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RULE FAILURE Communist Who Left the United States to Enjoy Benefit of Lenine's Theo ries Now Realizes His Mis take?Russian Trade May Be Stagnant for Years fa^HE writer of the dispatch which follows is well known to readers M of The New York Herald. Capt. Francis McCullagli, now again observing the course of events in Russia for this newspaper, is the correspondent who in March, 1921, startled the world bp cabling to The New York Herald exclusive news o] \ the renunciation of Bolshevism by Nikolai Lcnine. Capt. McCullagh's j dispatch, which was printed on March 19, was a report of a remarkable speech made by Lenine to the Tenth Communist Congress in Moscow. Lcnine said, in brief, that the idea of world revolution was madness, that Russia could not progress xcitliout foreign assistance and that she must make agreements with capitalist gov ernments. Publication of this ncics teas a shock not only to newspapers whose correspondents were less alert and well informed but to official circles as well. For three daps denials pro ceeded from "well informed guar? j tcrs." Ultimately, however, Sccre-' tarp of State Hughes and Premier\ Lloyd George publicly confirmed the I correctness of The New York Her ald's information. Capt. McCullagli has now rcr turned to Russia, where his famili arity with the language gives him ex ceptional advantages for obtaining exclusive news. lie will send to The New York Herald articles by cable and by mail at frequent intervals. Some of this material has already arrived and will be published immedi ately. To-day's contribution tells of the disillusionment of a Communist, educated in the United States, who went to Soviet Russia to find the ideal state of society which his theories led him to believe existed there. He ivas cruelly disappointed and wishes he had known when he was well off. CAPT FRANC 15 Ms CULLAGH By CAPT. FRANC Spectul Correspondence to Tug New York 1 If.rauv. Copyright, 1022, by Tub New York Herai.d j WI1ILE waiting at Kovno for [ the repair of the airplane which started with me for Moscow yesterday, hut which broke down here, I met a specimen of a fraternity which is now getting fairly numerous on the confines of Rod Russia?I moan the disappointed Com munist who has worked for Lenine but is now tired or him and doesn't roc anything in his fascinating the ories. lie was a Lithuanian called Anoph reus Karalas, an engineer by profes sion, 30 years of ago, though he looked considerably younger, and evidently a well informed and competent man. Karalas left Lithuania young.'lived a year and a half in Liverpool. England, and spent thirteen years in the United .State;;. Ho entered Valparaiso Uni versity. Indiana in 1911, and re mained there till 191", after which lie! entered the Tri-State University. In- | diana. which he left in 1916, after hav- j ing taken the electrical engineering course there. Getting employment in i the Edison Company, he was arrested ; by the American police for his Com- | munist activities and made to give $2,000 bail, for he was at that time a pronounced Communist; and in 1920 lie returned to Lithuania, having prob ably been deported by the American Government, though he does not say so. On Sept. 23, 1920. he entered Moscow on behalf of the American Society of Technical Aid for Soviet Russia; but a year's residence in Russia cured him completely of Communism, and now lie is leading a peaceful bourgeois life | oil his little estate in Lithuania. He i has found time to organize a battalion j of Lithuanian Hoy Scouts, and also to 1 write one of the most crushing expo sures of Russian Communism in prac tice that has ever been written. Karalas saw Lenino In April, 1921, and describes the Red Dictator as hav ing been then, according to all appear ances. in thoroughly robust health. He addressed a rousing speech to the Communist Committee of which Kar alas was then a member, and nothing In his words or his manner gave any indication of the incurable illness which was so soon- to strike him down. That illness is the same as that which carried off Lord Northcliffc. and the seeds of It were probably sown In both cases by overwork. Karalas also saw Trotzky about the same time, and formed u high idea of his energy arid capacity. Contrary to most observers of Russian politics, he thinks that Trotzky is very anxious for Soviet Russia to come to terms as soon as nossible with foreign capitalists. This la due fo the fact that Trotzky is now fmere??cd financially In a good ninny lompanies which have been formed in accordance with the new Soviet laws regarding commercial enterprises; and, being u shrewd man. he sees that, without the speedy assistance of for eign capital, these companies cannot succeed, Northeva, Under Suspicion, Was Sent to Prison Among other prominent Bolsheviks with whom Karalas associated In Mos cow was Northcva, the Finnish Bol shevik about whom there was a good deal of discussion In the summer of 1920, when Krassln first went to Lon don. On that occasion Northevn, who