Once a Canton-bound steamer, carrying the mails and a considerable amount of specie, had her progress obstructed by two junks that wilfully forced her into shoal water. In the confusion that followed the grounding, a score of coolies, who up to that moment had been regarded as honest deck passengers, rushed to the pilot-house and engine-room and murdered every white man on board. Practically everything of value was then transferred to the junks, now conveniently alongside, and the spoil was landed at such points in the estuary that made official detection well-nigh impossible. This is but a sample of the stories you may hear while yellow-faced Chinamen are serving your food, and it must be confessed that it affords a sense of confidence to know that the grates of the stairways are actually locked, and that the rifles of the guards are loaded with ball ammunition. As he sips his black coffee at the termination of luncheon, the captain assures you that until within a few years a skipper was suspicious alike of every native deck passenger and every fishing junk indicating a disposition to claim more than its share of the channel; "but the old days in China," he concludes, "have disappeared forever, and piracy as an occupation has passed with them."

Getting back to the forepart of the ship, the views on land and sea are engrossingly interesting. On the shores of the mainland and on an occasional island are ancient forts which revive memories of interesting experiences of the white man's invasion of the Celestial kingdom, and the foreground of rice-fields is backed by interminable groves of mulberry-trees explaining China's preeminence as a silk producer. Numerous villages are passed, and from them the traveler obtains a fair idea of the rustic life of China. Now and again a pagoda is visible, crowning an elevation, and recalling childhood's school-book illustrations. You jump at the convenient conclusion that these structures of from six to ten stories had to do with the religion of the country, which surmise is erroneous, for the towers were reared to guard the geomantic properties of their respective neighborhoods, and in reality are relics of a bygone age of superstition.

The pioneer European settlement of the Far East—Macao—is at last in sight, and it presents immediately a visual contrast to Canton, by reason of its picturesque situation. There is something about the promontory that takes you back to Southern Europe, to the summer sea and the shores of the Mediterranean, perhaps to a brightly situated fishing port of the littoral of the Riviera. As the vessel rounds the cape and comes to anchor in the pretty crescent formed by the Praia Grande, flanked by terraced houses colored with minor tints of blue and yellow, you know instantly that this stranded Eastern rainbow is Monte Carlo—no, the Oriental equivalent of the beauty-spot of Latin Europe.

Macao is a little place large with history, in fact is an atom of Europe almost lost to public gaze by the vastness of Asia, and as much a part of the kingdom of Portugal as Lisbon itself. As the most enterprising maritime and trading nation of the sixteenth century, the Portuguese were the first to sail the Eastern seas, the first to open up commercial relations between Europe and the great empire of China, and holding the monopoly of all Oriental trade until the end of the eighteenth century. Owing to the prospect of increased gain, following on this European invasion, the waters of the Pearl River estuary soon became infested with pirates, which the Portuguese magnanimously assisted the Chinese government to subdue, and, in return, it is recorded, received in 1557 the cession of the rocky peninsula on which the Portuguese colony now stands. More than once Portugal had to maintain her rights by recourse to arms, but the colony has remained Portuguese without interruption for more than three hundred and fifty years, and is a hoary patriarch beside infantile British Hong Kong and German Tsing-tau. The oldest lighthouse on the coast of China is that of Guia, standing sentinel on the highest point of the Portuguese colony.

The colony has a population of perhaps eighty thousand persons, and practically all these are Chinese. There are, of course, a few score of civil and judicial functionaries springing from the mother-country; and, as in all places where Europeans have long lived in friendly association with Orientals, the Eurasian class is strikingly numerous. In no court on the Tagus are the laws of Portugal construed with more tenacity and precision than in Macao's chambers of justice; and the flag of Portugal floats over the homes of hundreds of loyal subjects who know only in a hazy manner where Portugal really is—they are rich Chinese and others evading the Chinese tax collector, or escaping burdensome laws, and for many years these crafty Mongols have made a sort of political Gretna Green of Macao. Certain influential Chinamen carrying on business in Canton or other southern communities live in almost regal splendor in Macao, and when the minions of the Chinese government attempt to hale them before a tribunal of law, or compel them to share the expense of carrying on the administration of a province, they exclaim in Chinese, "Oh, no; I'm a subject of the King of Portugal"—and prove it. The great sugar planter of the Hawaiian Islands, Ah Fong, whose Eurasian daughters were beautiful and accomplished enough to find splendid American and European husbands, was a subject of the Portuguese crown, strange to say. His domicile on the Praia Grande is one of Macao's proudest mansions.

