To Germany in 1878 we exported sixteen and one-half million ($16,500,000) dollars' worth of manufactured goods and products. In 1898 we had doubled that. We sent over to her thirty-two millions seven hundred thousand dollars' ($32,700,000) worth of manufactured goods right in the face of her activity. I say that was due almost absolutely to individual effort and individual study of the market of Germany, and the needs there. They manufacture what they need. We manufacture it a little better, a little finer, put little touches here and there which take the market. And that is what we shall have to do all over the world.

It has been the same with France. In 1889 we sent over a little over five million dollars' worth of manufactured goods and in 1898 nearly twenty-four millions right in the face of her activities. One item we sent into Paris was Turkish towels, manufactured in Philadelphia. Why? Because we manufactured a finer grade than they manufacture in any of the mills of England.

To Belgium in 1889 we sent nearly three millions' worth. In 1898 we sent over nine millions (9,000,000). See the progress.

I simply bring out these points to show that the markets of the Orient are ours if we will study them, and if individual effort is made to capture them. They are not ours unless we go to them. I had prepared a little more in that line, but I am going to let that go.

One word on the Philippines, and the work of those islands. In the first place I believe these new territorial provinces, that, I do not want to say we are acquiring, but which are under our care at the present time, are doing a great deal of missionary work for us.

We are all perfectly well aware of the fact that we are not, as formerly, carrying our own goods abroad. I think we all feel a little ashamed of that. Forty years ago 90 per cent of our manufactures were going abroad in our own bottoms. At the present moment only 20 per cent is carried by our own ships. I wonder if any one has stopped to think of the cause of this, or of the revenue paid to England and Germany for carrying our goods.

Last year three hundred million dollars were paid to foreign shipping interests to carry our exports to Europe and elsewhere. That is nine millions more than the manufactures which we sent over to Europe amounted to.

We sent abroad, all told, last year twelve hundred and forty-eight million dollars' worth of manufactured and raw products, and out of that we sent over to Europe, about, I believe, two hundred and ninetyone millions, but the cost of our shipping from this country, which was outside of our own shipping, was over three hundred millions.

Now the point I want to make there is this: We have broadened

out wonderfully since we have possessed a little interest in Porto Rico, Cuba and the Philippines. We are actually sending our own transports and ships to the Philippines, and carrying the mail, and are about carrying our goods to the near West India Islands. It is to be hoped that we will develop a habit of doing that, of studying the necessities of the trade with different parts of the world, and of building our own ships and doing our own shipping. It is to be hoped we shall remove the obstructive laws that have taken all our shipping off the seas. I think the acquiring of the Philippine Islands and other provinces will be a missionary work in the study of the question. Again, did you ever think of the cost to us-what we pay for not having foreign banks in the countries where we do business? London is the centre of a banking system which has branches in every quarter of the globe, and Great Britain pays tribute to nobody. We pay tribute in doing business with England of about one-half of 1 per cent, and we paid out a great many million dollars last year for the privilege of doing our banking business through London. I am in hopes that this acquisition of territory will be a missionary effort in this direction. We will have our own banks in Porto Rico, Cuba and possibly in the Philippines, and this experience may give us a leaning in that direction, for as soon as we begin to study the question practically we will see how much money we are losing.

I believe the Philippine Islands will be of great advantage to us as a distributing centre for the Eastern trade. With the eight or nine hundred millions of inhabitants that border around the Orient, and the seven hundred and seventy-five millions of export material that goes in there, we furnish only forty millions. It looks as if we were now about to have our opportunity, and if we put individual interest into it, there is no reason why we should not, at least, take our share of it from Great Britain, Germany and Belgium, and have three or four hundred millions instead of forty.

I believe that the Philippine Islands will take us over and lead us to do that.

The Philippine Islands themselves I believe to be immensely valuable. There is no richer spot on the face of the globe, covering, as it does, an area equal to New England, New York and Pennsylvania. It is wholly tropical; everything can be cultivated there that can be cultivated in any tropical country. The main products of the islands can be increased a hundredfold with the use of the arts and appliances of civilization. It would be amusing if I should give you some of the methods in which sugar is raised and manufactured in the Philippines, and I doubt whether, if the sugar was not entirely changed in the process of refining, you would want to eat any of it.

Fifteen or twenty years ago the Philippine Islands raised a great many million dollars' worth of coffee. To-day, or last year, only twenty-four thousand dollars' worth of coffee got outside of the Philippines. That is one of the most promising crops that might be raised in those islands. It would be just as valuable as the coffee of Java had the islands been peopled with an intelligent people capable of coping with the disasters which in every country come to crops. The coffee crop of the Philippines was entirely ruined by an insect, and it has been practically given up. The only crop encouraged by the Spaniards was tobacco, out of which they made a great revenue. Cotton-growing would also be extremely profitable. Manila hemp is perhaps the leading crop at the present moment from which we receive four or five million dollars a year, and which, if properly cultivated and properly studied, and the quality improved, could be made tenfold more valuable than now.

