Times Colonist from Victoria, British Columbia, Canada • 19

i FEATURES Times Victoria aily THIRD-SECTION i. ii VICTORIA, B.C., SATURDAY, NOVEMBER 12, 1932 League of Nations Tackles MancKurian Problem Next Week The Charge, But What Will It Do When Japan "Goes Trial" for Alleged Aggression1 for Which the Shanghai Incident was Only a Smoke Screen? i the Defence and Possible Outcomes and Background of Assembly's Discussions Are Here Explained SOVIET RUSSIA fsmeM) U.S.NAVY I i tvi. hesebvatims PENINSULA hi fin jIL ii yi jy i KURILE IS. ftyJ 1875 JM 1 10 MANILA 4750 MILES s' iA-Vyf 1 iiaiMdSSi I A7" 'L air iv. ju CAROLINE IS.

MtU 1 xSh- A GLIMPSE OF JAPANESE DESTRUCTION IN SHANGHAI, wrought In that city's Chapel district, la shown above. Inset is Tsujoshl Innkal. Japan's 1 7-year-old premier, who was assassinated In May by militarist fanatics, after which army leaders took control of the government In Toklo and accomplished their conquest of Manchuria. POWER AND Pl'PPET IN MANCHl Kl'O. At the left Is Sado Arakl, Japan's minister of war, power behind the government which set up the "Independent republic." At the right Is Henry Pu-VI, former boy tjnperor of China, placed by Japan at the head of the new government.

Centre shows the headquarters of the Manchukno government ti Changchun. against Japan until she decides, to This news-map shows the progress of Japan's territorial expansion In the Orient, with the dates the various areas were acquired, and also the relative positions nt Japanese naval bases in the Pacific. It shows that Japan and her possessions, fence-like, now fringe the eastern coast of Asia from tha-Arctlc to the tropics. EDITOR'S NOTE: Timely is this story on developments in the Far Eastern situation since the warfare at Shanghai, a situation mhich is due to come to a climax on November 1 4 when Japan "goes, on trial" before the League of Nations assembly for alleged violation of treaties in siezing Chinese territory in JUST a- little Jess' tFan'a' year ago the long-nosed guns of Japan's navy were hurling shells on Shanghai, Japanese machine gun crews were sweeping through the streets of the terror-stricken Chinese section' and Japanese airmen were dropping bombs on the smoking ruins to complete the picture of death and destruction. What has.happefie'crimce:That time when Japan defied the world to inflict a terrible -object lesson: on "China for boycotting live up to agreements.

4. Japan can tell the League to go to hang, resign from membership and continue to do as she pleases in China. Tl'RN JO MILITARISTS Gripped by an economic depression worse than that in. America, the Japanese people have turned blindly to the militarists who promise to lead the States government likewise, refuses to recognize the fruits of Japan's militarism In Manchuria. But Japan, apparently cares liUle-she has Manchuria now and, from all Indications, Intends to keep It.

Never before a nation been placed on' trial before the world, accused -of' International robbery, as Japan 'will be at the forthcoming momentous session of the League of Nations. 6ummed up, the trial amounts to this: anteed all existing Japanese rights in Manchuria, was set up under the regency of the former boy emperor of China, Henry Pu-yt, JAPAN'S VtSt IIISTORf Japan organized this government, wrote its constitution, selected Its personnel, staffed Its offices with advisers, supplied money and guarded the whole setup with a strong military force. That Is the situation tb-day, Thus another chapter has been written In the history of Japan's expansion by force of arms. It follows the clever little empire's seizure of the nation out of its troubles. For a long time these leaders have fed the people with rumored 'threats of- an attack conditions in China had become so Impossible that Japan, her neighbor, was compelled to take action to protect Japanese Interests.