j was In Canada, wanted to Join Krassln) mit was arrested by the British au thorities, who announced their inten tion of sending him to Finland, where he would undoubtedly be imprisoned. If not put to death. Finally the Rus sian Government prevailed on Down ing HtrcCt to send Northcva to Moscow instead; and in Moscow Northcva worked for a time in the People's Commissariat of Foreign Affairs. :iS M'CULLAGH. There his business was to control the granting of passports and visas to people who wanted either to leave or to enter Russia; hut in the end he him self fell under the suspicion of his employers and was Imprisoned by them. As far as Karalas knows, he is still in prison. While he was still a passport officer | he spoiled a clever scheme of Karalas's | for leaving Russia for the United! States in order to bring back American engineers of Communist leanings for the work of reconstruction in Russia, This scheme was reaJly a blind to covAr a bolt front Russia, of which Karalas had by that time become quite tired. Karalas first submitted it. to Sverdlov, now chairman of the com mittee for the reconstruction of Soviet Russia, and formerly a tailor in Ixtn don, and Sverdlov approved of It. Prozor, the head of the railways, also recommended it. but Northeva saw through it at once and refused Kara las a visa. Then Karalas tried to escape, but I he was arrested and confined in J Smolensk prison. There he met a large | number of other political prisoners; and what surprised him most about them was the fact that they were all Mensheviks, Socialist-Revolutionaries and Anarchists, but never Monarch ists or Reactionaries. The explana tion given by Karalas is that the Bol- I sheviks have no longer the slightest j fear of the Monarchist Russians, whose , amazing incapacity for effective plot ting fills the Soviet Government with] a contempt amounting almost to pity. What the Bolshevik leaders are | really afraid of is the Socialist-Revo lutionary party, which is very large, well organized, and served by agents I who are as competent at plotting as | the Bolshevists themselves. Trotzky sees that the Socialist-Revolutionaries, or S. R.'s as they are called for short, have a greater chance than any otheb i non-Bolshevik party in Russia of over throwing the Soviet Government, for they have all the revolutionary cries of the Communists, and claim to have a more sensible program which would never have landed Russia in her pres ent economic mess. Hence the merci lessness of the Moscow Government toward the Social-Revolutionary con spirators, whom it recently condemned despite the protest of all Socialism in the outside world. Came From America. but Was Disillusioned Karalas gave me an Interesting ac count of the arrival in Russia, a year or two ago, of large numbers of Ameri can Socialist workmen, only very few j of whom, however, were Americans, most of them being Russians and Lithuanians settled In America, j Twenty-five thousand of these en- ' thusiasts came from the States In the i fall and summer of 1920, but there was only one American engineer among I them and he soon became very dis-1 gusted with the Soviet way of doing business, and flmBly conceived a vio- ; lent dislike for the* whole Communist i theory. The sani" change has since taken j place In the case of the American j workmen, who came at the same time, and there is not one of the Russian j workers who came on that occasion from America that has retained any| faith In the principle* of Karl Marx. Most of them, like Kara'as hlmseif, I would give all they possess to be back | In America again and able to rail [ themselves United States citizens. Before they arrived in Russia those I Immigrants were very enthusiastic | nbout Communism, but the change in their views began before they had j heen twenty-four hours In Moscow. At the Nlkolaevsky railway station they found Karalas awaiting them. He had Just been asked by the Su preme Council of N'atlo. al Konwniy| to organize a reception comfrlttee, but there was no food and no lodging awaiting them, and they were left to I TWO PRETENDERS TO RUSSIAN CROWN DIVIDE THEIR MONARCHIST FOLLOWING Grand Duke Cyril Recently Assert ed His Rights to the Throne, Sub ject to the Possi ble Reappearance of Prince Michel, Supposedly Dead ? _ I -By SANFORD GRIFFITH. Special Correspondence to The New Yobk Hkiuld. Copvripht, 19!:, by Thb Xeu. To,k ,lB1L1LD New lork Heruld Bureau, ) Berlin, .Sept. 9. \ RI SSIAN* monarchists have dis covered that the strength of the Soviet Government lies in their members subordinating personal differences to conform to Commun ist party discipline. The mon-1 archists who until this year have been | divided into a dozen different factions have now agreed to bury their particu- ! differences as far as necessary to present a united front to the outside world. They formed a Central Mon archist committee in Munich after i their conference last fall, and have agreed to work together at least as long as anti-monarchist Governments remain in power in Russia. The two pretenders and