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 the Pacific between the U. S. A. and Japan. For Japan, China is a vast reservoir of raw material; it is to China that Japanese capital is exported. Manchuria is an especially important field into which Japanese capital is penetrating. Japan has no iron, its whole war industry to a large extend depends upon China. Japan contains only 0,1% of the world's iron supply. It receives about 40% of the iron required for industry from China, the balance from the U. S. A. and Great Britain, Japan has a powerful navy, and excellent imperialist army, yet if it is cut off from China, this means the loss of iron and steel supplies and a still greater dependence upon the capitalist countries against which it must wage war in the future. Therefore Japanese capitalism is to an increased extent concerned simultaneously with the import of iron from China, in penetrating into the centres of the metal industry itself, especially in the provinces of Shantung and partically Hankow, in order to grab the overwhelming majority of metal works.

In the summer of this year the "New York American" published a sensational document. It was a secret document of the Japanese General Staff on the question of preparatory measures to be taken by Japan in case of a war with the United States. This document appeared in the American press on June 6 and would be worthy of publication in full, were I not prevented by the narrow limits of my report. This document discloses the importance of China, particularly Manchuria, as a base of supplies during the war. The contents of the document can be summarized under four points: a) only the exploitation of the rich natural wealth of Manchuria and in parts also of Korea (iron, coal, oil, food supplies) will enable Japan properly to organize its defense; b) the necessity to establish an extensive net work of railways throughout Manchuria and Korea for the transport of the products; c) the guarantee of free sea passages across the Korean