Popular Science Monthly/Volume 58/December 1900/Chinese Commerce

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CHINESE COMMERCE.[1]
By WILLIAM BARCLAY PARSONS.

THE foreign commerce of China is carried on through and at twenty-nine Treaty Ports. Previous to 1840 trade with foreigners was much hampered owing to its being subject to local regulations, all of which were annoying, many of them ridiculous, and some actually jeopardizing to both life and property. In 1842 Great Britain, availing herself of the successful outcome of what is known as the Opium War, stipulated that as one of the indemnities, China should declare the ports of Canton, Amoy, Fu-chow, Ning-po and Shanghai to be thrown entirely open to British trade and residence, and that commerce with British subjects should be conducted at these ports under a properly regulated tariff and free from special Chinese restrictions. Although Great Britain nominally secured for herself special considerations, she intended and actually accomplished the establishing of commerce between China and all other nations on a sound and liberal basis. The treaty of Nan-king was immediately followed by similar treaties with other powers, that with the United States being executed in 1844. Additional ports, decreed by treaties or other arrangements by the Chinese Government, have been added from year to year. At the end of the year 1899 the Maritime Customs reported twenty-nine of these ports, with several branch or sub-ports in addition. At nearly all of them there is a special reservation, called the foreign concession, where foreigners are allowed to reside and regulate their method of living in their own way. Although foreigners are permitted to dwell in the Chinese quarter if they so desire, the right to hold property in the concessions is usually denied to Chinese, and they are discriminated against in other ways.

Previous to 1860 the management of foreign commerce had been in the hands of Chinese officials, with the usually unsatisfactory result attending any official department handled by native overseers. In that year the business of the port of Shanghai was placed temporarily in the hands of English, American and French Commissioners, who were able to so improve the receipts by efficient and honest management that the Chinese Government, recognizing the desirability of continuing foreign supervision, organized the Imperial Maritime Customs and placed the management of the whole foreign trade in the hands of a single Commissioner, called an Inspector-General, and appointed to this position Mr. Lay, succeeded in 1863 by Mr., afterward Sir, Robert Hart, who has continued in the control since then, and to whom is due the present very satisfactory condition of the management of this Bureau, to which has since been attached, in order to secure efficiency, a Marine Department, covering lighthouses and harbor regulations and the Chinese Imperial Post-office.

The ports open in 1899 were: Niu-chwang, Tien-tsin, Che-foo, Chung-king, I-chang, Sha-si, Yo-chow, Hankow, Kiu-kiang, Wu-hu, Nan-king, Chin-kiang, Shanghai, Soo-chow, Ning-po, Hang-chow, Wenchow, San-tuao, Poo-chow, Amoy, Swa-tow, Wu-chow, Sam-shui, Canton, Kiung-chow, Pak-hoi, Lung-chow, Meng-tsz and Szmao. Of these Niu-chwang is located in the north, at the terminus of the Chinese Imperial Railway, and is the gateway through which the trade passes from China to Russian Manchuria. Two ports, Tien-tsin and Che-foo, are situated on the Gulf of Pe-chi-li, while the next eleven on the list, Chung-king to Soo-chow, are on the Yang-tze Kiang or its tributaries. Seven ports, Ning-po to Swa-tow, are on the East Coast. Wu-chow and Sam-Shui are on the West River. Canton is the great port of Southern China and the oldest seat of foreign trade in the country. Kiung-chow is on the Island of Hainan, and Pak-hoi, Lung-chow, Meng-tsz and Sz-mao are on the Franco-China frontier of Tong-king. The last three and Niu-chwang are the only places not situated on important waterways. Of the total foreign trade about three-quarters is transacted through Canton, Shanghai, Tien-tsin and Hankow, which are the great distributing points for the south, middle coast, north and interior.

The importance of Canton, Shanghai, Tien-tsin and Hankow is fixed by geographical conditions. Canton is at the head of the Canton River, which is really the estuary for the combined flow of the West, the North and the East Rivers, the three principal streams and consequent trade routes of Southern China. With its fine harbor and juxtaposition to Hongkong, it is of necessity, and must always continue to be, the gateway to the southern part of the Empire. In like manner, Shanghai, at the mouth of the Yang-tze, is the controlling point for the whole of the central zone; while Tien-tsin, the port of Peking, is the entrance to the north, the northwest and Mongolia. Hankow is at the head of steamship navigation on the Yang-tze, and at the junction of that stream and its principal tributary, the Han, and if the extreme western part of the country be omitted, which part is mountainous and very thinly populated, Hankow is approximately the geographical center of the Empire.

Native vessels trading between native ports report at custom-houses administered by native officials, where the records are hopelessly confused, and which, as a source of income to the Chinese Government, need not be considered in this place.

The foreign commerce of China, both import and export, is growing steadily, having doubled since 1891, the figures for 1899 showing that foreign goods to the value of 264,748,456 Haikwan taels ($185,324,000) were imported, and native goods to the value of 195,784,332 Haikwan taels ($137,049,000) were exported, or a total commerce of 460,533,288 Haikwan taels.

Owing to the lack of internal communication, the distribution of Chinese commerce is singularly restricted. Of the imports more than one-half is confined to two classes of articles alone; thus cotton and cotton goods in 1899 accounted for 40.2 per cent., and opium, unfortunately, for 131/2 per cent. In like manner the exports, silk and tea, stand out almost without competition with other articles; these two together also aggregating more than 50 per cent, of the total. Silk provided no less than 41.8 per cent, and tea 16.3 per cent. Kerosene oil, metals, rice, sugar and coal are other articles largely imported, and beans, hides and furs, mats and matting, and wool other exports.

Although the extent of the traffic entered at native custom-houses, or, at least, not passing through the Maritime Customs, cannot be ascertained, that it is considerable is well understood, as can be showm by the single item of the export of rice. The exportation of this article was in 1898 prohibited in order to prevent a possible shortage at home. The Maritime Customs, therefore, report no rice as having been shipped outward during that year. The Japanese Customs, however, report having received rice from China to the value of $2,000,000 United States gold. It had been smuggled out in native vessels through the native customs and the Government deprived of revenue. An amusing explanation of this is given, which so thoroughly illustrates Chinese methods as to be worth repeating. As rice forms the greatest single item in Chinese food, any falling off in supply threatens a famine, the one thing the Government most dreads. Such being the case in 1898, stringent orders were sent to the Customs Tao-tai in Shanghai to prohibit any export of the grain, the greatest source of supply for which being the Yang-tze Valley, Shanghai is the natural point of shipment. On account of the power attached to it, and the opportunities offered, the position of Shanghai Tao-tai is one specially sought after, and it is generally believed that the price paid for a three-year appointment, in the way of 'presents' to the Palace officials, is about 200,000 taels. Since the authorized emoluments are about 20,000 taels per annum, out of which expenses exceeding that amount must be paid, it is evident that great financial skill must be displayed by the official in order to make both ends meet. On receipt of the restraining order the Tao-tai, under the advice of the syndicate who were 'financing' him, held the order for some days, during which time the energetic syndicate members bought all the rice in sight, put it in vessels and rushed it abroad to Japan, a country which buys the inferior grade of Chinese rice for home consumption and ships abroad its own superior article. As soon as the embargo was published, the value of rice afloat at once rose and the Tao-tai syndicate cleared a handsome profit. This illustrates Chinese fiscal methods, and warrants the statement that the actual foreign commerce of the country is greater than the figures indicate.

China levies on its foreign commerce a tariff for revenue only. The rate charged on nearly all articles is five per cent, on imports and exports alike, although there are some special rates and a number of articles on the free list. The actual average rate on imports and exports runs from three to four per cent. It is the general opinion of merchants in China that, should it become necessary to add to the Government's income, this rate could be increased without any serious detriment to foreign commerce. In Japan the Government has found it necessary, in order to derive more revenue, to seriously increase its customs tariff, so that the present charges range from thirty to fifty per cent, ad valorem.

Foreign articles destined for consumption at the treaty ports or places of importation pay no further taxes. When, however, they are sent into the interior they are obliged to pay internal transportation taxes, called 'Likin,' collected at various stations along the trade routes. These likin charges, although they form a perfectly legitimate method of taxation, are objected to by the Chinese quite as much as by foreign traders, on account of their uncertain amount, which, according to Chinese custom, is left largely to the official in charge, who collects as much as he can. The foreign nations, in order to obviate these difficulties, have arranged with the Chinese Government to permit foreign articles destined for the interior to pay a single tax of two and a half per cent, to the Imperial Maritime Customs and then to receive what is called a 'transit pass' entitling the goods to pass the interior likin stations without further charge. Unfortunately, these transit passes are not always respected by officials in the interior, unless they think that the shipper will appeal to a foreign government, and, therefore, the officials are apt to levy likin in accordance with their own needs, and of the total collected but a small part finds its way into the public treasury.

The native merchant has no such advantage as the foreigner in securing immunity from likin extortion, and has to resort to all sorts of subterfuges to escape the impositions of his own countrymen, one of the most frequent of such resorts being to keep his goods under the name of a foreign merchant if possible. Another device was told to me by a customs official on the West River, where the local farmers raise tobacco which is consumed mostly in Northern Kwang-tung. If it were shipped direct it would be charged en route a large and uncertain likin tax, the uncertainty of the amount being the worst feature, as it may easily convert an apparently profitable transaction into a serious loss. To avoid this the tobacco is loaded on a sea-going junk and shipped to Hongkong. From there the junk brings it back and enters it at the point of original shipment as a foreign importation. For this the merchant secures a transit pass under which he ships it to its destination. He has paid the freight and import taxes of five per cent, each; the transit pass fee of two and a half per cent., and the shipping charges both ways to Hongkong, and the expense of rehandling. These items he can ascertain accurately beforehand, and, therefore, prefers paying them rather than run the likin gauntlet, which may be from ten per cent, to fifty per cent, or more.

The Chinaman is by very instinct a trader, is quick to see and seize an opportunity to turn a profit, and has, what few other Eastern Asiatics have, a high sense of commercial honor. Although the great mass of them is poor, yet there is a wealthy class, and there exists, even in the interior, a demand for much more than the mere necessaries of life.

Now, what have the United States done in the past in this great country, how do they stand there to-day, what can they do and what should they do in the future? These are the considerations that most concern us.

To answer the first two of these questions there are two sources of statistics which we can examine—the returns of the United States, and of the Imperial Chinese Maritime Customs. Unfortunately, both of these sources are rendered valueless for exact deductions because of Hongkong. This, as is well known, is a British colony, and one of the few places on the globe where actual free trade exists. Being a British colony, enjoying free trade and possessing a magnificent harbor, it has become a great depot, or warehouse, where goods, whose ultimate destination, either in China or anywhere else in the Far East, is not definitely fixed, are shipped in the first instance, and thence rebilled to the point of consumption.

In this act their nationality is lost, for the returns of the shipping nation classes them as exports to Hongkong, while China, of course, treats them as imports from that place. The import returns of the Imperial Maritime Customs show that nearly one-half of the foreign commerce entering China comes from Hongkong. Thence many writers fall into errors, either by taking the direct trade between China and any other country as limited to the reported figures, or by classing Hongkong under the head of Great Britain and Colonies. The conclusions reached in these ways are grievously wrong. Although foreign goods are transshipped from Hongkong to Japan, the Philippine Islands, Siam and other parts of the Orient, yet at least three-quarters of all goods (of American probably a higher proportion) received there find their final market in China; so to determine approximately the exports from the United States, or from any other country to China, the only way is to add to the direct exports three-quarters of the shipments to Hongkong. And to determine the relative standing of the trade of several nations, we should deduct the Hongkong trade from China's total as shown by the returns of the Imperial Maritime Customs, and then compare the reported direct imports or exports. This last calculation will not yield the actual amount of trade by about one-half, but it will show with fair closeness the percentage of trade secured and the rate of increase. I have in this manner obtained the figures for the year 1893, the period just previous to the Japanese War; those of 1883 and 1873, respectively the tenth and the twentieth year preceding 1893; and those for 1898, the fifth year following, and also for 1899, the Last complete year of normal trade conditions existing before the Boxer revolution. This table shows the import trade of China exclusive of Hongkong and the relative standing of the leading commercial powers, the actual trade of which is not as stated, for the table does not include shipments through Hongkong.

 

DIRECT EXPORTS TO CHINA.

1875.
Hk. Tis.
1883.
Hk. Tis.
1893.
Hk. Tis.
1898.
Hk. Tis.
1899.
Hk. Tis.
Total, except Hong-kong 44,202,000 45.863,000 72,435,922 116,737,079 146,652,248
Great Britain 20,991,000 16,930,000 28,156,077 34,962,474 40,161,115
India 16,709,000 17,154,000 16,739,588 19,135,546 31,911,214
Japan 3,207,000 3,738,000 7,852,068 22,581,812 31,414,362
Continent of Europe. 662,000 2,385,000 5,920,363 10,852,073 13,405,637
United States 244,000 2,708,000 5,443,569 17,161,312 22,288,745

In the above table all the Continental powers of Europe are grouped as one. From this it will be seen that the export trade of the United States, an insignificant amount in 1873, has now outstripped the combined exports from the whole Continent of Europe, and will be soon contesting for second place with India and Japan. Had it not been for sudden increased shipments in 1899 of certain special articles like coal on the part of these countries, which articles China can and-should produce, the United States would have passed the Indian trade and be close on to that of Japan. In point of exports from China the United States trade in 1899 had reached a point surpassing that of any other country except Great Britain.

But along what lines have these increases been made? Do they represent only a greater outturning of raw material—the direct products of the soil—or of manufactured articles, carrying with them the results of American ingenuity and American labor, a form of export trade always the most desirable?

Taking the full list, there were, according to the United States Government classification, exports in 1893 under fifty-seven heads, but in 1898, according to the same classification, exports under seventy-six heads. The greater part of the increase in the five years (amounting to a total of $6,091,613) was due to manufactures of cotton, which increased $3,558,791; to raw cotton, which increased from nothing to $370,670; to manufactures of iron and steel, including machinery, $116,018; and to oils, chiefly kerosene, $1,055,797. The manufactures of cotton, which in 1898 amounted to $5,193,127, reached, during the next United States fiscal year (1899), $9,811,565. That is to say, the value of cotton cloths alone was, in the year 1899, almost as large as the value of the total American imports into China during the preceding year of all articles of whatsoever nature. This class of goods, the products of our New England and Southern mills, is the greatest single item of American commerce, and has already reached a point where, in certain grades, it dominates absolutely the Chinese market.

Taking drills, jeans and sheetings, the three great items of cotton goods consumed by the Chinese, and examining the trade of the three northern ports of Niu-chwang, Tien-tsin and Chefoo, American goods comprise of total receipts at the first: ninety-eight per cent., and at the second and third ninety-five per cent., the small remaining balance being divided between the English, Indian, Dutch, Japanese and other manufacturing nations. But quite as extraordinary as this there must be kept in mind the fact that of the total exports to all countries of American manufactures in cotton cloths, the Chinese market consumes just one-half.

Another article of American commerce that figured very small in the early returns, but now shows a great and increasing importance, is flour. It is shipped almost wholly to Hongkong, and thence forwarded to Canton, Amoy or other southern Chinese ports. In the fiscal year ending June 30, 1898, no less than $3,835,727 worth was exported from here, and during the corresponding period of 1900, a value of $1,502,081. Wheat is not grown in southern China, and American flour has captured the demand, just as American cottons have done in the north. Next to Great Britain and Germany our best customer for American flour is China.

Such is the state of our Chinese trade to-day, and no one can find fault with its present condition and its recent development. But what of the future?

The success of the American commercial invasion depends absolutely on the maintenance of the existing status. China, in the liberality of the regulations affecting foreign commerce, is second to no other nation. In levying a tax, amounting to less than four per cent., she gives preferential duties to none, special privileges only as compelled by the stress of force in Manchuria and Shan-tung, and extends a freedom of welcome to all. It is true that nations occupying Chinese territory make so far no invidious distinction between their own and other people; but it must be remembered that their tenure is only nominal, and while the title to these lands remains vested in China, it would be difficult, in the face of existing treaties, to impose discriminating rules. Let Russia, however, become legally, as she is virtually, possessed of Manchuria; let her Trans-Siberian railway be completed, and let her claim openly as her own, not only Manchuria, but also the metropolitan province of Chi-li, is it to be supposed for one moment that the present freedom and equality of trade that China offers will be maintained? If anyone believes this let him talk with those in China who direct the course of Muscovite affairs. These officials, when in a confidential mood, will explain that the Trans-Siberian railway is a Government enterprise, and that it is much more important for Russia to give low and special rates to Russian cotton and other manufactures which the Government is fostering at home than to look for a direct profit from the operation of the railway. And yet Manchuria and the northeastern part of China are to-day the best market for American goods. During the year 1899 no less than $6,297,300 worth of our cottons alone entered the port of Tien-tsin, and $4,216,700 worth entered the port of Mu-chwang in addition. The latter amount was for consumption in Manchuria, Chinese and Russian. It is interesting to note that the whole import trade (including exports through Hongkong) from Russia, Siberia and Russian Manchuria to the whole of the Chinese Empire amounted to less than the imports of two grades of American cotton goods at Niu-chwang alone. When, therefore, Russia seized Lower Manchuria, the country most interested next to' China, whose territory was being despoiled, was not Japan, who was being robbed of her fruits of victory; was not Russia, who was adding another kingdom to her empire; was not Great Britain, the world's great trader, but it was, little as it was appreciated, the United States. The American interests in seeing commercial equality maintained, far and away transcend those of any other nation.

Foreign trade in China to-day is confined exclusively to the treaty ports located along the coast and up the Yang-tze River. When goods are shipped to China, they are resold by the foreign houses resident in these treaty ports to Chinese merchants, and by them in turn are retailed in the interior. So far, therefore, as the foreigner directly is concerned, his trade is confined simply to the outer edge of the country; to him the interior is a terra incognita. The success of a commercial invasion depends, not on these treaty ports, not on the purchase of goods along the outer edge of the country, but on the possibility of reaching directly that great mass of population which lies far away from the sea, out of reach of existing means of transportation, and practically buried in the interior. If they cannot be got at, or if, when reached, they cannot and will not trade, then it is not worth while to consider any general forward movement.

In the course of my journey in the interior of China, I went through the province of Hu-peh, which the Yang-tze Kiang traverses; the province of Kwang-tung, lying along the China Sea, and, between these two, the province of Hu-nan, which practically had not been traversed before by white men. Here evidently was virgin soil, and its condition can, therefore, be taken as a criterion of what the Chinaman is when unaffected by foreign influences. Even here I found that, although the foreigner's foot might never before have trodden the streets of the cities, his goods were already exposed for sale in the shopwindows.

In thinking of the Chinese, especially those in the interior, we are wont to consider them as uncivilized; and so they are, if measured scrupulously by our peculiar standards. But, on the other hand, they might say with some justice that we are not civilized according to the standards that they have set for themselves, founded on an experience of four thousand years. "With all its differences from ourselves, a nation that has had an organization for five thousand years; that has used printing for over eight centuries; that has produced the works of art that China has produced; that possesses a literature antedating that of Rome or Athens; whose people maintain shrines along the highways in which, following the precepts of the classics to respect the written page, they are wont to pick up and burn printed papers rather than have them trampled under foot; and which, to indicate a modern instance, was able to furnish me with a native letter of credit on local banks in unexplored Hu-nan, can hardly be denied the right to call itself civilized. In the interior—in those parts where no outside influence has ever reached—we found cities whose walls, by their size, their crenelated parapets, and their keeps and watch-towers, suggested mediæval Germany rather than Cathay. Many of the houses are of masonry, with decorated tile roofs, and elaborately carved details. The streets are paved with stone. The shops display in their windows articles of every form, of every make. The streams are crossed by arched bridges unsurpassed in their graceful outline and good proportions. The farmer lives in a group of farm buildings enclosed by a compound wall—the whole exceeding in picturesqueness any bit in Normandy or Derbyshire. The rich mandarin dresses himself in summer in brocaded silk, and in winter in sable furs. He is waited on by a retinue of well-trained servants, and will invite the stranger to a dinner at night composed of ten or fifteen courses, entertaining him with a courtesy and intricacy of etiquette that Mayfair itself cannot excel. Such are actual conditions in parts of China uninfluenced by foreign presence, and so far the civilization of the interior is a real thing. That the Chinaman allows his handsome buildings to fall into disrepair; that his narrow city streets reek with foul odors; that the pig has equal rights with the owner of the pretty farm-house; and that the epicure takes delight at his dinner in sharks' fins instead of terrapin—these are merely differences in details; and if they are faults, as we consider them to be, they will naturally be corrected as soon as the Chinaman, with his quick wit, perceives his errors, when the opportunity to study Occidental standards comes to him.

Chang-sha, the capital of Hu-nan, is one of the most interesting cities in the whole Empire, as marking the very highest development of Chinese exclusiveness and dividing with Lhassa in Tibet the boast of shutting its gates tightly in the face of foreign contamination. In a previous chapter an account was given of how the present conservative governor had closed the schools organized by his more liberal predecessor, and had tried to root up the budding movement toward reform and progress. But he made one interesting and highly suggestive omission in allowing the electric-light plant to continue. When, at the end of our first day at Chang-sha, as I stood on my boat watching the city wall, the picturesque roofs, the junks on the shore and the surging crowd slowly lose their distinctness in the twilight, and then saw them suddenly brought into view again by the glare of the bright electric arcs as the current was turned on to light the narrow streets, I smiled as I realized the utter impossibility of stopping the onward march of nineteenth century progress, and that the Chinese themselves, even at the very heart-center of anti-foreignism, are ready to turn from the old to the new.

In the shop-windows at Chang-sha there are displayed for sale articles with American, English, French, German, Japanese and other brands. One shop, I noticed, displayed a good assortment of American canned fruits and vegetables. This is the condition of affairs, not in Shanghai or Amoy, open ports, but in the most exclusively Chinese section in the whole Empire. That the Chinaman will buy, that he will adopt foreign ways, there is no question; and he is just as ready to make the greater changes in his life that must result from the introduction of railways as to buy a few more pieces of cotton or a few more tons of steel.

But in order to buy more the Chinaman must be able to sell more; for no matter what his inclination may be, unless he has something to give in return, he cannot trade. The exports from China have been expanding gradually, and in step with the imports. In 1888 they were 92,401,06? tails: had increased to 116,632,311 taels in 1893, and had further advanced to 195,784,332 taels in 1899. The two great items of Chinese export, as was shown above, are silk and tea. The output of silk is increasing steadily, especially in the manufactured form. The amount of tea exported, however, is not on the increase, being about the same that it was ten years ago, the tea trade having been adversely affected by the competition of Japan, Ceylon and India, where more favorable transportation facilities have given advantages. Both tea and silk, however, are staple articles, with no chance of substitutes being found, and the world's demand for both is steadily increasing. The possibility of enlarging the output of silk is great, for there are in Northern Kwang-tung alone large areas of land capable of producing mulberry, that are lying idle at present because there are no transportation facilities.

The idea we have of the interior of China as overpeopled, and with every square foot of land under cultivation, is entirely without foundation, except possibly in certain portions of the great loess plain in the north. There is a great amount of land, capable of producing crops of various kinds and of supporting a population, that to-day lies fallow and unfilled. Given the means of sending their produce to the sea and so to the foreigner, the people of the interior will see to it that the produce is ready.

Then there are vast mineral resources that are practically untouched. China, with coal-fields exceeding in quantity those of Europe, imported last year no less than 859,370 tons of coal, valued at $4,477,670 gold, nearly the whole of which came from Japan. With railways to bring the output of the mines to market, there will not only be no importing, thus permitting at least that amount to be expended for other foreign goods, but there should be a large export of coal to Hongkong for foreign shipping, and to other Eastern countries for local consumption. In addition to the coal, there are beds of copper, iron, lead and silver that, to-day untouched, are only awaiting the screech of the locomotive whistle.

In short, the resources, both agricultural and mineral, are at hand to permit a foreign commerce to be carried on—to pay the cost of building of railways and to provide sustenance for a commercial invasion.

But as yet China has made no effort to develop her latent powers. As was shown, the bulk of her exports are confined to two articles, due to her people not utilizing their natural advantages in diversity of soil and climate. Each locality produces that single article which gives the best local result, without considering broad market conditions. Thus in the south it is mostly silk and rice; in the central zone, rice and tea, and in the north, millet and wheat. Every bit of valley land is cultivated, but the hills are let go waste. There are great areas of grazing land where some day the Chinese will let herds roam, producing beef and hides, which they will turn to commercial profit; while on other hillsides, as I saw being done in places, they will set out forests, and arbor culture will be well suited to their patient ways. As yet they have worked their lands only with a view to home consumption; there are many ways in which they can devote them and their energies to furnish export articles for the imports they will buy.

The position of the United States in China is peculiarly advantageous, because, in the first place, China regards our country as friendly in the desire to protect rather than despoil her territory, and because, in the second place, other nations have been willing to see ours come forward when they would have objected most strenuously to the same advancement on the part of one of their own number. The men who guide our national affairs and foreign commerce should always see to it that China's confidence is not abused. But as for the friendliness of other nations toward us in relation to China, so soon as the pressure of American trade begins to be felt by them, efforts will be made to thwart it if possible; and it must be remembered that to-day all the machinery of commerce, in the way of banks, transportation companies, cable lines, and other forms, is in their hands. When the meeting of the American and European invasions takes place, unless we have an organization, a base and rallying point, a tangible something besides mere labels on boxes or bales as representing American force, the struggle will be a hard one, for the native is apt to judge his associates by the outward visible signs, and with a natural tendency to deal with the strongest. In this respect commerce in the Far East stands, and will stand for a long time, on a different footing from that of commerce in Europe.

In order to be thoroughly successful, to expand our trade far beyond its present boundaries, we should make a careful and intelligent study of the Chinaman in his tastes and habits. If we wish to sell him goods, we must make them of a form and kind that will please him and not necessarily ourselves. This is a fact too frequently overlooked by both the English and ourselves, but one of which the Germans, who may be our real competitors in the end, take advantage. For example, at the present moment, if a careful study were made of Chinese designs, the market for American printed goods could be largely broadened. It is not for our people to say that our designs are prettier; the Chinaman prefers his own, and he will not buy any other. The United States Minister to China, talking upon this subject, gave me a striking instance of foolish American obstinacy. The representative of a large concern manufacturing a staple article in hardware, let us say screws, had been working hard to secure an order for his screws, which he knew were better than the German article then supplying the demand. At last he obtained a trial order, amounting to $5,000, which he cabled out; but it was given on the condition that the screws be wrapped in a peculiar manner, say in blue paper, according to the form in which the native merchant had been accustomed to buy them. Was the order filled? Not at all. The company cabled back that their goods were always wrapped in brown paper and that no change could be made. The order then went to Germany. To the American concern an order for $5,000 was of small moment, perhaps; but they overlooked entirely the fact that this was the thin edge of the wedge, opening a trade that could be developed into tremendous proportions. This instance is not isolated, for, unfortunately, the reports of all our consuls are filled with parallel ones.

A study must also be made of the grade and quality of the article shipped. It is no use to send to China, to be sold in the interior, tools, for instance, of the same high finish and quality that our mechanics exact in their own. A Chinaman's tools are hand-made, of rough finish and low cost. In the interior cities one sees a tool-maker take a piece of steel, draw all the temper, hammer it approximately to the shape of the knife or axe, chisel or razor, or whatever other article he may be about to make; then, with a sort of drawing-knife pare it down to the exact shape required, retemper it, grind it to an edge and fix it in a rough wooden handle. This work is done by a man at a wage of about ten cents a day, and this is the competition that our manufacturer must meet. In spite of the difference in cost of labor he can do so, because his tools are machine-made and are better; but he must waste no money on unnecessary finish.

As an example, the case of lamps is directly to the point. The Chinaman fairly revels in illumination; he hates the dark, and everywhere, even in the smallest country towns wholly removed from foreign influence, it is possible to buy Standard oil or its competitors in the Chinese market, the Russian and Sumatra brands. The importation of illuminating oils is increasing tremendously. In 1892 it was 17,370,600 gallons, and in 1898 it was 44,324,344 gallons. But what of the lamps in which this oil is burned? In 1892 the United States sent to China lamps to the value of $10,813, and in 1898 to the value of $4,690. That is to say, lamps are one of the few articles which show a decrease. While the consumption of oil had increased more than two and one-half times, the importation of American lamps had decreased in almost the same ratio. This was not due to the manufacture of lamps in China, but to the German and Japanese manufacturers making a study of the trade and turning out a special article. These lamps—and I saw them for sale everywhere, even in unexplored Hu-nan—have a metal stand, generally of brass, stamped out from thin sheets, with Chinese characters and decorations; and were it not for a small imprint of the manufacturer's name on the base, they would be considered of Chinese make. They are inexpensive, of the kind desired by the Chinaman, although perhaps not for sale in Hamburg or Berlin. On the other hand, the American article, much more handsome, from our point of view, but also more expensive, is of the same style as is sold on Broadway, in New York.

There is no need to multiply examples. There awaits the American manufacturer an outlet, especially for tools, machinery and other articles in iron and steel. He will find a demand for the smaller and lighter machines, rather than for the larger ones. That is to say, he must appeal first to the individual worker who exists now, rather than aim at the needs of a conglomeration in a factory, which will come about in the future. The tools should be simple in character, easily worked and kept in order, and without the application of quick-return and other mechanical devices so necessary for labor-saving with us. Light wood-working machinery can be made to supplant the present manual-labor methods; and a large field is open for all kinds of pumps, wind-mills, piping and other articles of hydraulic machinery.

Cotton goods of the finer grades, as well as the coarser which are supplied, household articles of all kinds, glassware, window-glass, wall-paper, and plumbing fixtures will find a ready market, as will also farm equipments, such as light-wheeled vehicles and small agricultural implements of all kinds. In these, as in many manufactured articles, American trade has as yet made little or no impression; and yet the American article has an acknowledged superiority over any other foreign make.

It is necessary for us also to study the Chinaman himself. The English and American traders make but little attempt to learn the language, and, therefore, frequently fail to come into personal contact with the native merchant. They are inclined to leave such negotiations to be conducted through a compradore, a native in the employ of the firm, who makes all the contracts, and who guarantees to his firm all native accounts, receiving a commission for his services. The German, and especially the Japanese, merchants, on the other hand, make a great effort to come into direct relations with those with whom they trade. They are still making use of the compradore system, but within reasonable limits. As to which course is preferable in the long run there ran be no question. Our houses should adopt the suggestion made in the report of the Blackburn (England) Chamber of Commerce, "to train in the Chinese spoken language and mercantile customs youths selected . . . for their business capacity. Such a system," the report adds, "would give us a hold over foreign trade in China that present methods can never do."

Finally to be considered, there is the official representative of the United States, the consul. It is bad enough, as our practice is, to send consuls to France, or Germany, or Italy, who are unacquainted with the language of the country. But how much worse to send as our Government agents to China, the nation most difficult of all to come into relations with, men without any idea, not only of the language, but of the customs and the idiosyncrasies of the people.

This is not a reflection upon our present staff, many of whom are excellent and worthy men and who are now acquainted with the characteristics of those to whom they are accredited. But under our system, by the time a man understands his duties, he is removed. Nowhere else in the world is there so great a need for a permanent consular service as in China.

The British Government long ago established a separate consular service for the East, entirely distinct from that elsewhere, so that a man once in the Chinese service stays there, and is not likely to be transferred to a European or American post. Secretary Hay has lately made a beginning toward this end by proposing to establish a school at Peking. If the idea is not carried out now, circumstances will compel its adoption later. We should awake to the realization of our opportunities, and unite for the invasion, not only of China, but of other Oriental lands as well.

  1. This article will form part of a book entitled 'An American Engineer in China' to be! published shortly by Messrs. McClure, Phillips & Co.