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PROPERTY OF
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ARTES SCIENTIA VERITAS








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A RETROSPECT
OF
POLITICAL AND COMMERCIAL AFFAIRS
IN
CHINA
DURING THE FIVE YEARS 1873 to 1877.
> EDITED BT
Ef S^ GUNDKY. ,
SHANGHAI:
PRINTED AT THE "NORTH-CHINA HERALD" OFFICE.
1878.


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PREFACE.
Five years ago, a small volume was published containing a
reprint from the "North-China Herald" of the Ketrospects
of political and commercial events which are written every
year in that paper, for the five years from 1868 to 1872.
The project had been entertained of carrying back the
work in another volume to 1863, in order to provide a fairly
complete, even if very brief, sketch of events since the close
of the last war. Partly from lack of encouragement, however,
partly from other causes, this idea was not carried out;
but it was resolved to carry forward the design and to
publish a fresh volume at the expiry of another five years
—at the close of 1877.
That period has arrived; and a second volume, covering
the period from 1878 to 1877, is now published, with the
conviction that it will be found a useful book of reference
pending the appearance of a more pretentious history of our
intercourse with China.
The Political articles are, as in the former volume, solely
from the pen of the Editor, who is conscious that many
defects can be charged against them. The excuse is that
they do not pretend to be standard history, thoughtfully
elaborated in the ealm of a study, but simply retrospective
sketches of each year's events, written originally for publica-
tion in a newspaper.


The Commercial reviews, on the contrary, proceed from
many different authors j.but in each case from experts in the
subject treated of. The scope of these articles has continued
to expand yearly since they were first undertaken, as their
value has been recognised; and they form, it is believed,
a careful and complete review of the course of the four
chief staples of the China trade during the period treated of.


RETROSPECT
OP POLITICAL EVENTS IN
CHINA AND JAPAN
DUEING FIVE TEAKS (1873 TO 1877.)
18 V 3.
Political. The leading incident which we had to chronicle last year, was
the marriage of the Emperor—not, as we pointed out at the
time, the mere fact that His Majesty had taken to himself a consort,
but the acceptance of personal responsibility and power implied in the
proceeding. And his formal assumption of power, after a short interval
from the marriage, is the first incident that claims notice in our review
of 1873. His Majesty formally accepted the responsibility of govern-
ment on the 23rd of February; and the Foreign Ministers at once wrote
to the Tsungli-yamen, intimating their wish to congratulate him personally
on the event. Much haggling about form and ceremony j much
endeavour on the part of the Chinese to deprive the concession of its
value, and some effort on the part of the Ministers to assert the position
of the countries they represented—ensued. His Excellency Soyeshima,
Foreign Secretary to the Japanese Government, arrived in the meantime,
as Ambassador from the Mikado, and at once claimed admission to the
Presence on the same footing as his colleagues. Rumour said at the
time, that his firm attitude contributed to the eventual solution of the
problem; we must await the publication of official papers before judging
accurately the value of the report.
However this may be, the Audience was eventually had on the 29th,
in the building where Envoys of Tributary States are habitually received,
but with the essential difference that, in this case, the form of salutation
was foreign. The details of the ceremony appear to have been unobjec-
tionable. The misfortune is that proper measures were not taken to give
publicity to the circumstances, and to establish clearly in the eyes of


[ G ]
the Chinese the true position and power of Foreigners. So far from
this being done, the only notice taken of the ceremony in the Peking
Gazette was a statement that, as foreign envoys (designated by the same
term as the annual emissaries from Liuchiu and Corea) had supplicated
(the same term used by Chinese to supplicate a mandarin) permission
to present letters from their respective Governments, they might be
allowed to do so—and a routine announcement that the Emperor would go
on a stated day to the Temple in question, for the purpose of granting
audiences. The Mandarins who were present at the audience know of
course that the barbarians were too ill-bred and too unruly to kotow,
and that the Son of Heaven mercifully condoned their ignorance; but
what can the great mass of Chinese infer from the Gazette utterances,
but that the foreign envoys had been granted permission to humble
themselves before the Solitary Man, in the same manner and place as
other envoys had humbled themselves in all ages?
Greater in real, though less perhaps in nominal, importance than
the events just sketched, have been the successes of Imperial arms in
Yunnan and Kansuh. After years of independence under a Sultan of
their own election, the Mahomedans of Yunnan were finally crushed by
the capture of Talifoo, about the time of the Emperor's accession. Of
course the city was taken by treachery; even in Europe a proverb
exists that all is fair in love or war, and the Chinese push the axiom
to an extreme. They much prefer diplomacy to fighting, and are adepts
in the art of corruption. What is unfortunate is that some grains of
humanity are not also latent their character. The accounts received in
Burmah, of the capture and sack of Talifoo, describe a scene of massacre
and pillage scarcely equalled by the deeds of the Jews upon the Amalekites.
And now, from the North-west, we have an account of the capture by
Tso Tsungtang of the city of Suh-chow, which was the chief stronghold of
the Mahomedans in the further half of Kansuh. Suh-chow is situated
on the Tola river, just beyond the neck of land where Kansuh is nearly
divided by the converging provinces of Mongolia and Kokonor. The
account in the Peking Gazette speaks of hard lighting; and we accept
the statement for what it may be worth. It also gives a description
of butchery rivalling the achievements at Tali. "The troops," to quote
from the Imperial decree, "massacred the Mussulman inhabitants down
to the last man. Thus truly are Heaven's vengeance accomplished, and
the feelings of humankind assuaged." It is strange how all people, of
all religions, in all times, have been prone to claim the sympathy of
Heaven in the slaughter of its creatures! The success is evidently
thought much of at Peking, from the honours that have been showered
on the successful general and his subordinates. It seems to show that
• the Mahomedan insurrection has been thoroughly quenched within the
boundaries of China proper; and when we remember that, a few years
ago, not only was Yunnan a Mussulman State, but Kansuh, Shensi and
Shanse had been over-run by the Mahomedans in the Northwest, we may


