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228 regarded as permanently lost, until such time as China becomes strong enough to defeat Japan in war; and the whole of Manchuria has come more or less under Japanese control. But the Shantung Railway, by the agreement reached at Washington, is to be bought back by China—five years hence, if all goes well. Thus, except in regions practically lost to China, the Chinese now have control of all their more important railways, or will have before long. This is a very hopeful feature of the situation, and a distinct credit to Chinese sagacity.

Putnam Weale (Mr. Lennox Simpson) strongly urges—quite rightly, as I think—the great importance of nationalizing all Chinese railways. At Washington recently, he helped to secure the Shantung Railway award, and to concentrate attention on the railway as the main issue. Writing early in 1919, he said :—

The key to the proper control of China and the building-up of the new Republican State is the railway key.…The revolution of 1911, and the acceptance in principle of Western ideas of popular government, removed the danger of foreign provinces being carved out of the old Manchu Empire. There was, however, left behind a more subtle weapon. This weapon is the railway. Russia with her Manchurian Railway scheme taught Japan the new method. Japan, by the Treaty of Portsmouth in 1905, not only inherited the richer half of the Manchurian railways, but was able to put into practice a new technique, based on a mixture of twisted economics, police control, and military garrisons. Out of this grew the latter-day highly developed railway-zone which, to all intents and purposes, creates a new type of foreign enclave, subversive of the Chinese State. The especial evil to-day is that Japan has transferred from Manchuria to Shantung this new technique, which…she will eventually extend into the very heart of intramural China…and also into extramural Chihli and Inner Mongolia (thus outflanking Peking)