Mongolian strain in Siam and French Indo-China. In the vast area of China the races vary from a pure Mongol, in the northwest, to variations in the Manchus, the Chinese of central China, and the southern Chinese, the latter being closely akin to the natives of French Indo-China and Siam. The natives of the Dutch East Indies, the Philippines, and Malaya are Malay with a mixture of Arab and Chinese. The race of the Japanese has long been a matter of conjecture and dispute, the claim that they are a MalayMongolian mixture perhaps coming nearest the truth.

Following the racial strains, the languages show a decided tendency to vary directly with the race mixture. Hindustani is as basically different from Siamese as Siamese is from some south-China dialects, yet each has influenced the other. Nothing has shown the independent provincial growth of China so markedly as the difference in dialects. The superimposed Mandarin is the only common language that can be used by all the official classes, so that next to inadequate transportation, if not because of it, the language difficulty is the greatest bar to any hope for a unified, homogeneous China. Quite distinct from the Chinese spoken language, but using the ideograph, borrowed from China, in the written language, Japanese is by far the most difficult language of the East for the foreigner to master. Malay, on the other hand, is comparatively simple and serves as a basis for most of the dialects of the Island tropics. Spanish is useful in the Philippines, but more Filipinos speak English now than ever spoke Spanish. The commercial language in the East is English, and its use is becoming more widespread among the educated natives every year.

Economic Interdependence of Asiatic Countries.-The diversities in climate and resulting diversities in production have brought about a certain economic interdependence among the several countries of Asia. Thus, the rich agricultural lands of the tropics and India, particularly the

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rich rice fields of Burma and French Indo-China, help to feed the less favored portions of China and Japan and receive in exchange manufactured goods and certain commodities that cannot be raised in the tropics. The great trade routes, therefore, lay overland from India and Burma to northern China and by water around the China coast and the Malay Peninsula to India. This economic selfsufficiency of Asia was, perhaps, never more noticeable than during the war, when trade readjustments on a strictly inter-Asiatic basis were necessary and were accomplished with little, if any, economic upheavals.

Relation of History and Laws to Commerce. The history of China and Japan presents an amazing variety of contrasts and similarities, contrasts in the manner in which historical lessons have been accepted by the two peoples, and similarities in the development of the two peoples under like circumstances, albeit the development has not been contemporaneous because of geographical, racial, and other conditions. On the other hand, the history of the tropical Far Eastern people of the Philippines, Dutch East Indies, French Indo-China, Malaya, Siam, and British India is very similar in many respects, varying only with the peculiar characteristics of the European nations that have imposed their own determinations upon them. The buffer state of Siam stands alone as the one tropical Oriental country that has escaped foreign domination, and the history of its development is surprisingly similar to that of Japan, leading to the presumption that perhaps the relative "backwardness" of the European colonies is not in spite of, but because of, foreign control. The development of the commercial laws of these Far Eastern countries reflects very closely their political history. Japan has followed European, particularly German, codes in her commercial laws, perhaps from choice and because of their easy adaptability to native codes, but not without some desire to placate the

most exacting of those foreign nations, without whose consent extraterritoriality could not have been abolished. I China showed a tendency to adopt the same tactics until the war in Europe and her entrance into the League of Nations immeasurably advanced her chances for undictated legal autonomy. The tropical countries, except Siam, have all adopted modified systems based upon the home laws, and any development must necessarily follow, rather than precede, greater economic independence. The American system in the Philippines, with modifications dictated from time to time by the policy of gradual aspiration to independence, may prove the forerunner of like changes in the other tropical countries.

Potentialities and Actualities of China. The temptation to consider Asiatic resources in their potentialities rather than in their actualities eventually has done much to discourage and dishearten the prospective trader and investor. An overstatement of the facts is in all respects as undesirable as an understatement, and there is no way to give the exact picture except to recite the actual extent of the present production in each of the principal commodities. While such a method of presentation is not conducive to imaginative flights, and its chief drawback lies in the rather dry and precise statements which exactness dictates, we have sought to sacrifice style to staidness only when precision could be attained in no other way. In the face of all that has been said about the potentialities of China it is feared that the export figures during the past five years, representing the only true index to production, show a rather depressing condition. The inordinate rise in prices had so far concealed the true condition that many will be loath to believe that the volume of China's export trade was much smaller in 1919 than in 1914.

Japanese Trade and the War.-What China lost through the dislocation and withdrawal of shipping due to the war

and the high price of silver-the medium in which her products were valued for sale to countries on a correspondingly lowered gold basis-Japan gained by becoming the entrepot for Far Eastern shipping through her control of practically all the merchant vessels left on the Pacific. In a large measure Japan's industrial growth was predicated upon this control. As a result, Japan's trade increased remarkably, not only in value, but in volume as well. The character of Japan's development was well illustrated by the heavy imports of raw materials from America and India and the large exports of manufactured goods to China and the South Seas. In this way Japan catered to the starving markets of the Far East at a time when all European markets were closed and America's lack of ships and preoccupation with furnishing supplies to Europe permitted only casual participation in the trade. The war trade which Japan built upon the ruins of European commerce with the Orient bids fair to be only a temporary structure erected upon the sands of Japan's economic unfitness in many lines of industry.

Effect of War on Far Eastern Colonial Trade Policies. -Not the least interesting studies of commercial history during the war are those of the colonial trade developments in the Far East. The Dutch East Indies, cut off from their usual markets, turned instinctively to Japan and the United States, and in the latter case many of our traders discovered for the first time the source of many of their imports from Germany and Holland. The growth of the "Dutch Colonial" sentiment in the colony's population during the war, demanding as it did free markets for its products without the necessity of paying tribute by transshipment through Holland, gave an added impetus to the growth of direct trade which commercial and economic considerations had already dictated. In the British colonies, however, a somewhat different development took place. Realizing her inability to control India's exports of raw materials

as in the past, Great Britain, rather than encourage an outlet through direct channels, adopted the policy of encouraging industrial growth, although such a policy was directly inimical to British markets for manufactured goods in India and the Far East. The long view was taken, however, that prosperous, industrial India was a greater asset to the Empire than an agricultural India weaned from Imperial economic control. The policy, while not carried out in its entirety, has had a profound effect upon Indian economics, and the industrialization of India has carried in its train a score of social and political consequences. The effeet upon other countries in the Orient whose pre-war trade with India was important has been equally farreaching. British Malaya, on the other hand, producing three-commodities of immense significance in the war-rubber, tin, and coconuts, has been encouraged in extensive production as an agricultural and mining asset to the Empire. In the same manner the French have sought to utilize French IndoChina, with, however, only indifferent success, due primarily to the disabilities of the French as colonizers and also to the relatively restricted resources of the colony. Our own experience in the Philippines has been decidedly more encouraging, and the handsome profits made in coconut oil have only been partially counterbalanced by the losses incurred from too hasty and ill advised expansion of the oilmill industry. In their steady and patient industry during a period of turmoil in Europe, the native colonials have displayed in every instance the real economic potentiality of the East-frugal and industrious labor.

In the face of such a diversity of conditions, it has been no small task to collect from a number of sources all of the pertinent facts relating to the history, government, resources, and trade of Asia. Brevity and conciseness have been striven for, and the aim in writing the following chapters has been to present in the fewest possible words all