[ ? ]
well conceive that the Central Government finds reason for congra-
tulating itself upon the present political position. Ten years ago, in
fact, half of China was more or less out of hand. Now, Imperial 
authority is unchallenged in a single province. Kansuh, Yunnan, and
Kweichow are not quite tranquillised, but the conditions of disturbance
appear to have sunk from rebellion to brigandage.
The young Emperor has not yet made any apparent mark; and we
may be quite sure that Court intrigue will do its best to restrain him
from too vigorous personal action. A rumour has come down that he //
has once or twice emulated the nightly strolls which rendered Haroun- **
Alraschid so famous and popular. Of course everything will be done to
dissuade him. Courtiers prefer that monarchs should see through eyes
not their own; but the action indicates some energy of character, and
leaves room for hope that he will be able to overcome the emollient
influences that surround him. The most notable change which he has
sanctioned, is the conveyance of Tribute rice by sea, in foreign-built
steamers, instead of by the old Canal route. It is regrettable that the iW
Canal should have fallen into such disrepair that the rice junks can *
actually not make their way throughout it; but it is well to find the
Emperor recognizing the superiority of steamers to the native junk, and
creditable to his great Minister Li Hung-chang, by whose advice the
change is introduced.
It also speaks well for the young Emperor's intention, that he gave
orders on his accession for reviving and restoring the efficiency of the
public services; but we fear the wish has been little effectual. It would
require giant effort, in an able and vigorous man, to make an impression
on the Augean stable of Chinese Officialdom; and we can hardly expect
much beyond intention, in a boy. If he, bye-and-bye, extend to the
provinces the desire for personal inspection which he is reported to have
shown in Peking, he may do much; but it is to be feared that, in the
meantime, the effect of his order will rather be to revive the obsolete
and useless than to reform the bad. The active drilling of troops on
the old method, which has been reported from Ningpo, Foochow and
other places, illustrates our argument. In the meantime, as we said
before, we can only give His Majesty credit for good intention, and hope
that he will retain his energy when greater experience in life shall have
enabled him to direct it more efficiently.
Foreign Relations Foreign relations with China have been devoid of incident,
with chma. except the audience had by the Foreign Ministers in June.
That event had been elevated to considerable political importance by the
sustained attention and effort concentrated upon it; and we regret that
its solution took place under circumstances so little calculated to achieve
the object sought. What those circumstances were have been explained
in our columns, so far as it has been given us to penetrate the mystery
in which Peking delights to cower. What foreigners wanted was an


t 8 ]
audience that should impress the Chinese people, and convince them that
their Emperor had had to abandon the claim to universal supremacy
accorded to him by Celestial conceit. What the Ministers obtained was
an audience unobjectionable as regarded ceremony, but astutely shrouded
by Chinese diplomats in a cloud of edicts and circumstances which could
only persuade the Chinese people that an audience was being given,
according to established custom, to tributary envoys. It is not surprising
that the effect seems to have been null. The Emperor is said to have
looked forward with interest to the event, and to have been favourably
impressed with the aspect and bearing of the Envoys; but not a step
of political gain is yet discernible.
Political matters have in fact been stagnant, throughout the year.
Quietude is good in so far as it means peace; but stagnation represents
excess, which is always to be deprecated; and stagnation has been the
characteristic of Western diplomacy. Yet it cannot be claimed that
foreign relations with China are on a footing so perfect that Ministers
can afford to lie off in godlike ease, or to devote exclusive attention to
the beauties of celestial literature. They tell us nothing; so have only
themselves to thank if they are misrepresented. But a fairly accurate
impression of what goes on does somehow get abroad; and the existent
impression is decidedly not sympathetic or favourable towards the
Capital. It is to the British Legation that we look most naturally for
action, because British interests are incomparably the greatest in China,
and the occupant of the British Legation is a more permanent resident
than his colleagues and in a position therefore to carry out a policy
with greater continuity and success. But of the British Legation we
have beard nothing, except a hurried visit by Mr. Wade to the South
in October, during which he flashed though Shanghai where he ought to
reside three months in the year—and a visit by Mr. Mayers to the
Governor of Kiangsi, which resulted in the issue by the latter of two
proclamations J enjoining regard to transit passes and courteous treatment of
foreign travellers. Kiangsi is the only province in the viceroyalty of the
two Kiang where the Transit pass is still questioned; and the literati of its
capital city hug the traditional hatred to the foreigner and render unsafe
and unpleasant the endeavour to penetrate its classic precincts. Our
readers will remember that Mr. Baber, of H. M. Consular service, long
ago made the experiment—so long ago that the incident had almost
passed from recollection, together with the hope that measures would be
taken to punish the insults offered him. An ordinary Englishman tries
to knock down a man who kicks him, he does not reflect a year before
objecting to the insult; but anything so energetic would be inconsistent
with the li so venerated at the British Embassy at Peking. Months, we
had almost written years, are allowed to pass without a step being
ostensibly taken, by Mr. Wade, to exact reparation for the insult offered
t Published in "N.-C. Herald" 25th December, 1873.


