The total value of the outputs being put at Y.6.246, and the total cost of production at Y.4.540, the balance of Y.1.696 will represent the profit to be cleared from the treatment of every ton of oil shale. At the rate of 2,000 tons a day, the total annual amount to be dealt with will be 700,000 tons, bringing in the total profit of Y.1,187,200. From this profit may be deducted the sum of Y.300,000 for depreciation of the machinery and other equipment, together with the office expenses. In addition, the sum of Y.98,000 may be subtracted as the balance between the mining costs and the assets of the residue shale as a filling-up material, as mentioned later on. Thus, taking off the sum of Y.400,000, still the net profit of Y.787,000 will be left, which will give an income of slightly over 13 per cent. to the capital amount of Y.6,000,000, invested.

Then he went on to conclude that "in case of the same industry proving an economic success, fuel may be supplied at Dairen wharves to oil-driven craft, which contingency will be to the S. M. R. Co. a thing of too much significance to be passed over.

"Next, the open cut mining at Fushun collieries cannot be carried on without the preliminary stripping and necessary incidental costs, which, combined, will amount to only about half the costs for underground mining. Thus, the shale having to be stripped off in the order of things, no special price need be attached thereto. However, if considered independently, the shale mining cost, inclusive of the transportation cost to the dumping ground and the interest on the incidental costs, etc., are estimated at not more than 25 sen per ton. Now when the residue shale is to be substituted for sand now flushed into the pits, as a filling-up material, the residue will be worth 16 sen per ton in the flushing sand pockets. Now, 70 per cent. thereof consisting of the shale residue, the management will have the gratification to lay out only 12 sen per ton, instead of about 50 sen per ton of sand

hitherto in use. This will make a world of difference in favor of the management."

The Japanese have been worrying a lot over their oil supply. Their navy alone uses up about 500,000 tons of oil every year; their various steamship and other enterprises are reported to consume about 300,000 tons more. The production of the Japanese oil-field can only be mentioned in a whisper, for there is nothing about it that would encourage any loud talking. They are having more and more trouble in getting oil from America, owing to the American oil policy. It is small wonder then that Japan looks upon the success of the Fushun shale oil with something of a thrill of relief. For from that source alone she should get nearly 400,000 tons of petroleum a year if all goes well with the undertaking. Late in the summer of 1924 it was reported that the South Manchuria Railway Company was going to spend about 50,000,000 yen for the new plant and its equipments. If this be true the enterprise is to assume more than eight times the modest proportions which were in the mind of Mr. Akabane when he wrote the abovequoted article. It was reported also very recently that the whole project has received the approval of the Tokyo Government; and about the only thing to be done now is to complete the details of financing the undertaking. The South Manchuria Railway Company was reported to have laid aside 10,000,000 yen out of next year's budget as the first year's contribution for establishing the plant.

Soya bean and bean-cakes on the pier at Dairen awaiting shipment

CHAPTER XI

MANUFACTURING INDUSTRIES AND THEIR

PRODUCTS

THE manufacturing industries of Manchuria live and have their being in the products of her soil. Some people go so far as to declare that the raw materials a country produces are the tyrants who decree what sort of industry she is to have. That is not always true. Though Japan produces precious little cotton of her own, she is the spinner of cotton yarns for a large part of continental Asia. In the case of Manchuria-and I presume of all countries almost without exception when their industries are in the toddling stage-the raw materials coming out of her own soil are the determining factor.

We have seen that about 5,875,000 acres of Manchuria's cultivated area are annually devoted to soya beans, whose yield is about 103-million bushels. Yufang is what the Chinese call their bean-oil mills. They are exceedingly popular institutions throughout Manchuria. It is really astounding how much oil the Chinese use day in and day out. In the preparation of their food they seem to depend on it more than the Japanese do on their shoyu and the Americans on butter. The bean oil goes into a hundred-and-one other things in a Chinese household outside of food. They use it for lighting, for painting houses and furniture, to make their paper umbrellas and their paper overcoats waterproof, etc. It is hard to see how on earth they ever managed to live before they had their bean patches.

In 1922 Manchuria exported through her three great ports various goods valued at a little more than 119,