The colony of Macao is scarcely more important than one of Anthony Hope's imaginary kingdoms, but for the fact that it is on the map, for the area of Portugal's foothold is not more than two or three miles in length, and a half-mile to a mile in width; it is merely the rocky promontory of the tip end of the island of Heung Shan. A wall of masonry with artistic gateway separates the dominion of Portugal from the great Chinese empire—on one side of the portal the law of the Emperor of China is absolute, and on the other the rule of the monarch of Portugal is sacred. In various ways the place and its people remind strongly of a comic-opera setting—but the officer there serving his far-away sovereign discourses with serious countenance of Goa, and Delagoa Bay and Macao as important colonial possessions. Until Hong Kong under the British began to rise as a port and base of commercial distribution, Macao had a considerable trade; but with the decline of business the harbor has silted up until now an oversea ship could not find anchorage. A few industries, like cement making and silk winding, are carried on in the outskirts of the colony, and a suspiciously large amount of prepared opium is shipped, although the closest observer can detect not a poppy under cultivation anywhere on the rocky promontory.

The old Protestant cemetery contains many graves of good men and true, such as naval officers and seamen, who have died on Eastern seas, and whose comrades preferred to leave them interred in Christian soil rather than intrust their cherished remains to cemeteries in pagan lands. The headstones of Macao's God's-acre bear name after name once carried with pride on the rolls of the American, British or French naval and merchantman services, and diplomatic and consular titles are recorded on more than one headstone. It is interesting to scale the steps to inspect closely the façade of the Jesuit church of San Paulo, erected some three hundred years ago. Nothing remains but the towering façade, as erect as if reared yesterday, and bearing silent testimony to the courage of the pioneers in the Far East of the Catholic faith. A 'rickshaw journey through every important street, from the center where are the hotel and government buildings to the remotest patches of farming land near the "frontier," consumes scarcely two hours. In the public park you come not infrequently upon statues with tablets informing all observers of the importance and majesty of the home country welded to the peninsula of Europe, once famed for the intrepidity of its navigators and adventurers. If Macao move the visitor to voice an opinion, it is that under certain conditions which you might name the place could be a veritable paradise, but that benevolent Portugal is there conducting an earthly Nirvana for all and sundry of China's affluent sons mustering the ingenuity and influence to gain shelter beneath the flag of dear old Portugal.

Macao's claim to renown rests chiefly upon the fact that Portugal's greatest bard, Camoens, there wrote in part or its entirety the immortal "Lusiad," which in epic form details the prowess of the sons of ancient Lusitania in Eastern discovery and oversea feats of daring, and in which work the voyages and discoveries of Vasco da Gama are recorded with the fidelity of a history prepared by a sympathetic admirer. As scholars know, the "Lusiad" was first published in 1572, is in ten cantos and 1102 stanzas, and is translated into most modern languages. Important American and English libraries possess it by at least four translators, each being more or less a standard.

The life of the great poet is underlaid with romance and sadness. Born at Lisbon about 1524, he was given an education fitting him for a courtier's life, and it was an unfortunate affection for a high-born donna in attendance upon the queen that caused him to be banished from the land of his birth. After a roystering career as a soldier in Africa, he sought shelter at Goa, in India. There he wrote a volume severely castigating the home government for its official abuses in the East, and this led to his being treated by his countrymen as a traitor and outcast. Now in a Goa prison, now at liberty, he at last went to Macao, and it was there that by his pen he redeemed to some extent his good name, to the extent certainly of being permitted to return to Lisbon, and there he died about 1580, poor and neglected. It is insisted that Camoens's influence and efforts preserved the Portuguese language from destruction during the Spanish occupation of the neighboring country, and it is a fact that before 1770 no less than thirty-eight editions of the "Lusiad" were published in Portugal.

To commemorate the eight or ten years he passed in Macao, a public garden is named for him, and there, in a grotto of impressive grandeur, is a bust of the man singing the praises of his natal country as no other writer in verse or prose has ever succeeded in doing. The bronze effigy rests on a plinth upon which is engraved in three languages these lines from the pen of a pilgrim to the Eastern shrine once hallowed by the presence of the bard of a nation:

The lines were written by Sir John Bowring, English scholar and traveler, who visited Macao in the latter half of the last century, and the expense of the memorial and its grounds was borne by a patriotic Portuguese, Lorenço Marques, whose name has been preserved by being given to the seaport on Delagoa Bay in Portuguese East Africa.

For a place whose commerce is notoriously in eclipse, you are curious to learn whence springs the golden shower giving the appearance of prosperity to Macao, for the general air of the colony suggests an easy affluence. To keep the governor's palace and the judiciary buildings covered with paint costs something, you know, while the paved streets and bridges and viaducts give support to the surmise of an exchequer not permanently depleted. Portugal, nowadays almost robbing Peter to pay Paul, is in no condition to succor an impecunious colony situated in another hemisphere, you are aware, and you appeal for elucidation of the fiscal problem. "Very easy, dear sir," your cicerone promptly rejoins, "this is the Monte Carlo of the Far East. Gambling is here a business—all the business there is, and the concessions for the fan-tan and lottery monopolies pay for everything, practically making taxation unnecessary."

