United States. Dept. of Commerce and Labor United States. Bureau of Foreign Commerce.

Consular reports, Issues 188-191 online

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rice-milling and wood-working machinery, boat-building machinery and ma-
terials, and electric and ordinary railway equipment.

These, then, with the food products, and with the possibilities in other
lines suggested by the figures given above, should at least interest American
exporters in this field and prompt them to greater endeavor.

HOW TO INCREASE UNITED STATES TRADE.

In the course of my investigations, which I endeavored to make thorough,
I have made note of existing conditions that hamper the development of
American trade and of possible changes and improvements that suggested
themselves. From consideration of these, the manufacturers, exporters, and
merchants of the United States may discover something to their advantage.

(i) The lack of American shipping everywhere is so noticeable as to give
the impression among Asiatics that we are not a commercial nation. Of
over 500 merchant steamers and ships that entered the port of Bangkok in
1894, not one was American. Of over 1,700 vessels that entered the ports
of Japan in the same year, only 32 carried our flag. There was a time when
the ships of the United States were frequently seen in this harbor, and in



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FOREIGN TRADE OF SIAM. 29

those good old days, our trade with Siam was extensive. Coincident with
the decline of our commercial marine, came the surrender of trade ex-
change.

(2) The speedy construction of the Nicaragua Canal finds a strong argu-
ment in its favor in the Asiatic trade situation. It would be to the Atlantic
Coast and the Mississippi Valley what the Suez Canal has been to Europe.
From Japan to Java, one sentiment is expressed by all commercial experts,
viz, that the canal should be dug. The longer the delay, the greater the loss
to the exporters of the United States. New York, Boston, Philadelphia,
Baltimore, Chicago, St. Louis, and New Orleans would then have a fair chance
with London, Liverpool, Manchester, Hamburg, and Lyons.

(3) The permanent maintenance and extension of the steamship lines run-
ning from San Francisco, Portland, Tacoma, and Seattle to this coast should
be assured by the patronage of American exporters, and, in turn, these com-
panies should offer the inducement of the lowest freight rate possible, so as to
enable shippers to compete with European merchants who export by their
subsidized lines. In this connection, I would state that there is every evi-
dence in the Asiatic situation that subsidies to steamship lines are paid back
many-fold in increased trade.

(4) The establishment of American houses with sufficient capital and the
right kind of men I have already recommended. Representatives should
also be sent to these countries, but they must be men of experience, tact, cour-
age, and refinement. A polite, affable, but earnest man, who understands
his business, will not be discouraged by superficial signs, and will study the
field and build up trade, but a boorish, egotistical person will accomplish
nothing. If these men come, they must not believe all they will be told or
expect to make a grand conquest at once, but make sure of their information
and proceed step by step. In the matter of trade commissions sent out by
chambers of commerce, I can simply point to such enterprises dispatched
by the chambers of commerce of Europe which are now investigating the
China market and receiving hearty home support.

(5) Chambers of commerce and boards of trade, however, can bend their
energies to obtaining and keeping on file elaborate data on the Asiatic mar-
ket, the standing of Asiatic merchants and houses, freight rates to all Asiatic
ports, most direct routes of shipment, rates of exchange and current prices,
etc. One objection often raised here to trading with America is the delay
caused by the American exporter wishing to assure himself of the reliability
of the importer ; another is the demand generally made that the local importer
must deposit a certified check in some bank, and hence lose the use of the
money pending the long wait for the arrival of the goods. European export-
ers know at once the standing of the buyer, and, practically, give him the
same advantage as those offered buyers near at hand.

(6) The American exporter must always remember that he is competing
with the old houses of Europe, which have been long in the field, that there
are others just as ready as he to sell, and hence, he must compete against



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30 IRRIGATION IN SIAM.

them with their own methods and be willing to give the same terms of credit.
For instance, in view of these countries using silver exclusively, considerable
time is often granted buyers, so that they may take advantage of any rise in
exchange to remit payments.

