J APAN'S colonial policy aims at extending into its colonies the principle of paternalistic protection followed in the home land. As applied to colonial governments this means the assimilation of the colonies into the organic structure of the Empire. The Chosen Government makes an excellent example for the study of this characteristic of Japanese colonial policy. i. The Problem of Financial Aid. The Japanese Home Government has long made a practice of granting financial aid to the Chosen Government-General. The grant-in-aid from the Imperial Treasury to the Special Account of the Chosen Government-General under the budget of I936 amounted to YI2,9i8,io7, or 3.2 per cent of the budget total. From i9ii, the second year of the annexation of Korea, to i936, the amount granted for administrative purposes alone under such subsidies totaled Y31,869,o89. All military expenses in Korea are borne by the Imperial Treasury and included in the General Account of the budget of the Japanese Government. Military expenses for Korea for the fiscal year I93I-32 amounted to YI5 million including I2.8 million for the Army and 2.3 million for the Navy. Civil expenditure for the same year amounted to Yi5.5 million, thus fairly matching military expenditure. The total military expenditure on behalf of the Chosen Government since annexation in i9i0, however, exceeds the total civil expenditure. Obviously, therefore, the administration of Korea is a burden on Japan unless the subsidies for Korean administration granted by the Imperial Treasury can be construed as an investment yielding a financial return to Japan proper, or intended to yield a return through offering a field for Japanese economic operation. In this case, the expenses met by the Japanese national treasury need not be held to imply an economic loss. The fact remains, however, that