served on China in 1918, and because of her action as to Shantung, there has been an intense boycott of Japanese goods throughout China. Japan has lost at any rate, for the moment-a part of her most valuable foreign trade. As one of her leading government officials said to me, in Far Western slang, "We are in terribly Dutch in China. By becoming partners in the new consortium with Americans, who are popular in China, we hope now to fare somewhat better."

Meanwhile, Japan would welcome American capital on a large scale to develop her own industries. She has a limited supply of coal and is anxious to develop her water powers on a grand scale. She feels sorely the need of building good roads and of constructing new trolley lines. The United States will, as time goes on, be in a position to supply a good part of this demand. Our investment community can furnish much of the capital; our manufacturers can supply much of the machinery and equipment that are needed. At the present time, however, the apparent policy of Japan's Military Party will prevent any such American coöperation on a grand scale. We shall continue to buy Japan's silks and trade with her along ordinary lines, but we shall hardly be encouraged to accept her invitation to coöperate actively in the development of her enterprises until we feel more assured that her Military Party is not going to bring her into additional financial distress. Japan just now can not afford an ambitious over-sea policy of expansion. Her business men realize this, and they are urging the Military Party to be guided by more conservative counsels. As soon as we see a constructive change in the foreign policies that I have described, then indeed we can well afford to invest largely in Japanese development.

Meanwhile, we must not forget that dating from the days of Commodore Perry, Japan has looked upon the United States as an old-time friend and helper. We must not overlook the wonderful material accomplishments that our nearest neighbor across the Pacific has made in the last fifty years. We must be tolerant in our judgments of nations as well as of man. The Japanese have a sincere and intense desire for the abiding friendship of our country, and no American can be long in Japan without warmly reciprocating that desire. There is every reason why the two nations should be on the closest and friendliest footing. Even the perplexing California question is susceptible of amicable settlement if only we Americans show a little tact and a respect for Japanese susceptibilities. The Japanese are one of the proudest and most ancient people on the earth. Their manners to foreign visitors are a revelation of grace and courtesy. They expect in return a little of that same deportment. It is not so much what we do on the immigration question, as the way we do it. Certainly to one who has gained an intimate glimpse of the Japanese, it would seem certain that, with any ingenuity at all, we ought to be able to devise a formula which would meet the views of California and at the same time measurably satisfy the Japanese.

OPPORTUNITIES IN SIBERIA

I have not mentioned Siberia, the great undeveloped Russian state on the Pacific. I believe John F. Stevens, the eminent American engineer who has been managing the Chinese Eastern Railway for the Allied governments, can describe its possibilties better than I can. I met him at Mukden in Manchuria on my way out of China. What he said to me was this:

I have come down from Harbin, a journey of seven hundred miles here and rereturn, just to spend an hour with you and give you a message to the business men of the United States. That message is that they must never rest content until in Siberia the door of opportunity is surely kept open, so as to give free and equal trade opportunity to America and to all the other nations; so as to assist in the development of that wonderful region.

He, who had been working in that region steadily for three years, as you know, described to me in sober, restrained language its great resources as an agricultural, a timber and a mining region. "Siberia," he said, "is one of the great granaries of the world." It has for export great quantities of wheat. Hundreds of carloads of hides were waiting means for export. The forests are of immense variety and value. With exportable products that can be made available on such a grand scale, it is manifest that, in order to produce those commodities, the very the very things that Siberia requires are best made in America-harvesting machinery, mowers, reapers, tractors- and then more tractors. It is for our Government to keep open this door until the people of Siberia, with saner views than their Bolshevist brothers of European Russia, organize themselves politically, or until political conditions

in all Russia become stabilized.

AMERICAN TRADE IN THE PHILIPPINES

An important factor of our trade with the Far East is the Philippine Archipelago. Under American occupation and inspiration, the industries

of the islands have been tremendously stimulated and there has grown up a flourishing trade with the United States. The islands need more capital in order adequately to develop their industries and important public enterprises. For instance, the Port of Manila should be extended and enlarged, more piers built; and there is need for a drydock capable of receiving the largest liners and freighters. The United States is the only country where the large sums of money necessary for these enterprises may be obtained, but because of existing political conditions in the Philippines American investors are chary about advancing them. The political leaders of the Islands are demanding independence from the United States. Naturally there is some misgiving about their ability as yet successfully to paddle their own canoe, and a realization that if they fail their control must almost inevitably pass to other hands, to peoples with political ideals, perhaps widely differing from

those of the United States. If there could be assurance that American investments would be protected by stable government and just laws there would be no great difficulty in obtaining the money needed. Meantime, there must be considerable natural growth in this lucrative trade with the Philippines unless it is disturbed by adverse political conditions or controlled by a rival trading power.

