broadly classified as sentimental and material. Most sentimental impulses now moving in the East can be traced to the victory of Japan over Russia. There is no Asiatic country, from China to Persia, which has not felt the reaction of the Russo-Japanese war, and in which it has failed to awake new ambitions. These usually find expression in a desire to assert independence, to claim equality with white races, and have had the general result of causing western prestige to decline in the East. It is evident that this sentimental idea may affect even the internal affairs of all greater nations, which almost without exception have a " race problem *' of some kind to deal with. This is of special interest to those western nations which have undertaken to govern millions of Orientals, among which Great Britain is prominent. It is probable that Great Britain has felt certain adverse effects of Japan^s success more keenly than has any other nation except China, which is interesting in view of the fact that England so considerably contributed to the rise of Japan and the comparative enhancement of her position among nations.

That unrest of the native population of India, which repeatedly has been indicated during the last three years, is taking a serious trend is admitted by many observers of events in the East; but to some its causes are obscure. While certain demonstrations confined to India have clearly developed and stand out strongly, they seem to bear slight harmonious relations to each other, and even to involve contradictions inconsistent with a definite purpose and common sentiment. This somewhat puzzling condition leads one to look further, outside of India, for light on the situation. In 1906 I traveled over a considerable part of the Orient, moving from East to West. At Yokohama I picked up a thread, which was subsequently found to be distinctly traceable through Korea, China, the Straits Settlements, Burma, and on to India. This is beginning to be spoken of as Pan-Orientalism, frequently with skepticism, sometimes with ridicule, and occasionally with alarm. However it now may be regarded in the West, its influence is felt in all eastern countries, and some of its manifestations in India have peculiar interest and significance.

Like the reform movement in China, where a strong tendency toward modem progress is blended with occasional recrudescence of anti-foreign sentiment, the present ferment in India springs out of complex, even diverse, forces. Its basic sentiment undoubtedly is the growing desire of eastern peoples to take a larger part in the development and administration of their own countries. In India this half-formulated sentiment expresses itself in two phases — conditions which turn upon political and racial elements, and those which grow out of commercial and industrial matters.

In many respects British administration in India is enlightened and beneficial. It probably would be diflicult to convince many Britishers in or out of India that the chief aim and effect of British rule have not been and are not now for the advantage of the natives; and it is not easy to refute this long-established presumption, even •if one were disposed to undertake the task, which I am not. In its more obvious manifestations the government is excellent, its general administration quite efficient and free from petty official corruption. All this is common knowledge. Since she abandoned the attitude of conqueror for that of pacificator, England's treatment of natives of all classes has been generally beneficent and humane. Among other great reforms she has placed modern education within reach of the people, and uses competent natives in all grades of official life except . the very highest. Broadly, it may be said that the Government's disposition toward the natives is to grant them all the opportunity and liberty which they are considered to be capable of utilizing. This policy has preserved peace in India and gradually is bringing material prosperity.

But the native of India knows that while he may assist to govern, he really is ruled from afar and without his consent, a rule resting to-day, as in the days of Clive, upon British bayonets. This may sound harsh, but is the plain truth; and argument of the proposition involved, the right or wrong, the pro and con of it, is not pertinent in this connection.

While present ferment in India is in a sense a manifestation of perennial unrest, the cause of many explosions in the past, it has its particular sentimental genesis, and this is the success of Japan over Russia. It is first cousin of " The Orient for Orientals,'* " China for the Chinese," and similar catch-phrase doctrines. Dense as the mass in India is, the victory of Japan has penetrated its inner consciousness. In fact, pains were taken to see that it did. Within the last three years the whole East has been penetrated by cheap motion picture shows, usually managed by itinerant Japanese. I have attended these exhibitions in various parts of China, at Hongkong, at Singapore, at Rangoon, and in India. Most of the pictures shown are ordinary in character, of the kind sent broadcast by European and American makers, but many display representations of the Russo-Japanese war. Some are authentic, no doubt, for I have seen them exhibited in the West, and represent Japanese troops in the field, etc., and Russian prisoners at Port Arthur and elsewhere. But some evidently are fakes of a transparent character, and these usually represent some imaginary conflict between Japanese and Russians, in which Japanese invariably are the victors. Some of these pictures, taking the idea, perhaps, from similar ones (in conception) shown in London during the war in South Africa, depict Russians performing acts of brutality upon Chinese and other Orientals, who are rescued by Japanese and the Russians punished and humiliated. A Chinese or Indian coolie cannot be reached by literature, as a rule, except indirectly; but he is open to impressions from pictures which simulate action, the authenticity of which he does not dream of questioning, and which show the white race he has so long respected and feared beaten at war by a dark-skinned brother. By this and other less subtle means has the message which Japan's victory carries to the East been communicated to. the masses in China and India.