[ 9 3.
to his subordinate and delegate. Only now, at long length, is the matter
donbled np with that of transit passes, and the Viceroy moved to issue
• proclamations enjoining better behaviour in both respects, on his
subordinates and subjects, in future. On the tenor of these proclamations,
we commented at the time of their issue. They are so much gained;
but we fear whether they will have the full effect desired.
It has been often suggested, and we incline to give weight to the
idea, that greater intimacy between foreign and native officials would
lead to a better understanding than years of diplomatic intercourse. It
is notorious how much more readily two men can come to an understanding
in an hour's chat, than in a month's official correspondence; and the same
would be true of diplomacy. Things can be said, that men hesitate to
commit to writing; and the impression of sincerity is more easily conveyed
by voice and look, than by ink and paper. If Consuls had some social
intercourse with Taotais, and Ministers with Secretaries of State, we
believe they would find the diplomatic road smoother. It might be a
less dignified kind of intercourse, but would be more effectual. So
far as we know, Mr. Burlingame is the only one among the Foreign
Ministers who has followed that principle, and he undeniably succeeded
in acquiring great influence. How he used that influence is another
question.
The year has been unusually quiet too as regards missionary incidents.
We have one sad murder to record, of a French missionary at Kienkiang,
in Szechuen—a province which has gained an unenviable notoriety for its
violent hostility; and just now a report comes from Shantung, of a
Protestant Missionary having been stoned while preaching in the Chih-
nieh district. But these are the only troubles we have heard of; and
against them must be set Mr. Williamson's gratifying tour* through
Shantung, and the satisfactory settlement of certain land difficulties by
the American Missionaries in Hangchow.f We incline to share with
Tseng-kwo-fan the opinion that Christian proselytism will have no great
success in China; but intelligent missionaries do valuable work in
diffusing knowledge, and convincing natives to whom the foreigner would
otherwise be a strange animal, that he is not after all more barbarous
than themselves.
The Government has taken no step towardsimprovingcommunications,
working mines, or in any way developing the resources of the country.
Certain gentlemen in England, animated by a laudable desire to extend
commerce and benefit the Chinese, agreed to subscribe a large sum to
present a Railway to the Emperor. Meetings were held, speeches made,
the money promised—and, it is believed, Mr. Wade was instructed by
telegraph to ascertain whether the gift would be acceptable at Peking.
Anyone having a knowledge of the Chinese could have saved these
gentlemen a deal of trouble, by telling them at the outset what the reply
* v. " N.-C. Herald" December 11th, 1873.
t v. do. November 6th and Dec. 11th, 1873.


[ io ]
of the Chinese would be. Of course the informal proffer was declined.
China will go in for railways some day ; but the idea of tempting her by
ta present of a £60,000 toy was somewhat ludicrous. It is not money
that deters her, nor want of understanding what railways are; it is want
of energy, want of progressive spirit, hatred of innovation, and jealousy
of foreign intrusion.
A native of Shanghai was commissioned by Li Hung-chang, in the
spring, to take steps towards opening the coal mines at Nanking. Foreign
skill might be engaged, but the undertaking was to be Chinese. The
people were well satisfied, but the Nanking mandarins disliked the
prospect of a Shanghai layman controlling a scheme in which they
foresaw handsome pickings. They raised accordingly the usual cry of
objection by the people; the people, however, stoutly denied the
imputation—and there we believe the matter rests. The steamers
of the Chinese Merchants' Steamer Company, whose formation we
chronicled last year, are buying imported coal, while rich untouched
fields of the mineral lie on the very banks of the river on which they
run. Truly the Chinese are a curious people.
The Government has apparently taken up seriously the question of
the Grand Canal and the Yellow River; but they ignore utterly the
conservation of the Hwangpoo—a tiny stream by comparison, but one
whose commerce yields them a direct Customs revenue of £1,000,000 a
year. This river is silting up dangerously near the Foreign Settlements;
and the shallowness of its bar is a grave obstacle to the large steamers
frequenting the port. A dredger would remedy all, but the Chinese of
course will not move; they never will; and Foreign Ministers write
platitudes, instead of insisting on their doing their duty. The Nanking
mandarins say openly that the thing could be done if the Ministers took
it properly in hand, but the Chinese don't care to do it of their own;
motion; the river is quite big enough for junks; and if foreign steamers
couldn't enter it no one would lament. Yet river conservation is not
unknown; witness the works they have executed this year to improve
the channel of the Han.J
Neither will the officials recognise the existence of the Coast
telegraph cable, so far as to legislate for its protection from the pilfering
and malice of junks and fishing boats. Yet Chinese merchants use it
largely, and even officials have not disdained its aid.
We must not omit to note the abolition of the Camp, at Feng
Hwang-shan, which was established on the disbandment of Gordon's
force after the extinction of the Taeping rebellion. This camp was
intended partly as a protection to Shanghai, and partly as a school for
the discipline of foreign troopS: The drill masters, however, were never
sufficiently identified with their men to secure the first object, and
in the second capacity the Chinese appear not to have regarded it with
affection. It was, in short, allowed to fall through.
} v. "N.-C. Herald" March 13th 1873.


[ 13 ]
The departure of Mr. Malet, who filled for a short time the post of
chief Secretary at the British Legation, has been much regretted. He
gave good promise during his short tenure of office; and it was hoped
that the presence at Peking of a gentleman who had taken pains to visit
and become acquainted with the treaty ports, might have a useful
influence. There seemed a prospect, moreover, that he would some day
be in charge of the Legation, and that something might be done during
that interval. It is a compensation, however, that Mr. Wade has secured
the services of one of the ablest members of the British Consular Service,
as Chinese Secretary.
Mr. Geo, F. Seward has resumed charge of the United States
Consulate-General at Shanghai, and M. Godeaux has been confirmed in
the post of Consul-General for France. Mr. A. Dent has taken charge of
the Portuguese Consulate, during Mr. Hanssen's absence in Europe, and
Mr. Stronacb has succeeded Mr. Alabaster as Vice-Consul for Great
Britain.
Mr. Hart, the Inspector-General of Customs, has earned for China
a reputation in Europe which her own Government would have had
neither energy nor enterprise to secure, by causing her projects and
manufactures to be largely represented at the Vienna Exhibition.
Messrs. Bowra and Detring, who were deputed to Vienna as Commissioners
of the China Department have received much courtesy, and everything
has been done to encourage China on her first appearance—so to say—
in the western world. But it is really not China it is Mr. Hart who
deserves the honor and glory.
Among local matters we must not omit to note the acquisition by
the community of the doubtful rights and shaky property of the Soochow
Bridge Company, the removal alike of the old wooden bridge and of the
iron ruin once destined to take its place, and the construction of a broad
useful and free bridge between the English and Hongkew Settlements.
The construction of another bridge opposite the end of Honan Road was
sanctioned by the Ratepayers, when the free ferry bridge at the end of
the Szechuen Road was to have been moved. But neither project has
yet been touched. We fear in fact that the Council are recoiling almost
too far from the rather lavish policy of their predecessors, and neglecting
some necessary works—.notably the metalling of roads—in the desire to
accumulate a surplus.
The new building erected for the British Consulate, in the stead and
on the site of that destroyed by fire in 1871, was opened in March.
And a new theatre, in the stead of the old Lyceum burned in the same
year, has also been built on an adjacent site. A new hospital is in course
of construction in Shantung Road, on the site of the old building where
Dr. Lockhart first worked and earned a reputation among the natives for
Foreign medical skill, in 1847. The Chinese patients are accommodated
in the meantime in she Lock hospital building, which has not yet been
opened for its original purpose.