candidates to the throne of Russia are cousins of i the ('zar, both Romanoffs. One of I these is Cyril Vludlmirovich and the other Dmitry Pavlovich. Each has about an equally valid claim to the1 throne. Cyril recently issued a proc lamation asserting ' his rights but with the reservation that he would not seek the throne should Prince Michel biother of the Czar, still be alive* VVhat happened to Prince Michel may never be known. The Bolsheviks as sert that he was killed in the revolu tion but have never supplied details where or how. His mother, the aged Maria Keodo rowna of Denmark, imagines him still alive and sees him as the logical suc cessor to the throne despite his ple beian marriage to the daughter of a Moscow lawyer. It was doubtless out of consideration lor hpr rather than because of anv real belief in his being alive that Prince Cyril mentioned Prince Michel. Czar's Uncle Not Eager to Claim the Crown There is a mistaken notion that the Russian monarchists want to put Gen. Nicholai Nicholaievich, uncle of the late Czar, on the throne. He has still wide popularity and is highly esteemed In Russian monarchist circles. But he i is now a man well over sixty, and dis j tinctly tired. He himself iSjtiot eager for the Job. He has stated* definitely I 'hf,t h<* v,lil ?ot ucccpt appointment from the Russtun refugees outside of Russia, (inly the will of the Russian people he has said will decide him to accept this post. Monarchists assert j that this has already been given by a popular vote in the white Russian! sleep for weeks in some derelict goods ' ti ucks on a rusty and grass grown j siding. After that they were trans- I ferred to a cold, damp and ruinous barrack with holes In the roof and no glass in any of the windows, and at this stage the "reception committee" faded away and the Communists from America seemed to be utterly forgot ten by the people whom they had come to help. Karalas did his best to get things going, but the collapse of the whole machinery of social life in Moscow was at that time so complete that his ' best amounted to nothing. Moreover,' Bolshevik red tape tied up everybody and everything in so many knots that nothing could be done. ' Newcomers Were Not Welcome as Workers When an attempt was made to star: the returned Communists on engineer ing work the muddle became even ! more hopeless. The Bolshevik trade! unions were hostile and objected to the newcomers doing any work at all. in short, the muddle was awful, in terminable and Impossible, so that the ' hungry and bitterly disappointed! Americans took to selling the ma- | chines they had brought with them and skedaddling right and left. Home of the skilled mechanics among them got Jobs as hospital assistants. Mo- - torlsts got into Government offices as clerks, factory hands obtained em-! ployment as unskilled laborers, and every one of them cursed Communism with a fervor that could not he sin- : passed by the most violent anti-Bol shevik in America, and tried in vain to get out of tl>e Communist paradise. The majority became finally "specu lators" and smugglers, though specu-1 latlon and smuggling were then two of the seven deadly sins In the Commu nist catechism. As a result of this illegal activity many of their, were ar rested and ure now in jail, cursliv: Communism worse than ever. Karalas represented this hopeless stato of things to Steklov. editor of the Itvjieatia, and proposed that all immi gration from America should be ! stopped till the immigrants could be organized in groups capable of step ping into the kind of factory to which they had been accustomed, and bring- ! ing the necessary machinery with them from America. Kteklov accepted! tliis proposal and wrote several arti cles on it In his paper. He also pre sented it to the central committee of trade unions, which approved of it. with the result that immigration from America is now stopped save with the permission of that central committee. Karalas, though yesterday a Com munist, Is severer on Russian Com munism than most English and Amer ican editors. He maintains, for exam Pie, that the famine was the re sult. not of drought, nor of the block- i ade. nor the intervention, but simply cf the Communist system, and he maintains that things can never come right in Russia till every trace of I Communism has been swept away. As long as any vestige of Communism re mains there Will be muddle and no j possibility of Russia even entering on J BOTH SEEK ROMANOFF SCEPTER Grand Duke Cyril. Vlaoimirovitch Government in Vladivostok. But Gen.; Nicholsi does not propose to make an open move until he sees more clearly which way things are turning. The monarchist parties, however, have agreed that he is the only man to take over the regency until a decision . ia made as to who the sovereign final-? , ly will be. The two pretenders Dmitry j and Cyril agreed to the same principle, that is, only to accept the crown when the Russian people seek it. But the ( will of the people, as all three of them see it, would not be through a Duma nor a popular assembly