The relations between Great Britain and Japan prevents British officials and members of Parliament from openly criticizing the alliance in the ligHt of some results which may be attributed to it, but it has not prevented

British subjects, particularly those who reside in the East, where manifestations of Pan-Orientalism are more obvious, from freely expressing their opinions. The following, published in 1908 in The Japan Chronicle, Tin influential English newspaper printed in Japan, fairly represents, I think, intelligent British opinion in the East of the Anglo-Japanese alliance:

" It cannot be denied that there is a spirit of ambition and jingoism abroad in Japan to-day which will hardly be quieted except by a great success or a great disappointment. The more such a feeling prevails among certain classes, the more it is disowned in responsible official quarters, and if any outbreaks of it occur in the utterances of prominent statesmen, the more carefully are they glossed over and explained away.

" The old bogey of a Russian invasion of India, which had such influence on the minds of English statesmen during the eighties, has not been much in evidence of later years. But it seems that it still spooked in the minds of those who drew up the recent Treaty with Japan. The later course of events, the defeat of Russia and the new nationalistic agitation in India, have completely overshadowed it, — so much so that it now seems doubtful to most people whether it ever really was anything more than a bogey, skilfully dressed up by Russian diplomats, and successful, even beyond the hopes of its inventors, in distracting the attention of the rulers of India from more real issues. It seems strange now to think that a possible attack on the north-west frontier of India, made through hundreds of miles of mountainous wilderness, could ever have seemed a more real peril to British tenure of the peninsula than the natural aspirations for independence on the part of three hundred millions of Indians themselves. Much was heard, indeed, about Russian agents tampering with the loyalty of the masses; but it seems always to have been assumed that Indian discontent would take the form of a preference for Russia, and that the people would be satisfied with a mere change of masters.

" It seems clear that the first Treaty with Japan was inspired, on England's side, partly by the remains of the irrational fear of Russia, and partly by ignorance of the real strength of Japan. This country appeared in the eyes of the Western World in the light of a small nation standing up, for the sake of its independence, to almost certain defeat at the hands of the mighty Northern Power. The military strength of Japan was at that time little suspected abroad; her real spirit toward foreigners and the unlimited aspirations which her success would awaken were suspected still less. Taken altogether, the intentions with which the Anglo-Japanese alliance was entered into, in the light of the new issues which have developed since, form as good an example as could easily be found of the insufficient amount of wisdom with which the world is governed."

Sentimental effects which may be traced to the Anglo- Japanese alliance are interesting and far-reaching, but it is probable that some material results of Japan's rise have given British interests in the East greater concern. There is no longer any serious attempt to conceal the fact that many of Japan's new activities are injurious to interests of her ally, especially in commercial matters. Indications that British and Japanese statesmen are coming to understand that the alliance contains fundamental weaknesses, and does not afford adequate assurance of matters which it was designed to safeguard, are plentiful. How else can the recent Anglo-Russian/ Russo-Japanese ^ and Franco- Japanese* agreements logically be accounted for? If the Anglo-Japanese * alliance is considered by Japan to guarantee her position in eastern Asia, as it assumes to do, why should she feel it necessary to reach agreements concerning the same matter with other powers ? On the other hand, if England feels that the alliance with Japan assures the security of her Indian frontier, why did she hasten to reach an understanding with Russia which obviously is designed to cover the same ground? One hardly can doubt that British statesmen now are in a way to be convinced that the alliance with Japan is destitute of practical advantage to England in sustaining her position in Asia, while its sentimental effects have tended to lower England's prestige. English statesmen must by now realize also that this alliance may embarrass her relations with the United States, and with her colonies in America and the antipodes. It is especially offensive to Australasia, where Japan's ambitions are the subject of uneasy conjectures. Indeed, it is probable that considerable effort on the part of England and Japan will be required to prevent their alliance from becoming, before it expires, a butt of international ridicule. A disposition to openly criticize it already is displayed in the parliaments of both nations.

