tion in November approached exchanges dwindled perceptibly. Immediately after the November election increased activity and deferred settlements swelled exchanges to the highest point ever reached, and the amount continued heavy throughout the year. In April, May, and June it was unusually large because of the heavy stock sales. Compared with 1899 the closing months of last year are quite as good as the opening.

Bank exchanges this week at all leading cities in the United States are $1,955,111,085, a loss of 6 per cent compared with last year, but a gain of 18.4 per cent over 1900. Exchanges continue satisfactory in volume; they include the heavy settlements of the first day of the new year, whereas last year there are two days and in 1900 three days, all heavy days. In part the losses compared with last year are due to this fact. Figures for the week are compared below for three years:

Nor can legislation stop only with what are termed labor questions. The vast individual and corporate fortunes, the vast combinations of capital, which have marked the development of our industrial system, create new conditions and necessitate a change from the old attitude of the State and nation toward property.Theodore Rooseve, in speech at Minneapolis, September 2, 1901.

Corporations engaged in interstate commerce should be regulated if they are found to exercise a license working to the public injury. It should be as much the aim of those who seek for social betterment to rid the business world of crimes of cunning as to rid the entire body politic of crimes of violence.-President Roosevelt, in message to Congress, December 3, 1901.

OUR DIPLOMACY IN THE ORIENT.

MCKINLEY'S POLICY SAVED CHINA FROM DISMEMBER

MENT.

The interest of the United States in the peace and permanence of the Chinese Empire, while liable to escape the attention of those not conversant with the details of the commercial and political movements of the European powers in the Far East, is worthy of the serious consideration of every thoughtful American citizen. When we reflect upon the probable consequence to our domestic industries of a sudden arrest and cessation of our export trade, which now shows a favorable balance of more than $600,000,000 per annum, we realize that our national prosperity is, to a considerable degree, bound up in the retention and expansion of our foreign markets. If we make a mental survey of the globe with the purpose of ascertaining in what directions it is possible to extend our foreign trade, we shall see that the great Chinese Empire, with its population of nearly 400,000,000 souls, presents the largest possibility of commercial development of any portion of the earth's surface. The African continent has within the last fifty years been gradually drawn into the circle of European control by the establishment of colonies and the creation of "spheres of influence" until at present there is no portion of that vast region which is not under the more or less recognized predominance of European nations. In effect, the partition of Africa among these powers is already complete, and its future trade is subject to such restrictions or preferential treatment as these powers may choose and be able to impose.

Encroachment of a kind similar to that which has resulted in the partition of Africa has for some time seemed inevitable for the ancient and feeble Chinese Empire. Its dismemberment in the interest of several great powers was forecast as almost certain, when Secretary Hay opened a general diplomatic correspondence on the subject with the principal foreign offices of the interested countries and succeeded in obtaining from each of them a disavowal of intention on the part of that particular government to attempt

the dismemberment of China.

The Boxer Rebellion. The result of this correspondence was to render it morally impossible for any one of the interested powers to take the first step toward the dismemberment of China without self-stultification before the civilized world. Soon afterward the Boxer rebellion, which disclosed to an alarming extent the internal

weakness and almost total impotence of the Chinese Government, as well as a state of anarchy at Pekin and the nearer provinces, furnished a new occasion for international intervention and created a situation fraught with the gravest dangers to the integrity of the Empire. Marines and troops were landed for the defense, and finally the rescue of the legations at Pekin, which were exposed to a cruel assault that lasted through many weeks of terror for the inmates and of anxiety for the entire civilized world. The German minister, Baron von Ketteler, was killed, it is believed by a Chinese soldier at the commencement of the outbreak, thus exposing China to the danger of accountability to a great power for a violation of international law unprecedented in modern times. It seemed as if, with Russia ready to press for advantages in the north, France disposed to extend her influence in the south, Germany with a serious grievance to redress and an already established center of influence in the Shantung peninsula, and other powers certain to claim compensation for the wrong done to the legations, while the feeble Chinese Government resorted to flight from its capital, that the occasion had arrived for the cupidities of the powers to assert themselves to an extent which might involve the destruction of the Empire.