The statement would cause something of a shock to a guileless stranger, especially to one who had believed he had perceived a natural likeness between the little principality on the Mediterranean and this beauty spot of the Orient. But China is rather too far to the eastward of Suez for simon-pure guile, and the globe-trotter decides to thoroughly explore local conditions by way of adding to his worldly knowledge. If you go to the post-office to mail a letter, you recognize perforce how backward a colony of Portugal may be in supplying the trifling requirements of life, for you stand minutes in a nondescript line before your stamp is sheared from a sheet by a functionary having a capacity for activity possibly rivaled by an Alpine glacier—then you wait at the communal mucilage pot to secure in turn the required adhesive substance. A good correspondent in Macao would pass half his time at the post-office, you conclude.

But there is nothing backward, nothing harking back to the middle ages, in the plan by which the public cash-box is filled, you learn after plodding investigation. The merits of direct and indirect taxation, even of the Henry George program for raising the public wind, have never been seriously considered by Portugal's administrators in the East, nor has municipal ownership of utilities been discussed, you discover. The official bigwigs who administer Macao know that it is as necessary for the Chinaman to gamble as to have food—and the colony accordingly legalizes fan-tan and semi-daily lotteries, supplies the requisite machinery for carrying on the games, and reaps a benefice for its enterprise that runs the community without further ado. That is all there is to Macao's fiscal policy. Hong Kong, only forty miles across the estuary, bristles with commercial prosperity. The British government permits Hong Kongers to bet on horse-races, buy and sell stocks, and promote devious companies, but forbids fan-tan and lotteries. There is, consequently, a daily flow of men, women, and dollars between Hong Kong and Macao. Besides, no traveler not actively engaged in uplifting his fellow-man, feels that he has seen the Orient unless he passes a few hours or days in endeavoring to lure fortune at the gambling tables.

The colonial lottery is no more dignified or important than a policy game in an American town, and seems to be but the Western idea clouded by its adaptation to Asiatic uses, tourists affirm.

Macao licenses twenty fan-tan places, and these run all day and all night, and are graded in their patrons from tourists and natives of fortune and position down to joints admitting 'rickshaw coolies, sailors, and harbor riffraff. The gilded establishment claiming attention from travelers is conducted by a couple of Chinese worthies, by name Ung Hang and Hung Vo, according to the business card deferentially handed you at your hotel, and the signs in front of it and the legends painted on great lanterns proclaim it as a first-chop Casa de Jogo, and a gambling-house that is "No. 1" in all respects. The gamesters whose garments proclaim them to be middle-class Chinamen pack themselves like sardines into the room where the table is situated, for they obviously believe in watching their interests at close hand. The floor above, by reason of the rail-protected opening in the center, is little more than a spacious gallery; but it is there that the big gamblers congregate, natives in costly fabrics, and whose rotund bodies tell of lives not spent in toil. They loll on blackwood divans and smoke opium and send their bank-notes and commands to the gambling table by servants, until yielding to the exalted dreams induced by the poppy fumes. They are polite fellows, every man of them, and make it apparent that they would like to do something for the entertainment of each man and woman tourist in the room.

In this strange establishment globe-trotting novices sit around the railed opening and make their bets on the game below through an interpreter attendant. This obliging man lowers your coins to the croupier in a basket, and draws up any "bet" you may have had the luck to win. And what a medley of coins you are paid in! There are coins of China and Japan obsolete years ago in those countries, money of the Philippine Islands, even nickles and dimes whose worth has been stamped by Uncle Sam. It is said that half the pocket-pieces of Asia find their way onto the gambling boards of Macao, and that a thrifty croupier seeks to pay them out to the tourist who will remove them from local circulation. The linguistic representative of the management endeavors to play the bountiful host to most visitors. He takes one through the building, permits you to peep within a chamber filled with oleaginous Chinamen in brocade petticoats, sleeping off the effects of the opium pipe, explains painted fans and other attempts at decoration on the walls, and indicates a retiring room where you may rest or even pass the night, all without charge.

Then he orders refreshments brought, and with the manner of a veteran courtier proffers a tray heaped with oranges, an egg-shell cup filled with tea that is almost without color, and dried watermelon seeds that you might munch after the manner of the neck-or-nothing gamblers on the lower floor. When you politely decline these, the courtly one most likely says, "You no likee tea and seeds—then have whiskysoda." Chinese courtezans, with feet bound to a smallness making locomotion difficult and obviously painful, wearing what in the Western World would be called "trousers," and invariably bedecked with earrings or bracelets of exquisite jade, edge their way to the gambling table, and put their money down in handfuls as long as it lasts. To spend an evening in the liberally-conducted establishment of Messrs. Ung Hang and Hung Vo is enlightening in various ways.