In Indo-China France also has felt the sentimental effects of the Russo-Japanese war. Not for many years have her eastern colonies been so uneasy. That France is averse to further extension of Japanese influence in Asia may be assumed, but evidently she feels that it is prudent to safeguard her territorial interests there by falling in with the current. This probably induced her to

make the " arrangement " ^ with Japan which was signed on June 10, 1907. This "arrangement" is so vaguely worded that it is devoid of significance except when construed in conjunction with the similar arrangement® of Japan with Russia. It is interesting that this arrangement applies to " the regions of the Chinese Empire adjacent to the territories where they [the signatory powers] have the rights of sovereignty, protection or occupation." This agreement intimates that France observes the drift of events in China, and is not disposed to fall outside the breastworks if the " open door " principle lapses into inanition, and the " sphere of influence " doctrine is definitely revived. I do not interpret France's action in this matter to mean that she really favors the dismemberment of China, as has been asserted, and which is believed by some Chinese statesmen, but rather that she is preparing for possible eventualities.

Germany's policy in the East has attracted little attention within the last three years, chiefly because it has pursued an even and consistent course, and has avoided embarrassing entanglements. It now appears that the reversal of Germany's attitude toward China, which was one result of recognition of certain effects of the Russo- Japanese war, was sincere and that she is willing to lend her influence to maintain the integrity of China and the " open door." Since her change of policy in China, Germany's position there has improved. Tsingtau rapidly is becoming the principal port of Shantung, and German commercial interests in the Empire are moving with greater momentum since the passive hostility of Chinese, which was due to fear of German political designs, is being tempered. One is almost persuaded that Ger- * Appendix G. •Appendix B.

man statesmen are convinced that their former policywas disadvantageous, and that they now believe that German interests in China will do better under the " open door " than under a division of the Empire according to " spheres " now outlined. There is little for China and other nations to complain about in Germany's recent actions in the East, which leads one to hope that her influence will be exerted in behalf of principles to which all the interested powers have subscribed. Japan, at the time when she was negotiating her latest agreements with Russia and France, tentatively approached Germany with a similar proposal, but without success.

When the eastern situation is considered In the light of recent events and present circumstances, one is impelled to conclude that international equilibrium there can only be restored and maintained by creating a new balance of power; one which will be established on a different base, and which will contain a new element of strength and stability. This can be supplied, in my opinion, only by direct and active participation of the United States of America.

It seems inevitable that any patriotic American whose attention is intelligently directed to the subject will begin to consider the position of the United States in respect to the solution of this problem. It is evident that our nation will be materially affected by the course of events in the East, whatever it may be. Our position bordering upon the Pacific Ocean makes our national domain actually contiguous, in a modern sense, to countries which touch the Pacific on its western shores. We have possessions lying within the locality which must be the scene of the forthcoming evolution, and where some of its results will be directly expressed. And we have a hopeful interest, through commerce, in the enormous, the almost incalcul-

THE WAKING ORIENT ii

able material development which application of modern western methods and influence to the teeming resources of China is sure to bring about. It is difficult, in any candid examination of the present situation in the East, and the probabilities which lie before that locality, to escape a conclusion that the interest of the United States in them is fundamental, in so far as this expression may be applied to regions where our nation does not now exercise nor expect to acquire political authority. '

That our nation has reached another turning point in its development is generally recognized. The Spanish- American war and the unexpected acquisition of territories which was among its results brought new responsibilities and problems. But while these causes gave, for the moment, fresh interests and outlets, the greater and determining impulse toward wider fields must be sought deeper among the wellsprings of our national energy. It lies, in my opinion, in our economic situation. The United States has reached a crisis of its industrial development. I do not mean that it no longer has room to grow within. The resources of our own country are only partially developed, and for many years to come the greater part of our national energy will continue to be expended upon them. But in the equation between our swelling industrial output and our home consumption, enormous as this latter factor now is, we have come to a point when we must seek an outlet in new markets or soon see industrial conditions in America arrive at a state of arrested progress. Since such a condition will react upon our prosperity at home, and affect the future of our nation in comparison with other great nations of the world, it is clearly the province of American statesmanship to look beyond the needs of the moment and find new markets for American products, and to devise ways and means to secure for them equitable entrance to those markets.