(7) As specific important suggestions, but grouped together, the follow-
ing are submitted to American exporters : (a) Advertising in the local press
of Asiatic ports ; {d) sending consignments of goods at risk of exporter to
reliable parties to be sold on commission ; (c) preparing goods with a special
**chop'* for the local market; (^) using great care in packing all kinds of
goods; (^) bearing constantly in mind that goods shipped into the tropics
must invariably be prepared accordingly and under different conditions from
those sold in northern sections ; (/) allowing only the best quality of goods
of any kind or class ordered to be shipped ; (g) quoting the very lowest
rates possible, especially when introducing goods or first entering the market ;
(A) and employing the same energy and persisting with the same force, in
spite of early difficulties and disappointments, that they have exhibited
in building up the great internal home trade of the United States, which is
an achievement unrivaled in the world's material history.

(8) Congress could also lend great assistance if it would approve of
changes which would increase the effectiveness of legations and consulates
in advancing American commercial interests. At present, there is no deny-
ing the fact that in comparison with legations and consulates of Great
Britain, Germany, and France, those of the United States are undermanned,
and yet they are expected to equal the former in work done and results ac-
complished.

(9) In conclusion, I must emphasize the necessity of immediate and
continued effort all along the line. The best proof that the market is worthy
of such effort is found in the unremitting and reinforced campaign of Euro-
pean merchants to hold the trade they have already and control the increase
which they believe will follow as a result of the recent Japan-China war. I
fear it is now or never. No other part of the world — not even South
America — offers at the present moment a more inviting field.

All signs indicate that the great battle for the commercial supremacy of
the world is to be fought out during the next ten years.

JOHN BARRETT,

Consul' General,
Bangkok, November 14, 18Q5.



IRRIGATION IN SIAM.

Siam has one enterprise of inland development well begun that is worthy
of our Western States. It is experimenting in the construction of irrigating
canals, which are also navigable for small craft, and is using therefor the
most approved modern machinery. As a result, large tracts of land are being
opened to settlement and improvement which before were jungle.



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IRRIGATION IN SIAM. 3 1

Siam 'is essentially a land of waterways. Great rivers come down from
the mountains in the north. On reaching the vast level plain that extends
from the base of the foothills to the Gulf of Siam, they branch into lesser
streams which in turn are connected with numerous canals, some natural and
others artificial. The main artery of the Kingdom and the great highway
of its inland trade is the River Menam ("mother of waters*'). From this
most of the canals radiate so that it is possible to proceed to almost any
point in the country by boat. This accounts for the fact that there are no
regular roads outside of the capital (Bangkok), which is located on the
Menam about 30 miles from its mouth.

Notwithstanding the land is cut with this system of rivers and canals,
there are large sections with no waterways. It is one of these that the new
enterprise is aimed to open.

The credit for organizing so important an improvement in Siam is due
to certain Siamese princes, aided by one or two foreigners, principal among
whom are Prince Phra Ong Chow Sye Sanitwongse, an uncle of the present
King; his son, Dr. Y. S. Sanitwongse; Mom Rachawongs Supan; and a
German, Mr. E. Muller, who has long been a resident of Siam and who has
done much for its material progress. As the Government was not ready to
undertake the work directly or finance it, a company called the Siam Canal
and Irrigation Company was formed, to which the King granted a concession.

Concession. — This includes a large extent of valuable but undeveloped
land between the Menam and the Bangpakong rivers, and yet not more than
50 miles from Bangkok. The grant was made on these principal conditions:
(i) The canals should be cut within the limits of the concession, in order
that lands might be sold to settlers; (2) the Government is to receive 20
per cent of the net profits as royalty for granting the concession ; (3) the
land is to be sold on canals the width of which is 18 to 30 feet at 2 ticals
(about 65 cents in gold) per rai (twenty forty-ninths of an acre), on those
of 36 to 42 feet width at 4 ticals ($1.30 in gold) per rai, and on those of 48
feet width at 5 ticals (J 1.6 2 in gold) per rai; (4) the grantor, however, if
he sees fit, can lower or raise the rate, if conditions demand it ; (5) as no
specific time can be easily set for the completion of the entire system of
canals, a time is fixed for the construction of a specified canal. Should
difficulties arise necessitating a stoppage of work, the grantor must be in-
formed, and, according as he thinks fit, may grant or refuse an extension of
the term stipulated. If the company does not complete the work in the
time stipulated, the agreement and the concession shall be forfeited, the rights
and interests of the company passing back to the Government, which may
undertake the work itself or grant the rights and interests to another com-
pany, as it shall deem proper.

