merchants, and her manufacturers, and built up in Bombay, Calcutta, and Madras a commercial power that has made her the mistress of the Eastern world. For two hundred years a few thousand English have successfully governed 300,000,000 natives. England played the Hindoo against the Mohammedan, incorporated both races in her army, put them under British officers, and quelled in 1857 the Sepoy revolt, which was the result of an accidental offence to native superstitions. India has had an army that has guaranteed public order, and has come to the rescue of the Empire in her foreign wars. We might have done the same in the Philippines, uniting the insurgent forces of Aguinaldo, that helped drive Spain from the archipelago, with our own army of occupation under American officers; and by a mixture of force and kindness peace would have been established long ago.

Spain lost her colonies in the Western Hemisphere through her greed and cruelty. England has preserved hers by justice and humanity. She gave India factories, banks, schools, railroads, and ships, and let the natives share in the prosperity her policy inaugurated. By the same policy the inhabitants of Australia and New Zealand have become the equals of British subjects on the banks of the Thames and the St. Lawrence. The Dutch have pursued the same wise policy in Java and Sumatra. The Holland merchants, not the politicians, have shaped the destiny of these fruitful islands. A few thousand Dutch govern 25,000,000 semibarbarians, who enjoy a high degree of prosperity.

What we want to do is to make the rich resources of the Philippines a field for our industrial forces - the promoters, the syndicates, and the socalled trusts, those abused agencies of development and industrial activity that have given us commercial supremacy in Europe. When the great canal has been completed, the navy strengthened, a merchant marine established, a Pacific cable laid, and absolute free trade established with the Islands, the coal and iron of Alabama, Tennessee, and West Virginia, the cotton of the South, and the grain of the West will pass through this waterway to the Islands and the ports of Asia. Plants will be established in Manila that will rival those of Hongkong, Singapore, Bombay, and Calcutta. We can feed and clothe 800,000,000 Asiatics. England has 64 per cent of the trade of China; we have 8 per cent only; but in the last decade our trade has increased 121 per cent in quantity, and 59 per cent in value-mostly in cotton fabrics. Japan has a population of 42,000,000 only. Her foreign trade last year was $444,000,000. China's foreign trade was $495,000,000, showing a capacity for trade in China of tenfold what it is. A good share of this

vast trade rightfully belongs to the United States, and we may get it for the same reasons that have secured us supremacy in Europe.

But to develop the possibilities of the Philippines and build up this commerce in the Orient will require reliable labor. American workingmen will never go to the tropics in large numbers. Where, then, is the labor to come from? In my opinion there is but one answer to this question. It must come from China. Scratch a Filipino and you find a Malay- -a pirate by nature and a marauder and a ladrone by practice. Spain never could make the Filipinos work, but had to depend on the Chinese, who have been going to the Islands for three hundred years, and have been hated by the natives for no better reason than that they were willing to work. On one occasion during the sixteenth century the Filipinos massacred 30,000 Chinamen. But the Chinese showed grit, and returned to the Islands in the face of massacre and death. They are there to-day, but the testimony of the soldiers and visitors is uniform that if further immigration is excluded by military order or act of Congress, there will be no reliable laborers on the Islands. There is no "problem" in the Philippines. The situation there is simply a fact. All that is needed is a little common sense.

General McArthur, in one of his reports, expressed the opinion that the admission of the Chinese would be detrimental to native labor; but

he says:

Some merchants, a few large property owners, nearly all contractors, and all those engaged in enterprises of such magnitude that cheap labor counts as one of the elements of success complain not a little that the unlimited labor market of China just over the way has been closed to them, and that the material progress of the country must suffer for want of a labor supply possessing the ideal elements of cheapness, adaptability, patience, and uncomplaining industry. There is no question but that unlimited Chinese immigration would for a time give an immediate and powerful impetus to manufacturing, railroad construction, ship-building, the making of highways, and even the larger farming industries; but it is very questionable whether the benefits so accruing would anything like balance the incalculable damage and ruin which would be fall the great mass of the population "to the manner born," who would be deprived of employment, and who would but little appreciate a material progress of which they are not partakers and which brought them neither happiness nor prosperity.

But how can "the great mass of the population to the manner born" be deprived of employment they do not want and will not accept? And what cares the idle Filipino for the "prosperity and happiness" that honest labor brings?

Secretary Root reports that during the last year no less than $5,000,000 was paid out for rice imported into the Philippines, although the

Archipelago is known to be the best rice-producing country in the world. With Chinese labor rice would be a valuable export and source of wealth, while supplying the local consumption.

It is a fact that Chinese labor in the United States opened up the great lines of communication, bound the country together as with ribbons of steel, encouraged manufactures, developed the mines, and worked the farms of the Pacific coast. None of the evils predicted by demagogues ever resulted from this wise policy. Against the positive good that has been done we have only the vague assertions of the harm that may be done.

