you find nothing but a succession of low, marshy troughs, soaked with water, and separated from one another by low, unfertile hillocks, or impenetrable marshes on the banks of the Usuri, until you reach the stony, wood-clothed mountains,

The result is that Vladivostok has no hinterland, properly speaking. It is a port thrown out on the Pacific coast, very far from the regions where a thick Russian population can ever be settled. It is more than 600 miles from the Blagovyeschensk plains, and another 1,000 miles from the plains of Trans-Baikalia; and nothing but mere strings of villages could be kept up between the Pacific port and these two possible centres of a future population. This is what "the strong footing of Russia on the Pacific" comes to in reality.

And then came the Trans-Siberian Railway, which, it was evident, could not be built along the Amur. So long as it was built across the prairies of Western Siberia, similar to those of Winnipeg, and farther on across the high plains, similar to the "rolling prairie" of Calgary in Canada, there were no real difficulties in its construction, except in the number of large rivers which had to be crossed, or in the absence of stone and shingle in Western Siberia. Nay, even to the east of Lake Baikal, along the valley of the Uda and across Trans-Baikalia, there were no very serious difficulties in the way until the present terminus at Sryetensk was reached. But many years ago I already wrote that I could not understand how the railway could be continued beyond Sryetensk down to the Amur, nor how it could be built on the marshy stretch where the Amur is joined by the Sungari and the Usuri, without going into simply fabulous expenses which could never be recouped. The formidable Gazimur Mountains, through which the Shilka River has pierced a narrow gorge below Sryetensk, and the 200 miles of marshy ground inundated every year by a formidable river raising its level for twenty feet in a few days during the monsoon period- these obstacles could be overcome, but at what cost?

Of course, there exist no "impossibilities" for the modern railway engineer, if only he need not reckon what every yard of the railway will cost. But why should this expenditure be made, when it was evident that the first 800 or 1,000 miles beyond Sryetensk and the 300 miles above Khabarovsk could never become the seat of a numerous population? I know well the banks of the Amur, and I fully remember even now the hardships I had to endure when I had to ride along them on horseback. Consequently, as soon as the Trans-Siberian Railway was begun, I wrote in England and in the United States that it most

probably would never be built beyond Sryetensk. To build such a costly railway, of such a length, across a region which will never be thickly inhabited, would simply have been foolish. In fact, speaking as a geographer, I must say that the only reasonable means for connecting Lake Baikal (Irkutsk) with the Pacific would be to build the railway across Mongolia, via Kiakhta, Urga, and Peking; and that the only possible way to connect Lake Baikal with Vladivostok is evidently across Manchuria - not because these are the shortest routes, but because a railway along the banks of the Amur, via Khabarovsk, would be absurd for the reasons just indicated.

As to the Trans-Manchurian railway - speaking again as a geographer only its direction seems to be perfectly well chosen. It avoids the terrible Gazimur Range, by passing at its southern extremity; then it runs over the lower terrace of the plateau, which represents an undulating, naturally macadamized surface of so easy access that the Cossacks and myself crossed it with our two carts without any road. Next comes the crossing of the Great Khingan escarpment, which cannot be avoided, and offers no serious difficulties. The railway next reaches the fertile and populous plains of Tsitsikar; avoids the marshy lowlands of the lower Sungari; and crosses the highest of the three parallel chains which it must cross before reaching the Pacific, at a point where this mountain is pierced by the Sungari. Broadly speaking, a better direction could hardly have been chosen. This and the fact that Chinese laborers could be found in any number are the reasons why the building of this railway progressed so rapidly before the Boxer rising-far more rapidly indeed than was known to the Western press. Moreover, the railway had thousands of customers even before it was completed. those portions of the line which were nearly ready for temporary traffic, crowds of Chinese and Manchus came to fill up the working-cars whenever a train started.

In

Seeing how rapidly this railway was built before the Boxer rising, it is easy to foretell that, if no new complications arise in the East, the Transcontinental Railway will be nearly ready in a couple of years. And as this railway is going to connect the naval port of Russia on the Pacific, Vladivostok, with, so to say, the mainland of Russia-its connection with the Amur region is no connection at all, as already mentioned, it is evident that the Russian Government will not easily abandon its claims upon the control and the possession of the railway line. Even if Port Arthur were never taken by Russia, or were abandoned by her, the Russian Government would surely do its utmost to

hold, at least, this railway across Manchuria, even at the risk of being entangled in a war.