Progress of the work, — In course of construction are three canals, viz,
one 48 feet wide and 9 feet deep, to be 32 miles long; one 36 feet wide and
7j4 feet deep, to be 40 miles long; and one 30 feet wide and 4^^ feet deep,
length not exactly defined. Work further projected includes one canal 2%



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32 IRRIGATION IN SIAM.

miles long with a width of 48 feet, and two others, respectively 36 and 30
feet wide, length not stated.

These figures show that the enterprise is planned on an extensive scale,
and if fully carried out should be a source of great profit both to the com-
pany and the Government.

At the time of preparation of the data sent to me by the Government,
work already accomplished included 10^ miles on one canal 48 feet wide,
^i}4 miles on another 36 feet wide, and 36 miles on another 30 feet wide.
By the time this report is published, a third more can be added to these
totals of length.

The capital of the company is given as 320,000 ticals (about ^104,000 in
gold). It has purchased the latest patterns of excavators and dredges in
Germany, and the former are kept working night and day. They are pro-
vided with electric light, furnished by the same boilers that provide the
power for the machinery. Each machine is in charge of a foreign engineer,
but the other labor is Chinese and Siamese. Once begun, the work is not
very expensive.

The progress of cutting the canals is very rapid, owing to the lack of re-
sistance in the material excavated. There are no stones whatever. The
surface soil is a dark muck, and beneath that is a deep stratum of clay which
is cut as easily as cheese with a sharp knife. As the ground is not high and
is soaked for a greater portion of the year, the work is rendered still less
difficult. In fact, this whole area would not need irrigation for northern
crops, but for rice, the chief product of the land, there must be regular and
continued flooding of the surface. During the high-water season, the rivers
become swollen, overflow their banks, and force the water back into the
country through the canals, which in turn flood the neighboring fields.

But the use of these canals is not confined to irrigation. They provide
the '* highways" by which all the farmers carry their products to the market.
Without roads on land, the interior would otherwise be useless. The canals
are amply deep for the fleet of paddy boats that use them.

The system of the company's canals consists of large main ones connect-
ing with the rivers and smaller ones running at right angles. Those in turn
have more ramifications, made by the settlers, of such nature and size as they
have time, labor, and room to dig. There is no lack of water, and hence
no limit or measurement on what each settler can use. As soon as the canals
are completed they become public property. The financial return to the
company is in the disposal of the land only.

A NEW ERA FOR SIAM.

If this project is completed successfully, there will be many others started.
The digging of these canals may inaugurate a newer and greater prosperity
for Siam, for it is, and must always be, essentially an agricultural country.
It is a natural garden, a large portion of which is yet unimproved. No
other country has land better adapted to the growth of paddy or rice. Its



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CURRENCY REFORM IN RUSSIA. 33

exports of this staple during the last two years amounted to over $42,000,-
000 (silver), and yet vast areas of rich land are not cultivated.

If the Siamese Government will only show the same spirit of progress as
that manifested by some of its own people cooperating with foreigners, give
the necessary moral and material support and fully awaken to the advantage
of making its domain the home of a prosperous people, there is no question
that Siam will some day rank as one of the richest smaller kingdoms of the
world and one of the first of Asia.

Some interesting photographs of the work are forwarded herewith, which
will aid in showing the scope and progress of the undertaking.*

JOHN BARRETT,

Consul' General,

Bangkok, November 2j, iSpj,



CURRENCY REFORM IN RUSSIA.

The expectation, but uncertainty, of currency reform has had a most de-
pressing effect on Russian trade, home and foreign. The change, it may
be said, has come sooner than was anticipated, and Russia now faces a new
era of development in finance, industry, and foreign commerce.