[ 14 ]
Japan. The almost feverish movement of Japan is in strong contrast to
the stolid conservatism of China; and we fear the feeling generally
expressed is true—that one strains forwards as much too hard as the
other holds back. Great and useful progress has been made; improved
means of communication and appliances for developing the resources of
the country have been anxiously adopted; a new and more handy coinage
has been instituted, to suit the requirements of foreign intercourse;
efforts have been made to organise the national finances; embassies have
been sent to the nations with which Japan has foreign relations—all
necessary steps in the new career on which the country has embarked,
and deserving of all praise. But not content with these enlightened and
comprehensive measures, the Government has descended to a course of
social legislation as unnecessary as foolisb, and as irritating as unnecessary.
It is not by sudden edict that national customs and modes of thought
can be changed, but by gradual pei.suasion and example. And it says
much for the strength of the Government, and the docility and
submissiveness of the people, that edicts interfering with food, clothes,
hair, furniture, and fifty other details of daily life, have passed without
exciting violent opposition and uprising.
Uprisings there have been—caused, however, generally by more
solid grievances. The projects of conscription; the change in the
method of taxation from a contribution in kind to a money tax on the
estimated value of land; the unsettlement of religious questions; the
taxation of fisheries, and other measures excited riots of greater or less
extent, in districts which one or other of these measures affected. The
change in the calendar, the destruction of trees around sacred edifices,
the slaughter of cattle, the removal of woods from the possession of the
peasants to that of Government, and many minor complaints were also
urged. The opposition seems to have come almost invariably from the
agricultural classes, who are always the most conservative in every land;
and their emotion at the virtual denationalisation of their country which
the Government seemed to have undertaken, is not only not surprising
but will excite some sympathy. Foreign visitors to Japan universally
regret this destruction of national landmarks, this violent effacement of
customs and conditions of life which were quaint, interesting and often
picturesque. It was possible to introduce the principles which have made
Western nations wealthy and enlightened, without rushing into a hurried
external imitation. At the same time, the anxiety to emulate people
whom they saw and acknowledged to be superior, speaks well for the
pride and energy of the nation, and augurs well for its future. We see
no reason why future generations should not perfect the new civilisation
as cleverly as their ancestors had perfected the old.
It is a noteworthy feature, and argues well for the strength of the
Government in its present career, that the Samurai class were almost
always found on its side in the various collisions. Only in one or two
instances—notably that of the Fukuoka riots near Nagasaki—did they


[ 15 ]
take cause with the insurgents. Yet it was from this class—turbulent
from the nature of their profession, and likely to be irritated by the
change in their condition—that serious danger might have been
reasonably apprehended. The Commercial classes have all along been
favourable to the new regime; and the Government seem also to
command the sympathy of the great majority of the Daimios. For good
or for evil then, we may assume that Japan is irretrievably launched on
her new career; she has cut finally loose from old traditions, and
committed herself and her future fortunes to the influence of new ideas,
customs and teachings.
In making these changes, the Government have incurred heavy
outlay which will tax severely, for some time to come, the resources of
the State. One great financial burden is the annuities to the Daimios
who were dispossessed of their lands by the revolution, and to the
samurai whose claims on their lords were taken over together with the
possessions of the latter. And we learn with interest, from the Japan
Mail, that the object of the new loan of £2,400,000 contracted by the
Government last year in London, was to extinguish these annuities by
payments of ready money. "The claims were of a very burdensome
nature, and, being claims in perpetuity, threatened to be a permanent
charge, having the two-fold ill effect of a constant drain on the exchequer,
and of retaining in idleness a large class of men, often of a superior
order of intelligence, whose incomes, thus paid, sufficed only to maintain
them in their accustomed position, but were insufficient to enable them to
enter into mercantile or agricultural pursuits. In proposing, therefore,
to extinguish these claims by the payment of a sum of ready money
representing only a few years' purchase of their incomes, and to create
an industrious out of an idle class, the Government made a move of great
wisdom; and when it is further remembered that the high rate of
interest in this country, varying as it does from a minimum of 12 per
cent per annum to three per cent per month, renders the redemption of a
perpetual annuity for a few years' purchase of its amount a very feasible
operation, the wisdom of applying money borrowed at 7\ per cent for
this purpose is obvious." It is expected in fact to extinguish the
hereditary incomes by the payment of six years, and life incomes by
the payment of four years of their annual amount—half to be paid in
cash and half in government bonds bearing 8 per cent interest. The
wisdom of the operation on the part of Government is obvious; its
fairness to the pensioners is another question. But the Mail seems to
think they are satisfied, being tired of inactivity, and lacking resources
to enter on commercial enterprise, which the payment of these capital
sums will supply.
The hostility to Christianity has relaxed during the year; and the
survivors of those Christians who had been deported from Nagasaki were
allowed, last spring, to return to their homes. This implies a cessation
of persecution; and it is evidently difficult for the Government to go


