Iron is the most important element in modern industries. Its deposits are found in great quantities in certain areas and can be easily mined. The iron mines should be worked absolutely as a state property. Besides the Chili and Shansi iron mines, the other iron fields must also be developed. There are very rich deposits in the southwestern provinces, the Yangtze Valley and the northwestern provinces in China Proper. Sinkiang, Mongolia, Manchuria, Kokonor, and Tibet also possess large deposits of iron. We have the Han Yeh Ping Iron and Steel Works in the Yangtze Valley and the Pen Chi Hu Iron and Steel Works in South Manchuria, both of which are largely capitalized by Japan and are working very profitably lately. There should be similar works in the vicinity of Canton, the Great Southern Port, and also in Szechuen, and Yunnan, where iron and coal are found side by side. The iron deposits in Sinkiang, Kansu, Mongolia, etc., must also be developed one after the other, according to the needs of the locality. Iron and Steel Works must be put up in each of these regions to supply the local demand for manufactured iron. What amount of capital should be invested in these additional iron and steel works must be thoroughly investigated by experts. But I should say that a sum equal to or double the amount to be invested in the Chili and Shansi iron and steel works will not be too much, because of the great demand which will result in the development of China. PART II The Mining of Coal