The proposed reform, which has been worked out by the Minister of
Finance and which will soon be introduced, may be described as follows:

A gold coin of 10 rubles will be issued, the value of which will be equal
to that of the present paper ruble. The new coin will contain i zolotnikf
and 78.24 dolias (about 119.05 grains troy) of pure gold. Its full weight
will be 2 zolotniks and 1.6 dolias, and it will be legal tender to any amount.
Silver, although taken in the Government treasuries to any amount, will be
accepted for customs only to the value of i ruble, and may be refused in pay-
ment of private accounts when presented in sums of more than 50 rubles.
One ruble of the present gold coins (imperials and half imperials, issue of
1885) w^^^ ^ accepted for 1.50 rubles of the new coinage; consequently, all
Government and private loans and agreements contracted in metallic rubles
before the new law comes into force will be counted at one and a half of the
new coinage. The issue of deposit certificates will be stopped as soon as the
customs duties are permitted to be paid in paper rubles. The Government
Bank must exchange paper bills of the Government for gold of the new coin-
age, ruble for ruble, the exchange to be made at the St. Petersburg section
of the bank for any amount which will be on hand, and for this purpose the
bank will be supplied, for the present, with the sum of 750,000,000 rubles
of the new coinage, being the present exchange fund of the bank.

Hereafter, the Government treasury will issue no more paper bills, but
those outstanding have the same force in payments as the gold money of the
new coinage.

* Photographs filed in Bureau of Statistics, Department of State.
t X zolotnik (4.2657 grains)=96 dolias.

No. 188 3.



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34 GOLD AND PAPER MONEY IN RUSSIA.

The Government Bank is permitted to issue bills for commercial opera-
tions to the extent of a milliard, on condition that the paper bills in circu-
lation shall not exceed by more than double the amount of gold on hand,
while for every paper ruble issued over the milliard there must be gold on
hand to cover the same.

The issuance and destruction by the bank of paper money will be con-
trolled by officers of the Government, assisted by the representatives of the
nobility, commerce, St. Petersburg city council, and the St. Petersburg
Exchange.

JOHN KAREL,
Consul' General,

St. Petersburg, April 4, i8g6.



GOLD AND PAPER MONEY IN RUSSIA.

The rate of exchange for gold imperials has been raised 1.35 per cent over
the last quotation, and this advance has been made, according to the state-
ment of the Imperial Minister of Finance, simply for convenience and sim-
plification of calculation, making its relation i to i^; so that the present
value of the Russian gold currency is adjusted as follows:

Rubles.

I imperial, new issue I5'00

Half imperial, new issue 7-5^

I imperial, old issue 15*45

Half imperial, old issue 7.72

I chervonec 4-^3

This rate will remain until December 31, 1896. According to the above
quotations, i gold ruble equals 1.50 rubles in the credit or paper ruble or
I paper ruble equals 66^^ copecks in gold.

In announcing this change, the Minister of Finance reviewed the develop-
ment of the various measures adopted for the fixing of the rate and their
favorable results. After citing the different changes, he sa)rs :

The great instability of the rate of exchange had a very bad influence on
Russian commercial life. Agreements which had any relation directly or
indirectly with foreign trade and were not guarded against loss by the so-
called * ' covering of risks, ' * proved generally unprofitable. The most careful
financial calculations were often risky. The considerable fluctuation of the
ruble caused the prices of different articles to change. If the rate of exchange
fell, it embarrassed the import of foreign goods, and, in case of advance, it
facilitated foreign competition with Russia's production ; hence, some spec-
ulators gained large unmerited profits and others lost. On the average,
the country had only occasional profits, but generally sustained large unex-
pected losses, which often embarrassed enterprises.



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GOLD AND PAPER MONEY IN RUSSIA. 35

In 1892, the Ministry of Finance decided to stop the speculation in paper
rubles and to protect their value abroad, and for that purpose, adopted two
measures —

(i) By issuing an order June 20, 1893, ^^ the Russian exchanges, forbid-
ding the making of the differences in gold value, and ordering a statistical
duty for discount of the ruble moving across the frontier, reinforcing super-
vision of stock exchanges and restraining the banks from exporting rubles for
speculation.

(2) A measure for the satisfaction of the demands of foreign bills of
exchange and proposals for the same, if they really were necessary for the
purposes of commerce. The large amount of gold (over 670,000,000 rubles)
accumulated by the Government treasury and by the Government Bank at
the end of 1880 and b^inning of 1890, and which has since increased still
more, offered the possibility of establishing the stability of the rate of ex-
change.