[ 16 ]
farther, in face of the strong national dislike to a religion which in
former days has caused so much trouble and suffering.
We have already referred, in our sketch of Chinese politics, to the
successful mission of Soyeshima to Peking, and to the favourable •circum-
stances under which that minister had audience of the young Emperor.
It is singular that the very success of his embassy led to his own fall
from ministerial power. A chief object of his mission was to secure the
punishment, by the Chinese Government, of those Formosans who had
massacred the crews of certain Loochooan vessels -which fate had cast
upon the shore of Formosa. It was also whispered that he had
instructions to confer with the Chinese Ministers for Foreign Affairs
upon the unsatisfactory condition of the relations between Japan and
Corea, and to ascertain the probable action of China in the event of an
unfriendly solution of the questions pending between those two countries.
What transpired on the latter subject is not clearly known, but it is
believed that the Peking Government either promised itself to take
action, or delegated to the Japanese Envoy full power, so far as it was
concerned, to punish the Formosans for their misconduct. On his return
to Japan, Soyeshima seems to have advocated a warlike policy in both
directions—against both Formosa and Corea; but serious differences of
opinion on the subject arose amongst Japanese statesmen, and eventually
the ministry of which Soyeshima was a member broke up. Terashima,
late Minister at London, succeeded him as Minister of Foreign Affairs,
and Iwakura, the head of the late wandering Embassy to the West,
took office as Prime Minister. The question, however, seems by no
means yet settled. The feeling of the country is in favour of war with
Corea; and the great Satsuma clan is said to be gravely dissatisfied
with the present policy. Corea has been in the last degree insolent of
late, in her bearing towards Japan, and the sudden retirement of
Shimadzu Saburo from a post which he held at Yeddo, is regarded as
significant of irritation at the refusal of Government to sanction an
expedition for its punishment. A recent attempt to assassinate Iwakura
is attributed to the same feeling of hostility to his peace policy.
It is said that the Japanese have been greatly disappointed that the
late Embassy did not succeed in persuading Western Nations to abandon
the extraterritorial clauses in their treaties. This, says the Japan
Mail, is the darling project of Japanese statesmen and the highest
pinnacle of Japanese ambition. "They had made elaborate preparations
for the task it would entail. They had engaged lawyers to expound a
great foreign code, jurists to adapt it to their national economy, and
translators to render it into their language. They know how much the
development of their internal resources depends on the employment of
foreign capital, skill and knowledge, and they were anxious to utilize
these. But they could not do so, or thought they could not, unless,
or until, they could themselves adjust such differences as might arise
between themselves and those they were anxious to employ; and the


C 17 ]
refusal of this power was to the last degree unpalatable to them."
Obviously, however, with all their progress, the Japanese are far yet from
having established a system of laws or legal procedure offering sufficient
guarantees for the equitable administration of justice, to induce
foreigners to abandon this important provision.
A notable feature in Court life has been the frequent appearance in
public of the Mikado and his Consort—a step which it was feared at
first, even by foreigners, would tend to break down the more or less
mythical respect felt by Eastern Nations for Sovereigns who have
always screened themselves in the depths of a palace and surrounded
themselves with a halo of semi-divinity. No ill effect seems, however,
to have followed the change of practice. The Sovereigns have been
everywhere greeted with loyalty and respect.
The arrival of an envoy from Peru, to discuss the Maria Luz
question and to negotiate a treaty with Japan, resulted in the reference
of the former question to the arbitration of Russia. The Governor of
Macao also visited Teddo towards the close of the year, and had
audiences of the Mikado.
"We have, we believe, now glanced at the most prominent features
in the active whirl of Japanese politics during the twelve months. It
would be well if the country would now give itself breathing time, for a
space, while the progress entered on during the past few years is conso-
lidated, and the people have time to become in some measure familiarised
with the changes so rapidly forced upon them.


[ 20 ]
protesting. Trade is crushed by excessive taxation; its course is diverted
by the oppressive levies of the inland Customs, and commerce is thus
choked and languishes under the double difficulties of transit and exaction.
A serious outbreak which occurred last year in the Taichow prefecture*
gives one instance of the extent to which this blind policy has been
driven. The efforts made of late years to suppress rebellion in various
parts of the empire have no doubt caused immense outlay and
embarrassed the Government finances; but the means taken to get
money have been the surest way of stopping its collection; the
sponge has been squeezed diy, and dissatisfaction is rife among the
people. As we wrote in commenting on the Taichow emeute:—
"China ought now to be entering on a long course of prosperity. A
rebellion which destroyed in many districts nearly the whole of the
population, and which has left to the successors of the former inhabitants
a soil left fallow for years, and not populated to one-half the extent it
could easily support—has been put down, yet trade refuses to answer to
the call made on it. Produce there is.in abundance, if only the people
be permitted to make use of it. Yet, instead of prospering, they can
only earn a precarious livelihood from a land in many ways overflowing
with wealth. The people are everywhere oppressed, the interchange of
commodities is rendered impossible by repressive exactions, and the
natural growth of capital put a stop to by official interference. Such
is the state of China at the close of 1874."
Very evidently, China now wants rest to recover from the exhaustion
caused by foreign wars and internal rebellions; and, in face of this fact,
we cannot but consider unwise her apparent purpose of trying to recover
sway over the portions of Eastern Turkestan which have been lately
constituted an independent kingdom under the Atalik Ghazee. These
outlying dependencies have been always a source of weakness to her.
rather than of strength, and the effort to recover them will mean
a waste of substance for the sake of shadowy power. The Viceroy Tso
has been lately making wise efforts to reorganise Chinese administration
over the recovered province of Kansuh, and the Peking Government
would do well to restrain his efforts to that difficult task. There, as in
Yunnan, large garrisons will Still be needed; but garrisons can be
maintained at far less cost than standing armies, and garrisons will
suffice in both cases to keep down and stamp out the embers of rebellion
which still retain some spark of life.
Kweichow and Tunnan seem to be, in this respect, much in the
same condition. Both are subjugated, but both are uneasy. Subdued,
however, they are; and the whole eighteen provinces seem to be, at
the close of 1874, as tranquil as they ever have been or are likely to
be until the whole system of Government is changed.
* See N.-C. Herald, Dec. 31st, 1874.


