came into play. Tea and silk were the two important articles of export, the same that China sent into the world's commerce. The problem then presented was how a larger share in the existing market for these commodities could be obtained, and a share in any increase of market offered. China, by neglect of reasonable precautions, suffered the quality of both her tea and silk to degenerate, and the outside buyers were not slow to determine this fact. The value of teas exported from China has hardly varied in the last thirteen years, nor has raw silk followed another course. Only in silk cocoons and in manufactured piece goods of silk (including pongees) has there been an increased export. Japan, on the other hand, paid great attention to her products, and has reaped her reward. The exports of silk have doubled since 1885, and those of silk manufactures have risen from less than 270,000 yen in 1885 to 16,232,000 yen in 1895, and have attracted hostile duties in both France and the United States. The movement of tea has not been so progressive, showing only a small increase; but coal has quadrupled (2,004,000 yen in 1885, and 9,018,000 yen in 1896) due to Indian competition; cotton manufactures have gone from 181,000 yen in 1885 to 3,378,000 yen in 1896; manufactures of wood, bamboos, etc., from 112,000 yen to 6,129,000 yen; and of copper (raw) from 8,183,000 catties to 11,241,000 catties. In the aggregate, the exports have increased from $31,630,000 in 1885 to $61,571,000 in 1896.

Many have seen in this advance a picture in small of what will occur in China on a grand scale. There are certain differences that may be noted. The character of the two peoples are different, and the Japanese have much higher organizing powers. "The truth is that a man of good physical and intellectual qualities, regarded merely as an economical factor, is turned out cheaper by the Chinese than by any other race; he is deficient in the higher moral qualities, individual trustworthiness, public spirit, sense of duty and active courage, a group of qualities perhaps best represented in our language by the word manliness; but in the

humbler moral qualities of patience, mental and physical, and perseverance in labor, he is unrivaled.

"European superintendence is essential precisely because of their moral shortcomings above stated. Judged by our standards, we must pronounce all organizations in China (with a few exceptions) above the family and the small business partnership, to be hopeless failure. The upper class seem to lack the moral tone to carry on by enterprises; indeed the laws and the courts of justice are wanting as well as the men.”*

Japan fearlessly went into the money markets and obtained the capital needed for her enterprises. China is held under

No

a crushing weight of custom, of stagnating civilization, and is to be in tutelage for the account and profit of others. one can doubt for a moment that Europe does not regard the coast provinces as the end of their leases or cessions, or occupations. It is the great interior of China they have in view, and are so anxious to develop. The claim of Italy may be taken as a sample. A lease of the bay, and three islands in it—these matters are first; then the right to build a railroad to Po-yan Lake about one hundred and fifty miles from the sea is claimed, a claim that extends to running the railroad after construction. This is important, as many rivers empty into this lake, navigable into the interior of the surrounding country. Finally preferential mining and railroad rights within a sphere of influence covering two-thirds of the province of Che-kiang-a province containing 36,000 square miles (about one-third as much as Italy herself) and a population estimated at 20,000,000 (about twothirds the present population of Italy). So France in Tonking has her eye on Yunnan, and England, at the mouth of the Yang-tze, hungers for the trade of provinces 1,500 miles from that mouth, but only to be reached through it at present. Germany and Russia are no more neglectful of the prospective virtues of hinterlands. A map colored to meet the wishes of these land grabbers would resemble that of the *Blackburn Report (Bourne), 9.

American colonies of England, when charters were granted to extend from the Atlantic Coast to the South Sea. So anxious are they to obtain a part of what is lying waste that combinations are made like the Anglo-German negotiations for a railway from Tien-tsin to Chin-kiang; and the railroad enterprise over which England and Russia have nearly come to blows.

There are certain obstacles which stand in the path of the commercial development of China, and these obstacles now effect the merchants and products of all nations trading with the Chinese, though not in an equal degree. There is the natural disadvantage of the want of roads and easy access to the interior provinces. There are the rivers, to be sure, and they are great waterways. Apart from them the system of porters is used, a slow, painful and somewhat costly process of transportation. For many commodities it is prohibitive, and it practically confines the export interests of the far western provinces to such products as are of small bulk, and high value-silk and opium. The mountainous regions have mere tracks rather than roads, so narrow that the shoulder poles cannot be used; and a light frame strapped on the back of the coolie takes its place. "The weight which a coolie can carry in this way is perfectly astonishing, and it is a common sight to see him struggling over the most execrable roads having on his back three bundles of Sha-si made cloth, each containing thirty-nine pieces, equal to a load of 220 pounds. Of cotton yarn the load is 160 pounds, and one frequently meets coolies carrying 160 pounds of tin or copper, which has come from the mines in the district of the Tung-chuan."* Pack animals are not generally used, a coolie can carry a larger load, and while he takes a longer time is quite as cheap-3s. 2d. being a charge for 130 miles.

