The Liaoho-Sungari Canal is the most important factor in the future prosperity of Yingkow. It is by this canal only that this port can be made the most important of the second-class seaports in China and further the vast forest lands, the virgin soil and the rich mineral resources of North Manchuria can be connected by water communication with Yingkow. So this canal is all important for Yingkow, without which Yingkow as a seaport could at most hold her present position, a town of 60,000 to 70,000 inhabitants and an annual trade of $30,000,000 to $40,000,000 only and could never gain a place as the first of the second-class seaports in China. This canal can be cut either south of Hwaiteh in a line parallel to the South Manchurian Railway between Fan Kia Tun and Sze Tung Shan, a distance of less than ten miles, or north of Hwaiteh in a line between Tsing-shan-pao and Kaw-shan-tun, a distance of about fifteen miles. In the former case the canal is shorter but it makes the waterway as a whole longer, while in the latter case, the canal is about twice as long but it makes the waterway as a whole shorter between the two systems. In either line, there are no impassable physical obstacles. Both lines are on the plain but the elevation of the one may be higher than that of the other, which is the only factor that will determine the choice between the two. If this canal is constructed, then the rich provinces of Kirin and Heilungkiang and a portion of Outer Mongolia will be brought within direct water communication with China Proper. At present, all water traffic has to go by way of the Russian Lower Amur, then round a great detour of the Japan Sea before reaching China Proper. This canal will not only be a great necessity to Yingkow as a seaport, but will also have a great bearing on the whole Chinese nation economically and politically. With the Liaoho-Sungari Canal completed Yingkow will be the grand terminus of the inland waterway system of all Manchuria and Northeastern Mongolia; and with the approach from the sea deepened it will also be a seaport next in importance only to the three first-class world ports. b. Haichow