We face in the wide stretches of the Pacific an opportunity and an obligation; as we are responsive to our obligations, so we shall realize our opportunities.

WITH a total of 16,324,024 gross

WITH

tons of shipping, privatelyowned and government-owned, the American merchant marine now stands a close second to the merchant shipping of the United Kingdom, which is only about 2,000,000 tons larger at the present time. This total of 16,324,024 tons includes our smaller coastwise vessels and the 2,595,062 tons of shipping on the Great Lakes engaged in port-to-port commerce. Considering only the seagoing vessels of upwards of 500 gross tons, the American merchant. marine has an aggregate tonnage of 12,264,282, of which privately-owned tonnage represents 4,810,520 gross tons, and United States Shipping Board tonnage, 7,453,762 gross tons. This American fleet of seagoing vessels is somewhat more than twice as large as the entire German merchant shipping before the outbreak of the Great War.

Of all of our seagoing American merchant ships of upwards of 500 gross tonnage, 1,974,965 tons are enrolled for the coastwise trade and 10,289,317 tons are registered for foreign commerce. All of the recent notable increase in American merchant shipping has been in the amount of tonnage engaged in carrying overseas-the coastwise tonnage having remained almost unaltered. The 10,289,317 tons of seagoing vessels registered for foreign commerce at the end of 1920 show an impressive contrast with the 1,076,152 tons registered for foreign commerce on June 30, 1914. Our tonnage available for international traffic has increased tenfold in six years. In 1914 we were conveying only 9.7 per cent of our imports and exports in our own

vessels. In 1920 we conveyed 42.7 per cent.

It should be remarked, however, in this connection, that while 10,289,317 tons of our present shipping are registered for foreign trade, this aggregate includes upwards of 600,000 tons of emergency-built wooden steamers now withdrawn from traffic-and probably withdrawn permanently as well as 1,262,000 tons of steel vessels of the Shipping Board laid up unemployed but likely to return to service. Our active merchant carriers, however, have not far from four times the capacity of the total merchant shipping of Norway, or of France, or of Japan, which rank next after the United States as commercial maritime powers in

1921.

The new war-built shipping, which makes up seven-tenths of our total seagoing shipping, is not an ideal fleet in type and character. If we had been deliberately constructing the merchant tonnage along our accustomed commercial lines, the ships, of course, would have been much more carefully designed. They would have been as a whole of superior speed and average size, and they would have had very many more passenger, mail and fast freight liners among them. But the American people have nothing to apologize for on this account. They were suddenly compelled to create a vast "emergency fleet," to hurry supplies to their anxious Allies in Europe and to send our own boys over to the fields of France. Therefore, waiving all calculations of commercial advantage, we constructed the ships that could be most quickly built and made

ready for service the conventional "tramps" familiar to the ocean highways of the world.

There were belonging to the Shipping Board on June 30 last, 1,123 steel cargo steamers, 15 refrigerator steamers and 63 tank steamers, as contrasted with only 27 steel passenger steamers and 3 transports. Even including the considerable number of ocean passenger steamers owned by private companies, there is still a very marked deficiency of passenger tonnage in the American merchant marine.

DEVELOPMENT OF NEW CARGO STEAM

SHIP SERVICES

What has chiefly distinguished the new merchant shipping era of the United States is the widespread development of new cargo steamship services-any similar extension of passenger, mail and express freight services was, of course, impossible. Under the auspices of the Shipping Board, American cargo steamers are now operating from this country to every important commercial country in the world. Before the war our equipment of overseas shipping under our own flag was exceedingly inadequate for its purposes.

The half-century-old American Transatlantic Line was operating from New York to Great Britain and France. A few American steamers were on the Red Star route to Antwerp. These few ships, not more than a half dozen all told, represented the entire participation of the American flag in regular transatlantic carrying. Other American cargo craft made casual transatlantic voyages. There were no other regular American western ocean services beyond the activities already described.