in the western j sense of a universal suffrage. They | would reintroduce a replica of the old Sobor, the last of which met in 1614. and which then elected the Romanoffs] to become the reigning house of All the Russlas. Such a Sobor would give the various estates, nobles, clergy and peasants, as in France before the revolution, each its own rcpresenta-: tlves It is easy to imagine too that! the first two stages would have a preponderant voice in the final choice. This is indicated in the sort of (in ferences which to-day divide the Rus sian monarchists among themselves. Cyril for example, is regarded by many monarchists as disqualified for the throne because there is an article in the old Russian code which provides that the parents of the Czar must e members of the Orthodox Church. As many or the Romanoffs. Vladimir, Cyrii's father, married a German prin cess. But she. differing from the late Czarina, did not change from the J rot estant faith to the Orthodox Church. This would eliminate Cyril in the eyes | of the old orthodox believers. Prince Cyril, perhaps feeling uncei tain in his claim, seems to have de parted somewhat from the common pact to await for the decision of a Sobor, because recently he made a for mal proclamation announcing his claim to the throne. Cyril is not liked in old monarchist circles, especially in court ones. His^ the road to economic recovery. Every attempt to put things right will be in evitably strangled by red tape. There is a possibility, however, that Russia has abandoned every trace of Communism and that these disgrun tled Communists whom one now meets with at every point on the Bus sian frontier are simply the debris o a vast Socialist experiment which has collapsed. When the great imperialist fabric tumbled down the roads leading ( to Russia were blocked with the frag- j ments?old land owners. Generals, Ad mirals and court flunkeys. When; Kerensky's democratic republic caved j in the outside fringe of Russia was covered with rejected and furious "cadets." S. R?- Menshevlks and Lib- , Now that Communism has collapsed. | Reval. Riga and Kovno are full of ] furious Bolshevik extremists who ( have been kicked out. For when Mos cow takes to Its bosom?as it has done | ?capitalists like Mr. Leslie Lrquhart and Col. Boyle of the Shell Oil. it can not expect the old. hard bitten Bol shevik fanatic to remain within the fold, thouch when that type gets put out it will naturally develop an ex treme hatred of the Moscow Oovern- | ment and profess to be anti-Bol- j shevlk. Whole Electric Plan Condemned as Bad Of that Government and all its works and pomps. Karalas uses un printable language?a good deal of which is applicable, for It refers to the period when Lenine was a Bolshevik himrelf. The grand scheme of electri fication, Karalas?himself a competent American engineer?denounces as a | complete failure, badly conceived, badly carried out. an utter waste of time and money and human energv , from start to finish. A Bolshevik Gov- , ernment electrification committee, con sisting of 200 experts, drew up nn elaborate and optimistic report of that , scheme. The power of the Volkhov and Svera rivers between Ladoga ntul the Oulf of Finland, north of Petro irrad. was to be utilised as the power of Niagara has been utilized for elec trical purposes in Buffalo; all the Russian railways were to be electri fied. and great centers of electrical power were to ' e established south of Moscow and at various points through out European and Asiatic Russia. The magnitude and feasibility or these vast schemes made a go?d im pression on American engineers, and many newspapers in Europe and America commented favorably on them; but these foreign observers were all ignorant apparently of the fact that the plans for the Ladoga scheme at least hu.l been drawn up before the war under the direction o the Czar's Government, which would probnblv have completed that scheme successfully If it had remained In power. The plans and specifications on which the Bolshevik electricians worked had actually been pr?\?*red under the reactionary Stolypln fifteen years ago. and the Bolsheviks, while uddinR nothing new to them, failed to j carry them out. with the result that Grand Duke D mitry Pawlowitch record shows hirn to be an opportunist rather than the out and out conserva tive or liberal. In the late war Cyril was a commander of the Guard ma rines. When the revolution broke out and the provisional Government was set up Cyril overnight sought to adapt himself to the new order of things. He inarched his marines over to the Winter Palace and declared al legiance to th" new Government. This was an act which many good Russian monarchists regard as an unpardon , able betrayal of tlie Romanoffs. Inci dentally he was one of the few pas sengers saved on a Russian cruiser sunk by the Japanese in the. early part of the Russian-Japanese war. Dmitry, on the other hand, fulfills most of the requirements of the Rus sian monarchists. Many years before the war, when it was uncertain whother the son of