In this critical situation the administration of President McKinley found itself put to an extreme test. On the one hand, the protection of American life and property was necessary; on the other, the sending of troops for this purpose seemed to involve a war with China in concert with powers more or less hostile to the integrity of her territory and not unlikely to demand its partition as retribution for the outrages committed and in compensation for the enormous expenses of the campaign. Two positions were promptly taken by our Government, the wisdom and justice of which are now unquestioned. In his circular note of July 3 Secretary Hay boldly defined the attitude of the United States as favorable to the maintenance of the territorial integrity of China. Refusing to assume that the attack on the legations was an act of war against the powers by the Imperial Government, he continued his recognition of Mr. Wu, the sagacious minister of China at Washington, and through him his relations with the absentee Emperor, pointing out to the world that China was in a state of domestic insurrection rather than a state of war with foreign powers; for it was evident that the only hope of maintaining the unity of the Empire and the integrity of its territory was in the rehabilitation of the Imperial authority. The results of this attitude were: (1) the successful transmission of the cipher telegram to Minister Conger, through the good offices of Minister Wu, which was the means of informing the world that the rescue of the legations

was still possible when all hope had been abandoned; (2) the cooperation of the powers in the suppression of the insurrection without declaring war on the Empire, and (3) the ultimate recall of the Imperial Court to Pekin, its reestablishment in authority, the settlement of the difficulty by a money indemnity instead of a territorial occupation, which would probably have been indefinitely continued, and the final evacuation of Pekin by the forces of the intervening powers. It is true that these results could not have followed without the cooperation of the powers, but it is not difficult to perceive that it was the leadership of the United States, first in creating a moral situation which had evoked a general disavowal of cupidity on the part of the powers, and then in the exercise of a moderating influence by urging upon all a program of justice and magnanimity, that China escaped permanent military occupation and ultimate territorial dismemberment.

Success of American Diplomacy. The difficulty of this task did not consist alone in directing and harmonizing the purposes of the powers, it was necessary to exert a tonic influence upon the Imperial government of China also, in order to effect the rehabilitation of its authority. In the communication of the Emperor of July 19, 1900, he expressed his "special reliance upon the United States," and asked that this Government "take the initiative in bringing about a concert of the powers for the restoration of order and peace." In his reply to this appeal, dated July 23, 1900, President McKinley said: "The purpose for which we landed troops in China was the rescue of our legation from grave danger and the protection of the lives and property of Americans who were sojourning in China in the enjoyment of rights guaranteed by treaty and by international law. The same purposes are declared by all the powers which have landed military forces in Your Majesty's Empire." Thus, fixing once more the former declaration of the powers as the standard of their obligations, the President proceeded to mark out for the Emperor the only path that could save his Empire and to demand his acceptance of it, namely, prompt assurance as to the condition of the legations, immediate communication with their respective governments, cooperation of the Imperial authorities with the relief expedition, and the liberation of the besieged ministers. Upon these conditions only the aid of this Government in the settlement of the troubles was promised, and thus the Chinese authorities were brought to a sense of their responsiblities and made to see that their only hope of rehabilitation was in frankly accepting them.

It was by such wise and farsighted diplomacy that the Chinese Empire was rescued from its imminent peril of annihilation. Having brought that government face to face with its stern necessities,

it was still necessary to strengthen it for the performance of its international duties. When Earl Li was designated to negotiate for China with the powers, President McKinley demanded that his credentials be full and authoritative, "not only for negotiation, but to enable him without further delay to give assurance that the life and property of Americans will henceforth be respected throughout the Chinese Empire." Upon this assurance the journey of Earl Li to Pekin was facilitated and, on September 21, 1900, the minister of the United States was authorized to enter into relations with him and Prince Ching as the immediate representatives of the Chinese Emperor. The example of the United States was followed by the other powers, and the ways of peace were thus prepared.

Prevented Punitive Measures.-What was most needed for the rehabilitation of the Chinese authority for the fulfillment of its new pledges was such freedom of action as would enable it to vindicate itself before its own people and before the world. The occasion for this was furnished by the following proposal of the government of His Majesty the German Emperor, under date of September 18, 1900:

"The government of His Majesty the Emperor considers as a preliminary condition for entering into diplomatic negotiations with the Chinese Government a surrender of such persons as are determined upon as being the first and real perpetrators of the crimes committed in Pekin against international law. The number of perpetrators who served as tools is too great; a wholesale execution would be averse to the civilized conscience. Furthermore, circumstances would not allow that even the group of leaders could be completely ascertained; but the few among them whose guilt is notorious should be surrendered and punished. The representatives of the powers in Pekin will be in a position to make or adduce in this investigation fully valid testimony. The number of those punished is of less importance than their character as principal instigators and leaders. The government of His Majesty the Emperor believes that it can depend in this matter upon the concurrence of all the cabinets; for, indifference towards the idea of a just expiation would be equivalent to indifference toward a repetition of the crime. The government of His Majesty the Emperor therefore proposes to the interested cabinets that they request their representatives in Pekin to designate the principal Chinese personages whose guilt in the instigation or execution of the crime is beyond doubt. A similar communication is forwarded to the other interested cabinets."

On September 21, 1900, the following reply was made:

"The Government of the United States has from the outset pro