This is one of the problems which confronts the new statesmanship which America must and will have; and in scanning the world for the commercial opportunity necessary for its fruitation, the eyes of our statesmen cannot fail to turn to the East. There are no longer any geographical mysteries in the world, in the sense of undiscovered lands suitable for the profitable application of human activity. The sphere which we inhabit is defined so far as terrestrial limitations are concerned; and if its economic possibilities are not yet fathomed it is because nature always holds some secret in reserve to be revealed only on imperative need and demand of mankind. In China are more than four hundred millions of intelligent and industrious people, living in the temperate zone, and inhabiting a land which is a natural empire. There, too, is a great nation arrived at a turning point. There is something more than accident in this coincidence. Can anyone conceive that the American people will fail to rise to possibilities which are involved in the relations between China and the United States? It is not always possible for a Government by its separate action to create trade where none has before existed, although history affords some examples of such accomplishment; but it can pave the way for trade. I believe that it is the duty of a Government to do this. The time has come in our national history when the vision of American statesmen should no longer be bound by the limits of our national territories, but should survey the whole world. It is not possible that such a survey can fail to include the Orient, where two-thirds of the inhabitants of the earth, just waking to new conditions and opportunities, are congregated. Between the United States and China is a genuine community of interests, which has no proportionate parallel with the relations of our nation and any other Oriental state. If this is true, it is evident that no international arrangement or understanding having in mind the fate of China and the course of events there which does not to some extent accord with the interests and desires of the United States will possess any real vitality, nor give any genuine assurance that peace will be maintained in the East.

There are Oriental checks to an extension of Pan-Orientalism which, by bringing eastern peoples under a common nationality or establishing among them an affiliation of political interests, might create a real yellow peril for the West. These take the familiar shape of international jealousies and hatreds. Chinese are as averse to being ruled by Japanese as by westerners; indeed, it may be that brought to a choice between these alternatives China would choose a western master. China is intensely hostile to Japan's present continental policy, which she believes is directed against her. Left to pursue a normal development, Oriental nations which are now independent will in time create a stable balance of power among themselves, as has been done in Europe. Japan's continental ambitions are meeting with opposition even in Japan. Some Japanese statesmen draw a parallel to England's former continental policy in Europe, which kept the nation continually involved until it was abandoned, and expect a like fate for Japan's new ambitions. Those who hold this opinion are, however, now too few to influence Japan's policy, and fear that Its aggressive features can be checked only by a reverse. The destiny of the Orient, In comparison with the West, ultimately will be measured by the position of China.

Meanwhile, it is evident that Japan now is the most virile disturbing factor in the Far Eastern Question, which entitles her modern activities and present situation, in all their important bearings, to priority in any comprehensive examination of eastern affairs.

Chapter II Japan's New Economic Regime

Japan's Advantages in Embarking Upon a New Policy — Features of the Policy — Paternal Conception of Government — Economic Situation of the Nation — Genesis OF the New Idea — Need for Revenues — Government Control of Industry — Forms of Encouragement Applied — Part Played by the Banks — Their Relation to thb Government — Methods Employed — Use of Subsidies — Command of Transportation Facilities — Suppression OF Internal Opposition — The New Protective Tariff — Resources of the Country — Optimism of the People.

In embarking upon a new national policy Japan was not hampered by some matters which under similar circumstances would impede- and restrain many other nations. Her position is something like that of the United States of America when the colonies formed a federal government. As the Americans then were able to begin a new political career without having first to- break the full force of old ideas and institutions, so could Japan, after her victory over Russia, adopt an aggressive imperial policy with slight internal opposition. The force of old traditions and customs already had been broken. Japan had accepted the modern idea, and her people are more easily swung, at this period, to support what is presented to them as an advanced policy or system than the people of any western nation would be. The success of the war established the militant oligarchy in complete control, and for the moment the national spirit was peculiarly susceptible to any proposal to which was tacked the national banner. And the flag adroitly was hoisted over the new paternal policy, which in its initial processes moved with all the energy a common national impulse could give.

Some methods of Japan's new economic regime exhibit commercial and industrial paternalism in an extreme form. Here we find, for the first time in modern civilization, a great government extensively operating as a business corporation, and including under its direct control and supervision all activities which enter into the proposition. Here are exemplified in some degree the forms, or a substantial semblance of them, which may result from a socialistic movement should it eventually be successful in the West.