Because fan-tan is the passion of Asiatics, the popular idea is that it must be the wickedest of all games, if not the most complicated. Fan-tan as a fact is simplicity itself, being no more than the counting off into units of four several quarts of little metal discs called "cash," until there remain one, two, three or four discs. The result determines what bets, laid about a four-sided space on the table, win—a single remaining "cash" makes the 1-side win, two the 2-side, and so on. Each hazard is a one-to-three wager, and the bank pays on this basis after deducting the recognized percentage supporting the establishment. Spinning a top with four numbered sides would accomplish in a minute the same result as the tedious counting of a heap of discs, varying with every "deal" according to the whim or superstition of the players, who may add to or take from the pile prior to the beginning of the count. It is fortunate for the millions of the conservative Far East that their principal gambling game is not a quick one, like roulette, for the player of fan-tan gets "action" only about once in every ten minutes. At roulette and most other games favored by white men a gambler knows his fate in a minute.

CHAPTER XIV
THE KAISER'S PLAY FOR CHINESE TRADE

Having no voice in the controversy leading to the war, Germany should have remained neutral throughout the bitter Russo-Japanese conflict. Germany was neutral so far as official proprieties went; but in sympathy and numberless unofficial acts she aided and abetted Russia to a degree unsurpassed by the Bear's plighted ally, France. It is a fact incontrovertible that from the commencement of hostilities the German Emperor was as pro-Russian as any wearer of the Czar's uniform, and most German bankers and ship-owners found it easy to take the cue from Berlin and view situations of international procedure in a manner permitting them to reap golden benefits. Teuton bankers took the lead in financing the Russian cause, and whenever Russia was forced to purchase ships to augment her fleet, these were always found in Germany. When the Czar despatched his squadrons to the Far East, they were coaled practically throughout the long journey from German colliers. And in other helpful ways Germany officiated as the handmaiden of Russia.

The Kaiser's favoritism was infectious throughout his empire, and had the contending armies and fleets in the Far East been equally matched, with the outcome hanging in the balance, the influence of William II could have swayed the continent of Europe in Russia's favor, and a great moral advantage would thereby have accrued to Russia that would have been difficult to overcome. Why? Because the Kaiser is the strongest, most influential, and cleverest potentate in Europe. Splendid exemplar of the war-lord idea, he is really the peer of diplomatists, a ruler whose utterances are to-day weighed and discussed as are those of none other. Understanding the value of words, and a coiner of subtle phrases, an epigram from the Kaiser contrasting the destiny and rights of the "white man" and the "yellow man" would probably have isolated the British as Japan's only sympathizers in the Old World, had it been made at an opportune time.

But the psychological moment never came—there was a hitch somewhere in Asia, and Kuropatkin's genius was expended in masterly retreats; all the triumphs on land and sea were those of the little men under the sun flag. Finally came a mighty engagement, and William hastened to decorate the Russian loser and the Japanese victor. But the point was strained; the public perceived this. As a result, the incident fell flatter than the anticlimax of a melodrama played to empty seats.

The Kaiser's chagrin was great. But it need not have been, for the march of events in the East was proving him simply to be mortal—he had failed to pick the winner, and was gradually becoming aware of it. A plunger in a sporting event perceives an error of judgment in a few minutes, usually. With the War-Lord of Germany it required the lapse of months to convince him of the sad fact that Japan would win in the great struggle.

Why War-Lord, as an appellation for the august William? Adept in the art of warfare he surely is; but have not the Fatherland's victories under his rule been those of peace, and those only? Has Germany been involved in strife possessing the dignity of war since he came to the throne? Has she not, on the other hand, made headway in trade and sea transportation under his guidance that has no parallel in the history of a European state? Yes, emphatically. And are not the words "Made in Germany" so painfully familiar throughout two thirds of the globe, especially in Great Britain and her possessions, that they strike terror to Britons who study with apprehension the statistics of England's waning trade? This is true, also. And Suez Canal returns prove that the users of the waterway under Britain's red flag are yearly less numerous, while the number of German ships is steadily growing.

Then why not Trade-Lord, for this is what the German Emperor is? It is the better appellation, and more truthfully descriptive. It surely is creditable to the German people that their national progress is due to habits of industry and thrift, rather than to military display: the artisan, not the drill-master, is making Germany great.

And could Trade-Lord William be honestly called "astute" if he overlooked the fact, obvious as a mountain, that one of the stakes in the Russo-Japanese conflict would be the privilege amounting almost to right, to commercially exploit the most populous country on God's footstool—China? More than one fourth of the people of the earth are Chinese, and their country at the present time is more primitive, in the scarcity of railways, telegraphs, public utilities, and every provision conducing to comfort and common-sense living, than any other land pretending to civilization. It is a fact that outside of Shanghai, Canton, Pekin and Tientsin, the people do not want many of the products of the outer world; but it is a truism that much profit accrues from teaching Asiatics to "want" modern products.