(The western powers' position Is that when Japan Signed this treaty she was well aware of the unfortunate conditions In China and the fact that, conditions may have grown worse cannot be used as an excuse for violation.) 2. With regard to the Kellogg-Brland pact, the Japanese reply that they have committed no nviolations; that their actions in Manchuria were in self-defence, and in accord with reservations made by leading countries. (It Is now to be determined whether Japan acted! lit self-defence.) 3. With regard to the covenant' of the League of Nations, the Japanese reply that there was no seizure; that the, people of Manchuria rebelled against China and set up an independent government for themselves. "(Whether Japan is.

using this Japanese-made goods? THE CHARGE from across the Pacific. Japanese distrust is shown in' recent public utterances. General Nobuyoshl Muto, commanding Japanese officer In Manchuria, de and it was "sold" to Japanese audi, ences as an example of the naval effU ciency of a dangerous And what of China's 'future courss if the League of Nations falls to evict Japan from Manchuria? China past and weak, but with traditional Celestial patience has a method. alL her own. The Japanese military' ''campaign has been costly The nation has been forced off the gold standard, the yen has funk to less than half lt par value.

Per the first time In history, Japanese securities are lower than Chinese, and the government Is at Its wits' end as to how It can pay foreign loans due this year and next. Japanese taxes have multiplied several times over (from 50 to 60 per cent of taxes goes for war purposes) but revenues are far There Is a gaping deficit In the. national budget, the trade balance Is off 250 million yen, millions of Japanese workmen are unemployed and whole provinces of peasantry are living on grass roots. The Chinese boycott against Japanese-made' goods still operates, desplta the terrible punishment at Shanghai, and Industrial Japan must look ts China's 400,000,000 people for the bulk of Its. trade.

Despite its military success, the conquest of Manchuria has been an economic failure. Many millions of yea have been poured into that venture, and almost nothing has been returned as the region still is in Japanese army authorities In Man mere smoke screen, for the real purpose of apan still lay In Manchuria, as later events proved. MILITARISTS IN CONTROL Throughout February and despite the efforts of the powers to bring peace In Manchuria, the Japanese campaign continued. The Chinese refused to discuss peace -terms until the Japanese Invaders retired from their soli; this the Japanese refused to do. In May, the' militarists of Japan gained added strength when there developed a fresh outburst of political assassinations and bomb throwing by young army and navy officers.

Prime Minister Inukal was killed, the gov-ernmeht. fell and was replaced tfy a new government, which was a merely a tool of the army. Saa Arakl, Japan's minister of war, became the power behind the new government. He Is still in In August, Count Uchlda, the Japanese minister of foreign affairs, announced plans to recognize a new re-, public in Manchuria to be known as Manchukuo. Dr.

Lo Wen-kan, the Chinese foreign minister, was quick to reply that "Japan has now cast off her mask and openly revealed her scheme of aggression In China." In September, Japan formally "recognized" this puppet state of her own creation. A government, which guar clared: "Should anybody attempt to obstruct solution of the Manchurlan question, we should be obliged to November 14 when the League of Nations meets at Geneva to' take up China's charges. But to make this story clear, it Is necessary to go back to September, 1931, when someone there Is a lot of mystery about It damaged a Japanese-owned railroad Just north of the Chinese city of Mukden. The Japanese thereupon Invaded Manchuria "to restore law and order." combat such Interference relentlessly no matter who they may be." japan is accused of violating three great -International treaties which bind the leading nations of the world, each of which Japan signed. These treaties are: 1.

The Nine-Power Pacific Treaty, signed at the Washington arms conference of 1922, which guarantees the Integrity of China. "2. The Kellogg-Brland Treaty to outlaw war by pledging nations to abolish war as a national policy. 3. The covenant of the League of Nations, an Instrument for settling disputes member nations without application, to' force and which calls for mutual consent in the readjustment of boundaries.

A recent example of the spy scare hysteria came W-ien the Toklo branch of the National City Bank of New York pendent republic" as a pretext for China's millions, striking back Kurlle Islands in 1875, Formosa in the Chinese-Japanese war of 1895; Kwanj tung, and Sakhalin from the Russians in 1905 and the ultimate annexation of Korea in 1910. When the League of Nations assembly meets In. Geneva next Monday It will have before It a report by a commission of disinterested neutral Investigators whom It sent to Manchuria last summer. This long awaited report of the Lytton commis-slon, recently made public, Is unfavorable to the Japanese; It refuses point blank to recognize Japanese domination over Manchuria and emphasizes China's right to suzerainty in that region. The commission was headed by Lord' Lytton, an Englishman, and contained an American, a Frenchman, an Italian and a German, The United ran into serious trouble with the gov.

