The ideological establishment of a race-national outlook would have far-reaching consequences that might well continue working themselves out for centuries. The immediate exercise of this sense of unity was to be developed through a loyalty to state allegiance, which would also of itself be significant. These two new patterns—the one ideological, and the other institutional—running through the Chinese society and social mind were vitally necessary. But after the institutional habit of state-allegiance had been developed, what was the new democratic state, the instrument of the awakened race-nation, to do in the way of practical policies to give effect to the new consciousness and strength of Chinese nationalism?

Sun Yat-sen, whose principles tended to develop themselves in terms of threes,230 cited three perils constituting a threat to the Chinese society. The first was the peril to the Chinese race, which was faced with the possibility [pg 176] of decline in an expanding Western World and might even become vestigial or extinct. This peril was to be fought with race-nationalism. The second was the peril to the Chinese polity, the danger that China might become politically appurtenant to some foreign power of group of powers. This was to be fought with democratic race-nationalism. And the last, and most insidious, was the peril to the Chinese economy, the looting of China by the unfair economic measures of the great powers, to be met by a nationalist economic program. Sun Yat-sen was most apprehensive of the combined strength of these three pressures: “... I fear that our people are in a very difficult position; and I fear that we may perish in the near future. We are threatened by the three forces I have mentioned: namely, the increase of foreign population, the political force, and the economic force of the foreigners.”231

Of the three forms of the foreign oppression of China, the economic, because it did not show itself so readily, and was already working full force, was the most dangerous. It was from this oppression that China had sunk to the degraded position of a sub-colony. “This economic oppression, this immense tribute is a thing which we did not dream of; it is something which cannot be easily detected, and hence we do not feel the awful shame of it.”232

Sun Yat-sen, as stated above, was not hostile to the development of that portion of foreign capital which he regarded as fairly employed in China, and spent a great part of his life in seeking to introduce capital from outside. He did, however, make a distinction between the just operation of economic forces, and the unjust combination of the economic with the politically oppressive. Foreign capital in China was not oppressive because it [pg 177] was capital; it was oppressive because it held a privileged position, and because it was reinforced by political and military sanctions. There is no implication in Sun Yat-sen's works that the operations of finance, when not unjustly interfered with by political action, could, even when adverse to China, be regarded as wrong of themselves.

In what ways, then, did foreign capital so invest its position with unjust non-economic advantages that it constituted a burden and an oppression? There were, according to Sun Yat-sen, six headings under which the various types of economic incursion could be classified, with the consequence that a total of one billion two hundred million Chinese dollars were unjustly exacted from the Chinese economy every year by the foreigners.

First, the control of the Customs services having, by treaty, been surrendered by China, and a standard ad valorem tariff having also been set by treaty, the Chinese had to leave their markets open to whatever foreign commerce might choose to come. They were not in a position to foster their new modern industries by erecting a protective tariff, as had the United States in the days of its great industrial development.233 China's adverse balance in trade constituted a heavy loss to the already inadequate capital of the impoverished nation. Furthermore, the amount of the possible revenue which could be collected under an autonomous tariff system was lost. Again, foreign goods were not required, by treaty stipulation, to pay the internal transit taxes which Chinese goods had to pay. As a result, the customs situation really amounted to the development of a protective system for foreign goods in China, to the direct financial loss of the Chinese, and to the detriment of their industrial development. He estimated that half a billion dollars, Chinese, was lost yearly, through this politically established economic [pg 178] oppression.234 Obviously, one of the first steps of Chinese economic nationalism had to be tariff autonomy.

Second, the foreign banks occupied an unfair position in China. They had won a virtual monopoly of banking, with the consequence that the Chinese banks had to appear as marginal competitors, weak and unsound because the people were “poisoned by economic oppression.”235 The foreign banks issued paper money, which gave them cost-free capital; they discounted Chinese paper too heavily; and they paid either no or very little interest on deposits. In some cases they actually charged interest on deposits. A second step of economic nationalism had to be the elimination of the privileged position of the foreign banks, which were not subject to Chinese jurisdiction, and were thus able to compete unfairly with the native banks.

Third, economic oppression manifested itself in transportation, chiefly by water. The economic impotence of the Chinese made them use foreign bottoms almost altogether; the possible revenue which could be saved or perhaps actually gained from the use of native shipping was lost.

