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1. INTRODUCTION.
THE most striking political events of 1938 were the various agreements concluded in the form of treaties with Germany and Italy and in the form of an understanding with Poland. The former constitute full recognition while the latter is interpreted as a compromise which does not definitely commit Poland to recognition, but opens the door to future negotiation.
2. These events have been a source of great satisfaction to the Manchukuo Government. Taken in combination with the relinquishment by Japan at the end of 1937 of her exterritorial rights, they are read as marking the coming of age of the new State. The foreign observer may be pardoned for questioning the indepen- dence of Manchukuo. In form the independence of the State is guaranteed by runs "Manchukuo. But both countries would Japan. In practice Japan presumably maintain that their precise relations are their own affair and contend that Manchukuo functions as a separate entity.
3. The present moment, therefore, when Manchukuo claims to have become a full-fledged member of the family of nations seems a suitable one to study how far this claim can be substantiated and I propose to devote attention to the point in this report.
4. Less striking, but probably more important in the long run, is the change in attitude towards the question of recognition. Hitherto, Manchukuo has followed a passive policy. So long as the whole world outside of Japan refused to recognise the State, there was little she could do but acquiesce. Now that several countries have ranged themselves on her side, Manchukuo is beginning to divide the world into
Powers. From this and "non-recognising recognising" and "
who
point it is but a step to dividing them into friendly and hostile Powers: is not for us is against us"; and to consider the merits of an active policy to be instituted against the unfriendly Powers. I propose to discuss this question further in the appropriate section of this report.
5. The study of these two points: (a) the progress made by Manchukuo since 1932, (b) her foreign relations, necessarily occupies considerable space and minor events of the year, which have been reported from time to time, are omitted. The position of the British trader, threatened at one time with eclipse, has been ever so slightly improved in the second half of 1938 (paragraph 37). Problems of the future are the treatment of perpetual leases (paragraph 42) and the relations between the foreign missions and the authorities (paragraphs 77 and 78).
II-GOVERNMENT OF MANCHUKUO.
(1) Preliminary Comment.
6. There can be no question that on the whole the system of government is working, not exactly smoothly, but without developing so much friction as to destroy its efficiency. It is one that is repugnant to British ideas, but it is That the dangerous to apply Anglo-Saxon principles to oriental races. Manchukuo subject has no liberty of action or thought gives an unfavourable impression of the Government's ideals, but we have to remember that to 99 per cent. of the population liberty is but a name. If they are subjected to autocratic domination, it is only to what they and their parents have always been accustomed.
7. The change from the rough-and-ready methods of their former Chinese war-lords to the meticulous, not to say fussy, methods of the Japanese was bound to be distasteful to the Chinese, particularly as their new masters were alien, but the Chinese is very adaptable and such foreign observers as are in a position to judge are generally agreed that he has settled down with oriental resignation to life under the present régime.
8. Order has been restored in the greater part of the country and is returning in the remainder. Laws have been codified and law courts set up. Taxation has been standardised. A beginning has been made with standard education. Provision has been made for Government hospitals in principal centres, doctors are being trained and efforts are being made to educate the public
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