In the months that have elapsed, this small but mllitantly aggressive island empire has completely and efficiently overrun China's rich province of Manchuria and set up there, under the protection oi Japanese bayonets, the of Maa-chukuo. i "LAW 'AND ORDER-' Continuing Its policy of expansion by conquest, Nippon has taken, by force of arms, China's richest region an area as big as France and Germany combined, which than half of the railroads In China and which la Immensely rich In both' 'agricultural and mineral resource's. For this "theft" of a neighbprlfiK nation's choicest area In which violation of three great international treaties is charged Japan is scheduled to be placed on trial before the world bh eminent while taking photographs of against a powerful military enemy seizing Chinese territory is a question for decision.) the city for- publicity purposes. The War Office made the accusation that the pictures were actually for use in with the best weapon "at their command, declared a boycott against Japanese goods. This act cut at the POSSIBLE OUTCOME case of American air aids over Japan.

Later, the Poren Office announced economic heart of industrial Japan, which finds most of Its market in it attacned no blame or suspicion." CHINA BIDES TIME A recent movie based on the ex. China, and. the terribla object, lesson JAPAN'S DEFENCE 1. The League can Japan and camouflage her Manchurlan protectorate by sidetracking the Lytton report. 2.

The- League can. call for a diplomatic, economic and financial boycott of. Shanghai followed in January Japan gave as herTeason that Japanese lives and property were endangered. churia estimate it will take them from five to seven years to establish order. And China, weak but very patient, Is convinced that Japan will be bankrupt long before that time.

plolts of navy flyers, created a sensation when It was shown in Japan. Its title, "Hell Divers," was changed to "The. Bombing Corps of the Pacific," 1. With regard to the Nine-Power Pacific. Treaty, the Japanese reply that Shanghai, the Chinese said, was a How; Your Taxes Have Been Increasing Faster Than Anyftiing, Else Trouble Canada Chiefly Due to Fact That Our Governments Persist in Spending $134 to.

$152 for Each $100 They Take In; Now We Have to Pay Out In Interest Alone More Than Our Total Revenue Twenty Years Ago TAXES-pkcapita AGGREGATE DOMINION-PROVINCIAL and MUNICIPAL. ri pared by W'. Sanford Evans of Winnipeg, and which is one of a series, concludes. INTEREST CHARGES PILE IT: TAXPAYERS' BURDEN'S Canadian- governments on the the past eighteen years "'have been spending $134 for every $100 of according to Santord Evans, Winnipeg statistician, who' has been conducting a series of researches intoHhe cost of government for the Canadian Chamber of Commerce. The says Mr.

Evans, has been added to-debt, This average represents also approximately the -relative expenditures of the Dominion. Provincial govern- 'CfJlBIXED taxes levied by Dominion, provincial and municipal governments in Canada -were: K95-6 55,000,000 1904-5 93,091,361 1913-14 $238,036,485 1921-22 $580,851,718 1929-30 $772,969,615 Pe'r capita, the levies are as shown in the diagram 1895-6 $10.94 1904,5 $15.98 1913-14 $31.20 1921-22 $66.10 1929-30 $77.08 public domain, fines for infraction of laws, regulatory licenses, yield revenues. Then fees, or payments for special services, such as postage for main services and charges for water, light, power or transportation when supplied by governments, are important contributing sources. WHAT ARE NOT TAXES No sharp boundary line can be drawn, either theoretically- or practically, between this class of charges and what are called taxes. All Imposts are for the purpose of enabling government services to be performed, but where a charge is for a specific service and Is fixed in some relation to the estimated cost of that specific service it Is not ordinarily called a tax.

"For 'all "general" services of governments, including the making good of deficits, If any, on specific services, governments raise money wherever they think It can most conveniently or with least social disturbance, be obtained. These Imposts are classed as 6 at stated rates of Interest. If provision tor repayment out of income is not made, other money must be borrowed to refund Interest continues a fixed annual charge. Interest paid in 1930-1931 was or actually appreciably greater than total consolidated fund expenditures for all purposes In 1912-13, of $112,059,537., Total revenues of the Dominion from all sources were never large enough prior to 1911-12 to have paid the interest bill of 1930-31. MUCH LARGER SHARE In 1930-31 Interest payments by the Dominion were over 9 times as great as in 1912-13.

