Mr. Chen traced the history of loans and expressed the hope that more capital would come to China as private investments. Mr. Jenks says:

"I am sure many people thing reasonable should be their financial needs.

will agree with the speaker that every

done to aid China and other nations to meet Practically every country and the business men of all countries are seeking loans and offering inducements to investors. China must be financed on the same principles based on sound economic laws and in use for other countries." He then discussed laws of finance and showed that recently China had broken these laws. He pointed out the relation between tariff revision and loans, since tariff income was the security for the loans. "We are friends of China and believe in her but sympathy will not cover losses. No country can get outside of the realm of economic laws nor of the moral laws upon which the other laws are based." Mr. Ta Chen discussed tariff autonomy, giving its history and stated that "tariff autonomy is a sovereign right enjoyed by every independent state and should not be denied to China;" that the present tariff is unscientific, inelastic, yields too little revenue, and hampers industrial development.

At the first meeting of the Round Table customs control and tariff revision were discussed on the basis of statements by Mr. Willoughby and Mr. Chen on the history of customs control in China. In discussing the working of the system, Mr. Wen said: "I have been a superintendent in the Chinese customs for over ten years. We appreciate what Sir Robert Hart has done in 45 years, but in all that time he never trained any Chinese for indoor service. There are over 750 British in the customs. Tariff revision was presented in papers by Mr. Willoughby, Mr. Hornbeck, Mr. Chen, in which the interrelation of Chinese problems and diplomatic procedure were frankly stated. In closing, the Chairman said: "I believe we have all agreed that China should regain her rights to revise her tariff, but that we must consider facts. There is a fear on the part of business men that, because of the lack of order in China, they might not get the benefit of the revision of that tariff. Then there remains the question of "likin" . . . should it be abolished or not? (See Nos. 30, 32, 38 of papers distributed to Members.)

At the second meeting the topic was foreign loans, a discussion based on material in papers presented the previous evening by Mr. Chen and Mr. Jenks. Interest centered about the methods of making loans. The Chinese members restated their desire for private loans instead of loans to the government. The point was raised that it was difficult to determine the will of a people apart from their government; this created much discussion. It was clear that most of the members present did not favor loans to the

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present Chinese government. Mr. Hornbeck gave a history of past loans to China, assisted by Mr. Jenks, Mr. Koo, and others. Many suggestions were made, especially for "some commission of the Chinese government, together with representatives of foreign governments or individuals . . to work out some practicable plan. (See Nos. 38, 73

of papers distributed to Members.)

In reporting to the Forum, the Chairman gave a summary of these two meetings, using the following outline:

I. Customs control and tariff revision.

A. Situation.

1. History-by different treaties control of Chinese customs came under foreign control and tariff was scheduled at the 5 per cent rate on all goods.

2. China's desires:

a. Demand for the administrative control of customs.

b. Demand for the full control of tariff.

3. Reasons:

a. Recovery of sovereign rights.

b. Present technical difficulties owing to foreign control.

c. Financial and commercial reasons for regaining tariff autonomy.

B. What can be done about it?

1. Foreign powers favorably inclined to agree to tariff revision but demand the abolishment of Likin.

2. Washington Conference gave consent to raise the tariff 7 1-2 per cent or 12 1-2 per cent.

3. Two apparently conflicting views existing among the people interested-bond holders favorable to the raise of tariff which will give them more chance to get their interest paid-business men's apprehension of hurting their trade by the increased duties.

4. Question raised whether abolition of Likin should be insisted upon by foreign powers as a condition to increase of customs duties.

5. Gradual raise of rates advised with the ultimate goal of tariff autonomy for China.

II. Foreign loans.

A. China's desire:

Chinese people do not want foreign bankers to grant more loans to present government at Peking.

B. Practical difficulties.

C. Solution:

Creation of an impartial committee composed of both foreign and Chinese with a view to studying and consolidating all standing Chinese loans suggested and agreed upon.

25. NATIONAL ECONOMIC, COMMERCIAL AND FINANCIAL POLICIES THROUGHOUT THE PACIFIC

ROUND TABLE (ONE MEETING): MR. TSURUMI, CHAIRMAN

A. Chief obstacles to economic international cooperation:

1. "Economic illiteracy," ignorance of sound economic principles as shown e. g. by legislators of every country.

2. Special interests of individuals or corporations in conflict with national and international interests.

3. Partisan politics.

B. Intelligent understanding points to the ultimate advantage of mutual help among nations.

C. The best internationalism is really intelligent nationalism.

Discussion of certain factors involved followed in an effort to discover what sound economic principles indicate about them. Opinions were expressed regarding:

1. Tariff. The scientific basis for a tariff levy has as its fundamental factor whether the industry, after being protected for a reasonable but limited period, can hold its own in free competition.

2. Raw materials. A nation should freely exchange its surplus with other countries.

3. Subsidies. The same may be said here as of tariff.

4. International movement of capital.

5. Conditions of labor in foreign countries: It helps conditions in every country to raise the standards in other countries.

