2
Her relations with France are now excellent.
With Russia her relations are
better than they have been for fifty-two years. On the other hand, rivalry with Germany is growing in acuteness. The peoples of the two countries are friendly; they unquestionably respect and admire cach other; they are allied in commercial matters not only in China but in many other parts of the world, and the Governments are nominally on the best of terms. But undoubtedly international jealousy between the two countries is all the time increasing. Only so recently as 1897 England could be regarded as an isolated Power, free from foreign alliances. Since then there has been a rapid growth of her international friendships, understandings, and alliances. Naturally Germany views with jealousy this growth in power of her rival, and, actuated by the policy of self-preservation, has set herself the task of trying to weaken these understandings and alliances.
In the first place, she attempted to alienate England from the United States, Not long after the war between Spain and America the German Ambassador at Washington endeavoured to create the belief among Americans that England had attempted to form a combination of European Powers to bring about a termination of the war unfavourable to America and that Germany had declined to enter the combination.
As a matter of fact the sympathies of the English people during that war were almost wholly with America, whereas the sympathies of Germany, both officially and of her people, were with Spain.
That war brought England and America closer together than they had been for forty years; that war satisfied the United States that in any European emergency, even if the whole continent of Europe were against her, England would support America. Overwhelming evidence was produced to show that it was Germany who had endeavoured to form a European coalition to interfere in the war and that it was England who had prevented it.
The German Emperor cast the blame on his Ambassador, and the Ambassador, Dr. von Holleben, was recalled and disgraced and has never since been permitted to hold office.
In the second place, Germany had seen with apprehension the growth of the cordial understanding between England and France, strengthened as it has been by understandings with Sweden, with Norway, with Spain, and with Italy. Owing to her strained relations with France since 1871, Germany was powerless to prevent the growth of this understanding.
Germany was also powerless to prevent the rapprochement between England and Russia which has been a natural corollary of the cordial understanding with France. German action in connection with Austria and the annexation by Austria of Bosnia and Herzegovina and the humiliation thereby inflicted upon Russia has had the effect of antagonising Russia and therefore increasing the friendly regard of Russia for England.
So with Japan. It has been the principal aim and object of Germany during the tenure of office of Baron Mumm to try to sow distrust between the two allied Powers of England and Japan.
Obviously this distrust can be fostered by keeping China apart from Japan; obviously it is to the interest of England that the friendliest relations should exist between China and the ally of England, Japan.
Differences of opinion between Japan and China intimately concern Japan and England and have an intimate bearing upon the alliance between those two countries. While those differences exist and questions remain unsettled there must be anxiety as to the future. England is desirous that the difference between the two Empires of the Orient shall be removed, and Japan is equally desirous, not only because of her relations with England, but because of the serious economical problems with which she is now confronted.
During the recent visit of my colleague on the "Times" and of myself to Japan we were shown unusual honour. The Prime Minister entertained us. Even the Emperor, without any request from us, caused us to be invited to private audience with him.
The object of this attention was two-fold: first, to show Mr. Chirol, who came out specially from England, how deep-rooted is the alliance between England and Japan; and second, to show me, who had come over from Peking, how desirous the Japanese Government now are to modify their policy towards China and remove all causes of misunderstanding.
3
In my various conversations with the statesmen of Japan these are the impressions I have formed :-
The outlook in Japan is not unclouded. Thoughtful Japanese regard the situation with considerable anxiety. Many think that Japan has a greater problem before her now than she ever had in her history, for she is confronted with the problem of adjusting her finances to meet the enormous burden of expenditure imposed upon her by her recent war. No such advance in expenditure has ever been recorded in history. How, then, is Japan to meet it-that is the question? She can only meet it by a great expanse in trade with China and Manchuria. But this passive antagonism of China has seriously affected Japan. Her trade has had a year of disaster, her shipping has suffered loss in almost every branch. A very material proportion of her whole mercantile fleet has been lying idle, and this at a time when her expenditure has grown prodigiously.
Depreciation in trade and depreciation in the value of her stocks is accompanied by another serious factor. Owing to increased burdens required to meet increased expenditure, there is a great increase in the cost of living, and therefore a great increase in the cost of production. Thus the competition of other countries becomes more serious, and Japan loses the advantage hitherto enjoyed by her in competing for the trade of the Far East, namely, the great cheapness of living in Japan, and the great cheapness, therefore, wherewith all manufactured commodities were produced. This advantage is disappearing, and her burdens are becoming every day more burdensome. Japan is not a country of great natural resources. Like Australia, she is a country where rains in due season or scarcity of rain can make all the differences between prosperity and adversity. As a country grows in strength and acquires increasing responsibilities it endeavours to develop its resources so as to be independent as far as possible of the caprice of climate. Japan is therefore straining every nerve to multiply her industries and manufactures and make herself independent of rainfall, which, good or bad, may affect her production of silk and rice by several millions of sterling per annum. To multiply her industries she requires capital, so Japan is doing everything possible to encourage the inflow of cheap capital from abroad; but unless industrial conditions improve money will not be forthcoming. For foreign bankers watch events very closely, and they are aware that Japanese, especially in China, have suffered during last year losses that the country can ill afford to bear.
Such being the condition in Japan-great increase of expenditure with great increase in cost of production, unsatisfactory trade, and gloomy outlook-it is not to be thought that Japan can adopt any aggressive policy for a long time to come. Those who speak of Japan's adopting an aggressive policy towards China speak nonsense. There is no possibility of such a thing. It is to Japan's interest to come to an under- standing and sweep away the differences which now separate her from China. It is as much to Japan's interest to remove these differences as it is to China's. differences can be removed, and now seems the time to remove them. There must be conciliation on both sides. There is danger in leaving frontier and other questions unsolved. As I understand, there are nine questions of importance between the two countries in relation to Manchuria.
These
1. The Chientas Dispute.-Japan will withdraw her claim to Ch'ientao territory provided China recognises her right to exercise jurisdiction over Coreans settled in that territory. It is of paramount importance for China to recover this territory and have its boundary clearly laid down for all time. Recovery is worth a large price. The price asked does not seem a large one.
At present China has no jurisdiction over the subjects of other Powers resident within her Empire; but that is a temporary condition only, and the day cannot be far distant when China shall recover jurisdiction over all foreign subjects within her borders. Siam has recovered this jurisdiction.
What Sian has done with such
success cannot be beyond the power of China.
Japan has the right of consular jurisdiction over Coreans in China, but not the right of police control, except in certain specially designated Japanese settlements at the treaty ports. It seems to me that there can be no difficulty in adjusting the difficulty in Ch'ientao. Coreans resident there are claimed by the Japanese as Japanese subjects; they are claimed by the Chinese as Chinese subjects. No one can be protected against his will. Surely it can be left to the residents themselves to elect within a certain time whether they are really Chinese or whether they are to remain as Coreans and pass under Japanese consular jurisdiction. Multitudes of Japanese subjects belonging to Formosa hold land and property in Fukien territory
[2391 i-9]
B 2
A