to the German Consul General, Japan wants to retain the power for the decision whether the development of certain industries in China should be permitted at all, which would be regulated according to the requirement of the Japanese economy. “As far as the Chinese factories are still existing, they will be taken over by the Japanese. For instance the cotton spinning industry of Middle China has thus been taken over by Japan and has been divided up for management by Japanese spinning mills. “Usually this happened in such way that one day Japanese engineers, most of the time with military escort, appeared, hoisted the Japanese flag and put up signs on which it was announced that the factory was now a Japanese enterprise. The Japanese emphasized that they only aspire to ‘cooperation’ with the Chinese owners who are invited to bear the repair expenses, which are usually considerable, to agree to the appointment of a Japanese manager and a technical advisor and to be content with a partition of the net proceeds. (W VII 1876). “Should the Chinese owners object, then they are put under pressure either by refusal of admission to the factory buildings and other administrative measures or the resumption of the management takes place without Chinese consent. In this procedure it is not the arbitrary acts of individual military authorities, but they are the systematic attempt, which is approved by the Japanese Government to manage