The German Emperor foresaw that China could not much longer resist the invasion of outside enterprise and trade; and to his mind there could have been no suspicion of doubt that the victor in the awful contest could and would dictate trade terms and privileges everywhere in the Celestial Empire. If Japan won, the Japanese would surely exploit commercially their great neighbor, whose written language is nearly identical with their own—this would be but natural to the Mikado's people, teeming with aptitude as manufacturers and traders, and recognizing the necessity for recouping outlay in the war.

If Russia were successful, her reward would be the validating of her hold upon Manchuria, the bundling of the Japs out of Korea, and the attainment to a position of controlling influence in China's political affairs. The supplying of articles of general manufacture and commerce to the 400,000,000 people of China could have been no part of Russia's aspiration, for the reason that Russia is not a manufacturing country and has but little to sell. Her enormous tea bill to China is paid yearly in money, even. A nation seeking in time to control the whole of Asia couldn't bother with commercial matters, certainly not. Yet, one of the fruits of victory in the war would have been the splendid opportunity to exploit trade everywhere in China—a privilege of priceless value.

What country was to benefit through this, with Russia's moral support and permission, had the Czar's legions been successful?

France? Hardly; for the French were bound by hard and fast alliance, and it had never been the policy at St. Petersburg to give anything material to France. Uncle Sam, whose people had financed half the war loans of Japan, could scarcely hope to extend his business in China with Russia's cooperation; nor could Japan's ally and moral supporter, John Bull.

Who, then, could stand in a likelier position to become legatee of this valued privilege than the Trade-Lord of Germany? The Emperor William had been Russia's "best friend" from the inception of the war, and was admittedly an adept in promoting trade, for his people had attained in a few years to an envied position in the commerce of the world. A quarter of the trade of "awakened" China would make Germany a vast workshop, a hive of industry. And this was precisely what the astute Hohenzollern saw through the smoke of battle in far-away Manchuria. He saw a prosperous Germany if the Slav crushed the yellow man. To say he did not would be a libel upon a giant intellect.

Any one disposed to review practically certain incidents in the recent history of Germany may develop a dozen reasons why the Emperor should seek to make his country all important through trade conquest. Let it be remembered that the Kaiser chafes at barriers of every kind, and that there is a boundlessness in his nature at times trying to his patience. He looks at the map of the German Empire and painfully admits that the present frontiers and area are practically those bequeathed by the great William. To a divine-right monarch this is exasperating. The loftiest ambition of a sovereign is to have the national area expand under his rule.

William's medieval temperament shudders at the crowded condition of the earth in this twentieth century, when all frontiers appear immovable. Had he lived in the days of the Crusaders his valiant sword would probably have brought all Palestine under German control; and had he been a free agent when Bonapartism collapsed he most likely would have carried the German standard to the Mediterranean, perhaps to Stamboul. The ironical fact is that the German Emperor has had rebuffs and disappointments in his efforts to expand his realm. The Monroe Doctrine, excluding his empire from even a coaling station in this hemisphere, is to the Kaiser a perpetual nightmare. Sturdy sons of the Fatherland control the trade of more than one republic in South and Central America, but nowhere is it possible to unfurl the standard of Germany over "colony" or "sphere of influence." To forcibly back up his subjects' pecuniary rights in the American hemisphere, even, the approval of the government at Washington has first to be obtained. In his heart the Kaiser loathes the doctrine of Monroe; that is obvious.

It is twenty years since Germany began to build up a colonial empire in Africa, and the net result is that, after spending some hundred million dollars, she has acquired over a hundred million square miles of territory, with a sparsely scattered German population of between five and six thousand souls. A third of the adult white population is represented by officials and soldiers. Militarism is rampant everywhere, with the result that the white settler shuns German colonies as he would the plague. The keen-witted Kaiser long ago saw that empire-building in the Dark Continent could produce nothing but expense during his lifetime.

"To perdition with the Monroe Doctrine, and with African tribes blind to the excellence of German-made wares," the Kaiser might have said ten years ago: "I'll have sweet revenge upon all and sundry by capturing trade everywhere—I'll make Germany the workshop of the universe. Keep your territory, if you like; I'll get the trade! Bah, Monroe Doctrine! Bah, grinning Senegambians!"

The resolute Trade-Lord then turned his face to the bountiful Orient, pregnant with resource beyond the dreams of avarice, teeming with hundreds of millions of people. The East had made England dominant in the world's affairs. Keeping his soldiers at home, the Kaiser hurled a legion of trade-getters into the Far East, planting commercial outposts in Ceylon, sending a flying column of bagmen and negotiators to India and the Straits Settlements, and distributing a numerical division of business agents throughout China. The Empire of the Celestials was made the focal point of a great propaganda, openly espoused by the Emperor.

