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 With regard to the nature of these investments, it will be found that the majority of the capital has been devoted to transportation enterprises (mainly railways), agriculture, mining and forestry coming next. As a matter of fact, the Japanese investments in South Manchuria centre mainly round the South Manchuria Railway, while the investments of the U.S.S.R. in the North are to a great extent, directly or indirectly, linked up with the Chinese Eastern Railway.

Foreign investments other than Japanese are more difficult to estimate and, in spite of the helpful assistance of those immediately interested, the information obtained by the Commission has been meagre. Most of the figures given by the Japanese are prior to 1917 and consequently out of date. For the U.S.S.R., as has been stated, no definite estimate is possible. With regard to other countries, a recent Russian estimate for North Manchuria only, which it has not been possible to verify, indicates the United Kingdom as the next largest investor with 11,185,000 gold dollars, followed by Japan with 9,229,400 gold dollars, the United States of America with 8,220,000 gold dollars, Poland with 5,025,000 gold dollars, France with 1,760,000 gold dollars, Germany with 1,235,000 gold dollars, and miscellaneous investments 1,129,600 gold dollars, making a total of 37,784,400 gold dollars. For South Manchuria, similar figures are not available.

It is now necessary to analyse the part Manchuria plays in the economic life of Japan. A detailed study on this subject Will be found in an Annex to this Report, from which it will be seen that, although this part is an important one, it is at the same time limited by circumstances which must not be overlooked.

It does not seem from past experience that Manchuria is a region suitable for Japanese emigration on a large scale. As already stated in Chapter II, the farmers and coolies from Shantung and Shihli (now Hopei) have in the last few decades taken possession of the soil. Japanese settlers are, and for many years will mostly be, business-men, officials, salaried employees; who have come to manage the investments of capital, the development_of various enterprises, and the utilisation of natural resources.

As regards her supplies of agricultural produce, Japan to-day depends on Manchuria mainly for the soya bean and its derivatives, the use of which as foodstuff and forage may even increase in the future. (As a fertiliser, which is to-day one of its chief uses, its importance is likely to decrease with the growth of chemical industries in Japan.) But the question of food supply is not at the moment acute for Japan, the acquisition of Korea and Formosa having helped to solve at least for the time her rice problem. If at some future date the need for this commodity becomes urgent for the Japanese Empire, Manchuria may be able to provide an additional source of supply. But in that case a large amount of capital would have to be spent in the development of a sufficient irrigation system.

Larger still, it seems, will be the amount of capital necessary for the creation of Japanese heavy industries, if these are destined to become independent of foreign countries, as a result of the utilisation of the resources of Manchuria. Japan seeks, above all, to develop in the Three Eastern Provinces the production of those raw materials which are indispensable to her national defence. Manchuria can supply her with coal, oil and iron. The economic advantages, however, of such supplies are uncertain. For coal, only a comparatively small part of the production is utilised in Japan; oil is extracted from shale only in very limited quantities, while it would appear that iron is definitely produced at a loss. But economic considerations are not the only ones which influence the Japanese Government.!. The resources of Manchuria are intended to assist the development of an independent metallurgic system. In any case, Japan must seek abroad a great part of her coke and certain non-siliceous ores. The Three Eastern Provinces may ensure greater security in the supplies of certain products which are