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 indispensable for her national defence, but heavy financial sacrifices may be involved in obtaining them. The strategic interests of Japan in Manchuria involved in this question have been mentioned elsewhere.

Further, Manchuria is not likely to supply Japan with those raw materials which she needs most for her textile industries.

The Three North-Eastern Provinces provide a regular market for Japanese manufactured goods; and the importance of this market may even increase with their growth in prosperity. But Osaka, in the past, has always depended more on Shanghai than on Dairen. The Manchurian market may perhaps offer more security, but it is more restricted than the Chinese market.

The idea of economic "blocs" has penetrated to Japan from the West. The possibility of such a bloc comprising the Japanese Empire and Manchuria is often found in the writings of Japanese statesmen, professors and journalists. In an article written shortly before he took office, the present Minister of Commerce and Industry pointed to the formation in the world of such economic blocs, American, Soviet, European and British, and stated that Japan should also create with Manchuria such a bloc.

There is nothing at present to show that..such a system is practicable. Some voices have recently been raised in Japan to warn their compatriots against dangerous illusions. Japan depends for the bulk of her commerce far less on Manchuria than she does on the United States of America, China proper and British India.

Manchuria may become, in the future, of great assistance to ail overpopulated Japan, but it is as dangerous not to discern the limitations of its possibilities as it is to under-estimate their value.

When studying the economic relations of the rest of China with her Three Eastern Provinces, it will be apparent that, contrary to what we have seen in the case of Japan, her chief earlier contribution to their development consisted in the sending of seasonal workers and permanent settlers, to whom the great agricultural development of the country is due. More recently, however, particularly in the last decade, her' participation in railway construction, in industry, trade and banking, and in the development of mineral and forestry resources, has. also shown a marked progress the extent of which cannot be adequately shown due to lack of data. On the whole, it may be said that the principal ties between Manchuria and the rest of China are racial and social rather than economic. It has been recalled in Chapter II that the present population of Manchuria is, in the main, drawn from recent immigrations. The spontaneous character of these immigrations show clearly how they have fulfilled a real need. They have been a consequence of famine, although they were encouraged to some extent by both the Japanese and Chinese.

The Japanese have for a number of years recruited Chinese labour for the Fushun mines, for the Dairen harbour works and for the construction of railway lines. But the number of Chinese thus recruited has always been very limited and this recruitment ceased in 1927, when it appeared that the local supplies of labour were sufficient.

The Provincial authorities in Manchuria have also on several occasions assisted the settlement of Chinese immigrants, although in practice these activities of the authorities of the Three Eastern Provinces have only had a limited influence on immigration. The authorities in North China, and the charitable societies, have also in certain periods endeavoured to encourage the settlement of families in Manchuria.

The principal assistance received by the immigrants has been the reduced rates offered by the South Manchuria Railway, the Chinese lines, and the Chinese Eastern Railway. These encouragements given to newcomers showed that, at least until the end of 1931, the South Manchuria Railway, the Manchurian provincial authorities and the Chinese Government regarded