It was readily demonstrated that Great Britain had no permanent control of commerce in the East, not even in her own possessions. The Teuton, for a time content with trifling profit, underbid all rivals—and orders and contracts poured into Germany. Belgian products competed only in price; and American manufacturers seemed too busy in providing goods for home use to seriously try for business in Asia—they booked orders coming practically unsought, that was about all. The Chino-Japanese conflict of a dozen years ago, although disastrous to China's army, stimulated the absorbing power of the Chinese for goods of western manufacture, and Germany sold her wares right and left.

Important steamship lines were then subsidized by the German government to maintain regular services between Germany and the Far East, carrying goods and passengers at reasonable charges: and it was known that in his personal capacity the Emperor had become a large shareholder in one of them. Germany was prospering, and the Trade-Lord and his lieutenants were happy. All recognized the possibilities of Oriental business. China was preparing to throw off the conservatism and lethargy of centuries, and trade was the key-note of everything pertaining to Germany's relations with the Pekin government. German diplomatists on service in China were instructed to employ every good office to induce German business, and the Kaiser himself selected and instructed consular officials going to the Flowery Kingdom. Able commercial attaches, with capacity for describing trade conditions, were maintained there, and required to be as industrious as beavers. For trade-promoting capacity German consuls in China have no equal—and they all know that the Kaiser's interest in Chinese trade amounts to mania.

The assassination in the streets of Pekin, in 1900, of Minister von Kettler, Germany's envoy, and the subsequent sending of an imperial prince of China to Berlin to express the regrets of the Chinese government, strengthened materially the Kaiser's hold upon Chinese affairs. Reiteration from Washington of the "open door" in China struck no terror to the Kaiser, justified in believing he could hold his position against all comers. As proof of this belief he might point to German steamers in Hong Kong and Shanghai literally vomiting forth each week thousands of tons of goods "Made in Germany," penetrating every section of China even to the upper waters of the Yang-tse. A few years ago nearly all this trade was exclusively British.

The question of Chinese exclusion and the threatened boycott of American goods by China was the occasion of anxiety in this country—but none in Germany. It is well appreciated that the spread of the sentiment in the East that the United States is unjust to Chinamen of the better class might undo the splendid work of Secretary Hay in cultivating the friendship of the Celestial Empire by standing fast for China's administrative entity and insisting on the "open door" policy.

Knowing that the "awakening" of China would be one of the results of the war, the Master Mind in Berlin had not long to consider where the interest of Germany lay, for he well knew that if they conquered, the Japs might in a few years supply the kindred Chinese with practically every article needed from abroad.

If Russia won, then "Best Friend" William of Germany, one of the most irresistible forces in the world, would have a freer hand in China than ever—and this would mean a prosperous Germany for years to come.

By directing the sympathies of the German people to the Russian side, the Kaiser played a trump card in statecraft, certainly. As a soldier, William II must have known the fighting ability and prowess of the little men of Japan, for German officers had for years been the instructors of the Mikado's army—but the public attitude of the head of a government must ever be that which best serves the State. Whatever the chagrin at Berlin over Russia's defeat, a battle royal will be needed for Japan to overcome Germany's lead in Chinese trade; but in time Japan will have this, provided she is well advised and has the tact to play fair with Uncle Sam and his commercial rights.

What of the German colony in China—Kiau-chau, on the east coast of the Shan-tung peninsula, whose forts frown upon the Yellow Sea? Is there anything like it, strategically and trade wise, in the East? When the Kaiser's glance falls upon the map of Kiau-chau, and he recalls the ease with which he segregated from Pekin's rule a goodly piece of old China, he may be irreverently moved to the extent of again snapping his fingers at the Monroe Doctrine, and at millions of simple Africans who refuse to eat German foods and wear not a stitch of German fabrics. Kiau-chau represents the cleverest feat of colony-building the world has seen since the great powers declared a closure to land-grabbing in the East.

When some German missionaries were murdered a few years since in China, the Kaiser, ever an opportunist, was justly angry, and Pekin shuddered at the possibility of national castigation. "Could the Mighty One at Berlin condone the offense if China gave Germany a harbor to be used as coaling station and naval headquarters?" "Possibly; but how can China bestow territory, in view of the American government's certainty to insist that there be no parceling of China, none whatever!"

"Easily managed," was the reply. "It need not be a transfer of territory, but a 'lease,' say for ninety-nine years. This would save China's 'face,' and not disturb the powers."

Hence a "lease" was prepared for all the territory bounded in a semi-circle drawn fifteen miles from Kiau-chau bay—a goodly piece in all conscience. Then came pourparlers for greater German authority, and more territory. As a consequence, in a supplementary document signed at Pekin, it was additionally agreed that "in a further zone thirty miles from all points of the leased territory the Chinese government shall no longer for a space of ninety-nine years be entitled to take any step without previous authorization from the German government."

