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outsiders lurk in her Yang-tsze strongholds. In addition, under pretext of propagating religion, outsiders have visited every natural strong place, and they know China better than the Chinese. The real cause of this hurt is the influx of capital and its ramifica- tions. Obvious as all this is, dishonest Chinese are tempted by greed to spy for t outsider and teach the monkey to climb the tree, until our grand State is worried into seeking alien support and doing alien bidding, and thinking it luck to get alien charity. It is this that makes patriots beat their breasts and weep. Thus the influx of foreign capital is more cruel than struggles for territory or cities, attended as these are by mountains of corpses and seas of blood.
Thus terrible being the harm done by influx of foreign capital-which can neither be withstood nor forbidden, and which will make the State poorer, the people weaker, the longer it is allowed to go on, and end in disaster such as the mind refuses to contem- plate the only course is to devise a countervailing scheme. Now the influx of foreign capital falls under two heads-public loans from foreign States, and foreign industrial enterprises--and these require separate remedies.
As to the first China had never any public debts of old, though King Nan of the Chou dynasty's hiding from his creditor subjects on the debtor's refuge is an old joke, and sudden emergencies have had to be met with benevolence or the opening of trading marts. European States, however, have all internal loans, the interest on which is raised by taxation, though repudiation or forced reduction of the principal has been a fertile source of weakness and discontent. The most prominent case of failure to meet foreign debts leading to interference with finances and control of rights is afforded by Egypt, which ceased to be her people's owing to reckless borrowing from strong Powers and squandering of proceeds. The next case is Argentina, which, in zeal for progress, borrowed heavily from England but did not develop quickly enough, with the result that loans fell due and all enterprises had to stop, leaving her ruined and nearly extinguished. For failure to arrange to meet charges increases the evil result of foreign capital. At this moment reform measures have been set going, and require vast sums. If these cannot be met internally, foreign borrowing is imperative, but only from States weaker than ourselves and far away, so as to avoid danger of control and covetousness; and before borrowing it is necessary to work out the industries which, by the use of the loan, can bring enough profit to meet the principal charge on due date. As to control of funds and of employés, we must retain this, and not let capitalists interfere with our rights if we are to minimize the harm of influx of foreign capital and, avoiding the fate of Egypt and Argentina, make all nations regard the attempt to play that game on China as too risky.
Before their rebellion, the United States of America had, for railways, mines, industries, &c., borrowed from the States of Europe until the Government was responsible for 2,800,000,000 gold dollars, 60 or 70 per cent. of the bonds being held in Europe, where America was jeered at as the gold-borrower and her people as the debt-burdened. Luckily the Americans did their utmost and, by successful schemes of redemption, soon recovered five-sixths of their bonds, until now they rank as a first- class State for capital, and can invade the European market to take back their lost prestige.
Similarly, France had, besides internal loans, to raise abroad over 104,000,000 dollars to pay the indemnity imposed by Germany; and two-thirds of the large sums borrowed when Italy became a State were held abroad. Spectators thought both countries in peril, but vigorous reforms and popular confidence, causing native capitalists to strive to get back national bonds, unperceptibly restored their control of their debts. So also India thirty years ago had to seek industrial capital in England, but now stands alone (as Englishmen there say, their position is now like that of Europeans in America). For the influx of foreign capital, however great, can, by skilful arrangements, be made extraordinarily productive and a great gain. Supposing the capitalist country's hope of interest prevents its interfering causelessly for fear of losing our favour and jeopardizing an outlet for its money, and our people thoroughly realize the special benefit of reform and buy up the bonds to keep outsiders from profiting, this would be a spontaneous acceptance of help without Government pressure, and in such a case the influx of foreign capital would do good and not ill.
As to the influx of capital for industries in the interior, its evident harın is less immediate but its secret influence worse. For debts end once they are paid off; whereas traders, preying on our vitals, stealing our livelihood, squatting on our important places, becoming intimate with our popular feelings, end, if they cannot be resisted or prohibited, in unthinkable disaster. Yet the ill can be met if it cannot be prevented, and the best way to this end is to open lots of schools for arts and crafts, extend
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establishment of factories, set up Companies to strengthen their trading power, give sole rights to encourage traders, lighten export duties to widen consumption, set up banks throughout foreign countries to facilitate circulation. The old prejudice for study and .contempt of handicrafts, which extended even to out-of-the-way quarters, is now dying with greater enlightenment, and schools are rising, either Government or popular, which are fully supplied with fine-looking systems. But our nature is to regard externals and to be wanting in perseverance, while the teachers are not always expert nor ready to give away their trade secrets. The result is the students know what should be done but not how to do it, can imitate foreigners but not improve on their doings, and further foreign improvements leave us behind. To meet this danger the best way is to bave schools attached to factories, into which only pupils up in mathematics, science, and chemistry will be received, either from lower schools or by selection, and which will give them an excellent career while imposing strict lessons. Then there will be practical progress, and any special invention will bring medals and sole rights, while, if it succeeds, the authorities will step forward with capital for the largest style of Company, will protect the rights, and prevent infringement of patent. With such encouragement pupils will surely work hard and successfully and schools and factories flourish. Our products will save freight, and so be cheap enough and good enough to oust foreign dear articles, and with rise of native trade foreign trade will die of inanition, and, without actual prohibition, influx of foreign capital will silently cease.
But internal markets will not then suffice to counteract the evil of that influx. We must imitate foreign countries, which encourage their manufactures by lightening export dues and by imposing on all imports but necessaries which they cannot themselves produce prohibitive charges. To the objection that this would entail loss of revenue we reply that vastly increased business would result in larger revenue, even at lower rates, and that only certain staples need be thus encouraged.
Alas! foreigners here do as they will, interfere with our rights, and bully our authorities; they take away money for what they bring to the tune of innumerable millions a-year, while they will not let Chinese immigrants send home the money they make abroad to amounts over 500 dollars, and confiscate their businesses when they die, so that the money drained from China never can return. Such unjust treatment should be abolished when the Treaties are renewed by insisting on equal treatment with other Powers; but meanwhile the remedy is to have branches of the Board of Revenue in all chief foreign ports to remit our people's money at moderate charge, and also to enforce Treaty rule against export of currency.
Ah me the effects of the influx of foreign capital depend on the situation of the State. If it is strong the influx simply enhances its profit; if it is weak the influx does nothing but harm. As regards systems of counteraction, these, however well considered, cannot be worked if a State be too weak. Our China, for her wide area, vast population, abundant resources, rich supply of talent, has long been at the head of the five continents. Fler sudden weakness is not due to outsiders, but simply to herself. Nor by herself"
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do we mean her people, but to her centuries of policy designed to make the people simple, weak, and to hold them down. Therefore to withstand the danger arising from influx of foreign capital the first essential is to make the State rich and strong an object only to be gained by a reversal of this false policy of making the people simple and weak.
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