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 local crisis. Once this, economic crisis is over and order has been re-established, Manchuria may once more serve as an outlet for the population of China proper. The Chinese are the people best adapted for the colonisation of Manchuria. An artificial restriction of this migration by arbitrary political measures would be prejudicial to the interests of Manchuria, as it would be to the interests of Shantung and Hopei.

The ties between Manchuria and the rest of China remain chiefly racial and social. At the same time, economic ties are continuously becoming stronger, which is shown by the growing commercial relations between Manchuria and the rest of China. Nevertheless, according to Customs returns, Japan remains the best customer and chief supplier of Manchuria, China proper occupying the second place.

The chief imports from Manchuria into the rest of China are the soya bean and its derivatives, coal and small amounts of groundnuts, raw silk, miscellaneous cereals and a very limited amount of iron, maize, wool, and timber. The chief exports to Manchuria from China proper are cotton piece-goods, tobacco preparations, silken and other textiles, tea, cereals and seeds, raw cotton, paper and wheat flour.

Consequently, China proper relies on Manchuria for certain foodstuffs, most important of which is the soya bean and its derivatives, but her imports of minerals, with the exception of coal and her imports of timber, animal products and raw materials for manufacturing purposes have in the past been slight. Furthermore, China proper is able to use only a portion of Manchuria's favourable balance to offset its own unfavourable balance. It is able to do this, not by virtue of its political affiliation as such, as is generally thought, but chiefly because the Manchurian Post Offices and Customs have been highly profitable institutions and because of the substantial remittances of Chinese settlers to their families in Shanghai and Hopei.

The resources of Manchuria are great and as yet not fully ascertained. For their development they require population, capital, technical skill, organisation and internal security. The population is almost entirely supplied by China. Large numbers of the existing population were born in provinces of North China, where their family ties are still very close. Capital, technical skill and organisation have hitherto chiefly been provided by Japan in South Manchuria and by Russia north of Changchun. Other foreign countries to a much smaller degree have interests throughout the Three Provinces, but principally in the large cities. Their representatives have exercised a conciliatory influence in the recent years of political tension, and will continue to do so, provided that Japan, as the dominating economic Power, does not attempt to monopolise the field. The all-important problem at the present time is the establishment of an administration acceptable to the population and capable of supplying the last need namely, the maintenance of law and order.

No foreign Power could develop Manchuria or reap any benefit from an attempt to control it without the good-will and wholehearted co-operation of the Chinese masses which form the bulk of the population, tilling its soil, and supplying the labour for practically every enterprise in the country. Neither will China ever be free from anxiety and danger unless these Northern Provinces cease to afford a battleground for the conflicting ambitions of neighbouring Powers. It is as necessary, therefore, for China to satisfy the economic interests of Japan in this territory as for Japan to recognise the unalterably Chinese character of its population.

Parallel to an understanding of this kind and in order to allow all interested Powers to co-operate in the development of Manchuria, it seems essential that the principle of the Open Door should be maintained, not only from the legal point of view, but also in the actual practice of trade, industry and banking. Amongst foreign business-men in Manchuria other than Japanese, there is a fear that Japanese business concerns will try to