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

Consular reports, Issues 224-227 online

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China anywhere outside of the treaty ports ; (3) the general apathy

* Good galena. t x«6oo big cash=|i in United States gold. \ X33>^ pounds.

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326 HINDRANCES TO BRITISH AND AMERICAN TRADE.

and want of knowledge which has in the past been displayed regard-
ing Chinese affairs. As an illustration of the absence of good faith
on the part of the Chinese Government, the failure of the transit-
pass system is cited. So long ago as 1858, provision was made in
the Tientsin treaty that on the payment of an extra half duty, transit
passes could be obtained under which imports and exports could be
transported to and from the interior exempt from all further inland
charges whatever. The memorandum says that these privileges are
universally ignored and exist only in name, the additional taxes
levied by local officials on the goods throughout the Empire causing
a practical stoppage of trade in many directions.

France and Germany, it is pointed out, have of late been more suc-
cessful in enforcing their treaty rights. The British China Association
thinks that the only way to obtain satisfaction is to deal with abuses
where they occur and face Pekin with the fact of grievances already
redressed. Speaking of one of the most recent concessions — the
right to navigate inland waters in China — the memorandum points
out that the permission is utterly futile, so long as liberty of residence
for purposes of trade is withheld, except at the treaty ports. It is
obvious, says the memorandum, that for the protection of merchan-
dise transported by foreign craft under foreign control, there must be
established upcountry stations and depots where foreigners or their
agents can reside, for the management of the traffic and for the
storage and delivery of goods. Other restrictions on the concession
likewise limit its value.

In regard to the second obstacle to trade, the British Association
says :

It is the want of security which is the main reason for the slow development of
foreign trade with China; and the increased dangers involved in the present situa-
tion are not only sufficient to check any attempt at extension of enterprise, but are
also a serious menace to the trade which already exists. The revenue of the im-
perial maritime customs, of which the provinces have in the past received their
share, is now practically wholly hypothecated for the service of the foreign loans;
concurrently with this, the demands from Pekin for more money from the prov-
inces are increased. What can be the result, other than an increase of inland taxa-
tion? As one means of supplying the deficiency in her revenue, China has given
notice of revision of the existing foreign customs tariflf. Foreign traders in China
are generally favorably disposed towards a revision of the tariff in China's favor;
but they at the same time most distinctly demand that no such concession shall be
granted, unless full security be given for the protection of foreign trade in the in-
terior against the abuses experienced in the past.

China's financial necessities, brought about by the disaster of her war with Japan
and the obligations which she has in consequence incurred with European coun-
tries, make it plain that a continuance of her policy of exclusion and contempt for
foreign ways can no longer be maintained. Pressure from without, powerfully
aided by an empty exchequer within, has already persuaded her so-called rulers
that the vast natural resources of the country can no longer be permitted to remain



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HINDRANCES TO BRITISH AND AMERICAN TRADE. 327

undeveloped; and in consequence, there are now put out to the world huge schemes
of railway and mining enterprise, for the carrying out of which foreign capital is
invited. It may, however, be taken for granted that before responding to the invi-
tation the capitalist will pause to look into the security which is offered; he may
reasonably ask:

What power has the Central Government in Pekin to protect concessions granted
in the provinces?* What has been the experience in the past as to China's good
faith in the matter of treaty engagements and contracts ? What amount of foreign
control and supervision is to be allowed in the expenditure of the capital asked for?
Is the present prohibition of foreign inland residence to be relaxed, in order to
enable foreign supervision of foreign inland enterprise? It is clear that in the
answering of these questions is involved the further one. Is this much-talked-of
opening of China to be made real, or is it a sham ? If it is to be made real, it is
plainly necessary that strong foreign influence must be used to prevent repetition
of the chicanery of the past. No security can be looked for, except such as may be
found in the establishment of a Government at Pekin which is not only strong, but
which is in sympathy with the wishes and feelings of the nation at large, and, we
believe, a first necessity if China is to be saved from partition. Signs are not
wanting, indeed, that partition has already begun. The policy pursued by Russia
in Manchuria is plainly aimed against China's sovereignty in that province; and in
the regulations recently issued by the bureau of mines and railways, it is significant
to note that it is expressly stated that they are not to have effect in Manchuria or
in the province of Shantung. It is not explicitly admitted, but the inference is
clear that already these regions are withdrawn from the field where British capital
maybe invested on equal terms with those given to other nations. On the ques-
tion of progress and reform, we believe that the new teachings have been widely
accepted throughout the Empire, and we can not but think that in fostering and
guiding this reform movement Great Britain would be following a policy worthy
of herself and of her best traditions. It is plain that wholesale administrative and
fiscal reform is imperative, both for the salvation of China herself, as well as for
the security of the foreign capital which she is inviting for the development of her
resources. Suggestions as to methods of reform do not fall within the scope of
this memorandum; suffice it to say that the practical side of the question has not
been neglected by this association, and it may be fairly claimed that the British
Government has received from its ministers, consuls, and merchants a sufficiency
of facts, opinions, and suggestions from which a definite and resolute policy might
long ago have been deduced. The future of our relations with China may safely
be gauged by the experience of our relations with China in the past. Nothing has
ever been gained from China except through pressure, backed by force, and noth-
ing ever will be gained from her except by the same means. Great Britain is to-day
looking with some anxiety for new fields for her exports; no finer field in the world
exists than in China. Other nations also are equally anxious for peaceful develop-
ment of the vast commercial possibilities of this country. Let the nations who are
so interested and whose aims are not territorial aggrandizement join together in
exerting the necessary pressure for reform, through which alone the required
security for trade can be found, the integrity of the Empire maintained, and the
door of trade kept open to all on equal terms.

We say, then, that the one thing wanted for the development of trade, for the

* Whilst writing, practical demonstration is received of the power of the Chinese authorities to
protect new enterprise. We learn to-day that a riotous mob has destroyed the works in connection
with the opening of a mine in the Nin^po district (comparatively close to Shanghai), and that the
European manager barely escaped with his life. No doubt, the matter will be made one of repre-
sentation to Pekin. Prompt and decisive action on the spot would be more to the point.



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328 HINDRANCES TO BRITISH AND AMERICAN TRADE.

protection of capital, and for the extension of enterprise in China is security: and
we say that such security must be sought in fiscal and administrative reform of the
country, which can only be effected through pressure from without; and we further
say that the vast preponderance of British interests in China clearly demands that
Great Britain shall lead and guide the movement. We attribute the hitherto neglect
of the China question by our Government and the policy of drift into which wc
have fallen to a mistaken estimate of the strength of British prestige in the Far
East, coupled with a fallacious belief in the power of China herself. Other pations,
newer in the field and comparatively unhampered by traditions of the past, have
seemingly been better able to interpret events in the light of common experience,
and have found opportunity in our complaisance and inactivity to exploit the situ-
ation to our disadvantage. We do not wish to concern ourselves with any imper-
fectly understood catch phrases, such as **open door" or "sphere of influence."
further than to say that Great Britain's sphere of influence should be wherever
British trade preponderates, with the door open for equal trading opportunity to
all. This is an ideal which can never be reached without resolute determination
on the part of the British Cabinet to lead and not to follow in Pekin. We do not
hide from ourselves the difficulties which must be faced in order to bring about
China's reform; and we therefore urge that Great Britain, in leading the move-
ment, should endeavor to obtain the cooperation of other great nations who have
like aims and interests with ourselves.

The American Association of China has for its objects and pur-
poses :

(i) To foster and safeguard the trade and commercial interests of the citizens of
the United States and others associated therewith in the empires of China, Japan,
and Korea and in the Philippine Islands and elsewhere in Asia or Oceania.

(2) To secure the advantages of sustained watchfulness and readiness for action
which will accrue from united and permanent organization in all matters relating
to Asiatic trade or legislation or treaties affecting the same.