I want to state that I believe that the foothold we have obtained in the Orient will lead us to study the whole question. We will introduce civilized methods into those islands which will bring out the value-put our own sugar machinery in for that which is one hundred and fifty years old, antiquated and useless, introduce our own economic plans and ideas, and in that way increase the output and quality, and in time make one of the most valuable spots on the face of the globe of the Philippine Islands. At the same time being in the Orient, studying the whole question of foreign trade there, which is an individual study, based on individual effort, we will be able to take from other nations, not so active, perhaps, part of their trade, and as China and Japan grow in civilization, and need ten, or a hundred or a thousand fold of the civilized products they now need, we shall be on the ground ready and able to supply those needs.

Professor E. R. JOHNSON, University of Pennsylvania.

The purpose of this session of the American Academy is to discuss our commercial prospects in the East and the factors affecting them. The Hawaiian and Philippine Islands are factors that will influence our Pacific trade, but they are only two of many forces and a consideration of their influence is incidental rather than fundamental to the discussion in hand. These two groups of newly-acquired island possessions are attracting so much attention at the present time that we are in danger of making the double mistake of overestimating the commercial importance of the islands and of neglecting to study other and possibly more important factors that are to affect our Pacific trade.

In criticism of Mr. Ford's paper I would say that I sympathize with the general spirit and method of his study. There are so many loose and exaggerated statements current regarding the prospective expansion of our Pacific trade and the quickening influences that our new possessions are to exert that we need to have our assertions subjected to critical analysis, and Mr. Ford is a master of that art. However the man who loves analysis strongly may neglect synthesis; and I think Mr. Ford's study does not construct so many castles of hope as the facts warrant us in building. I shall endeavor to illustrate this by criticising one point in the paper.

From his survey of the industrial and commercial conditions, present and probable, of China, Mr. Ford concludes that China will increase her exports largely, but that she will not have occasion to import much, and of what she does import we shall have but a small share. As he says "Of the imports into China, cotton goods hold the first place, opium the second, rice the third and metal manufactures and mineral oils are of equal importance, as fourth and fifth on the list. In no one item of this enumeration has the United States a natural monopoly; and in only one (petroleum) has it a partial monopoly, fast being impaired; and in two (rice and petroleum) it has and can have no share.” These statements are true, and they seem to predict a sorry place for us in Chinese markets, but possibly they do not present the whole of the case. I think there is probably a stronger prospect than this picture indicates that American manufacturers will be able for some time to come to sell cottons and metal wares in China in competition with rival producers; of that however I will not speak; but will consider the probability of our being able to find larger markets for our food products in China. Is there reason to

expect that Japan, China and Eastern Asia will furnish a considerable market for American cereals?

The answer to this question must depend in part upon whether China is or is not going to pass through an industrial revolution. I agree with Mr. Ford that there is every indication that "China will not remain as she is. France, Germany, Italy, England, Russia— these nations have gone to Asia for a purpose. They intend to build railroads, open and develop mines, establish industries, and secure all they can from a careful attention to encouraging competition on Asiatic conditions."

Mr. Ford also expects that China will manufacture largely and import but small quantities. cottons, products of iron and steel, or other metals, or rice, China will utilize her own resources. This may be a work of time, but under the stimulus of so many competitors it will not require many years to bring it to pass. Every ton of iron, of copper or of tin wrought into metal ware in China; every pound of wool or of cotton, or of silk made into cloth in the provinces, will reduce the necessity of importing them from other countries."

He says: "In place of wanting

As regards one thing all observers of what is going on in the East are agreed; China is going to be controlled by occidental nations, and her natural resources of great value and variety are to be exploited. Concerning the development of textile manufacturing industries in China the future is not quite so certain; but the present indications are, as Mr. Ford suggests, that there are to be many cotton mills established in China. If the coal and iron and other mineral resources of China are exploited-of course it will be by native laborand if a considerable portion of the population becomes engaged in manufacturing, certain results are certain to follow; population will increase in numbers, the percentage of the population devoted to the production of foods will decrease, and the necessity for importing food will increase. China is now a large importer of food-rice being third in the list of imports; in the future she will be obliged to import more largely. China is now such a thickly settled country that these industrial changes must place her in the list of nations that depend upon foreign countries for a considerable portion of their food supply. Is this imported food going to consist exclusively or mainly of rice? If so, then we shall not share in China's food imports very largely, at least in the proximate future. So far as I know the Oriental has no antipathy to wheat and other cereals of the temperate zone. He eats rice because it is his natural domestic crop. During the past five years our sales of wheat flour have doubled in Hong Kong, have more than doubled on the continent of Asia and have nearly quadrupled in