sions, official and unofficial, to the various countries. Their object was to learn of the needs of countries that were rendered less accessible to European exporters because of the shortage in tonnage. One of these was the Japanese Economic Commission to Siberia. The commission made recommendations for the exchange of goods between the two countries. Siberia needed food and clothing, and Japan was ready to supply both. Cotton cloth, shoes, electrical supplies, and salt were greatly in demand. On the other hand, Japan needed the raw materials of which there was an abundance in Siberia, leather, hides, wool, furs, bristles, and match-sticks, and lumber. The only reported needs of Siberia that Japan would be unable to supply were engines, freight cars, and railway supplies. These, it was expected, would come from the United States. The investigations and conclusions of this commission are typical of the survey that Japan is making of available markets which she must find in order to maintain a dense population on a small area.

The question of raw materials appears to be basic. The character and volume of Japanese exports depend upon the availability of raw materials.

"It is out of the question for Japan to compete with Britain and the United States in the exportation of iron commodities. The goods in the sale of which Japan can compete with them are textiles, primarily, and in addition cheap manufactured goods. Japan's competitors will therefore be, not the United States, but Great Britain and France. However, if Japan secures a source of iron ore and develops her industries so as to produce machinery she may at some future time enter into competition with the United States."

99 19

In the opinion of the Japanese, the trade of the world will shift toward the Pacific. The countries bordering on the Pacific are the great raw-material producing countries of the worldAustralia, with her minerals and live stock, South America, with her minerals and agricultural products; Mexico, rich in all resources; the United States, Canada, and China, all with boundless natural resources. The development of these will require capital 19 Article by T. Okamoto quoted above.

and population, whose need for manufactured goods will create a market for the industrial exporting countries.

To prepare herself for the trade opportunities which development of these regions will create, Japan needs coal and iron. The entire known iron deposits of Japan are equal to the production for a single year of the Lake Superior iron ore district. To meet her increasing need for iron, Japan looks to China. The demand for Kwantung is a political expression of this economic fact. Japan already has 170 million tons of Chinese coal reserves partially under her control. Furthermore, the seizure of the German colonies in China turned over to Japan the Chinlingchen Mines, which the Japanese will draw upon to supply their government foundry at Yedamitsu with 120,000 tons of ore annually.20

However, it is not alone as a source of raw material that Japan is interested in China. The millions inhabiting her broad expanse of territory form a natural market for Japan by reason of her proximity. Japan has certain advantages which no other nation enjoys. Furthermore, there is a close affinity between the tastes and habits of the people in the two countries. The articles produced in Japan for the home trade are the same as China uses such as low-priced raincoats, straw hats, umbrellas, boots and shoes, handbags and trunks, cheap perfumery, toilet articles, and toys. In addition there are the great staples which before the way China obtained from Great Britain, such as textiles, metals, and ships. Japanese trade promotion in China must be prompt.

"China is beginning to awake and her industries will soon develop to such an extent that she will be able to manufacture herself those articles which she must now import from Japan. Before China becomes industrially self-sufficient it is necessary that Japanese industries should develop further, otherwise it will be impossible for Japan to maintain her present position in Chinese trade."

To strengthen her commercial position in China, Japan is establishing numerous branches of her banks in Chinese ports. The

20

New York Evening Post pamphlet reprint of articles appearing Saturdays, May 22 to June 22, 1918.

"Article in Japan Chronicle by T. Okamoto.

Yokohama Specie Bank has imitated the lines of development of the British Trade Corporation. A new company similar thereto was recently established, the Home and Foreign Enterprise and Trust Company, Limited, the president and vice-president of which are appointed by the Governor. Indeed, Japan aims to supplant Great Britain as the banker of the Far East.

The economic policy of Japan has been publicly stated and in order for the western mind to understand it, it is essential to get the Japanese point of view. Count Terauchi, in an address to the new ministry in November, 1916, stated that "one thing necessary to the absolute independence of a state is its ability to supply its needs in raw materials. Only after this condition has been reached can a nation be called prosperous. Upon this principle we must build the economic development of Japan." In the same vein is the statement of Finance Minister Shoda in his budget speech, that the provision of raw materials for her own use constitutes Japan's chief after-war problem. This economic program merges insensibly into the larger political program of dominance in the Pacific. In an article on "An Oriental Economic Monroe Doctrine," Professor I. Kawada, of the Imperial University of Kyoto, said:

"Japan must confine her expansion in the Orient to the economic field, but in this field she must establish herself so firmly as to exclude other powers. To this end she must convert the Oriental world into one big self-supplying sphere independent of and impenetrable by the economic powers of the West, by exploiting the natural resources and establishing industries under the control of Orientals themselves assisted by the Japanese. The aim is to secure the independence of Oriental economics under the guidance and control of the Japanese Empire."

Whether this policy means Asia for the Asiatics or Asia for the Japanese, is a question in which is involved the peace of the world.

"New York Evening Post, series of articles quoted above.

CHAPTER VIII

THE MINOR POWERS

A. Europe

(i) Belligerents

(a) Russia

Before the war Russia exported more than she imported, and her foreign trade was increasing rapidly. As a result of the war, exports declined very markedly and imports were fairly constant until 1916, during which year they increased over 100 per cent. The balance of trade changed to an excess of imports from the excess of exports which characterized Russian trade before the

The effects of the war were reflected also in the changes in the commodity groups of trade. The exports of food in 1916 were about one-fifth in value of those in 1913. The exports of raw and semi-manufactured articles declined about 50 per cent. The exports of live animals practically ceased. The exports of manufactured goods decreased but slightly, except in 1915. In 1913 the largest part of the exports was made up of articles of food, and in 1916 of raw and semi-manufactured articles. The imports of food in 1916 were less than in 1913. The imports of raw and semi-manufactured articles declined, but the imports of manufactured goods increased greatly. Articles of food constituted over one-half of the exports in 1913 and less than one-third in 1916, whereas raw and semi-manufactured articles represented about four-tenths of the total exports in 1913 and over six-tenths in 1916. Raw and semi-manufactured articles made up over onehalf of the total imports in 1913 and about one-third in 1916, but manufactured goods constituted a little over a third in 1913 and much over a half in 1916. Russia depended upon foreign countries for her manufactures.

The war affected the origin of imports and the destination of exports. Germany and Austria were eliminated. The Netherlands, Denmark, Italy, and the East Indies decreased in significance in the import trade of Russia, either because they were inaccessible or because their supplies were scant, or because some of these countries were compelled to supply Germany in order to obtain much needed German coal and chemicals. The following countries increased in importance in the import trade of Russia: United States, Sweden, Finland, United Kingdom, Norway, France, China, and Switzerland. In 1913 the imports of Russia came chiefly from Germany (52.6 per cent) and to a less extent from the United Kingdom (13.9 per cent) and the United States (6.1 per cent). In 1916 they were more evenly distributed, 35.8 per cent coming from the United Kingdom, 24.7 per cent from the United States, and 12.4 per cent from Finland. The effect of the war on the exports of Russia was more striking. In 1916 they declined greatly, exports to the Netherlands and to Italy being about one one-hundredth of the 1913 values, to Norway