(3) To provide for convenient ascertainment and distribution of information
affecting the interests of its members; and,

(4) Generally to promote a beneficial acquaintance and association of those hav-
ing interests and pursuits in common concerned with such trade or commerce.

The president of the association, Mr. Haskell, in a letter to the
American-Asiatic Association, a printed copy of which is sent by
Consul Fowler, says that the importance of the China trade is inade-
quately appreciated by the mass of Americans. Imports of cotton
goods from the United States have increased in the last ten years
no less than 121 per cent in quantity and 59^ percent in value,* and
now represent 33 per cent of the total value of such fabrics im-
ported into China. Of this trade, from 85 to 90 per cent finds its
consuming markets through the northern ports of Tientsin, Niu-
chwang, and Chef 00, f or within the area where recent operations
of European powers have been conducted. It is to conserve this
trade that efforts of the American association will be directed. After
cotton fabrics, kerosene oil is the most important article of export

* See Consular Reports No. 223 (April, 1899), p. 560.

tSee Consular Rbports No. 215 (August, 1898), p. 575, and No. 221 (February, 1899), p. a86.



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HOW TO DEVELOP TRADE WITH CHINA. 3^9

from the United States to China. During the ten years from 1887
to 1897, exports increased from 13,613,000 gallons to 48,212,505
gallons. In other articles of American origin, such as flour, lumber,
raw cotton, iron, and steel, there is a promising trade.

After referring to recent concessions to foreign countries, which
appear to menace United States trade, the letter says:

The favored-nation clause in the treaties between China and civilized powers
insures equal privileges to all. The claims to which we have adverted are in direct
contravention of the treaties, but China at this critical juncture is helpless either to
protect herself or to effectively secure the observance of her treaty obligations.



HOW TO DEVELOP TRADE WITH CHINA.

In reply to inquiries from a Chicago correspondent,* Consul Wil-
cox writes from Hankau, January 28, 1899:

In my opinion, the time is ripe for the United States to develop
trade with China. Other nations are sending travelers all over this
Empire to learn what are the productions and needs of the various
provinces, and how best to secure their share of trade.

I think the establishment in four or five of the leading commer-
cial cities of China of expositions in charge of experienced business
men who know the ways and language of the country is the best
plan yet offered. Thirty years ago, there were a large number of
such men, citizens of the United States, engaged in business in China,
but to-day they are few. The English, Russians, Germans, Jap-
anese, and French conduct their trade here to a great extent through
men who possess the above requirements. There are now a large
number of Americans visiting China representing various trade
organizations in the United States. These representatives visit the
ministers and consuls and request them to get dates for interviews
with the Tsungli Yamen at Pekin, the viceroys, and other high offi-
cials in the various provinces of the Empire. Their plans are simi-
lar, they are all from the United States, and they request the Tsungli
Yamen to instruct the viceroys to gather specimens, to be sent to the
association they represent. Of course, each commission informs
the officials that his league is composed'of the most prominent and
wealthy commercial men of his country. The consequence is that
the Chinese officials, by having so many association^ brought to their
notice, are confused.

They have not the time or inclination to assist all, and, while they
will promise to do many things to help the enterprise, they give little
or no attention to the matter. If all these associations in the United

*To whom Advance Sheets have been sent.



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330 SHOES IN CHINA.

States that are working to the same end and wish to accomplish the
same purpose would unite into one organization, they could and
would accomplish wonderful results. Business is not done in the
same manner in China as it was thirty years ago, when it was vir-
tually in the hands of foreigners. During these years, the Chinese
have become educated in the manner of conducting commercial en-
terprises, and to a great degree have wrestled the trade from the
foreigners and carry it on themselves.



SHOES IN CHINA.

The following is the substance of an article which appeared in
the Leipziger Tageblatt of March lo, 1899:

China is, at the present time, a country with which all commercial nations are
endeavoring to establish trade relations, and Germany, since its acquisition of
Kyao-chau, is in the lead in the struggle for commercial supremacy.

