production was quite enough to cover local demands. For years more than 85 per cent. of their products had to be shipped out of the country.

Harbin is the center to which all this agricultural life and many industrial activities based on agricultural products, principally wheat and beans, gravitate.

There are twenty-four flour mills standing now in Harbin. They are no mere water-wheel decoration of an old Chinese landscape. Many of them are huge modern brick structures, with modern occidental equipments which make one's fancies travel back to Minneapolis. Most of them were built by the Russians. But many of the Russian mills have passed into Chinese hands since the "Reds" came to power. Two large new Chinese flour mills were opened a few years before my visit there. One of them stands on the northern bank of the Sungari and is capitalized at $2,000,000; the other one, with a capitalization of $1,200,000, is in the Tungszechiatze section. The daily capacity of the first, I was told, was about 360,000 pounds; and of the second, 304,000 pounds. All of which gives an idea as to the magnitude of these establishments. These twenty-four mills account for 77 per cent. of all the flour mills along the line of the Chinese Eastern Railway.

Bean-oil production is a great industry at all the leading centers of Manchuria. Out of more than 50 oilmills in Harbin, only three belonged to Japanese: all the rest were under Chinese control. Leather business is another line of industry which the Chinese are conducting on a large scale there. For years it has not done very well. The factory organized by General Chu, exmilitary Governor of the Amur Province, with the capital of $200,000 back in 1915, was not much of a success because of the lack of adequate capital. A new leather factory with a capital of $3,000,000 was organized by a well-known Chinese capitalist in Harbin, Mr. Chang

Fengting. Half of the total capitalization was spent for the purchase of machinery for the factory, it was said.

RUSSIAN WORK IN PORT ARTHUR AND DALNY

South in Port Arthur Russians found an entirely dif ferent condition of things. Unlike Harbin, Port Arthur was an old fortified town of something like 10,000 people, with traditions and vested interests, when Russia took it over. The fortifications were quite out of date and about as effective against modern weapons of attack as stage scenery. Just how many millions of good Russian rubles went into the reconstruction of the fortifications is not known. It was no military secret, however, that Russians spent more than 12,000,000 rubles in building a European town there. By January, 1903, the old Chinese town and the new Russian section had the total of more than 42,000 people. Of course it was essentially a garrison town, and an overwhelming majority of the Russian population there belonged to the official class. Some 13,580 of them were either army or navy men. The Russian civilians numbered slightly over

4,000.

The building of the port of Dalny, as the Russians called the present Dairen, was much like the creation of Harbin. Russians went to work there in 1899 and found a disreputable fragment of a Chinese fishing hamlet along the rim of the Talien Bay. The budget for the first stage of the construction of the harbor called for 10,800,000 rubles, and in addition 2,000,000 for the building of the port city. The actual amount of Russian money thrown into the enterprise was more than 30,000,000 rubles. The Russo-Japanese war broke upon it like a withering storm just when the first stage of building was done and the second stage about to begin.

The city had about 18,000 people at the time according to a contemporary report, and its water works, electric lighting plant, and a number of modern brick buildings of European style. But of course the constructive work of Russia in Port Arthur and Dalny cannot compare with what she achieved at Harbin.

CHAPTER V

ENTER JAPAN

JAPAN came in direct touch with Manchuria early in the eighth century, in the days of the Kingdom of Pohai. A Japanese authority says that the Manchu kept up direct trade relations with Japan from 727 to 930 A.D., more than two centuries. Manchu traders came from a district near where the present Hunchun stands in the valley of the Tumen River near the present Chosen border. They crossed the Sea of Japan to the Japanese port of Tsuruga, whence they made their way overland to Nara, the new capital city of the Mikado, round about which the first great cultural epoch of the Yamato race was then coming to bloom, and to other cities of the provinces of Yamato and Yamashiro. The Manchus brought with them tiger and leopard skins and ermine and wild ginseng, and exchanged them for the brocades and silks of Japanese looms.

When the near-world Empire of the great Khublai rolled over Manchuria and Chosen, Japan came in touch with it also in 1268. The mighty Mongol fleet of 1,000 Chosen ships carrying 50,000 Mongol and 20,000 Chosen braves, combined with several hundreds of large oceangoing Chinese vessels with 100,000 Chinese and Mongol fighters aboard, was smashed off the coast of Kyushu August 14th, 1281, by "God's wind." That ended the second attempt of the Great Khan to bring Japan under his dominion. After that, Asian continental powers left Japan severely alone. But the Japanese adventurers and pirates kept in touch with Manchuria and the southChina coasts. These pirates usually made their base