Further, since 1892, the amount of paper rubles has not increased, because
the 125,000,000 rubles which were temporarily issued August 14 and 28 and
September 23, 1892, and October 4, 1893, were withdrawn on January 30
and March 15, 1893, ^^^ J"°^ 9> 1894. However, the gold guaranty of credit
bills increased considerably, in consequence of the reinforcement of the ex-
change fund by the order of the Czar on December 4, 1894, and March 3,
1895, to the amount of 160,000,000 gold rubles. This fund now amounts
to 375>ooo>ooo gold rubles, independent of the 75,000,000 rubles of the
temporary issue, which were not withdrawn from circulation and which
guaranty ruble for a ruble. The desire of the Ministry of Finance to lessen
the fluctuation of the value of the paper ruble and the measures taken for
this purpose were mistrusted, not only by circles interested in the continual
fluctuations of the rate of exchange, but by a considerable part of the pop-
ulation. They supposed that the fluctuation of Russian rates of exchange
was inevitable and impossible to successfully oppose; that the interference
of the Government would only destroy the natural order of economic
relations, and, without bettering the situation, cause great losses. The prop-
agation of such ideas, which gave to the abnormal course of things the
significance of an economic law, shows that the evil done by the instability
of the money unit has penetrated so deep into the economic life of Russia
that the public opinion of the country has become used to it. Facts, how-
ever, show that these apprehensions were erroneous. After the adoption of
these measures, the rate of exchange did not undergo any great changes, and
its fluctuations decreased gradually, coming down to such a minimum that
they did not influence the price of the paper ruble and did not exceed the
normal changes of the rate of exchange between countries with metallic cur-
rencies.

In 1892, the fluctuations of the rate of exchange, in comparison with the
lowest rate of exchange of St. Petersburg on London, equaled 9.6 per cent
(in 1890, it was 19^ per cent, and in 1891, 28 per cent); in 1893, ^ P^r



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36 GOLD AND PAPER MONEY IN RUSSIA.

cent; in 1894, 1.94 per cent; and during ten months and a half of 1895,
they did not exceed 0.54 per cent, notwithstanding that during the few latter
months great political and economic events of universal importance, and
especially of great significance to Russia, have taken place, such as the tem-
porary interruption of commercial relations between Russia and Germany,
the death of Alexander III, the war between China and Japan and the dip-
lomatic negotiations between the diflferent powers which occurred therefrom,
and, finally, the difficulties on the Balkan Peninsula and in Asia Minor.
The rate of the ruble, which was before influenced by the smallest political
event, remained during the above most important events on a scarcely
changeable level; and when, in the autumn of 1894, foreign stockjobbers
tried to take advantage for their own interest of distressing times, they suf-
fered great losses, as their operations proved unsuccessful.

The stability of the rate of exchange attracted the attention of a special
committee of finance, which, in its journal of March 15, 1895, stated that
"the policy which the Ministry of Finance pursues, decreasing the fluctua-
tions of the price of the paper ruble to a minimum, is quite successful.**
Being satisfied that the money market can be guarded from fluctuations, and
having given proofs of the stability of the ruble to persuade the commerce
and industry of Russia and foreign stock exchanges, the Ministry of Finance
began to secure the results acquired by trying to do away with such obstacles
as hindered the circulation of the gold currency. To this end, when the
opinion of the Government council, sanctioned by the Czar on May 8,
1895, permitted agreements in Russian gold coin to be made and different
duties to be paid in gold at the rate fixed by the Minister of Finance, the
following principal measures were adopted:

(i) All establishments of the Government Bank were allowed to buy,
and the principal ones also to sell, gold coins at the rate fixed, as published.

(2) Regulations concerning deposit certificates, written on a gold basis,
were published, and on August i, 1895, ^^^ establishments of the Govern-
ment Bank began to issue such certificates.

(3) In August, the St. Petersburg and Moscow banking offices and other
establishments of the Government Bank began to accept gold money on cur-
rent accounts.

(4) From July i to August 31, permission was given to pay in gold coin



Online LibraryUnited States. Dept. of Commerce and Labor United States. Bureau of Foreign CommerceConsular reports, Issues 188-191 → online text (page 6 of 102)