[ 21 ]
The principle of Foreign audiences, which was admitted in 1873,
has continued to be recognised. What we wrote, however, in describing
the first audience in our restrospect of that year, has been fully justified
by documents subsequently brought to light. Not only were measures
not then taken to establish clearly, in the eyes of the Chinese, the true
position and power of foreigners, by affirming the equality of footing on
which the audience had been claimed; but a description* of the incident
was circulated in the inland provinces, having for its object to bring
ridicule on foreigners and their representatives, in the eyes of all readers.
Our last retrospect chronicled the marriage of the young Emperor
Tung-che, and his assumption of the reins of power. The present chapter
would be bald, if we omitted reference to his death. The incident
belongs, however, properly to the record of 1875, and will claim pro-
minence when the close of the current year invites us to pen our annual
sketch of the events it shall have witnessed. It would be out of place
for us to do more, now, than refer to the "departure." At the close of
1874, Tung-che was still Emperor of China, though his illness was well
known, and a decree of the 18th Dec. had constituted the Empresses
Dowager regents, pending its duration. The year's history has not
enabled Foreigners, nor, certainly, his own subjects inthe provinces, to
gain much insight into the young Emperor's character. It is difficult
to trace the impress of individual will in the current routine orders that
find utterance in the Peking Gazette. The only really personal actions
with which we have been able to connect him, are his visit in the
spring to the Imperial Tombsf and his petulant degradation of Prince
Kung in the following September.;}; It is possible to connect both these
incidents with the Chinese belief that His Majesty was intolerant of
restraint, and anxious always, for good or evil, to break out from the
palace walls; but such an attempt would be pure speculation, and out
of place, therefore, in an article which is professedly a record rather
than an essay. Suffice it to say thatHis Majesty is credited with various
nocturnal excursions, and with occasional exhibitions of self-will that
excited anxiety among his relatives—though whether the honest anxiety
of advisers fearing for his welfare, or the terror of maires du palate
dreading a master who showed energy and might some day wish to see
with his own eyes, we have no sufficient evidence to judge. The Em-
presses Dowager appear to have retained the influence naturally
acquired during their long regencj; and we find the Emperor obediently
reinstating Prince Kung, at their desire, after his little ebullition in
September, and looking to them to govern his Empire when illness
overtook him.
The growth and the developement of the Chinese mercantile marine
has been one of the most marked incidents of his late Majesty's reign;
* Vide (N.-C. Herald Jujy 4th, and Times August 17th, 1874.)
t N.-C. Herald, April 25th, 1874.
J Ct.-C. Herald, Sept. 19th, 1874.


[ 22 ]
the Chinese Merchants' Steam Navigation Company, laboriously created
by Li Hung-chang, on the idea apparently—however distorted—of
European mail services, lias grown during the year in strength and
influence. Largely subsidised by an extravagant grant for the conveyance
of tribute rice, it is able to hold its own against foreign competition;
and, however false the economy of the measure, however patent the
intention to ruin foreign interests, one cannot help but admire the
patriotic intent of the founder. Foreign steamers had destroyed the
native junk trade; with foreign vessels should foreigners in turn be
driven from the coast. The project may be romantic but certainly
deserves the credit of boldness. The promoters seem to be at least
earnest, for there is no doubt they intend adding largely to the number
of their vessels.
The conclusion of a treaty with Peru is the only other political
incident we recall, of note or interest. It is unnecessary to go over
again, here, the oft trodden ground of coolie emigration, or to repeat
that Western humanity would soon have exacted a complete stoppage
of the traffic, had not the two nations concerned agreed on measures
for its proper regulation. China sent a mission to South America and
Cuba, to enquire into the actual condition of the emigrant, at the same
time that Peru sent a mission to China to negociate a treaty legalising
emigration. Both objects have been accomplished. The Chinese Mission
has returned, and Mr. Macpherson has gone to Peking to give, we
presume, an account of his enquiry. The Peruvian envoy has
negooiated a treaty which has been signed and ratified. It only remains
for us to hope that China will exercise a real and careful protectorate
over those of her subjects whom the very treaty she has concluded
encourages to adventure themselves on Peruvian soil. The treaty will
be worse than useless unless she have the will and the intention to
see its provisions executed.
Refrtious. We pass naturally from discussion of the Peruvian Treaty, to
remark on the extinction of the coolie trade of Macao. Early in January,
the Viscount de San Januario ordered that the so-called emigration of
Chinese from that island, should cease with the following March; and
we had the greatest gratification, three months later, in recording that
the order had been enforced. The trade ceased absolutely on the day
fixed, and one of the greatest blots on foreign relations with China was
then extinguished. The Hongkong Government had previously passed
an ordinance forbidding even the fitting out of emigrant ships in colonial
waters, so that the ships hitherto engaged in the trade had no refuge.
It was greatly owing to the influence of Great Britain that this result
was attained, and it supplies at least one credit entry in the record of
our political intercourse with China.


[ 23 ]
The Peruvian Treaty was one of the first consequences of the
changed situation; the old easy trade being interrupted, Peru sought to
legalise an emigration on which her prosperity so much depends; and
we repeat our hope that both contracting parties will endeavour loyally
to improve the condition of the emigrant. Emigration goes on to the
British West Indies without trouble or aspersion, and there is no
reason why emigration to South America should not be placed on a
similar footing.
In other respects, the year has been very uneventful. Several
foreign Ministers have had audience of the Emperor, on their first
arrival at Peking; but the privilege has gone no further; and the
Ministers appear to have acquiesced tacitly in the restriction. Even at
the New Tear, when, if ever, a ceremonial visit to a Sovereign should be
paid, no such idea seems to have arisen. Visits were exchanged, as in
former years, with the members of the Tsung Li-yamen, and the Emperor
was left alone in his dignity.
Neither has this concession to the prejudices of the Court advanced
our interests with the Government. Likin duties are exacted with an
energy only known to Chinese officials when squeezing is in case. Tran-
sit passes are ignored with an indifference which the complaisance of our
Ministers goes far to justify. In fact, there can be no doubt that, as
pointed out by Mr. Seward in a recent able despatch to the Secretary of
State at Washington, foreign prestige is suffering and foreign interests
are languishing for want of vigour in our political relations. However
little flattering may be the comment to our national pride, we cannot but
endorse his verdiot that "our representatives, failing to perceive how
firmness may be mingled with moderation, and judgment with urgency,
have drawn back from due responsibility, until the policy of England, for
instance, has been emasculated to a pitiable degree." Hardly a voice in
China fails to condemn the present conduct of this policy, and to yearn
for a change from the deadly monotony by which it has been marked.
And what has China done to justify this consideration? Let us again
quote Mr. Seward's despatch :—
".I know of no highway in the empire whioh is in tolerable order. I i \
"know of few canals which are not utterly abandoned for any purposes '-
"of conservation or improvement. I know of no mines, of all those
"immensely rich ones possessed by the empire, that are worked to any
"appreciable extent. I know of no manufacturing establishments in
"whioh more than the members of a family are engaged. I see no
"disposition to introduce railroads and telegraphs. I find no adequate
"grappling with popular superstitions, such as those that precipitated
"the Tientsin massacre, and from time to time threaten the safety of
"foreigners at that and other points. I find petty officials here and
"there allowed to impose all kinds of extortions upon trade. I find the
"people debarred from opportunities for legitimate enterprise, and


