whether avowed Christians or not, who can contribute an element of upright, disinterested and self-sacrificing service that the secular institution finds it more difficult to secure. By using a certain number of western teachers, they can give the students a sanity and breadth of view and an appreciation of the difficulty and slowness of social development, that is next to impossible in a school none of the staff of which have a background of centuries of struggle with just these problems. This means that the Christian forces should deliberately direct their energies to the training, not only of distinctly religious workers, but also of Christian leaders in the industrial, commercial, yes, and the political life of the new China. There is a chance, also, by sending out more doctors to assist the small but increasing number of well trained Chinese physicians, who for many years will be unable to overtake the physical needs of 400,000,000 people living under poor sanitary conditions. Then, too, the Christian physician can minister to the mental and spiritual needs of these people and bring to them a comfort and inspiration that is beyond the power of the non-Christian doctor, however competent he may be professionally. In the realm of Christian philanthropy there is a further opportunity. The call upon the spirit of brotherliness that arises from the poverty and squalor of millions of Chinese homes in thousands of villages is beyond the power of the present generation to meet. Experience in India and Japan abundantly testifies to the fact that while the non-Christian can imitate the activities that have been developed in the West under the inspiration of the Christian religion, there is a flavor, an atmosphere about the Christian orphanage, asylum, or settlement that is peculiarly its own, and that gives it a success beyond the reach of the non-Christian. A tree is known by its fruits, but we have not yet learned to produce the fruit apart from the tree.

This leads naturally to the declaration of my belief that one of the greatest services the West can render to the new China is by the more vigorous effort to develop a self-supporting and self-directing Chinese church. It has already been noted that a goodly proportion of the leaders of the

revolution in China are Christians and those who have adopted Christian ideals. They are seeking to make China a more righteous as well as a more powerful nation. The difficulty with China has not been the lack of a high ethical code. China has been weak, among other reasons, because of the lack of a moral dynamic to make those ideals realizable. A century of Christian work in China has proved beyond a doubt that Christianity can furnish this dynamic. It has changed the lives of thousands and sent them forth to serve their fellow countrymen. China needs many things. Without industrial development, without political reform, without a more general spread of education, the dreams of the new China cannot become actual. Nevertheless, if China gets or is given these things but fails to secure this new ethical power, they will count for little, as Japanese leaders are now coming to realize. It is at this point that the Christian West can make its most valuable contribution to the life of China and through it to the life of the world. The doors are open now; they may later be closed.

We have thus sketched the part that western influence has played in preparing the way for the radical changes that have occurred in China within a twelvemonth. We have noted some of the outstanding points of strength and of weakness in the Chinese people and some of the specific ways in which the West can be most helpful to the new China. It is all summed up in this: China needs the help of a good example and of a spirit of brotherly assistance, especially along ethical lines, as she is seeking to adapt her ancient Confucian civilization to the new environment into which she finds herself plunged, against her own wishes; to the end that the most populous as well as the oldest nation may have her share in the unified development of the human race as it struggles towards the ideal of perfect self-realization through a life of achievement and service.

CHINA'S LOAN NEGOTIATIONS

By Hon. Willard Straight, Representative of the American Banking Group

It is the purpose of this paper to explain, if possible, three things: (1) the significance of Chinese loans; (2) the importance of securing and retaining an American interest therein, and (3), the peculiar difficulties encountered in the recent loan negotiations.

Dr. Arthur H. Smith, in that able and interesting work, Chinese Characteristics, pointed out that those who, understanding the vernacular, walk in China's streets will hear the passersby talk of little save money. As it has been with the daily life of the people so it is today with the political life of the nation. The question of money is all important. For the last ten years, and especially in the past twelve months which witnessed China's wonderful transformation from the oldest empire to the youngest republic in the world, there has been an incessant discussion of Chinese loans.

China's loan history may be divided into four periods: The first, immediately after the Chino-Japan War-when funds were secured from abroad to pay the indemnity exacted by Japan at its conclusion.

The second, following the so-called "leasing years" when the great powers encouraged their bankers to finance railway construction in the regions which they had marked out as their spheres of special interest, and when besides acting as the politico-financial agents of their governments, these bankers secured for the industry of their respective countries the orders for the materials required.

The third, following the Russo-Japanese War, when likin was pledged as security for loans and when a combination to

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which the American group was later admitted was formed by British, German and French financiers for undertaking Chinese loans, and for sharing the orders for materials required for their construction.

The fourth, and present period, in which a combination has been effected between the four groups named above and Russian and Japanese interests, for jointly financing the reorganization of the Chinese government.

American bankers were first interested in Chinese finance in the second period, in the Hankow-Canton Railroad; for business, not for politics. Their rights were sold back to China who financed the repurchase by a loan obtained from the government of Hongkong, which thus for obvious political, because geographical, reasons, secured for British interests a preferential right to finance the construction of this road in case foreign capital should later be required.

During the third period the American group was organized and became associated with the British, German and French banking groups. The American group, moreover, greatly contributed to the successful formation of the combination which marks the fourth period, a combination which is the financial expression of John Hay's" Open Door" policy, and which makes of international finance a guarantee for the preservation, rather than an instrument for the destruction, of China's integrity.

Before discussing the most recent phase of China's loan negotiations however, and the manner in which the American group at the instance of the Department of State made its entry into this field, it is necessary briefly to review the history of the past few years, and to consider the factors in the creation of what has been called "Dollar Diplomacy." Because of this so-called "Dollar Diplomacy," President Taft, and his Secretary of State, Mr. Knox, have been subjected to no small measure of criticism. The administration one hears has formed an unholy alliance with the Octopus; and Wall Street, the property scape-goat of our national political drama, is accused of seducing a reluctant and hitherto well-domesticated government into the maelstrom of international financial adventure.

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As if this were not sufficient, sober and intelligent journals have demanded why American capital should seek foreign fields when there is so much work to be done at home. Others admitting the desirability of foreign investment and the possible necessity of diplomatic support for those who undertake it, have objected to the administration's assisting certain institutions in Wall Street instead of American bankers in general. It must be remembered, however, that the success of any association of American capitalists undertaking this business depends primarily on their being of such standing as command respect from financial groups abroad and upon their willingness and ability to bear the expense of representation through tedious and too often unremunerative negotiations. Without these qualifications American bankers are not equipped to become the instruments which our government requires to assist in the extension of our foreign trade.

Another section of the press hails each and every oversea venture with indiscriminate enthusiasm and rhetorically preens the feathers of the Bird of Freedom, sneering at or condemning our rivals, and lauding American enterprise with an impartial disregard of the real facts.

There has been too much unjust criticism, too much unwarranted praise, and too general a lack of candid exposition and intelligent comprehension of the reasons for, and possibilities of, "Dollar Diplomacy."

"Dollar Diplomacy" is a logical manifestation of our national growth, and the rightful assumption by the United States of a more important place at the council table of nations. Our export trade is constantly increasing and foreign markets are becoming each year more and more necessary to our manufacturers. The new policy aims not only to protect those Americans already engaged in foreign trade but to promote fresh endeavor and by diplomatic action pave the way for those who have not yet been, but who will later be, obliged to sell either capital or goods abroad. European diplomacy is engaged in solving a maze of complicated questions immediately political, ultimately commercial in character. France, Germany, Russia, Italy, Austria