the two countries does not, we are assured, lie with the responsible classes on either side of the North Sea, but with the fishers in troubled waters on both sides. It is the clamour of the military, the bureaucratic, the journalistic, and to some extent also the professional classes in Germany, which kindles and fans the flame of hatred to England, and it is, roughly speaking, the corresponding classes in this country who fling back the firebrand. In other words, it is not the producing but the consuming and more or less parasitic community whose breath is vituperation, and whose delight is as the joy of a wanton crowd at a conflagration. Business men on both sides neither speak nor write, partly because they are better employed, and partly because they have not the trick of fluent utterance. But those who by their labour create things needful for man, those who by their capital and skill organise that labour, and those whose energies are engaged in distributing its products, - in other words, the industrial and commercial classes, - are the true backbone of any country. And it is their views and wishes which are entitled to weight rather than those of the noisy persons who contribute nothing to the national wealth and but little to its welfare.

Manufacturers and traders of different countries are mutually intelligible, because they deal in tangible things and do not quar- qu

rel about chimeras. Practices may vary, but there is a self-adjusting standard to which the commerce of the whole world must eventually be referred. Commerce is the one universal language. What

is required, therefore, to steady not German only, but English and all other foreign and colonial policy, is the stone ballast of active trade, and that the wealth producers should have their due influence in the counsels of their respective States.

Applying this reflection to the circumstances of China, can it be supposed that Great Britain and Germany united would not be able to achieve much in the furtherance of trade which is impossible while each stroke of the pioneer's pickaxe is frustrated by a grasp from behind, which has been the sole game of officials with their petty personal antagonisme? A hundred men working in concert may cut a road through a jungle which would baffle all separate efforts, yet the way once opened is available to all. That an understanding is practicable between the working bees of both hives was proved by concrete example in the past year. The financiers of Berlin and those of London (the French were forbidden by their Government to join for fear of offending Russia 1) combined their forces in contracting for a loan to the Chinese Government. The transaction was carried through to the satisfaction of all parties, and a precedent has been thereby established for international cooperation which may possibly be the herald of more cordial relations in the future.

But whether in concert with Germany or other Powers, or on our sole responsibility, the time is opportune for a great effort to push our commercial interests in every part of China. There is no danger of our forgetting that our keenest competition with foreign

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nations is in the very article of commerce, nor have we any illusions respecting the easing of that competition by the opening of new markets. Every new market brings new competition. But surely we, of all people, should be the last to complain of a contest on our own ground, where we have the command of our tools instead of their having the command of us, as has proved to be the case in other fields of conflict. Should we be worsted in the struggle it is inexorable nature which will pronounce the verdict, from which there is no appeal. But let us screw our courage to the sticking-place, and we'll not The decadence of nations comes from within, and we shall only be defeated through the misuse of the capacities with which we have been so bountifully endowed. It is by using these capacities to the utmost, and not by snarling at the efforts of our neighbours, that we shall fulfil our commercial mission, whether in China or elsewhere. Cavilling is the note of inferiority, the confession of failure. France, Germany, and Russia are giving strong proofs of their interest in China. Let us emulate and excel them, that so, by convergent if not united efforts, China may be opened for the benefit of all. Only, let us be on the spot, keeping up such a constant pressure that no channel can be opened that we do not immediately fill.

Government has of late years done an immense deal in the way of furnishing merchants and manufacturers with data for the improvement of their foreign trade, but without, it is to be feared, any very decisive results. It is one thing to bring the horse to the water, or the water to the horse, but another to make him drink.

It is the business of traders themselves, individually and collectively, to push the national trade, and to find the means of doing so. What Government can do by its diplomacy and by its executive is insignificant compared with the task which lies before the industrial and commercial community themselves.