On the other hand, Consul-General Wildman, late of Hongkong, in his report of July 25, 1900, says:

Sixty-one thousand and seventy-five emigrants left Hongkong for various places during the year, most of whom were Chinese. It is interesting to note, in the light of the fact that many people in the United States fear an overcrowding of Chinese in America, that the statistics for the year demonstrate the fact that as many Chinese are returning from America to Hongkong as are going from Hongkong to America. For the year ended December 31, 1899, 7,591 Chinese left this port for San Francisco, and 5,806 returned from San Francisco. Seventy-four Chinese entered Seattle from Hongkong, and 157 returned; 649 left Hongkong for Portland, and 91 returned; 460 left for Takoma, and 293 returned; 896 departed for Honolulu, and 1,130 returned. By striking a balance, it will be seen that the Chinese population in the United States increased by 2,191, and inasmuch as the bulk of these were merchants who had previously obtained a residence in America, it does not appear that we have anything to fear from the Chinese commercial invasion. More than 95 per cent of all the Chinese who go to America from China depart from this port. As a comparison, it is interesting to note that 45,666 Chinese departed from Hongkong alone for the Straits Settlements. Chinese immigration to the Straits is encouraged by that Government, and to Chinese labor they are indebted for the opening of their mines, the cultivation of the land, and in a very large measure their commercial prosperity.

The restriction should be removed from the Hawaiian Islands as well as the Philippines. The planters complain that native labor is entirely unreliable, and say that unless they can have the Chinese and the Japanese on their large sugar plantations, that industry may as well be abandoned to the weeds and briers.

But it does not follow that because the bars are thrown down in our insular possessions they cannot be kept up in the United States. Under the decision of the Supreme Court in the insular cases Congress may exclude them, if it is deemed wise to continue this mistaken policy.

Not only in the Philippines and in Hawaii, but in the United States more labor will be necessary. The American working-man will not much longer work for wages. Our wage-earners are fast passing into

the class of capitalists, and are becoming employers instead of employed. Labor is apotheosized; we all praise it, and we all want to get away from it. The man who throws our coal into cellars performs the same kind of service as the coal baron who brings it to the pit-mouth. The cabman who drives us from the depot to the hotel performs the same service as the railroad that carries us from city to city. But the laborer would rather be the coal baron, and the cabman the railroad president.

The reclamation of the arid regions by irrigation, as recommended by the President, will open up millions of acres for agriculture, to which the Chinese are so well adapted. China is nothing but a vast field of irrigation. The increasing demand for our cereals will require more farm hands. Coal mining in England and Belgium is becoming more and more costly. The undeveloped coal lands in the United States can supply the world for ages. Lord Charles Beresford bears witness that, with efficient foremen, the Chinese are the best miners in the world. We have the capital, we have the natural resources, and with reliable labor we shall lead the nations. Solon once told Croesus that whoever had the iron would possess all the gold. As Carlyle said of England more than fifty years ago: "What a future, wide as the world, if we have the heart and heroism for it "-which by Heaven's blessing we shall.

What the elder Pitt was to England in the eighteenth century Theodore Roosevelt will be to the United States in the twentieth. Our bold young President will be equal to his opportunity and his duty. President McKinley laid the foundation, but the superstructure completed by his successor will be grander than dreamed of by its founder. The great British statesman raised his little island kingdom to dominate the politics of Europe and crowned his country with commercial supremacy.

Naturalists tell us of a parrot in the South Seas that by constantly feeding on the ground has lost the power of flight. So we have pessimists and so-called statesmen who are grovelling on the low plane of prejudice, clinging to exploded theories of constitutional construction, and refusing to rise to the height of modern possibilities. Macaulay's picture of the New Zealand artist standing on a broken arch of London Bridge to sketch the ruins of St. Paul's may never be realized. But the faithful historian will record the fulfilment of the prophecy of Seneca in the age of Nero: "A power will arise in the West that shall rival Rome." ROBERT HUTCHESON.

GERMAN INDUSTRIAL CORPORATIONS AND THE FORCING OF MARKETS.

AMONG the features common to the industrial life of the United States and that of the German Empire are the vast corporations, which are nowhere else developed in an equal degree. In both countries the creation of organizations such as those of Krupp, Siemens, Stumm, Schuckert, and others is due principally to energy and inventiveness, in combination with the concomitant genius for organization. Some of them, as, for example, the German Electrizitäts-Gesellschaft, were originally stock companies, while others later became such, in order to attain the greater degree of independence enforced by financial conditions. As regards both the power exerted by the capital of these corporations and their economic significance, whether in a good or an evil sense, the corporations must be acknowledged as greatly superior to the trusts, because they are natural organic creations characterized by a spirit of unity, whereas the latter are the products of a pressure artificially exerted, the constituent elements of which are easily disposed under favorable conditions to sever their connection with the organization. Hence the phenomenon of which I purpose to speak in this paper is, in Germany at least, more frequently found among the great corporations. This phenomenon is the artificial creation of an outlet for products which can be no longer advantageously sold in the open market.

Artificial production—i.e., production which aims at an output greater than that justified by ordinary demand is shown, for example, in the endeavor of a bicycle syndicate to bring about the adoption of the wheel by the post-office or by the standing army by means of personal influence or pressure exerted upon the newspapers. Analogous examples are furnished in the endeavor of an ordnance manufactory to secure the adoption of a new gun by the Government, or in a combination of docks and iron-works for the purpose of increasing the national fleet, when these enterprises are dictated solely by financial considerations. Still another illustration is the artificial establishment of electrical plants, for purposes of either illumination or transportation, in districts