The fundamental of all progress and reform is character, individual and national. Whenever any reform is proposed it is assumed, as a matter of course, that the proposal is favoured by the inhabitants of the land and that there would be no shirking of responsibility, however much foreign advisers might be employed to help. Human nature being what it is, it means, of course, a proper state of laws and the infliction of penalties for infringing them. European countries, or others that have come under the influences of Western civilization, are not, with all their legislation, able to prevent individuals from giving way to temptation; moreover, the officials in civilized or quasi-civilized countries have to reckon with public opinion and the press, which constitute very powerful agencies to keep public men in the straight path. With few exceptions, the average man is not honest or straightforward because he sets up a certain standard and follows it, although, no doubt, education, public opinion, and environments have created a high standard which is now being adopted by a large number of people. The average man is straightforward because he fears the penalties following on the in fringment of the laws of the land. In the present state of industrial advance, with the increase of individual affluence, the temptations are far too great for common nature not to succumb to them - if the penalties are not sufficiently deterrent. I emphasize this general observation because it has become the fashion among European writers to judge the Chinese as a race rather harshly. It is very doubtful if the modern civilized nations of Europe would be any more moral than Chinese to-day, if they had to live under conditions which the Chinese have to submit to, with practically no laws to govern commerce or individual business, and with no control of any kind on the part of the people in administration or taxation. It is very common to speak of the "squeeze" of the officials; but what could any official do if he had to spend ten times his salary to keep up his position? The head of a district is usually paid about Tls. 200 a month; on that salary he has not only to feed and clothe himself and his family, but has also to keep a miniature court and pay the salaries of scores of minor officials, runners, tax collectors, village magistrates, etc. The line of demarcation between honesty and dishonesty in public life is not usually distinguishable; it depends very much on conditions; in circumstances in which the Chinese have found themselves, it might confidently be asserted that there has been far less dishonesty among officials or merchants than would have been the case if similar conditions prevailed in any other country in the world. The Chinese merchant is as straightforward as his compeers in any other country. If there are defaulters or men who repudiate, the proportion of such is not much larger than in other civilized countries; and in view of the fact that there are no laws governing commerce and no control over them except such as they have voluntarily submitted to, the Chinese merchants certainly follow a higher plane of ethical conduct than that with which they are generally credited. The administration of the country, on the other hand, has not done its duty to the individual. It is not a fair proceeding to place temptation in the path of the individual, leaving no rule of conduct except an ethical standard, and convict him of dishonesty when he swerves even to the slightest extent. It is therefore of extreme importance that the civil and commercial laws of China should be brought up to the level of those of other countries; only when the laws covering the individual conduct are properly regulated would any reform prove successful. This point is beyond the scope of my work and my object in referring to this subject is simply to show that the human element should be carefully attended to. Although my proposal relates to the finance and economics of this country I have to make a brief reference to other necessary reforms. In my work "Finance In China" I have given a bird's-eye view of the economic situation as it is to-day, with brief references to the past. I have explained enough to show that the present position was not brought about deliberately by; the government or the people; and the foreigners having political and commercial relations with this country have also not been solely responsible for it. A conspiracy of circumstances has brought about a result which is now very much deplored. When the Chinese placed obstructions in the path of commerce or when the budgets were cooked in order to show prosperity, the authorities had really no intention of committing a venal act; when the Powers sometimes acted in a manner which appeared to be unfair, they certainly as a rule have had no intention of acting against the interests of the country. It is fruitless to go in detail into the motives of the several acts of China and the Powers that have brought about an unsatisfactory economic situation. In my book "Finance In China" I have detailed several incidents that have led up to the present state of affairs. I now propose to find remedies for the ills of the body politic.
To sum up briefly the resultant situation is as follows: China is loaded with a huge debt, partly through her own fault; but it would be a flea-bite if only the resources were fully developed, either on her own initiative or with the aid of foreigners. The country is sadly lacking in communications; about 5,000 miles of railways are open and the total mileage including the projected lines is only about 12,000. China with her dependencies has an area of 3,300,000 square miles; India with less than half the area has over 35,000 miles of railroads in operation, besides a number of projected lines. I do not wish to compare China with any European country in this respect, for the conditions of wealth, trade and industry in these countries are so different as not to permit of any parallel to China. Throughout the length and breadth of the land there are no roads in the real sense of the word.