"the bamboo sprouts after the Spring shower" disappeared pretty nearly as quickly as they appeared. Some of them held on grimly, however, by extending their markets into Russian Siberia. In March, 1909, Russia struck the milling interest in Harbin another deadly blow. In that month Russia did away with the free-trade provision for the Railway Zone in Manchuria. From that time on all the Manchurian flour entering Russian Siberia had to pay the heavy duty of 45 kopeks per pood. As if that were not unkindly enough, the Chinese Eastern Railway raised its freight rate. At the same time the Russian Government gave all possible facilities to the Russian enterprises in the Railway Zone along the Chinese Eastern Railway to move their plants and machinery into some portions of Russian territory. With the idea of practically compelling the Russian industrial plants to conform to this policy, the Russian Government in January, 1913, abolished the free-trade zone of fifty versts along the Russo-Chinese boundary line. It did seem as if that were finis for the Russian flour mills at Harbin.

There was another development coming to flower along about the same time, however, which gave a rosy outlook to the wheat-flour-milling business in North Manchuria. It was the sudden and tremendous increase of population in North Manchuria-many thousands of whom were wheat-flour-consuming Russians. Then, also, the standard of living among the Chinese population was steadily rising. Many of them wanted more than kaoliang and millet for dinner. They had the purchasing power to get a much better grade of wheat flour than their native mofang could afford them. In this manner the increase of local demand for the products of large modern mills gradually took the place of the Siberian demand, and kept many of the Harbin mills from going under. The coming of the Great War handed the flour mills of Harbin a golden present which they had never dared to dream of.

EFFECT OF RUSSIAN POLICY ON HARBIN MILLS

The chaos which followed the Bolshevik Revolution in Russia, however, gave a terrific shock to the Russian enterprises along the Chinese Eastern Railway in North Manchuria. The flour-milling industry suffered from it of course. That they have weathered the storm and in handsome style shows how healthy and firm their economic foundations have become since the days of their early struggle. The milling industry reached the top of its prosperity toward the close of 1919 and in the first part of 1920. By that time the number of flour mills increased to twenty-three in the city of Harbin alone, and in addition to them there arose nine factories along the line of railway. This was due to the exceptionally fine harvest Manchuria enjoyed that year, coupled with the shortage of wheat in the United States and other wheatgrowing and exporting countries. That resulted in the high price for flour the world over. In 1920 Manchurian wheat was shipped out through the one port of Dairen to the extent of 439,140 tons or 6,660,945 piculs, valued at over 22,247,500 Hk. taels. It was a record figure: nothing even approaching it had ever been known before or has been since. How sensational it all was can be readily seen from the fact that the export figure of the same grain from the same port in 1922 amounted to less than 149,510 piculs (a picul is 133.3 pounds) valued at less than 522,390 Hk. taels. Quite a contrast, that; and to make the contrast still more dramatic, in that same year, 1922, Manchuria imported from abroad, through her three chief ports of Dairen, Antung, and Newchwang, 1,421,918 piculs of wheat flour, which represents more than 125,000 tons of wheat.

The interesting thing about the above-recounted importation of flour into Manchuria is the fact that, out of

the 1,421,000 piculs which went into Manchuria in that year, American flour accounted for more than 873,400 piculs of the value of 4,238,690 Hk. taels. The wheatcrop condition of North Manchuria, therefore, has a direct and immediate effect on the American flour export to the Far East. As long as her wheat crop continues normal Manchuria should have all the grain and flour she needs. Her normal production of wheat is usually placed at about 42,500,000 bushels. That is nearly 10,000,000 bushels more than the Japanese yield in the record year 1917. That is a few million bushels more than Minnesota's 1920 crop. Out of this amount fortyfive large flour mills in Manchuria would consume about 29,000,000 bushels, and some 2,000 native mofang would take about 1,500,000 bushels more, making the total of 30,500,000 bushels for flour-milling purposes. Then about 4,000,000 bushels would be reserved for seed. That would give Manchuria a surplus of 8,000,000 bushels. Supposing the farmers would use up some 2,000,000 bushels more for various purposes at home, it still leaves something like six million bushels for export if market conditions happen to be right.

As the wheat acreage in North Manchuria is increasing at a great pace, one would suppose that she is to be quite a factor as an exporter of wheat. The cold statistical figures, however, do not seem to say so at all. Since she reached the sensational peak of 1920, when as we have noted her export amounted to 439,410 tons, her wheat export has been going down hill-and very fast. In 1921 the amount fell to 229,820, and in 1922 it was merely 9,960 tons. Exceptionally bad wheat crops in Manchuria are the outstanding answer for this extraordinary showing. That and also the conditions of the world wheat market. One thing is certain: it was not due to excessive increase of the Manchurian flour mills or of

their activities. When I was in Harbin last year practically all of the flour mills were closed down except two which belonged to General Chang of Mukden.

CHINESE IN MILLING BUSINESS

Of the twenty-three large modern mills in Harbin no less than fourteen belong to Chinese interests. That is significant. In the early days the Chinese worked only those antediluvian toys run by donkey power which they called mofang. Russians and Japanese used to poke fun at them. Meanwhile wheat consumption among the Chinese developed at an eye-opening pace. With the tremendous increase of the Chinese demand for wheat diet, the number of Russian mills did not increase. What happened was that some of them passed into the hands of Chinese. In the South the Japanese woke up to the possibility of the flouring-mill industry in Manchuria and set up large mills equipped with modern machinery; but they did not invade the center of the Manchurian wheat belt with any éclat. To-day the Russians who started the milling business in Harbin with no less than three modern mills in 1902 have only four. And even of the four, two are reported to be joint enterprises between Chinese and Russian interests. There are three Japanese-managed and controlled mills at Harbin. In addition there is still another mill which is operated jointly by Japanese and Russian interests. Of the nine modern mills along the Chinese Eastern Railway all but one belong to Chinese and are under their management.

As soon as the purchasing power of the Chinese increased and their standard of life rose South Manchuria became an excellent field for the establishment of flour mills. In 1913 the first modern mill was established in Changchun. There are six of them there now with the daily capacity of about 800,000 pounds. At Kuang

chengtze, which can be treated as a part of Changchun, there are three more with the daily capacity of 162,000 pounds of flour. The cities of Dairen, Kirin, Mukden, Kaiyuan, and Tiehling have one large mill each; especially the one at Tiehling has been talked about a lot. These mills in South Manchuria have the combined daily capacity of 69,850 bags of fifty pounds each. One trouble with South Manchuria as a flour market is that it is constantly under the invasion of imported flour. The flour mills there must ever be prepared to compete with the fine quality of American flour, which sells there at a very reasonable price whenever the price of wheat is low in the international market.

DISTILLERIES

The third of the "Big Three" of Manchurian industries is the manufacture of the kaoliang liquor which the natives love under the name of shaochiu, the burning liquor (the samshu of English writers). It is an important and very extensive industry among the Chinese in Manchuria. According to Chinese official reports, its annual production is something like half a billion pounds (in China liquid is usually sold by weight) and has the value of about sixty million Chinese dollars. Most of this fabulous annual output comes from small plants which the Chinese call shaokuo, scattered, much after the manner of the old-fashioned yufang, all over the interior of Manchuria. It was toward the close of the Seventeenth Century-so goes the oral tradition there-that the superabundance of the kaoliang in the hands of the Chinese farmer immigrants from Shantung and Chihli Provinces began to take this form of liquid curse. It has a scent and flavor all its own, prized by its devotees but rather offensive to a foreign sense of smell. It is as strong as its name, containing about 65 per cent. of