street children. Rows of granite flagstones were laid at either side of the immaculate street pavements, and ironshod cart wheels and knife-edged wheel barrow wheels soon learned to keep to

those stone runways strictly. Even the wheelbarrow's shriek was silenced by municipal order. Chinese police saw to it that municipal flower-beds were respected, and a municipal millennium

had arrived. Germans and Japanese have set a high civic standard, and the Chinese should respect its traditions and keep Tsingtau the perfect thing, the model city of the Far East.

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II-SHANTUNG

BY CHARLES HODGES

FTER a battle royal, in which Japan's capture of the key to North China from the German leaseholders at the opening of the Great War was but the first skirmish of a struggle that extended from Far Eastern Foreign Offices and the Versailles Peace to the Washington Conference itself via the American Senate, the Japanese are evacuating the prize of Kiaochau.

The international hue and cry over the question of Japan's control of Shantung was not raised merely because of the leasehold of Kiaochau Bay and the charming Teutonic-Nipponese wateringplace of Tsingtau. Japan did not have to "own" the 55,984 square miles of

Shantung Province or govern some thirty millions of Chinese packed 550 to the square mile in order to control its future. That was a matter for what statesmen call "economic imperialism" to all intents and purposes conquest by railway, bank, and business diplomacy.

When the German Empire occupied this corner of the old Middle Kingdom during the "battle of concessions," ostensibly as reparations for a missionary outrage, it was for the very purpose of effecting the economic penetration of China. The object of Japan was the same, and was clearly evidenced from the first days of the Great War. It was to make out of the privileged position so

easily seized from the Germans in Shantung a new Japanese preserve tha would have affected the future of all North China. Japan had done this once before in the case of Manchuria, just across the Gulf of Pechili from Shantung.

THE ECONOMIC STAKES

When the Japanese military occupation of the German interests in Shantung was completed in 1914, the tangled skein of hard-handed diplomacy, business, and a new nationalism in the East was brought before the world for unraveling.

The 400 square mile leasehold, including Tsingtau engirded by the 2,500

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square miles of neutral zone about Kiaochau Bay, does not tell the whole story, The lodestone drawing the Mikado's land into the Shantung adven ture consisted of (1) coal deposits much overrated; (2) iron resources of considerable magnitude; and (3) new commercial opportunity promising to relieve the pressure in part on Japanese industrialism. An accurate understanding of the Japanese stakes here would include, therefore, a 256-mile shoestring of railway stretching from the city of Tsingtau as the railway terminus and harbor to Tsinan, the capital of the province, where the hinterland of North China could be tapped by existing connections with the Chinese Government trunk line running north and south-which were to be fortified by subsequent concessions.

Japan, it must be remembered, occupied this railway zone from the sea to the interior as though it were Japanese territory. A gore ten miles wide was driven through the heart of Shantung, the only modern communications within the province itself being garrisoned, policed, and politically administered with Japanese civil courts along the railway and its branches to the mines. Within the full extent of the zone, the Japanese succeeded to all the special rights of exploitation wrung by the Germans from China in 1898, and even revived many concessions voluntarily relinquished by the latter prior to the World War.

DIPLOMATIC FORTIFICATIONS

The present settlement has been reached only because one by one various agreements upon which, as diplo

matic fortifications, the Japanese depended for their tenure in Shantung have been broken down.

The recession of Japan's position is marked by four stages. First, Japan forced on the Chinese the ill-advised Twenty-one Demands of 1915 as an ultimatum to stifle diplomatic efforts to oust the Japanese from Shantung, leaving the Mikado's land for practical purposes master of the situation. Second, not satisfied with either the secret treaties of 1917 under which the Allies assented to Japan's programme or the grip on China developed during the Great War, Japan maneuvered the Peking Government in 1918 into two new agreements. These marked a turning-point in the Japanese policy. On the one side, they strengthened the grip of Japan on Shantung through new railway rights. On the other side, they yielded to the Chinese the military control and civil administration of the existing railway. Third, the Peace Treaty signed at Ver sailles gave everything to Japan with the unwritten commitment that she was eventually to restore Chinese sovereignty while retaining material economic advantages. Fourth, the negotiations just consummated to carry out the provisions of the Washington Conference settlement provided for a retrocession to China of political control exercised by Japan; the nationalization of the disputed railway communications; the turning of the strategic extensions over to "an international financial group;" the surrender of the original German cables, the Japanese wireless stations at Tsingtau and inland at Tsinan, and public properties; and Japan's renunciation

THE REAL MEANING OF THE SETTLEMENT

The significance of the Shantung settlement cannot be overestimated. Japan, it is true, gains material and moral compensation for doing the right thing: but China assumes obligations which she has yet to prove her ability to meet.