The first change must be toward constructing better roads where water carriage is not available. Cochin China and Tonking are favored by their many water courses, both

*Blackburn Report, Neville and Bell, 78.

rivers and canals. Not only do these favor the cultivation of rice, but permit a ready shipment of the crop, just as Virginia and North Carolina were favored in their rice and tobacco days by the same means of getting direct to the plantations. Annam and Cambodia are wanting in rivers. The West River of China is not available to trade; but the Red River promises a means for the French to reach Yunnan -called "the natural economic complement to Indo-China." Even the further sections of the Yang-tze offer serious problems to the navigator-rapids and a rise of seventy feet during the freshets. The Yellow River is more uncertain in its course than our Mississippi, and it is a common occurrence for it to leave its bed, plow a new course through a densely populated country, carrying death and destruction in its new path, and leaving drought and famine in its old. Railroads will supplement river traffic but can never supersede it; and for some time railroad ventures will be costly, uncertain and experimental.

Good means of transport and communication will avail little without a thorough revision of the tax question. This means a reform of provincial or local administration. The likin on imports and the duties on exports not only limit the distribution and consumption of foreign products, but place China at a disadvantage with rival peoples. The existence of these taxes is an encouragement to official corruption, and it is estimated that of every three taels collected, only one reaches the imperial treasury. The burdens imposed by a series of likin barriers, each one taking its toll at a rate fixed by the local authority, involve serious loss and discouragement to trade. Hong Kong is the natural port for the southern provinces. But the impositions levied on merchandise on the West River make it more profitable to take goods intended for Kwang-si to the seaport of Pakhoi, thence partly by boats and partly by porters to the upper waters of the West River, a journey of eight days. One reason for resorting to coolies is the desire to avoid likin stations.

The likin question has in a measure determined the position

of the foreign merchant in China. Generally speaking it has been the treaties with foreign countries that fixed the rights and privileges of the foreigner on Chinese territory. But a subtler and even more powerful influence has neutralized the advantages expected to flow from treaty provisions, and a change of some moment has been wrought so quietly and yet with such determination, that the foreigner, as merchant, may be said to be out of China.

What has been the position of a merchant in China until a very recent time? He possessed a bare right to import and export at certain ports established by treaty. In these ports he occupied a "concession," that is a piece of ground leased by the Chinese Government to his own government, and sublet to the merchant; or a "settlement," an area within which he may lease land directly from the native authorities. He could not manufacture, he could not mine or engage in agriculture. He was a mere commission merchant, for outside of these places, the internal trade is in the hands of the Chinese, "excellent peddlers" as they are. Of late some concessions have been made. By treaty privilege steamers may be sent up the Yang-tze to Ch'ung-king, a distance of 1,400 miles from the sea. Under the treaty of Shimonoseki the right to manufacture has been granted and machinery may be imported. Twenty-one ports are treaty or open ports.*

On

It was the purpose of the negotiator of the treaty of Tientsin to lighten some of the burden of these likin or local charges, and the transit pass system was the outcome. payment of the legal customs duty at the port of entry, and one-half that tariff in addition, goods, whether import or export, should be free to pass between the port of shipment or entry, to or from any part of China, without further charge of toll, octroi, or tax of any description whatsoever.†

These are: New Chwang, Tient-sin, Chefoo, on the northern coast; Chungking, I-Chang, Shasi, Hankow, Kiu-kiang, Wuhu, Chinkiang, and Shanghai, on the Yang-tze River, Ningpo, Wenchow, Foochow, Amoy, Swatow, Canton, Hoihow (Kiungchow), and Pakhoi, on the coast south of the Yang-tze; and Hang-chow and Soo-chow, two cities in the neighborhood of Shanghai.

+ Lord Elgin, in China No. 4, 1870.