This amounted in substance to saying farewell on China's part to a slice of domain in all more than twice the size of the state of Rhode Island. The "sphere of influence," so-called, measures 2,750 square miles. Germany was given as well the equivalent of sovereignty over the harbor of Kiau-chau, no end of mining and railway rights, and other privileges. The lease dates from March 6th, 1898. England was to give Wei-haiwei back to China should Russia retire or be driven from Port Arthur, but has not done so. In all probability Germany, as well as Great Britain, is located on the Yellow Sea under a tenure that will be found to be permanent.

Kiau-chau harbor is one of the most spacious and best protected on the coast of China. The small native town of Tsing-tau, admirably situated on the harbor, was adopted by Germany as the seat of government, and all the appurtenances of a military and naval station have there been erected. A look of permanency characterizes every structure. The house of the naval governor is even pretentious. The capital is laid out with generous regard to broad streets, designated on name-plates as "strasses." A bank and hotels await the coming of business. The harbor has been dredged, and two miles of the best wharves in Asia constructed of masonry. Warehouses, barracks, hospitals, administrative buildings and coal sheds are there, all in German style, and intended to last hundreds of years.

Tsing-tau as a seat of deputed government may not have found its way into school-books—but the inquisitive traveler in Northeast China readily learns of its existence. Perhaps it is meant to be complimentary to China to retain the name Tsing-tau—but that is all about the place that is Chinese, save the coolies executing the white man's behest. There are 3,000 Europeans, almost exclusively Germans, in William II's capital on Kiau-chau Bay. Soldiers and officials predominate, of course, but merchant and industrial experts are in the pioneer band in conspicuous number.

And what of the "hinterland," compassed by the 45-mile semicircle, dotted with thirty odd native towns, the whole having a population of 1,200,000? This patch of China is surely in process of being awakened: there are numerous schools wherein European missionaries are teaching the German language, and enterprise greets the eye everywhere. Locomotives "Made in Germany" screech warnings to Chinese yokels to clear the way for trains heavy with merchandise of German origin—and this is but an incident in the great scheme of Germanizing the Chinese Empire. Incidentally, it is provided by the agreement between the Pekin and Berlin governments that a native land-owner in the leased section can sell only to the German authorities. This ruling conveys a meaning perfectly clear.

Less than a hundred miles up-country are the enormous coal fields of Weihsien and Poshan, by agreement worked with German capital, and connected with the harbor by railways built with German money and so devoted to Teutonic interests that the name of the company is spread on the cars in the language of the dear old Fatherland. The whole is a magnificent piece of propagandism, surely.

And what is back of it? What is the purpose of the appropriation of 14,000,000 marks for Kiau-chau in last year's official budget of the German government? Trade, little else; and Trade spelled best with a large T. Kiau-chau is a free port, like Hamburg. Why not make it the Hamburg of the East? is the question asked wherever German merchants foregather and affairs of the nation are discussed. From the standpoint of German trade, an Eastern Hamburg is alluring and laudatory—but few American manufactures, let it be plainly stated, will penetrate China through a gateway so controlled.

America's seeming indifference to Chinese trade, let it plainly be stated, is the only solace that commercial Europe is finding in our wonderful national growth. The subject is almost never referred to in the columns of British journals, nor in those of Germany, France, or Belgium. But manufacturers and exporters of these countries need no spur from their newspapers—without the accompaniment of beating drums all are seeking to make the Chinese their permanent customers. And, buttressed by undeniable advantages, Japan takes up the quest and means to spread her goods, largely fabricated from Uncle Sam's raw products, wherever the tenant of the earth be a Mongol.

Could a human being be more complaisant, more materially philanthropic, than the United States manufacturer or other producer? He surely cannot be blind to the undebatable fact that America cannot always wax opulent on home trade alone; he must know that in time we are certain to reach a period of overproduction, when it will aid the nation to have alien peoples for customers of our mills and workshops. Every land in Asia east of Singapore can be commercially exploited by the United States more easily, and with greater success, than by any other people, if the task be gone about systematically and practically.

The Chinese envoy of a few years ago to Washington, Minister Wu, said many wise things, and no epigram fell from his lips containing a profounder sermon for the American people than when he remarked that two inches added to the length of the skirts of every Chinese would double the market value of every pound of cotton.