[ 24 ]
'.actively betaking themselves to opium as a means of dissipating the
"tedium of existence. I find the direotions in whioh only progress has
"been made, for instance, the establishment of arsenals and navy-yards,
"the employment of foreigners in the Customs, and the education of a
"few youths in western ways, subject to the criticism that a lack of
"confidence in themselves and a fear of foreign arms have been the
"considerations which have led to these steps."
The sketch is graphically true, and we cannot avoid the conclusion
that we are throwing away our opportunities and that the time has come
when Foreigners should take up a more positive attitude in the Empire.
If China were in political difficulties, if she showed any inclination to
progress of her own accord, if her rulers showed a desire to compel
observance of the treaties by their subordinates—they would be entitled
to consideration, and there would be reason for forbearance. But
the case is diametrically opposite, and our policy correspondingly
mistaken.
Although our political position is unsatisfactory, our relations with
the people have been generally friendly. The old awe of the foreigner
has greatly disappeared, but has been succeeded by the tolerance of habit.
There have been collisions, but they have generally had special causes,
and have not arisen from sheer dislike to foreign intrusion. There have
been, as usual, missionary troubles; notably at Che-meh* in Shantung,
and at Hoochow.f Both were eventually settled by negociation. A
serious riot also occurred in the French Concession at Shanghai,J
through a dispute between the Ningpo guild and the French Council.
The latter wished to lay out and metal a road which had been
traced on an old plan of the Settlement, and which they contended
therefore had been virtually reserved as Municipal property. The
Chinese urged that the road would run through an old graveyard,
and offered to give other adjacent land. The Council refused; much
excitement arose, large crowds gathered about the Joss House, and
eventually a collision with the police precipitated a riot. The mob
burned and gutted a number of houses, maltreated several French per-
sons, and were proceeding wildly with the work of destruction, when the
Volunteers were called out and sailors were landed from the various
men-of-war. At their approach the rioters scattered. A proclamation
issued next day by the French Consul-General, terminated the difficulty
by yielding the point at issue. M. Godeaux's action was severely
criticised, and time has not altered popular opinion. The great majority
of foreign residents favoured the Chinese view of the question at issue
between the Guild and the Council; but every one condemned M.
Godeaux's concession under mob pressure, as politically bad and a
dangerous precedent. He acted, moreover, without the knowledge and
in opposition to the wish of his colleagues, who were loyally standing
* N.-C. Herald, June 13th. t N.-C. Herald, Doc. 17th. J N.-C. Herald, May 9th.


[ 25 ]
by him in his difficulty. The punishment of the rioters and the restora-
tion of the damaged property should have been insisted on, as preliminary
to any further negotiation.
An affair, trifling in itself, but which gathered some importance
from the violent action of the Chefoo Taotai, occurred in connexion
with the Lighthouse work on the Shantung Promontory.* Some
dispute arose between the workmen and the country people; a
foreigner in charge of the work was assaulted, and struck one of his
assailants with the butt of a revolver, which went off and killed a man
behind. The Chinese of course accused him of murder, and he was
brought up for trial before H. M. Consul, in the presence of the Taotai.
No sufficient evidence was forthcoming, and Mr. Lay acquitted the
accused, when the Taotai was guilty of most unseemly violence, declaring
at first, that no one should leave the Conrt till the judgment was altered.
Mr. Lay, however, was quite equal to the occasion; the matter passed
over, and the accused left Chefoo. He was subsequently re-arrested by
the order of the Chief Judge, and tried but acquitted by a jury. We
quote the case chiefly to record the impertinence in which the Chinese
magistrate indulged. We can understand that, as it was clearly a bullet
from the foreigner's pistol which caused death, he was to the Chinese
mind guilty of murder. But no Chinese magistrate would have ventured
ten years ago, to comport himself as did the Taotai of Chefoo towards a
British Consul.
Riots have also occurred in Foochow, in connexion with the projected
telegraph line from that city to Amoy. Sanctioned by the Local Authorities
when war with Japan appeared imminent, and quick communication with
Formosa was important, the work was thwarted direotly that danger had
passed. Unable to evade the sanction they had at first given, the offi-
cials seem to have got up the farce of popular opposition. Mobs, in
which the presence of yamen runners was accused, attacked the workmen
and destroyed certain property of the Telegraph Company. The neigh-
bouring villagers subsequently disclaimed, to the Foreign Superintendent,
any personal hostility to the project, the Elder expressing himself rather
favourably to the undertaking, as providing remunerative work. It
remai ns to bo seen what action the Danish Government will take, and
what assistance will be lent to its Minister by the Representatives of
other powers, in the remonstrances which will necessarily have to be first
made, at Peking.
Rumours got afloat at one time, of renewed agitation at Tientsin,
and of an intended fresh outbreak against foreigners; but they probably
originated in the uneasiness which preceded an emeute among Li Hung-
chang's troops. It was felt that something was coming, but it was not
known exactly what. The mutiny, when it did occur, was promptly
quelled.
* lf.-C, Herald, August 8th.