During the recent visit of Li Hung Chang the attention of all Europe was turned to China, and the occasional speeches of that statesman contained the germs of enterprises of great pith and moment. He had an object to serve by holding out to the British nation in particular the prospect of new developments of trade in China, by which that country no less than this was to be benefited. There is no reason to question the sincerity of the Chinese statesman, for what he said was only redeemed from commonplace by the personality of the speaker. But in order to bring any practical results out of these hints and suggestions, and to enable him, or whoever comes after him, to give substance to his aspirations, it is obvious that he must be backed by an active force from our side. He is but one live man amid the deadening influence of thousands, and the resolutions formed in the exhilarating air of Europe will surely be extinguished in the mephitic atmosphere of Peking unless they are effectively supported by the influences which gave them birth.

China, as we have said, does not move spontaneously, but by force majeure. She acts either under external pressure, or when she is placed in a dilemma in which she is obliged to purchase deliverance. Such an occasion was believed to have arisen in connection with the exhaustion of the financial resources of China by the payment of the Japanese war indemnities. The mission of Lì Hung Chang was understood to be intimately connected with this impecunious situation. The Chinese Customs tariff is regulated by treaty with foreign Powers, and the Government desired a revision which would enable them to augment their revenue. In return for this concession by the Powers, it was understood that China on her side would grant concessions in the form of additional facilities for trade; and on this do ut des basis the hopes of a new departure in commerce were built up.

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But the Chinese Government is inscrutable to the Western mind. Since Li Hung Chang returned to China it has been announced that a commercial treaty with Japan has been concluded in Peking confirming the existing scale of duties for another ten years, and thus precluding any present revision of the tariff. For under the "most favoured nation" system Power binds the rest, and had the Chinese Government meant seriously to ask for revision of the tariff they would not have stultified themselves by making this new convention with Japan. Most likely the negotiators did not realise the consequences of what they were doing, for there is great want of business intelligence in the Government departments of Peking. The transaction also suggests the query whether Li Hung Chang in his tentative negotiations in Europe was not playing off his own bat in order to have something to offer to his imperial master; nor is the possibility excluded that the negotiations with Japan were hastily closured by his enemies, from mere personal motives, in order to frustrate the projects of Li Hung Chang, what

ever they may have been. Be the explanation what it may, the action of the Peking Government seems to close the door on the concession of those commercial equivalents which were expected to be granted in consideration of the foreign Powers assenting to the revision of the tariff.

What may be the fate of the budget of reforms needed for the promotion of foreign trade, if they can no longer be negotiated for on a basis of reciprocal concessions, is a matter of doubt. But the most important of them all, because including within itself the living germ of all material reforms, may be treated on an independent footing. Though a scheme of railway construction would in all probability have figured among the concessions asked from the Chinese Government in exchange for higher duties, it may with no less propriety be urged on its own merits as a measure of safety for the State-a fruitful source of revenue, and as a link which would bind up the interests of foreign nations indissolubly with those of China. Railways, in fact, are in the air. The most significant, because the most definite, pronouncement of Li Hung Chang while he was in England was the voluntary pledge he gave to the merchants of London that he would consecrate his remaining strength to the promotion of railway enterprise. What may remain to him of strength after he has stood for some time between the opposing factions in the imperial Court may not amount to a great deal, and it may all be needed to save his own head. But even irrespectively of Li Hung Chang, there seems some likelihood of this great enterprise being undertaken in one form or another, and it is a matter of the utmost practical interest to Great Britain to consider under what conditions the Chinese dominions are to be intersected by lines of railway.

As to the immediate success of railways, we know from experience how eagerly the Chinese people have taken to them, so far as they have had opportunity, just as they formerly did with steamboats. We have seen how, as in India, a mineral line develops into a passenger line, and how traffic unlooked for flows in. We know also the immeasurable advantages which China possesses over India in her energetic commercial population, their freedom from caste prejudices, or other traditional observances which hamper cooperation. There is consequently very little risk in predicting business prosperity for the future Chinese railways.

That, however, is far from exhausting the question. For the introducing of such a force among the teeming millions of China is like undertaking some gigantic scheme of hydraulic engineering, the draining of the Zuyder Zee or the flooding of the Sahara, "not a thing to be enterprised nor taken in hand unadvisedly, lightly, or wantonly." The consequences cannot be reduced to an arithmetical formula.