the Czar would ever reign, Dmitry was regarded as a pos sible successor to Michel. Dmitry is popular as one of the conspirators with Prince Yousoupoff, who partici pated in breaking up the fantastic camarilla about Rasputin, sharing in his assassination. He has never mixed much in politics, but has let it be un derstood that he stands pretty much for all the principles of divine rights which the house of Romanoff and its supporters have always represented. Neither of these pretenders to the crown of All the Russias can be said to represent a definite political pro gram which can be classified specifi cally as conservative or liberal. Alle giance is divided even inside the vari ous monarchist parties. In the Russian monarchist move ment are two very distinct tendencies 1 which may he defined as absolutist monarchist and constitutionalist mon archist. In the circles of the "abso lutists arc the remnants of the court, the old land owners who have lost their property and most of the officers of the old army. Their ideal can bo summed up as a return to the old or al! these schemes have now been aban-i doned. The Bolshevik experts not only failed to start new electrical enter prises, for which their predecessors had left them all the data, but even failed to keep in repair the electrical works which had been established un der the old regime and had been work ing well. ' I asked "Karalas If t'le Bolsheviks cannot change completely to a capi talist system, but he says that though they are trying hard to do so they cannot. There must be a complete overturn of the Soviet system, he says. Even if they allow the old factory owners to return, those owners can do | nothing, for their machinery is rusty and damaged and (hey have no money to spend on repairs, while the Bolshe- I vik Government has no monpy to lend them. Karalas accordingly thinks I that the recognition of its debts by the ,Soviet Government and the return of all foreign confiscated property to the 1 original owners will effect no Improve ment in the Russian situation, as the Soviet has no money wherewith to pay its debts and the foreign factory own ers have no money wherewith to start j their factories. Soviet Has Spent All Its Hoard of Cold The Bolshevik Government has now spent practically all Its gold and has only fifty million pounds sterling (?50. 000,000) of platinum, and jewelry (Crown, Church and confiscated pri vate property), worth perhaps another, fifty millions. That will not go far. j and neither England nor any other i country can advance loans to Soviet. England had Undertaken at Genoa to finance Its own merchants doing Rus sian trade to the extent of 30,000,000 pounds, and it has new agreed to raise this figure to 90.000,000; but this will only be advanced to approved British concerns, and the Moscow Government will get none of if. That Government will therefore find Itself in the awk ward position of being penniless while British firms establishing themselves in the country will have plently of money; and its strong and Justifiable suspicion that under such an arrange ment a Government must eventually lose all moral and material power over its own citizens accounts for the ex treme insistence with which at Genoa, Tchitcherln, Lltvinov, and Rakovsky claimed a direct loan from Gieat Brit ain. They thought then, aud they still think, that such a loan is a matter of life and death to them as a Govern ment. The only sflheme of theirs which looks at all hopeful Is the Co-Opera live Scheme, but, unfortunately, these Co operatives are not Independent organ izations, being completely under the j thumb of the Soviet which appoints the majority of the members. The Moscow Government has been advanc ing gold to them for trading purposes, and seeks through them to establish j a system of "Government Capitalism "! "Back to capitalism under the aegis of the proletarian dictatorship" is now! the cry. A very curious development of Uol-' Dmitry Is Popular as One of the Conspirators Who Put an End to Rasputin, the | Fanatic Monk Who Ruled the I Czarina der of things In Russia. They are Great Russians. They would not rec | ognize the freedom of the Baltic prov inces, and only In an ambiguous form that of Poland. They would set up | Orthodox Church again along the old I lines and attempt to restore land titles to their old owners. Movements Within Movements Are ATany The Constitutionalists, called the 'nion of Russian Popularists, corn rise several different movements and are more progressive. In their ranks j are Cadets and even moderate Intel j loctuals of Social revolutionary iean I ings. The right wing is represented I by lefllmovsky, a Moscow lawyer, for merly a member of the Cadet pen t>. j Professor Milioukoff stands at the i other extreme and is technically out j side the party. He seeks to make a bridge between the Cadets and mod | crate Social Revolutionaries such as Savinkoff. This left wing of the Con stitutionalists would, as their name In dicates. restore a monarchy but within the limits of a more or less demo cratic