There is no doubt that the Chinese Empire, with its enormous population, offers
a splendid field for exporting many of the products of this country. The question
arises whether or not shoes are among those articles which can be profitably im-
ported into China. Trials should be made in this direction, by all means; for what
ground is not covered by Germans, the English and Americans will take at once.

Of course, it must be remembered and seriously considered that the Chinese, as
a nation, have a distinctive clothing for the feet; but there is no reason why we can
not make the kinds of shoes and after the patterns desired. Again, it is to be ex-
pected that through the influence of Europeans, who are constantly increasing in
numbers in China, European foot wear will come into fashion.

Already, there are a number of firms in China which import German goods. They
have their own branch houses in the large commercial centers, and several of them
have established agencies in Germany. Through the medium of such firms, the
experiment of exporting shoes to China could be tried without great diflSculty or
expense. It may be that there is a large business to be done in this line; at any
rate, an earnest and fair trial should be given.

The newspapers of this country, undoubtedly inspired by the
chambers of commerce, are urging the merchants to exert themselves
to obtain a firm commercial hold in China in almost every line of
goods, with the result that Germany, within the past year, has in-
creased her exports thither enormously.

This morning, I had occasion to call upon several parties who
had just returned from China, one of whom had the following to
say about the shoe trade in that country:

I am very certain that any attempt on the part of the manufacturers of Ger-
many or of America to manufacture Chinese shoes to be Imported into China
would prove a failure, because of the prevailing low prices for which such articles
are sold in that country. A good substantial pair of Chinese shoes can be pur-
chased for what would amount to about 20 cents in American money. In a very
large number of Chinese families of the poorer classes, the shoes for the entire



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FLOUR IN CHINA. 33 1

family are made by the wife and mother. The Chinese are slow to adopt foreign cus-
toms and habits, and I am sure it will be many years before they can be induced
to wear our shoes. Of course, as the newspaper article says, the foreign popula-
tion in China is growing very rapidly from year to year and should be taken into
account. It would certainly be a good idea, in view of this, for shoe manufacturers
to pay careful attention to the Chinese markets, for the purpose and with the aim of
extending their trade. American shoes are well known in China. They are sold
there to some small extent through English houses, and, were it not for the very
high prices which are asked for them, many more would be sold.

It has been proven by our shoe manufacturers that they can com-
pete with those of any other country as regards price and quality,
and for this reason they should watch very carefully for openings
in foreign countries where there is any likelihood of their products
being sold.

Another point: Our exporters should be careful to see that the
retailers have a uniform price for their shoes, and that it should not
be excessive, as is sometimes the case. Dealers in American shoes
in foreign countries give as an excuse for exorbitant charges the fact
that they have so little call for them. Remedy this fault and our
shoes will become very much more popular than they are to-day.
Exporters of shoes and leather goods, in preparing shipments for
China, should remember to pack so as to suit the climate.

Brainard H. Warner, Jr.,

Leipzig, March ii^ i8gg. Consul,



FLOUR IN CHINA.

In answer to a Minnesota correspondent,* Consul-General Good-
now writes from Shanghai, March 9, 1899:

The flour imported into China was valued at 1,505,653 taels
($978,673)1 in 1896, 1,221,516 taels ($793,9^5) in 1897, and i, 774,7^2
taels ($1,153,562) in 1898. I would estimate the weight in 1898 at
59,000,000 pounds.

The advance in the price of flour has materially checked its use.
The small cakes used by the lower classes are now made almost
entirely of rice flour, and only varnished over with wheat flour. A
return to the average value of wheat in the United States and to
the average rate of freight from the Pacific coast to this point will
result in a very large increase in the use of wheat flour here.

Most of these people are poor beyond our understanding, and
wheat flour is a luxury to them just as if was to our forefathers,

^To whom Advance Sheets have been sent.

t The consul-e^eneral values the haikvran tael at 65 cents. Accordingr to estimates by the United
States Director of the Mint, the average value in the three years was: 1896, 8x.x cents; 2897, 73.9
cents; 1898, 69.4 cents.



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332 HEMP-WORKING MACHINERY IN NEW ZEALAND.

and not a necessity as it has grown to be to us. Its use is instantly
lessened by a rise in price.

The increase in 1898 and 1897 is not an increase of consumption
by Chinese. A large proportion has gone to the new garrisons of for-
eign troops at Port Arthur, Weihaiwei, and Kyao-chau, and to the
foreign men-of-war now on this coast. On the other hand, the local
mill at Shanghai sold last year nearly 10,000,000 pounds of flour.
This enters directly into competition with flour from the United
States. While Shanghai flour is slightly darker, it sells (wholesale)
at $1.85 in Mexican currency (87 cents in United States currency)*
for 50 pounds. American flour is sold at $2 in Mexican currency
(94.4 cents) per 50 pounds.

The present difficulty in importing flour is in the matter of trans-
Pacific transportation. There are more freights offered than boats
to carry them. Consequently, the rate now is $S Mexican ($3. 78
United States) per ton from San Francisco to Shanghai, an increase
of $2 Mexican per ton over the rates prevailing two years ago.
When this high freight rate was united to a high price of wheat in
America during most of 1898, flour wholesaled here at 5 cents Mexi-
can (2.4 cents United States) per pound. To-day, the wholesale
price is 4 cents Mexican (1.89 cents United States) per pound.
When we have sufficient ships in the Pacific for the demands of the
trade, the lessened freight rate will lower the wholesale price of flour
here, and increase its consumption.



HEMP-WORKING MACHINERY IN NEW ZEALAND.f

In reply to instruction directing me to report regarding a bonus,
or prize, offered by the New Zealand Government for an improved
Phormium tenax machine for the native flax of this country, I beg to
state that this matter has been thoroughly investigated by me, and
several letters have been written to parties in the United States who
have asked for information. I am told that the time has lapsed dur-
ing which the bonus for improved machinery for working hemp was
offered, but (semiofficially) I am informed that anyone able to fur-
nish a really satisfactory machine or method for dressing flax could
very likely make such terms with the New Zealand Government as
would lead to his receiving an equivalent of the bonus originally
offered.

I do not think it will be worth while to attempt to lay down New

* Taking the valuation of the Director of the Mint, April i, 1899, %\ in Mexican currency=47.a
cents in United Sutes currency.
tThis report was obuined at the request of a resident of Washington, who has received a copy.



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HEMP-WORKING MACHINERY IN NEW ZEALAND. 333

Zealand hemp in a raw state in any American city, because I believe
it takes about 7 tons of the raw material to make i ton of the dressed ;
and therefore, unless the article could be dealt with here, I think
there would be poor prospects of building up a trade.

Under date of November i, 1895, theDepartment of Agriculture for
New Zealand issued a notice (No. 430) for a bonus of ^1,750 ($8,516)
for a machine or process for dressing New Zealand hemp {Fhormium
tenax) which should be an improvement on the machines or processes
then in use, and which should, at the trial, be found to materially
reduce the cost of production, improve the product, or increase the
quantity of dressed fiber. All applications were to be addressed to
the Minister for Agriculture, Wellington, to reach him not later than
December 31, 1897. They were to be accompanied by a description,
particularly stating improvements on present machines or processes,
and also the cost at which the machine or process could be sup-
plied ; the machine or process was to be submitted to examination,
at such time and place as the Government might direct, to a com-
mittee of three or more experts. The cost of bringing the machine
or appliances to the ground from within the colony, supplying the
necessary shafting, motive power, and buildings, was to be defrayed
by the Government ; and, if any machine was sent from beyond the
colony, and was awarded the bonus or part thereof, the cost of
bringing the same was to be borne by the Government. The com-
mittee was to supply a sufficient and equal quantity of green hemp
to each machine or process as a test ; also, to take into consideration
the time occupied in the operation, the cost of labor, and time re-
quired after the fiber had left the machine or process before it was
ready for baling, the percentage of dressed fiber or tow produced



Online LibraryUnited States. Dept. of Commerce and Labor United States. Bureau of Foreign CommerceConsular reports, Issues 224-227 → online text (page 39 of 92)