The Yellow Peril.

New York Times 100 years ago today, October 2, 1912:
    Mr. Schwab informs his countrymen, through a Berlin interview, that the Chinese peril is industrial, not military. Those who have refused to be affrighted by the military peril will preserve their equanimity over the industrial peril. It is true that China has made some freak exports of pig iron to the Pacific Coast, but the opening of the Panama Canal will remedy that. Such imports prove the high cost of transcontinental freight traffic rather than the cheapness or excellence of Chinese iron. They were hardly justified economically, as the matter stood, and they will not be justified at all when the freights are halved.
    Besides, China exported that iron only because of its lack of home demand at a time of unusual prostration by civil war and extreme backwardness of industrial development. In proportion as China awakens it will arouse a home market needing home supplies. With an extremely dense population China has hardly any railways, and the need is so pressing that most of the loans now projected are for railway construction. When China is building railways on any scale commensurate with its needs it will not export the iron which might be made into rails, but is more likely to import products of iron and steel from other countries, and from none more likely than from the United States.
    The Chinese cheap labor which abounds, and which suffices for such coarse work as making pig iron, is so little suited for advanced processes that we will probably export machinery and finished metal products, whether or not China sends us raw iron. In just that manner we long furnished raw materials to the rest of the world, and took back finished articles. The last cotton crop year was the first year in which the cotton-producing States manufactured more cotton goods than the other States of the Union. It has taken a century to produce that result, and it will be more than a century before China becomes an industrial peril. In the interval its teeming millions are likely to develop a consuming power which would make China an industrial outlet rather than an industrial competitor on any considerable scale.