It is not generally known, but it is a fact, that even before the Boxer rising the Russian Government was already holding this railway line in a military way. Russian papers reported, indeed, that 3,600 soldiers and Cossacks were already quartered along the line when the Boxer movement began. It is thus evident that it was already the intention of the Russian Government to establish across Manchuria something similar to the line of communication which it has maintained for nearly forty or fifty years across Mongolia. I mean the caravan route and the telegraph line from Kiakhta to Peking, via Urga. Both run over Chinese territory, but both are practically in the hands of the Russian Government. The road is a Russian road running across Chinese territory. When I mentioned this fact lately to the well-known Belgian Professor of International Law, Dr. Ernest Nys, he remarked that such communications were known in international law in the first half of the nineteenth century as "military roads." Thus, to quote but one example, Prussia kept such a road across the Rhenish provinces previously to their annexation. Something similar will probably be the outcome of the present conflict. It would be foolish, indeed, for Japan to let herself be rushed into a war for the Manchurian Railroad, as it would be foolish for Russian statesmen not to recognize that one day or another Korea will be so thickly colonized by Japanese that it will be Japanese for all practical purposes. There lies the possibility of an understanding.

And yet I cannot but repeat that the interests pursued by Russian statesmen in the East are the interests of a military state, not those of the Russian nation. If Russia should abandon all her possessions on the Pacific with which she cannot be connected otherwise than by keeping a "military road" across a territory which will never be Russian, but is sure to be more and more colonized by Chinese this abandonment would spare to the nation enormous sacrifices; it would avoid the possibility of war entanglements in the East; and it would only strengthen the position of Russia against any possible invasion from the East. Fully granting the possibility of a militarily reformed China rushing some day, with its millions of men, against the Aryans, in which case Russia would be the first to support the shock, it is not in the Amur region and still less in Manchuria, but in Trans-Baikalia, amidst a thoroughly Russian population, that the first stand could be made against that invasion. P. KROPOTKIN.

BONDS OF FOREIGN GOVERNMENTS AS AMERICAN INVESTMENTS.

THE increase of wealth in the United States within the last decade has largely diminished foreign ownership of our corporate securities. A further result of this accumulation of capital is the placing of certain foreign government loans in the American market. These present to our investors a new kind of security, and novel problems. It may be useful to dwell upon two or three aspects of the question, from both the public and the private point of view.

First, there are the ordinary, the surface considerations. When the money lender scrutinizes a loan, the character of the borrower goes for much. His ability and prospects, his reputation for promptness, his moral character and business rating are important, as well as is the security which he offers. So it is with a state. If its credit is doubtful, the lender insists upon a specific security, like the lien upon Chinese customs. If its monetary standard is uncertain, the terms of payment will naturally specify the medium. If its good faith is doubted, a higher interest rate reflects that fact. But there are quite other questions than these, which both the investor and his government will do well to ask. However, let us first try clearly to realize the distinction between a state in debt and an ordinary debtor. In the latter case there will be a definite security. In case of default this security may be taken by foreclosure or other process. No such right exists against a state, the nearest approach to it being in the rare cases where some specific form of revenue is pledged to the satisfaction of a particular loan or the interest due upon it. What the state gives as security for a loan is not a tangible asset, but its pledge of honor, of national reputation, of good faith.

There is a marked difference, also, between the remedies open to the two kinds of creditors, the one who lends to a foreign individual and the one who lends to a foreign state. The former can proceed single-handed against his debtor by judicial methods. A specific remedy is within his grasp. The latter, on the other hand, can only proceed diplomatically,

through his own government. He is thus doubly helpless, because he has nothing specific to seize for the satisfaction of an acknowledged debt, and because, to set any remedy at work, he must first interest and then employ the delicate and uncertain agencies of the state department. In theory the remedy is simple enough. Every bond sold by a state to a foreign investor is a contract. Default in payment of principal or interest is a violation of contract. The injured party is entitled to protection from his government. By assumption of his claim that governRedress being denied, the final

ment may make the case its own. penalty for breach of an international obligation is war, if regard for its reputation and regard for its future borrowing capacity are insufficient. But in practice the mere statement of such a remedy is enough to show its insufficiency and absurdity. As a matter of policy, it could only be thought of as against a weaker power. As a matter of common sense, the cost of the remedy is enormously out of proportion to the amount of the wrong. So, in point of fact, redress in case of default in government bonds is very problematical.

There is another fact to be borne in mind. The act of a state in pledging its faith and credit is quite on a different plane from the act of an individual or corporation doing the same thing. Accordingly when one state borrows from the subjects of another, this other state must consider what relations other than those purely financial are involved. Thus it comes that there is always a double point of view to be preserved in considering the loans of one government placed under the jurisdiction of another, namely: (1) the political point of view that which relates to the interests of the state itself; (2) the investors' point of view that which regards the transaction as a matter purely of private interest. This offers a convenient division of the subject, though the two aspects cannot always be kept distinct.

First, in regard to government loans politically considered. Although a state will hardly undertake to control the investments of its subjects, it can further or hinder its fellow states in their borrowing operations; and here, in truth, its interests may be quite other than those of its investors. If the British Government, for instance, should desire to build up Japan as a buffer against the advance of Russia eastward, she might naturally make easy the path of that ambitious empire as a borrower in England. Then, though the needs and vicissitudes of war might hurt the English bondholders, the political interests of Britain would be served as a makeweight. Something like this has been going on in Turkey for a generation or more.