Fourth, the Western territorial concessions constituted an economic disadvantage to the Chinese. Wrested from the old Manchu government, they gave the foreigners a strangle-hold on the Chinese economy. Besides, they represented a direct loss to the Chinese by means of the following items: taxes paid to the foreign authorities in the conceded ports, which was paid by the Chinese and lost to China; land rents paid by Chinese to foreign individuals, who adopted this means of supplementing the tribute levied from the Chinese in the form of taxes; [pg 179] finally, the unearned increment paid out by Chinese to foreign land speculators, which amounted to an actual loss to China. Under a nationalist economic program, not only would the favorable position of the foreign banks be reduced to one comparable with that of the Chinese banks, but the concessions would be abolished. Taxes would go to the Chinese state, the land rent system would be corrected, and unearned increment would be confiscated under a somewhat novel tax scheme proposed by Sun Yat-sen.

Fifth, the Chinese lost by reason of various foreign monopolies or special concessions. Such enterprises as the Kailan Mining Administration and the South Manchuria Railway were wholly foreign, and were, by privileges politically obtained, in a position to prevent Chinese competition. This too had to be corrected under a system of economic nationalism. The new state, initiated by the Kuomintang and carried on by the people, had to be able to assure the Chinese an equality of economic privilege in their own country.

Sixth, the foreigners introduced “speculation and various other sorts of swindle” into China.236 They had exchanges and lotteries by which the Chinese lost tens of millions of dollars yearly.

Under these six headings Sun Yat-sen estimated the Chinese tribute to Western imperialism to be not less than one billion two hundred millions a year, silver. There were, of course, other forms of exaction which the Westerners practised on the Chinese, such as the requirement of war indemnities for the various wars which they had fought with China. Furthermore, the possible wealth which China might have gained from continued relations with her lost vassal states was diverted to the Western powers and Japan. Sun Yat-sen also referred to the [pg 180] possible losses of Chinese overseas, which they suffered because China was not powerful enough to watch their rights and to assure them equality of opportunity.

Sun Yat-sen did not expect that forces other than those which political nationalism exerted upon the economic situation could save the Chinese. “If we do not find remedies to that big leakage of $1,200,000,000.00 per year, that sum will increase every year; there is no reason why it should naturally decrease of its own accord.”237 The danger was great, and the Chinese had to use their nationalism to offset the imperialist economic oppression which was not only impoverishing the nation from year to year, but which was actually preventing the development of a new, strong, modern national economy.

What is the relation of the sub-principle of economic nationalism to the principle of min shÊng?238 Economic nationalism was the preliminary remedy. The program of min shÊng was positive. It was the means of creating a wealthy state, a modern, just economic society. But the old oppressions of imperialism, lingering on, had to be cleared away before China could really initiate such a program. Not only was it the duty of the Chinese national and nationalist state to fight the political methods of Western imperialism; the Chinese people could help by using that old Asiatic weapon—the boycott.

Sun Yat-sen was pleased and impressed with the consequences of Gandhi's policy of non-coÖperation. He [pg 181] pointed out that even India, which was a subject country, could practise non-coÖperation to the extreme discomfort of the British. The creation of race-nationalism, and of allegiance to a strong Chinese state, might take time. Non-coÖperation did not. It was a tool at hand. “The reason why India gained results from the non-coÖperation policy was that it could be practised by all the citizens.”239 The Chinese could begin their economic nationalist program immediately.

Sun Yat-sen pointed out that the basis for the weakness of China, and its exploitation by the foreigners, was the inadequacy of the Chinese ideology. “The reason why we suffer from foreign oppression is our ignorance; we ‘are born in a stupor and die in a dream’.”240 Conscious of the peril of the foreign economic oppression, the Chinese had to exert economic nationalism to clear the way for the positive initiation of a program of min shÊng. In practising economic nationalism, there were two ways that the Chinese could make the force of their national union and national spirit felt: first, through the actual advancement of the programs of the whole of nationalism and the progress of the political and economic condition of the country; second, through non-coÖperation, “... a negative boycott which weakens the action of imperialism, protects national standing, and preserves from destruction.”241