constitution. They would re store the Douma, making the Czar a sort of tame King of Kngland. They are not propagandists for the Greater Russia. They have already recognized the independence of Poland, Finland and the Baltic provinces. Although they think that sooner or later the Baltic provinces will come into a federation with Russia, they agree to recognize their full freedom and autonomy. The Constitutionalists have admitted an independent Poland. These two great factions arc now grouped together under a common monarchist committee with headquar ters in Munich. They propose to hold their next congress in September at Nice, and then to transfer their head quarters to Paris. The Russian monarchists felt more at home in monarchist Bavaria than elsewhere. But since the German Government concluded the Treaty of Rapallo they now And themselves in an awkward position recognizing the Soviet Gov ernment. Also Germans are no longer able to advance money to the Rus sians. The monarchists have therefore de cided to move their headquarters to Paris, where they have support in1 several political and hanking circles. Gen. Wrangel has carefully avoided afiiliating himself with any one of the monarchist factions. The remnants of his army are therefore regarded by all factions as the monarchist army which one day will support the reg ency and restored sovereignty of a 1 Romanoff. j shevik industrialism is the fact that j though few factories are now working there is overproduction owing to the | fact that the people are too poor to absorb the very limited number of ar ' tides manufactured. The existence of this almost incredible state of things has been proved not only in full and I elaborate statistics which were sub ; mitted to me in Berlin but also in a ! series of articles published recently by i the Bolshevik economic journal Eco nomic Life, which has shown in com i parative tables that industrial produc ! tion in every line?cotton, leather, ! thread, Iron, coal, etc.?has been delib ; erately cut down by the Soviet Gov j ernment because of this overproduc } tion. Even boots accumulated in the | factories because the people were un ' able to buy them even at the low prices demanded and the most indie I pensable articles were similarly and ; for the same reason left unbought. No Market in Russia Now for American Goods This knocks on the head the con tention of those who maintained that Russia was hungry for every kind of American manufactured goods. Russia cannot buy even her own manufac tured goods, so that if an American, manufacturer dumps down in I'etro grad a cargo of his wares, those wares will never be sold. Russia is in the position of a patient recovering from a severe illness: she can hardly digest even a spoonful of milk daily so that it is nonsense to think that she can tackle large quantities of solid food, j Consequently America might recog- i nice Russia de facto and de jure and j heavily subsidize American merchants trading with Russia, lnft for many ? years to come this will do no percep- j tible good, and the economic situation will remain much where it is to-day. j It is certain that the economic recov- j ery of Russia will be a very slow pro- ! cess. Why, at present Russia is even importing grain, though, ten years j ago. she could export enough grain to! feed all Europe. On this point the American State Department him always been pessi mistic and right, while the enthusias tic Lloyd George has been invariably wrong. Early in 1920 he even spoke In the House of Commons about the "bursting corn-bins" of Russia; but the present famine and the present import of grain show that he had mis judged the situation completely. Even now he is still too enthusiastic. The opening up of Russia in the fullest manner will have no effect whatever on the general economic situation In Europe for the next ten years. On the j , contrary Russia will, during that time, j , need to bo fed and aupported by the | ( outside world. She will he a hindrance , instead of a help. This, at all events, is the view taken ; by ninny people Including disappointed | American communists like Mr. Ano-: phreus Karalas. There are well in- , formed and Impartial men who take a more hopeful view, and I shall shortly let them speak for themselves in the columns of The New York Ukraui, j leaving the readers of that paper toi form their own conclusions from all j those f?U. I U. S. IS CHINA'S VALUED FRIEND Our Unselfishness Is Appre ciated in the Orient, Where the Warning "Asia for the Asiatics" Isbeginning to Be Heard Because ot Foreign Encroachment By RICHARD 1 THE factional strifes In China that cause political unrest and civil warfare are hardly more than the fights between the kites and : crows when compared with the great opportunities for foreign capital in China, since the Far East to-day i offers a tremendous market for Amer ican products. In the long future' China is bound to be the greatest for eign outlet in the world for American | enterprise if properly developed. There are now more than 10,000! miles