Small as it was, our commerce in China was severely lessened last year, not alone by the boycott, but through the enterprise shown by other nations having a share in Celestial trade. The cotton cloth exports of the United States to China and Manchuria for the nine months ending September 30 fell off by over ten million dollars as compared with the same period of 1905. The respective amounts were $15,416,152 and $25,566,286. The Chinese buyers gave preference to the British, taking $34,245,129 worth of cotton fabrics from the United Kingdom for the first nine months of 1906, a decrease of $3,770,584 from last year. The British loss on bleached and gray goods was about half that of America's total loss, but the English exporters made up a large part of the shortage by much larger sales of printed and dyed goods. But while America remained almost stationary last year in selling cotton manufactures to the world, Great Britain made a tremendous stride. Her cotton fabric exports for the first nine months of 1906 were valued at a little more than two hundred and seventy-six million dollars, an increase of about twenty million dollars over the same period of 1905, and of nearly fifty million dollars over the first nine months of 1904. This was accomplished almost wholly by marketing wares wrought from fiber grown in our Southern States, let it be remembered.

And what would happen to British trade, let us inquire, were America to cease exporting raw cotton, to permit our staple to emerge from our land in a manufactured state, only?

The mere suggestion of the thing is sufficient to cause a cold shudder to play down the spinal column of John Bull. But the American people will never play the game of commerce in that way.

CHAPTER XV
JAPAN'S COMMERCIAL FUTURE

A nation has risen in the Far East that is earning high place among enlightened governments, and in all probability the new-comer may already be entitled to permanently rank with the first-class powers of the earth. Japan is day by day a growing surprise to the world.

That the diminutive Island Empire should have been able to humble the Muscovite pride was no greater marvel than that she should in a brief half-century advance from the position of a weak and unknown country to the station of a highly civilized nation. The government of the Mikado is to-day the best exponent of Asiatic progressiveness. And of a people with a capacity to perform in two generations such amazing things who shall dare say what to them is impossible?

Europe has never been in joyful mood over the rise in Japanese prestige, and she was more than reluctant to recognize the New Japan as the dominant force in the East. That a yellow people should claim fellowship with European countries guided by houses of lofty lineage was never believed to be possible. Continental Europe was unprepared to admit that Japan's triumph proved anything beyond a genius in the art of war that was nothing short of a menace to the rest of mankind, and that luck and geographical position helped the Mikado's legions in all ways. The great Hohenzollern spoke of the Japanese as the "scourge of God"; in France the "yellow peril"—a phrase really made in Germany—was seriously debated; while Russia many times sought sympathy from the Christian world on the ground that she was fighting the white man's battle against paganism. Solitary in her preference for the Japanese, expressed in the form of an astute and fortunate alliance, England gloried when her Oriental ally revealed the weakness of the vaunted power of the north that had dared to cast covetous eyes at India. All these nations hold Asiatic possessions, each has aspired to have a say in Chinese affairs, and each confesses to having a panacea for the innumerable ills of the Celestial Empire—each is hungry, likewise, to extend her trade with the awakening Orient.

Japan intruded, and deranged the plans of all and sundry for rousing China to a realization of her greatness; and in all human probability Japan will do for herself what several European powers wanted to do for Asia. Japan can always justify her claim that she was driven to war to preserve her national existence, by pointing to her rapidly-increasing population, existing in an archipelago incapable of producing food for even two thirds of her people, since every possibility of obtaining a foothold on the adjacent continent had been cut off by self-imposed Russian rule. There was no room for expansion, that was clear.

When Japan shattered the strength of Russia she gained many coveted advantages. One of these was the opportunity to commercialize neighboring Korea, a goodly section of Manchuria, and practically the whole of China—enough to recoup the war's outlay; and once entered upon, why not perfect and extend the enterprise wherever she might, thereby providing occupation for her increasing millions of people?

For a long time to come Japan will remain conspicuously in the public eye, but her achievements and victories hereafter are to be those of peace. Her scheme for national betterment, already well under way, is as thoughtfully prepared as was her war program. The Mikado's people emerged from the Russian conflict with energies enormously aroused, and a few months later every condition was favorable to a realization of the dream of empire giving to Japan an importance amounting almost to sovereignty over a vast section of the Far East. The new treaty with Great Britain, which Germans claimed to be anything but altruistic, is having a steadying influence on the policy of the Tokyo government.

With the conversion of Japan from war to peace, the process of fiscal recuperation and industrial development has been observed by students of Eastern affairs with the keenest interest. The debt of the nation at the close of the war in 1905 was approximately $870,000,000, which sum, apportioned among Nippon's 47,000,000 inhabitants, was $18.71 per capita. The amount properly chargeable to the campaign was $600,000,000, or thereabouts. A characteristic of the war commanding widespread attention was that the Japanese side was conducted from start to finish on the soundest financial principles, with her credit abroad scarcely lessened by successive bond issues. It was the criticism of students of finance that Japan conducted her campaign throughout on a gold basis, as if exploiting a vast commercial program, without subjecting herself to usurious commissions, and without resorting to the issuance of fiat or negligible currency. The financing of the Asiatic side of the great Russo-Japanese conflict was certainly as businesslike as anything ever done by a European power compelled to raise funds by foreign bond sales.