Very considerable interest has been aroused by the publication in these columns yesterday of a despatch from the special correspondent of the "North-China Daily News" in Japan reporting Mr. Ginjiro Fuji-hara's views on the possibility of Japan being able to carry out her ambitious project for the reconstruction of China without foreign financial assistance. Mr. Fujihara is one of Japan's foremost industrialists, and business leaders, and his opinions deserve the greatest respect, always with the proviso, however, that much of what he said was probably designed solely for home consumption. It is necessary that his conclusions should be recalled. They are as follow Japan alone can accomplish the task of reconstructing China by means of her own financial resources and ability, plus her human strength; that is, unflinching determination to succeed and hard work.
After reform of China's financial structure it can be made to defray the expenses of the new government to be established, as well as of the Japanese army that will have to be maintained there to preserve peace and order.
After China's commerce has been readjusted, the, work of reconstruction and development can be achieved without borrowing a single penny from foreign capitalists, though their investments will be welcomed if advanced in the spirit of real ce-operation.
The idea prevalent abroad that Japan can be beaten by economic warfare is a fallacy, because it falls to take the human element into consideration.
Tremendous progress and prosperity awaits a reborn China, attended.by commensurate benefits to both Japan and China, and in which the Western nations can participate if they are so disposed.
An indication of what Japan will be able to do in China is seen not only in the successful founding of Manchoukuo (which Westerners expected would break Japan financially) but in the development of Taiwan (Formosa) and Chosen (Korea) whose foreign trade increased 3,000 per cent. and 2,000 per, cent. respectively since they were acquired by Japan, which is ten times greater than the similar increases in New Zealand and Australia respectively during the comparable periods of their development.
Mr. Fujihara bases his views largely on what Japan has done in Korea, Manchoukuo, and Taiwan, and in the course of his address adduced imposing reasons to support the contentions which he makes. In fact the speech may be taken as an industrialist's reply to Mr. Neville Chamberlain's recent statement about Japan's future need for money in the development of China.
At first glance there is a great deal in what he says, but his arguments are not without their fallacies. It can be admitted that it is possible for Japan to carry out her programme without outside assistance, but if it is desired to obtain a quick return on the enormous amounts of money she has already spent in China, and in all probability will have to spend for quite some time to come, foreign assistance will be necessary. Here, naturally, the time factor plays an important part. If she is prepared to postpone reaping the fruits of her military venture, awaiting the slow process which is inevitable if she determines to carry out the work unaided, she may very well dispense with the assistance from abroad which it is confidently expected in some quarters will be necessary. Again after the reform of financial structure of the occupied portion of China it may be possible to defray the expenses of the new government and the maintenance of Japanese garrisons in the country, but the experience of the past year in north China shows that attempts to remodel the financial structure, there have met with nothing but failure, while indications from the north concerning the new taxation which it is proposed to levy are to the effect that a heavy burden will be placed upon the Chinese at a time when they need every assistance for their rehabilitation. A noteworthy example of this is to be found in the difference between the old and new taxation at Chefoo, for instance. The old revenue obtained by taxes by the municipal authorities was à little over $204,- 000 per annum: the proposed new taxes are expected to bring in no less a sum than $670,000 well over three times as great. Obviously so heavy a burden, repeated throughout the whole of the occupied territories must have a bad effect upon trade in general, and place a very onerous load on the people engaged in the struggle back to their former prosperity. True, it is proposed to raise about half this sum by means of an opium tax, but it is quite plain that the encouragement of opium smoking is again likely to militate against all round improvement.
When it is realized that the disaster which has been wreaked on China is already greater than that of the Taipings, and, when it is understood that there are districts in China which never recovered from that catastrophe, the likelihood of a rapid development without the use of very considerable sums of money seems not a little remote. Nevertheless it does depend entirely upon what Japan's policy is to be. If slow she can carry it out herself, if it is to be rapid she will need euiside assistance. For this reason it is suggested that the financial threat is not quite so powerful as it would appear at first blush.
It is only really applicable in one set of circumstances, and it has been shown that Japan has an alternative in this matter. It is obvious then that the real weapon in the hands of outraged foreign neutrals which can be depended upon to be the most effective is adequate retaliation for discrimination. With the ability to strike at forty per cent. of Japan's foreign trade, a means is available of shutting off that supply of money which in the event of Japan deciding to do without foreign assistance would make her task of rehabilitation in China even more difficult. It would be a blow at the very vitals of Japan's economic structure. The placing of Japanese trade under every disability which is at present placed upon neutral trade in China is the most powerful means of bringing pressure to bear upon Japan, for she has no means of avoiding its results. The destruction of a great portion of her trading, the subject tion of her ocean carrying business to similar discrimination as that which she is exercising in China are perfectly good weapons, the use. of which can be justified by precedents created by Japan. The financial arm is not quite so strong, for Mr. Fujihara has shown, with considerable conviction, that its effactiveness can be diminished merely by a change of policy concerning the rapidity with which it is proposed to reconstruct China.
Text read from the printed page and cleaned; old type leaves the occasional error.