of railway in China, compared with 6,500 in Japan, and as this facil ity for travel Is operated by foreign ers, the safety of foreigners usually is assured despite brigand attacks sometimes on tourists or pirates'! efforts to hold up water commerce In the interior. The type of rolling stock as well as the roadbeds are for the most part European, though the dining and freight cars and most of the locomotives of south Manchuria, Pekin and Mukden are of American [ type, while the average rate is twenty- i two miles of speed to the hour. There are so many signs of China's awakening that it is difficult to label i them under any particular head, since I new thought and modern ways dove tail with so much that presage.:! change. Millions of dollars' worth of American machinery whirs in Chinese i factories. China has also recently sent missions of silk manufacturers to investigate the making of silk in America for the purpose of improving her output. Business find old cus toms are gradually giving way to the ' external teachings of Western technic, since the idea prevails that it is best to leave old China alone, morally and culturally, and leave it.to ttade anij medicine to work those reforms that! pure missionary zeal alone cannot; effect. Our ethics seem rather likej "new wine in old bottles." Great Awakening Sure to Come in Industryj China herself has high ideals and ] when her domestic system gives way there will be a great industrial revolu tion, as in England a century ago, for I her women are eager to enter the marts of trade like the American typ ists and shop girls, and the wonderful j success they show when given the op portunity to learn, together with th%ir | great patience, promises that us "up- . to-date" flappers they have the germ implanted In their imaginations. When ITesident Harding In his' Inaugural address said: "We know : full well we cannot sell where we doi not buy, and we cannot sell success fully where we do not carry," he tapped ' the root of the shipping problem, since with the Shipping Hoard rests the future to a great degree of American commerce. The opportunity is there? with the Orient and particularly China ?but it depends on the policy of the Shipping Hoard as to whether America grasps this opportunity of keeping money in the United States. The trouble is. America is so rich in her own possibilities and so vast in area ' that she has never thought of the sea and foreign fields as England has, and likewise Japan and Holland. Be it understood that we deal on a; different basis from England, for wher- i ever the British pound goes there fol-1 lows the Union Ja-k with its protee- j tion, since the Old Lady of Threadncdle Street is seldom caught napping. The United States must realise that ships can he built on the Clyde cheaper than in our America, and that other vessels can carry c heaper than the American Shipping Board because no labor prob lems regulate their crews to forbid the employment of Malays and Chinese. The White Peril Already Dreaded by Asiatics Americans are exporting their ma chinery and sending their money to China, where labor problems do not ! interfere or Internal revenue tap the production of factories as in the States; ! hence the cry already goes up of the "White Peril" in China, and "Asia fox the Asiatic." Meanwhile, wide awake Japan is forging ahead, silently iodizing that her ascendency in trade will mean more to Nippon's wealth than Shantung's political privileges, while hoary China rubs her eyes after a Rip Van Winkle sleep of over 3.000 years. Kconomt' difficulties are not signs of decay in t'hina, but of awakening; she has seemed changeless, r njo?nl. for her possibilities stagger conception. It is a scene for study and surmise, for no speculations as to the outcome are worth the paper they are written on. The population of China Is 400. 000,000, which is now double that of England, France, Germany, Spain and Belgium, the Netherlands and Italy combined. Not until one has pen trated the interior and s<??n the hordes 'of yellow faces, is It possible to realize what might happen if ever these people reullze then- strength But the wall of <"hines<> prejudice like the Great Wall of China has given way in places as a result of th? World's War. The Allies transported over 300,000 coolies to work in France, these men traveling mostly via Can ada?hence they have brought back to China a realization of the big world outside. The old East, the Far East, is lift- i lot Its hoarv head and blinking nr Edison's electricity, while Standard 1 >11 has literally become the "Light of Asia." The real China of the pres ent, is no papi< r-mache country but a China where the Orient and Occident meet now at the cross-roads of com merce; a China that is undergoing great changes overnight, a China that looms ponderous like a comical Fni staff blended with the dignity of a | mcr: a China of whJim America known MONCURE. little but which Gautier and Loti ap preciated?a China almost preserved In amber?a moving pageant of Ori ental splendor?dignified by