Japan has accepted a foreclosure of public opinion East and West upon her actions. They involved the perpetuation of the old order in the Orient, a breeder of war through militant political and business aggression from a dangerous use of military power. In this picture of the outcome of a bold bid for a new dominion in the Far East there is no hostility toward the Japanese people. Yesterday Japanese statesmen perhaps had reason to think this was the surest way to prosper the Mikado's land. Today those in the high places of Tokyo wisely sense the costly futility of the whole approach to position in the East based upon international ill will and distrust. These leaders of Japan, shaking off the burden of War Office diplomacy, are realists in world politics still; but they understand that the politics born of the Great War have been far too costly to serve further useful ends.

Great as has been the lesson of Shantung to China of the dangers of national backwardness, it has meant far more to Japan. Disillusioned as to the dividends from abuses of national strength, awakening from the alluring dream of empire, workaday Japan is now bent on capitalizing the more certain returns from neighborly friendship and confidence.

A

N impression prevails that La Follette's

political apogee was

reached in 1912, when he seemed to be a stone's throw from the Presidency. On the contrary, he is only now, ten years later, approaching the peak of his political power, which will reach a very high curve beginning March 4, 1923.

In the next Congress no man will have greater potential influence. In the field of economic legislation, the most important with which Congress has to deal, it will be extremely difficult to put anything through against him, and whatever he desires to originate will have a high chance of success.

In fact, for the coming six years Robert M. La Follette will be practically the American Chancellor of the Exchequer-if we had such an office. It sounds absurd, considering his policies and his record. To many it may sound alarming. But it is true.

This is not primarily because La Follette is La Follette-one of the most vital and consistent political economists in public life anywhere in the world. It is not only because the late elections have given the balance of power in Congress to the radicals. Yet each of these causes enters into the result.

La Follette will be the new arbiter of American economic legislation through the operation of the rule of seniority in the United States Senate.

Months ago, anticipating the results of this election, I asked Lenroot what would happen in such an event. Would La Follette be permitted by the Senate to rise to the place of Smoot and Townsend? "Never!" he exclaimed; "the rule of seniority will be first abrogated." I asked Smoot the same question. "It is possible," said he. It is likely that Lenroot's certainty has been modified since November 7.

This apparition of the intense noncompromising radical in the seats of the mighty is not a new one in the sight of history. It is one of the commonplaces of political evolution. Yet it never fails to startle its contemporaries. And the American public is going to be startled when it sees La Follette next to the former seat of Aldrich and of Penrose.

Consider the situation. La Follette, ending eighteen years in the upper house, is now the third member of both the Inter-State Commerce Committee and the Finance Committee. These two committees, with the Committee on Appropriations, control economic legislation. As appropriations concern only expenditures, practically all creative policies affecting the economic life of the country originate either in the Finance or in the Inter-State Commerce Committees. Committee chairmen, together with ranking members of the majority party,

See editorial comment on La Follette on an"page.

This portrait of La Follette helps us to understand the fact that as a young man he wrote to Booth and offered a suggestion to the latter as to an Improvement in his histrionic technique

as the Senate is organized and operates, practically dictate legislation.

In the present and the last Congresses La Follette has been a constant menace to the conservative Republican leaders, yet he is only the third member of the two important committees. To prevent his entering the conference committee on the Tariff Bill-this is the solar plexus of Congress, for it is here that all tariff schedules are really written the former rule taking in the three ranking majority members of the Senate Finance Committee was changed to take into con

ference with the similar committee (Ways and Means) from the House only the two ranking members.

But they can't keep La Follette out of conference in the drafting of any economic legislation in the next Congress, for McCumber's defeat in North Dakota will advance Smoot to the chairmanship of the Finance Committee and will make La Follette the ranking member. And in conference there must be at least one of the minority, so the majority will have to be represented by at least Smoot and La Follette.