Mukden, and the administrative center of the Kaiyuan District. More than 400 bandits who were reported to be deserters from the army attacked the outlying villages near the city, pillaging and looting everything in sight. Chin, the chief of police at Kaiyuan, went after them at the head of about 400 policemen, but he had to call for reinforcements from Tiehling, Tungfeng, and Hsian. Governor Wang of Mukden was actually compelled to order the chief of Marine Police at Liaoyang to make an end of the outlaws. There was one grand rush of all the well-to-do Chinese merchants and citizens into the Railway Zone.

After all the unkind things which have been said about the soldier administration of the Kwantung Leased Territory and of the Railway Zone, one thing stands out preeminent and undisputed: the Railway Zone is the safest place for Chinese as well as for everybody else to live in and carry on business in all Manchuria. All this is largely the result of the military administration of Kwantung in the years following the Portsmouth Treaty. By the early part of 1919, all the preliminary rough work of laying the foundation had been completed. The result was the Imperial Ordinance No. 94 of April 12th, 1919. It displaced the soldier governor of Kwantung by a civilian. Baron Hayashi, who is now the Japanese Ambassador to the Court of St. James, was appointed the first civilian Governor of Kwantung. Since then no soldier has been placed at the head of the leased territory.

When Russians entered South Manchuria, the first thing they did was to fortify Port Arthur: that is where they centered their efforts and their expenditures of money first of all. What they wanted in Manchuria was political. Japanese did not look at Port Arthur much when they followed Russians into Manchuria. It was on the port of Dairen, on the coal fields of Fushun and

Yentai, on the railway facilities, that their first efforts and expenditures were concentrated. They did not spend a yen on repairing the fortifications at Port Arthur which they had smashed up in the Russian war at such terrific cost of life and treasure.

What the Japanese wanted there-and want now more than ever-were economic advantages. That is how the Japanese activities in Manchuria differed from the Russian, and that is the key to all their actions there. Therefore the story of Japanese entry into South Manchuria is the story of the South Manchuria Railway Company, which is given in the following chapter. It is through the railway company that the Japanese efforts for the development of the Manchurian resources have been made.

CHANGE IN RUSSO-JAPANESE RELATIONS IN MANCHURIA

The summer of 1907 brought forth the convention between Russia and Japan of July 30th of that year. It was brief, being made up of only two articles, and there was nothing new in it. It covered the old, old ground of respecting the territorial integrity of the contracting powers each by the other and of recognizing all the rights resulting from the treaties and agreements with China; also the integrity of China, the maintenance of the status quo, and so on. A mere collection of diplomatic generalities, as the reader can see from its full text, which is given in Appendix 23.

The fact presented to the world by this brief document was, however, both dramatic and new-and tremendous in its significance. For this convention spelt out an entirely new relation between the two mightiest Asiatic powers at the time. It said simply that they were going to pull together in the same harness from

that time on-let the past bury its dead. But of course this was a mere proem.

The same spirit of co-operation between the two powers in their activities in Manchuria came to full flower in the Russo-Japanese Treaty of July 4th, 1910. It read in part:

"ARTICLE I. For the purpose of facilitating the communications and developing the commerce of the nations, the two High Contracting Parties engage mutually to lend each other their friendly co-operation with a view to the improvement of their respective lines of railroad in Manchuria, and to the perfecting of the connecting service of the said railways, and to refrain from all competition unfavorable to the attainment of this result.

"ARTICLE III. In case any event of such a nature as to menace the above-mentioned status quo should be brought about, the two High Contracting Parties will in each instance enter into communication with each other, for the purpose of agreeing upon the measures that they may judge it necessary to take for the maintenance of the said status quo."

The full text of this important document is given in Appendix 25.

CHANGE IN THE RUSSIAN POLICY IN MANCHURIA

The Russo-Japanese War brought about a radical change in the Manchurian policy of Russia. It killed the Russian imperialistic scheme. For the first time in the history of Russian Manchuria, Russia looked upon her Manchurian railway system as a purely commercial venture; for the first time, she tried to make it pay. Russians went after the export bean freight from the Changchun District, the largest bean belt in Manchuria, over the Chinese Eastern line via the port of Vladivos

tok. Normally this freight should find its way out to sea over the Japanese-controlled line of the South Manchuria Railway. The distance from Changchun to Vladivostok by way of Harbin over the Chinese Eastern is 633 miles. The distance from Changchun to Dairen over the South Manchuria is 437 miles. In spite of nearly 200 miles of additional haul, the Russians charged the same rate for shipments of beans to Vladivostok that the South Manchuria charged to Dairen. The Russian rate eastward from Harbin to Vladivostok was invariably cheaper for practically all classes of goods than the rate quoted for the southward shipment to Dairen. Of course the actual amount charged for Harbin-Vladivostok shipments should be less than the one charged for HarbinDairen shipment, for the distance is slightly longer. The point is that the Russian rate for Vladivostok was much cheaper in proportion to distance.

All this Russian effort had the expected result-much of the bean shipments from the Changchun District went over the Russian line instead of over the South Manchuria Railway. The Chinese Eastern kept on shaving down its deficits gradually, and turned them finally into profit, and that in spite of various unkindly things which happened to it. As soon as Russia came to herself, after the Russo-Japanese War, she set to building a line of railway connecting Europe with Vladivostok all on Russian soil. She lost no time. As early as 1908 she started to build the line connecting Kuenga in trans-Baikalia with the town of Habarovsk on the Ussuri line, a single track line traveling through the valley of the Amur for the distance of 1,295 miles, which was finished in 1916. This line parallels the Chinese Eastern, so competing with and being bound to affect the balance sheet of the Chinese Eastern.

Then came the Bolshevik revolution in European Russia and the chaotic condition in Siberia. Naturally they