The primary condition to be kept in view is that China, being of herself incapable of building or managing railways, must invoke foreign aid. Herein lies the obstacle which has hitherto stood in the way of railway progress. If foreign aid must be had, how is it to be regulated? Whose is to be the directing hand? That is the crux of the problem.

It is more than thirty years since the agitation for railwaymaking in China began. It proceeded from foreigners, and was

ipso facto doomed to barrenness. All Christendom has joined in the unholy scramble for the favours of China. Great syndicates, or persons professing to speak in their names, have encamped like mendicants before the gates of the Chinese authorities, inviting contumely and spoiling their own chances. They all want "concessions," powers, monopolies, the very things which China, so long as she retains any national conscience, cannot grant. Each syndicate, in short, aims at setting up an imperium in imperio in China, at extra - territorialising Chinese soil and creating an alien authority in the country. By such means alone was it supposed their concessions could be protected-concessions which, in the first instance, they proposed to obtain by the usual oriental methods which are not confined to the Orient. But the instincts of the Chinese have served them well in this matter. Better never have a mile of railway in the country than introduce a pandemonium of rival concessionnaires, of rival Governments, each claiming rights in the interior, and each disputing the other's claims, as if China were a second Africa. far the Chinese have managed to keep their railways in their own hands, employing their own servants and regulating their own finances. Yet even under that simple régime the Great Powers by their agents have had their names dragged through the mire in spiteful efforts to mar each other's business. The material for railway construction had of course to be imported. Each of the Powers - Russia always excepted-prostituted its diplomacy by arrogating the right to prevent rivals from supplying these wants. Even when contracts were put up

So

to public tender the Ministers of the Western Powers in Peking have not scrupled to protest against orders being intrusted to merchants of any nationality but their own. This of course was but a form of veiled attack on British trade, which, in an open market, was bound, on the merits, to secure the bulk of the orders. The Chin

ese

have sometimes yielded to threats and thrown a bone to the howling dogs, but always with the worst results, worthless material being supplied to them at unconscionable prices.

Now, the observation suggests itself that if this beggary with violence can be displayed where no rights whatsoever exist, what a nest of furies would be let loose on the unhappy country if the interference of foreign Governments had the most flimsy pretext of justification! No friend to China could desire to see railway or any other kind of progress on such conditions. Neither, it may be added, could any friend to European peace, for no surer source of quarrel could be created than a scrimmage for the exploitation of China.

The railway problem in China, and others of kindred nature, may be succinctly stated as, How to pour in the new wine without bursting the old skins. The general defectiveness of communication being assumed, what concerns us next to consider are the resources which China has at her disposal for supplying her own needs for it is to the deficiencies in these resources that we foreigners propose to address ourselves.

From the point of view of material development there would appear to be three principal characteristic disqualifications in the existing state of China:

1. Laxity of social organisation. 2. Absence of financial account

ability.

3. Want of practical education. It is quite unnecessary to complicate the question by ethical theories or odious comparisons. The phenomena are sufficient for us, and from them it is a natural deduction that the strict administration of funds and the economical combinations necessary to the carrying out of great public works are beyond the capacity of Chinese officials. (It is only officials that are in question.) No bond fide investor would touch an undertaking which any official person controlled. The efforts we hear of from time to time to force merchants to subscribe capital for making railways are interesting, no less for the effusiveness of the mercantile response than for the adroitness of the evasion of any practical issue therefrom.

Here, then, we have an immense gap to be filled by foreign enterprise, which gives food for very grave reflection. This great alien force once introduced, what is to be its destination? To transform China like a leaven, or to supersede her? That will depend on the further question, whether the loose and corrupt Chinese administration is susceptible of reformation, -a question which no man can answer. It is well that we are not obliged to untie the knot; it has been cut for us, as we shall now see.

Although unable to raise loans from her own people, China is able to borrow from strangers, because she respects her pecuniary obligations abroad, and is ready to offer to foreigners what looks like security. That security has hitherto consisted in the faithful administration of one branch of the revenue service-the Maritime Customs-which is under foreign direction. This anomalous