Across the Pacific at the outbreak of the world war one American steamer, the Great Northern Minnesota, of 20,000 tonnage, largest in our mer

chant marine, operated from Puget Sound to the Orient. Five American steamers of the famous old Pacific Mail Company were running via Honolulu to Japan and China. The Oceanic Line had three ships in service from San Francisco to New Zealand and Australia. This was the total of our Pacific liner transportation-and the Minnesota and the five Pacific Mail liners were withdrawn and sold in 1915 on the enactment of the La Follette Seamen's Law.

A branch of the Pacific Mail Company sent small steamships coasting down from San Francisco to Mexico, Central America and the Isthmus of Panama, whence the Panama Railroad Company's fleet, owned by the War Department, went northward in the Atlantic to New York. The New York and Cuba Mail Steamship Company (Ward Line), the United Fruit Company, the Munson Steamship Line, the Clyde Line and the Red "D" Line maintained services from North Atlantic and Gulf ports to the Caribbean region, where alone in all the world the American merchant flag was dominant. Our relatively few "tramp" steamers and large sail vessels made occasional voyages to South America; but, with the exceptions noted, American merchant shipping was confined to the coasts of the United States and to domestic commerce with Alaska, Porto Rico and Hawaii.

Now, because of the war and its requirements, this condition has quickly and completely changed. Private capital and enterprise have established new passenger and cargo services from our Atlantic coast to Hamburg and into the Mediterranean, and private capital and enterprise, in coöperation with the United States Shipping Board, are operating 202 established general cargo berths between the United States and the ports of various foreign coun

tries. No fewer than 100 of these 202 general cargo berths are from ports of the North Atlantic, while 27 are from ports of the South Atlantic, 54 from the Gulf and 21 from ports of the Pacific. American cargo steamships are for the first time in regular operation out of the Gulf to European and other distant ports. These are some of the entirely new American-flag, regular, general cargo services:

New York to South and East Africa New York to East Coast of Africa via Red Sea

New York to India

New York to Dutch East Indies and Straits Settlements

San Francisco to Dutch East Indies and
Straits Settlements

New York to Australasia
New York to Far East
Baltimore to Far East
Jacksonville to Far East
New Orleans to Far East

New Orleans to India

Pacific Coast ports to Far East
Pacific Coast ports to Australasia

San Francisco to East Coast of South
America

South Atlantic ports to East Coast of
South America

South Atlantic ports to West Indies
Philadelphia to Far East

Portland, Me., to Antwerp
Boston to Antwerp

Boston to Constantinople and Black Sea ports

Boston to Copenhagen and Gothenburg

These services are being operated under authority of Section 7 of the Merchant Marine Act of June 5, 1920, which directs the Shipping Board

to investigate and determine as promptly as possible after the enactment of this Act, and from time to time thereafter, what steamship lines should be established and put in operation from ports of the United States, or any territory, district or possession thereof, to such world and domestic markets as in its judgment are desirable for the promotion, development, expansion

and maintenance of the foreign and coastwise trade of the United States and an adequate postal service.

Two wholly new transatlantic passenger services have been created for the Shipping Board in the United States Mail Steamship Company, operating former German liners and newer ships to the United Kingdom, Bremen, Danzig and the Mediterranean, and the United American Lines, Inc. (the Harriman Company), from the North Atlantic to the port of Hamburg-the latter carrying only steerage passengers at the present time. The Shipping Board has also established a freight and passenger service from New York to the east coast of South America and from New York to South and East Africa. Of these the east coast South America line to Brazil and the River Plate, employing large former German passenger steamers, is of very great importance. The United States also possesses an admirable passenger, mail and fast freight service from New York through the Panama Canal to the west coast of South America in privately-owned ships of W. R. Grace and Company.

On the Pacific Ocean the Shipping Board has allocated to the Pacific Steamship Company and to the Pacific Mail Steamship Company newly-built passenger and cargo steamers, converted from army transports, for the essential routes from Puget Sound and

San Francisco to the Orient and for an

entirely new service from San Francisco to Manila and India. These new liners are of two classes-one of a length of 535 feet and a speed of 17 knots, with a capacity for upwards of 200 passengers, and the other, somewhat less in length and of a speed of 14 knots, with a capacity for about 80 passengers. Though not record-breakers in speed or size, these ships are approved by practical operators as of an excellent,