6. Coastwise trade should normally, except for reasons of national defence, be open to foreign shipping.

7. Uniform currency among nations: Would expedite business.

8. Uniform standard of measure, presumably the metric system: Would encourage and facilitate trade.

(See Nos. R 43, R 45, 30, 32, 38, 73 of papers distributed to Members).

26. THE GOVERNMENTAL ORGANIZATION OF EACH OF THE PACIFIC COUNTRIES WITH SPECIAL REFERENCE

TO ITS MACHINERY FOR HANDLING
INTERNATIONAL AFFAIRS

ROUND TABLE (ONE MEETING): Mr. BlakeSLEE, CHAIRMAN

Statements were made for Australia, Canada, New Zealand, China, Japan, United States. See Nos. R 4, R 5, R6, R13, R 27, R 28, R 29 of papers distributed to members.

In the discussion of these statements certain other points of view were added:

1. The British Empire is still a single political entity and the various dominions do not yet possess in reality the status of independent states or equality within the Empire.

2. In spite of the shortcomings and difficulties pointed out in reference to the American diplomatic machinery, it has worked very creditably in Pacific affairs.

3. The Rogers Act will not radically make over American machinery but it will provide a corps of trained men for the foreign service.

27. ARMAMENTS IN THE PACIFIC

ROUND TABLE (ONE MEETING): MR. LEEBRICK, CHAIRMAN

Brief statements made by members of the group, outlined in a nontechnical way, the situation as regards armaments in Australia, Canada, New Zealand, Japan and the United States. See Nos. R 57-R 61 in list of papers distributed to members. Discussion followed.

MR. HALL (Abstract): Australia looks upon the proposed naval base at Singapore with interest because of her large dependence upon foreign trade. A Pacific base capable of taking the largest battleships is necessary if the 5:5:3 ratio in capital ships is to mean anything in the Pacific. So far little has been done and the Labor Party in Australia which represents about half of the voters in Australia is sympathetic towards the policy of abandoning naval development at Singapore. The Australian defence budget is on a very modest scale, and the possibility of cutting it further would be welcome.

Organizations working for peace are developing in Australia. In some states steps are being taken to provide appropriate instruction in schools and popular opinion is steadily rallying behind the League of Nations.

MR. NELSON (Abstract): Canada has no naval policy and Canadians are little interested in either army or navy, although British Columbia is somewhat in favor of naval armament. Opinion is divided as to whether Canada should build a navy or depend on that of the British Empire. The policy was heading towards a Dominion navy when the Washington Conference changed the sentiment.

MR. GLAISTER (Abstract): Sentiment in New Zealand favors a navy adequate for defence but is against large expenditures and against anything like aggression. MR. ZUMOTO (Abstract): The policy of Japan was moving towards reduction in the military and naval establishment prior to the Washington Conference. Popular sentiment had forced a reduction in the army of about fifty thousand men and during the last session of the Diet, further reduction was made by provision for retiring 2,000 officers and nearly 40,000 men. Reduction of the navy is more difficult because of the expansion of Japanese shipping and the need felt regarding its protection. However, the Japanese Government cooperated with the other powers in a drastic reduction. The Japanese considered the decision to build the Singapore base as an indication of an attitude of suspicion on the part of a people lately a party to the Anglo-Japanese Alliance.

MR. SAITO (Abstract): The peace movement in Japan is widely extended and vigorous. There are nineteen different organizations working for world peace. (See No. R58 of papers distributed to members.) The results of the Washington Conference were hailed most warmly by business men, laboring men, and the people in general. The military group are much less admired today than formerly by the young men and women.

MR. WILLIAMS (Abstract): The American people generally abhor war: the sentiment is against any large military establishment. As the United States develops its foreign trade more and more, protection of her citizens and their rights in foreign places will demand a large navy. The United States is not in fact isolated and cannot be sufficient unto herself; relations are interlocked. In the Pacific it is necessary to have sufficient naval power to protect American interests. No nation need fear aggression by the United States, but a police force is necessary to protect ourselves from disorderly elements which always exist in the world.

Subsequent discussion-further viewpoints:

1. That the claim by a nation of the right to defend itself means ordinarily, not only its territory but its policy. To defend its policy, however, each nation must be stronger in armaments than any other.

2. That each nation has its jingoistic elements, which feed the public on war scares; the forces in each country making for constructive internationalism should be more efficient than the jingoists.

3. Governments ought to be willing to make sacrifices in armaments in cooperation with other nations.

4. In the United States popular approval for naval and military expenditures is difficult to secure for Congress, being sensitive to votes, generally appropriates relatively much less money for these services than the military leaders feel is necessary. Believing themselves illy prepared, they are unlikely to desire war.

5. The Washington Conference treaties should be ratified as a whole group because refusal to ratify certain ones by some of the powers puts the others who have ratified at a disadvantage.