[ 26 ]
An idea gained ground in the early part of the year, that Ichang
would be shortly opened to foreign steamers, but no symptom has yet
appeared of any intention to make that concession. We should not be
surprised to see the steamers of the C. M. S. N. Co, run there, with the
declared object of bringing away tribute rice; nor should we be surprised
to see the innovation let pass, without a like a privilege being insisted on
rfor foreign steamers.
No move has yet been made towards deepening the Woosung bar;
and the Inspector General of Customs is credited with the chief opposi-
tion to the measure. He believes that Shanghai is doomed to extinction,
that foreign interests are moribund, and tbat Cbinkeang is the port of
the future, where only a few foreign agents will contrive to eke out a
painful livelihood, while Chinese merchants flourish and the Chinese flag
floats proudly in the ports of Liverpool and London. As we disagree
with Mr. Hart, we still hope against hope tbat the Chinese will be some
day made to do a work which no civilised nation would hesitate about.
The Woosung bar wants dredging, and the Hwangpoo river wants
, dredging; but only reasonable care and conservation are needed, to
J preserve the latter as the important channel of commerce it now is.
An attack on the steamer Spark during her voyage from Hongkong
to Macao, proved that piracy is yet far from extinguished in the South,
though it has apparently been rooted out from the Eastern coast. A
number of pirates who went on board as passengers, rose during the trip
and murdered all the foreigners on board except one, Mr. Mundy, who
however was so badly injured that his recovery is surprising. A pirate
junk then ranged up and took off the murderers and the valuable portion
of the cargo. The Chinese engineers took the steamer into harbour.
Active research led to the discovery of some criminals and some cargo,
but the greater part seem to have escaped.—Mr. Mundy asked Lord
Derby to claim compensation for him, from the Chinese Government, but
was refused. And, in fact, we do not see just ground for the claim.
The outrage was certainly perpetrated by Chinese, but it was not
perpetrated on Chinese soil or under the Chinese flag. The steamer was
a foreign one, and the Chinese Government might reply that it was the
business of the foreign owner to take the necessary precautions for
discipline and safety during the passage.
On the whole, the record of Foreign relations with China during
the past year is an unsatisfactory one, though marked by no political
incident of note. A sense of stagnation weighs upon us, and a feeling
that the position and prestige which were conquered in 1859, and which
should have been upheld and exalted by moral influence, are being
rather let fall. The error of consenting to treat as equal a nation which
is not our equal, becomes every year more apparent. One does not
argue with children; one reflects on what is best, and desires them to
conform.


[ 28 ]
The Museum, which we have so often recommended as an addition to
the Library, has become an accomplished fact, and promises to prove a great
success. The numerous foreign sportsmen who make so frequent up-country
excursions during the Shanghai winter, have contributed largely; and an
interesting collection is being rapidly arranged.
From a Municipal point of view, the year has been quiet; without
inaugurating any startling policy, the present Council have administered
our affairs carefully and well. They have at last taken up the question of
widening roads, on the importance of which we have so often insisted.
Several improvements in this respect have been made, and we trust the
policy will be energetically followed up.
Two important points were raised at the Ratepayers' annual meeting,
and seem to have had less attention. The need for revision of the Laud
Regulations has been often urged, and is generally admitted. A committee
was appointed for the purpose, in 1873, but did nothing. Another was
appointed in May last, but seems to have been equally inactive during the
past year. We have often said that the form of revision that is chiefly
needed, is entire re-writing. Additions are wanted to the present code;
but its great fault is obscurity, resulting from the patchwork manner in
which it was compiled, altered and amended in Committee and at public
meetings. The groundwork is good, if the meaning were clearly expressed;
whatever additions are needed may be well noted in Committee; but the
only way to attain to a satisfactory code, will be by handing over the whole
thing to a man who can write lucid English, to remodel. The second
matter to which we have referred, is proxy-voting. The principle that
ratepayers who are present in Shanghai, but do not care to attend
Ratepayers' annual meetings, may still be represented by proxy, has been
objected to from the beginning, and has been found to work badly in
practice. It is right that absent land-owners, whose interests are perma-
nent, should be represented by their attorney; but it is not right that a
man who is actually present in Shanghai, but is too indifferent to attend,
should have the same privilege. A Ratepayer who is in Shanghai
should be required to register his vote personally. A resolution in favour of
this view was passed by a large majority at the last Ratepayers' meeting,
and an able letter was subsequently addressed by Mr. Carter to the Treaty
Consuls, setting forth the reasons for the resolution he had proposed. We
have not yet heard that the Treaty Consuls have taken any action in the
matter.
Another Municipal matter which has been much discussed, is the
annoying presence of the Opium Guild runners in the Settlements. We
have no sympathy with the opium trade, and would not interpose a word to
prevent its extermination; but the exaction of petty taxes on a few balls of
opium as they are moved from hulks to opium shops, neither will, nor is
intended to have, any deterrent effect; it is a simple case of petty
exaction; and it should be our policy to oppose stringently the levy of
these petty taxes on trade within Municipal limits. Opium is not the
only article so harrassed; and to admit opium tax-gatherers within our
limits, is to admit an intrusion and an organisation that cannot be too


[ 29 ]
strongly condemned on principle. The limits of the Port should be at
least identified with those of the Settlement. Foreign goods, of whatever
description, do not pay import duty for the mere privilege of coming up
the river; additional dues cannot in reason be exacted for the privilege of
passing over 100 yards of road. Whatever right the Chinese may have to
tax opium in its subsequent adventures, that right can hardly begin in the
port itself—or the tariff rate had better be struck out of the Treaty.
However, we are not writing to defend opium, but to protest against the
innumerable exactions of which the Opium Guild runners are a type j and
which, we contend, should not be allowed in our midst.
The Law business during the year has been considerable, as our
records will show. But perhaps the only case of historical interest is the
action entered by the Race Club against the Recreation Fund Trustees, to
prevent the erection by the latter of any buildings within the interior of the
Course. In an elaborate judgment*, which had the sympathy of the com-
munity, Sir Edmund Hornby sustained the Race Club in their objection.
Several new buildings have been erected during the past year—notably
the handsome structure of the Hongkong and Shanghai Bank, which is
nearly completed, on the site of Messrs. Turner and Co.'s old houg, on the
Bund; and a new Chinese Hospital, which has been constructed on the site
of the old one, in Shantung Road.
The usual talk has taken place about a Sanitarium, with the usual
result. We seem to bo no nearer having one now than when Messrs.
Hanbury, Coghill, Henderson, and Cunningham first went to Pootoo in
1863, in search of a suitable site. As a matter of fact, there are any
number of suitable sites. The Saddles, