civilized nations, he should have no desire, so long as the reception fell short of such requirements, to appear in the imperial presence. It may be argued that any temple or hall which is good enough for the emperor should be good enough for a minister of a foreign state. But in China such reasoning is inapplicable. In that land of rites and ceremonies every form carries with it a distinct meaning, and no observance is without an arrière pensée. An audience granted to the foreign ministers in a pavilion consecrated to "the New Year receptions of the outer tribes" sets its seal on the ministers as representing states on a par with Tibet and the Mongolian dependencies. The Foreign Offices of Europe, with the exception of that of St. Petersburg, are so little accustomed to Asiatic modes of thought that these considerations are beyond their ken. Forms which in the eyes of Chinamen are of vital importance are regarded by them as insignificant details, and they are apt to consider as trivial and ceremonious that which really involves the weighty matter of national honour.

CHAPTER XVIII.

FOREIGN TRADE WITH CHINA.

No one would dispute the right of the Chinese to be called a nation of shopkeepers. From the earliest dawn of history they carried on, as their records tell us, a constant trade with the neighbouring states; and with the growth of power they built up, with laudable shrewdness and industry, that system of commerce which excited the admiration of Marco Polo, and which at the present day strikes with astonishment the visitors to the treaty ports. On all sides evidences of flourishing trade and accumulated wealth are observable. The rivers and canals are crowded with junks carrying the merchandise of Europe and of the distant provinces of the empire to marts where these may be exchanged for the products of other localities. Centuries before the first ships from Europe reached the shores of far Cathay, the merchants of China had gained for themselves throughout Eastern and Central Asia a well-earned reputation for commercial enterprise and ability. The arrival of foreigners at Canton added but a drop to the mighty stream of native trade. The cottons and goods of Manchester were, it is true, taken in exchange for a portion of the tea and silk of the

central and southern provinces, but the addition to the existing commerce was, as it still is, comparatively trifling. This may appear anomalous when we recollect that the total value of the foreign trade with China has reached, as the returns for last year (1892) attest, to the very considerable amount of 237,684,723 taels, or, reckoning the tael at its present value, to about fifty millions sterling. The growth of this vast trade has been rapid and continuous. In 1845 its value was not more than six millions sterling. Without deviation this sum has steadily increased until it has now reached its present large proportions. But though this is so, there are considerations which considerably diminish the value of the trade to us as a nation. Up to the year 1862 to be a China merchant was to be a rich man. Fifteen years in a Hong at Shanghai or Canton was time enough to accumulate a fortune which even to English ears sounded colossal. Men went out in the prime of youth and returned loaded with wealth before their complexions had had time to become yellowed by an undue residence in the East. In almost every county in England and Scotland retired China merchants were to be found, who supported liberally every national sport and contributed with lavish generosity to the charities and hospitals of the district. But such days are past But such days are past and gone. Fortune was kind to those who retired before the very serious competition arose which now wrests from the British merchant a large proportion of the gains which used to flow into his pockets. In the halcyon days before the date spoken of, the trade was almost entirely in the hands of Englishmen, who fixed the market prices, and bought and sold

with leisurely ease. Now, however, competition from the continent of Europe, the United States of America, China itself, and later still, Japan, has become keen enough to reduce to very small proportions the profits which used to be gained by the older generations of merchants. An additional cause for anxiety is also found in the fact that of late years the trade of Great Britain with China has not increased in the same proportion as that of the countries of the continent of Europe.

In 1880 the value of the direct trade with Great Britain was 49,705,207 taels, while last year (1892) it amounted only to 39,346,399 taels. This falling off in the direct trade was aggravated by the fact that whereas in the first-named year the value of the tael was about five shillings and fourpence, in 1892 it had fallen to four shillings and fourpence halfpenny. It is true that the trade of the colony of Hong Kong with China increased by leaps and by bounds during the same period. In round figures the advance was from 46,000,000 taels to 110,000,000 taels. This is accounted for by the change which has come over the conduct of trade. From being merely a place of passage Hong Kong has become, in course of time, a place for the transhipment of goods. It is there that cargoes brought from Europe and America are transhipped into smaller steamers which distribute them among the treaty ports, and it is to Hong Kong that the products collected at the ports are severally sent to be transhipped into ocean-going steamers for Western lands. This system applies not only to the British trade, but to the European and American trades. The great increase which has accrued, therefore, to

X

Part of it must certainly

Hong Kong must not be, by any means, credited altogether to our account. go to swell the returns countries with China. Continental trade with

of the trade of other In 1880 the value of the China was 14,157,975 taels,

and last year this amount had increased to 22,294,682 taels; while at the corresponding dates the trade of the United States with China stood at 10,311,442 taels and 16,846,555 taels respectively. It will be seen, therefore, that, while our direct trade with China has decreased, the direct trade with Europe and the United States has increased. It is probable, however, that our commerce may be credited with twenty-five per cent. of the Hong Kong trade, and that therefore the result shows some increase, though not in proportion to that acquired by Europe and America. It is unfortunate, also, that while the total volume of foreign trade with China has increased, the profits to be derived from it have considerably diminished; and it is an open secret that British firms have for some years been working at only a very small margin of advantage.

In the report for 1891, issued by the Chinese imperial customs, this unfortunate condition of affairs is insisted on. Although," it is stated, "more merchandise, to the value of twenty million taels, entered and left China than in the preceding year, the past twelvemonth cannot be recorded as one of commercial prosperity. Capital invested in the trade has yielded meagre returns. . . . Most banks had to reduce their rate of interest, and in some cases earned nothing on their capital, while two of the largest old-established firms suspended pay