This ratio, of course, reflects an Increase in average Interest rate, because of heavy borrowings when money was dear, as well as the Increase in debt. In 1930-3 Interest payments constituted over 31 per cent -of all Consolidated Fund charges, whereas in 1912- WHAT IS REASONABLE TERM? If proportionate spending continues. In an easily calculable number of years even present total revenues would not be adequate for interest charges alone. Tor repayment" of debt, still further real financial obligation exists. Borrowed money must be repaid and repayment should be within the period of effective service of the investment.

On this principle, what is a reason able term within which existing debts should be liquidated? They cover objects Hinging from funding current deficits, or grading roads, to the defence of national Interests in war. Would a fair average of effective, service be twenty years, twenty-five years, thirty years? If thirty years, then the Interest charge of the Dominion for 1930-31 of $121,289,944 should be Increased by a little over one-third, or by some of sinking fund, to represent the real annual charge upon income for service of the debt: The extent to which the varloua governments are now meeting sinking fund requirements can be determined only after special Inquiry, but it should be realized that proper debt charge against income are much heavier than the figures of interest alone. All these things necessarily follow from spending $124 to $152 for every $100 of income. merits have spent $152 for every $100 of income. Municipal governments, with their more restricted credit, have 'not Increased debt In the same propor 0- 1329-10 77.0) 1321-22 ft 10 tion, having spent $124 for every $100 I3I3-U 3I 1904-5 1591 1835-6 1094 of income.

These calculations are based a comparison of total income with In crease In gross direct liabilities. MIST BE REPAID 13 they were only llv. per cent of charges one-third as great. According to Mr. Evans, whose re IIIGKER TAXES PER FAMILY Most tax bills are paid by heads of families.

Adopting the census returns of 1921 of 4.62 persons as the average per then taxes per family of 1144.14 In 1913-14 had grown almost 214 times to 1350.10 per family In 1929-30, or almost $30 per month. These Increases have far outrun the indices of basic Industrial and financial development, according to a bulletin ot the National Committee on Economy in Public Finance. The committee 1 organized under the auspices of the. Canadian Chamber of ARE TAXES TOO HIGH? Whether or not taxes are unduly heavy at any time, or are fairly distributed, however, be left to comparative statistics to decide. Taxes are the point at which the practical side of government comes home to individual citizens, and the people have constitutionally gained and preserved the right to determine, Judging for themselves, how great a burden by way of levies may be Imposed upon them.

Taxes are compulsory levies by a government for purposes of its revenues. Not all government Income is derived from taxes, Sales or leases of the Provinces and municipalities do not negregate all Interest charges on their direct liabilities In one account, as port was issued by Col. W. L. McGregor $150 more was required in 1929-30 than in 1913-14, or $294.29 as against $144.14..

general services, what deficits in special services, have caused the Increase? Whether existing taxes are wise or tolerable, it is for the public to determine. The decision is a public responsibility. If, in the negative, the question, will be, What is to ba done about it? the bulletin which was pre money loans, the taxpayers In 1929-30 were required to pay as against (238,036,485 In 1913-14. It may. be said there Is the war debt.

But there are also the war taxes. Deduct the war taxes for 1929-30, and the balance Is still or 270 per cent of the tax bill or 1913-14. IS I TO PUBLIC Ttf family, exclusive of. war taxes, chairman of the national committee of business on public finance, money taxes. i Between 75 and 80 per cent of all government revenues, as appearing In their accounts, are derived from taxes, and the percentage has not declined despite the great extension of special service charges.

NOT ALL DIE TO WAR After users of government utilities had paid all that was charged for postage, water, light, power, transportation, does the Dominion, and therefore fig' urea for these governments exactly corresponding to the above cannot be borrowed by governments creates a direct charge on income for Interest and, moreover, must be repaid. Almost all direct liabilities of governments are given. Their positions are, however, similar; slightly more extreme In some respects lh the case of the provinces, lor money borowed for definite erms.