CHINA'S GREAT PROBLEM 463 



and telegraphs) consume nearly an equal sum and return only about 

 two thirds as much in the form of revenue, the difference being partly 

 due to expansion and partly to a present lack of profits from many enter- 

 prises. Naval and military affairs consume a large sum, but the present 

 temper of the Chinese public is strongly contrary to a reduction of the 

 effort to make China self-protecting. Educational expenditures should 

 be increased, rather than curtailed, and it may similarly be said of most 

 of the other items that though the moneys might perhaps be more wisely 

 and efficiently expended they can not very well be decreased if the 

 country is to prosper. China's hope lies, not in decreasing her ex- 

 penses, but in increasing her income. 



To greatly increase the income from the Maritime Customs scarcely 

 seems feasible. The present rate of 5 per cent., imposed equally on 

 imports and exports, is certainly low, but the commercial treaties 

 existing with the principal countries only provide for a moderate 

 increase, and it scarcely seems possible that the banker nations would 

 look with favor upon a proposal to tax foreign trade in order to secure 

 income to meet the interest upon their loans. The likin (internal 

 transit tax) should be abolished; like the ridiculous prohibition of the 

 export of grain from one province to another, it hangs like a vampire on 

 the industrial body of the nation, sucking out its life. The conception 

 that certain parts of the country are best suited to the production of 

 certain commodities, while others can best produce something else, and 

 that the best interests of the whole are secured by offering every facility 

 for the free exchange of products, is so elementary that it is strange that 

 even such pronounced individualists as the Chinese have not earlier 

 perceived it. The salt gabelle, similarly, is a financial anachronism. 

 The income from the government-owned enterprises can be greatly 

 increased by better, more intelligent, more careful, and more honest 

 management. In fairness it should be said that the lack of profits from 

 these is not all to be laid at the door of the Chinese ; foreign engineers 

 have built $40,000,000 railroads where the probable trade only justified 

 a $10,000,000 road, and foreign supervision of enterprises has often 

 brought with it fat contracts for the foreign merchant. 



The land tax might be increased, but the farming class, the large 

 landowners, are already barely above the margin of subsistence, as a 

 whole. But by development of agriculture, as in the United States, the 

 income of the farming class could be greatly increased, with a corre- 

 sponding taxable margin. Agriculture is the fundamental industry of 

 any country, and the new government will be stupidly negligent if it 

 does not make provision for its scientific development. Progress has 

 already been made in this regard in Manchuria. The improvement of 

 yield and of product by the judicious selection of seed is an idea which 

 has never occurred to the Chinese ; indeed, it may be broadly said that 