philoso phy?having felt the impress of Buddha. Mahomet and Christ?but a China which if dismembered, would mean an end to American commerce, for other countries stand hawk eyed, not hampered by Monroe Doctrlna restraint?and to this fact the United States owes the cordiality with which Its citizens are received in the l ar East. , ... President Roosevelt, a deep student of human nature, with a Now 'iork cr's keen sense of business, tried to corner the Far Eastern commercial prospect by his Panama Canal fore sight; for, said he, "The Mediterra nean era died with the discovery or America, while the Atlantic era is now at the full tide of its ascendency; but the Pacific era, destined to be the greatest, is just at its dawn." Seward Early Realized Importance of Pacific Seward also fifty years previous had sensed this vast possibility for America in his Alaskan purchase, ex plaining. "The Pacific Qcean. Its isl ands and vast region beyond, will become the entire theater of events in the world's great hereafter." The realization of this vision is well appreciated by men like Herbert Hoo ver sin. e every day new possibilities arise, which remind one of John Hays's prophecy: "Whoever under stands China sewsaly, politically, eco nomically and rellK .? tly holds ho Key to the wtrld's politics for the next five centuries." But the world war and the fluctua tions In the money market resulting therefrom have been felt in China as elsewhere, and she has been shackled bv two great impediments?her wiit ten language, that is now undergoing a transformation that will bring pub lic libraries to the masses, and her money system, which is terribly hard for a foreigner to grasp and which, not being stabilized, offers opportunity for squeeze which is the key of most Eastern trading. Importers and exporters trade on a small margin, but. since China has In different sections different money systems, a tael in Shanghai is not the same as a tael in Canton, Pekin or Hongkong?which Is most baffling to strangers. To try to readjust these difficulties for foreigners prompted the establishment of the consortium, which Is a banking group from France, Great Britain and Japan, since China is hopelessly dependent on foreign loans. Unless looked after lur mandarins, officers and politicians v ill pawn her most valuable natural re sources and wink likewise at uoium production and importation. Movies and Lectures to Stir the People The Chamber of Commerce in Shanghai is awakening to the impor tance of new methods of stinv the Chinese by the use of movl lecture work, which radiate 1 the interior?reaching as lar as den. Pekin and Hanchow. Phi of course, remains the premiei nearly 600 foreign going st< >? touching at Hankow, which tl ^ the Yangtze River taps the h< that vast area known as < China, through which Amerlc tributes over 29.000.000 gallons yearly. Great Britain and Japa outrank America, however, other commercial lines in thb traffic. England also holds first place as to cotton importations, which seems strange, since cotton is a product of the Gulf States; yet the United States ranks first as to oil. China Imports $300,000,000 worth of cotton goods alone, while she exports only about 27 per cent, of the world's silk. Th? country's resources are. however, un limited in beef. Mongolian mutton, poultry and eggs. In Shanghai are huge cotton mills, whore not only weaving and spinning employ vast throngs of natives, but a Government school for vocational training exists to perf?x't the youth of the land as to the best methods of this Industry. China always has had ancient news papers. but when the modern script now being introduced, replaces the old style of writing the stimulus to mod ern learning will Increase tenfold. The saying prevalent lias been: "The Ger mans leave an arsenal; the British leave a custom house; the French a railroad, but the Americans leave a school house," which adds to United States welcome and popularity. Hankow Is called the Chicago of China?while the Premier Iron and Steel works of Hangyang employ T..OOO men and turn out yearly enormous outputs in pig iron and steel. Shansi is ono of the richest coal countries in the world, having seams from 27 to 3t, feet in thickness, her bituminous and anthracite deposits being plainly visible in longitudinal strata, making mining exceedingly easy The necessity for various rationali ties having their own post offices was evinced, as the cosmopolitan popula tion of Shanghai alone Is represented by at least twenty-five different tongues. To the French must be Kiven the credit of establishing tho mall system now prevalent in China. Oth rwise the system of "Squeeze, which everywhere prevails, would have made the letter-writing of the East a veritable Chinese puzzle for the foreigners whose duties depend on their regular correspondence with the home office. Yet. in faith, tradition and customs the almond eyed people of the Far East are marvels of both patience and politeness, if treated right, and with them, the American holds first place as a friend. l.