Trade, although constantly proclaimed to be in a bad way, is steadily growing as new wants are created and fashions change. An immense amount of new building has been done, particularly in those regions which the Revolution of 1911 most devastated. The archaic fiscal system, having been tumbled into open ruin, has been partially replaced by European conceptions which are still only half-understood, but which are not really opposed. The country, although boasting a population which is only some fifty millions less than the population of the nineteen countries of Europe, has an army and a police-force so small as to allow one to say that China is virtually disarmed since there are only 900,000 men with weapons in their hands. Casting about to discover what really tinges the outlook, that must simply be held to be the long delay the world has made in extending the same treatment to China as is now granted to the meanest community of Latin America. It has been almost entirely this, coupled with the ever-present threat of Japanese chauvinism, which has given China the appearance of a land that is hopelessly water-logged, although the National Debt is relatively the smallest in the world and the people the most industrious and law-abiding who have ever lived. In such circumstances that ideas of collapse should have spread so far is simply due to a faulty estimate of basic considerations. For we have to remember that in a country in which the thoroughly English doctrine of laissez faire has been so long practised that it has become second nature, and in which the philosophic spirit is so undisputed that the pillars of society are just as much the beggars who beg as the rich men who support them, influences of a peculiar character play an immense role and can be only very slowly overcome. Passivity has been so long enthroned that of the Chinese it may be truly said that they are not so much too proud to fight as too indifferent,--which is not a fruitful state of affairs. Looking on the world with callous detachment the masses go their own way, only pausing in their work on their ancient Festival days which they still celebrate just as they have always celebrated them since the beginning of their history. The petty daily activities of a vast legion of people grouped together in this extraordinary way, and actuated by impulses which seem sharply to conflict with the impulses of the other great races of the world, appear incredible to Westerners who know what the outer perils really are, and who believe that China is not only at bay but encircled--caught in a network of political agreements and commitments which have permanently destroyed her power of initiative and reduced her to inanition. To find her lumbering on undisturbed, ploughing the fields, marrying and giving in marriage, buying, selling, cursing and laughing, carrying out rebellions and little plots as though the centuries that stretch