) secured freight rates that
practically stifled foreign business competitors. The railway company
now asserts that rebates (formerly allowed, it alleges, because of
heavy shipments) are no longer given; but in many cases the evil
effects of the former rebating policy remain in that Japanese traders
were thus allowed to rush in during a formative period and establish
permanent trade connections.

Meanwhile, too, the relations between the Japanese Government and the
Mitsui Bussan Kaisha are so close that competitors are virtually in
the plight of having to ship goods over a line owned by a
rival--without any higher tribunal to guarantee equality of treatment.
As was recently declared:

"Two directors of the South Manchurian Railway are also directors of
Mitsui Bussan Kaisha. The traffic manager of the railway is an
ex-employee of Mitsui. The customs force at Dalny is not only
entirely Japanese--no other foreigner in charge of a Chinese customs
office employs exclusively assistants of his own nationality--but a
number of the customs inspectors are ex-employees of Mitsui. The
Mitsui company also maintains branches all through Manchuria in and
out of treaty ports. In this way they escape the payment of Chinese
likin, or toll taxes. The Chinese have agreed that these taxes--2
per cent, on the value of the goods each time they pass to a new
inland town--shall not be paid so long as they remain in the hands
of the foreigner. American piece goods often pay likin tax, two,
three, or four times, while the Japanese--sometimes legitimately by
reason of their branch houses, sometimes illegally by bluffing
Chinese officials or smuggling through their military areas--manage
to escape likin almost altogether."

It may not be true that the Japanese customs officials at Dairen (the
treaty provides that China shall appoint a Japanese {89} collector at
this port), ignorantly or knowingly, allow Japanese goods to be
smuggled through to Manchuria--although consuls of three nations a few
months ago thought the matter serious enough to suggest an
investigation--but the evasion of likin taxes in the interior is an
admitted fact.

More flagrant still is another violation of international treaty
rights. Under Chinese regulations foreign merchants are not allowed to
do business in the Manchurian interior away from the twenty-four open
marts, but it has been shown that several thousand Japanese are now
statione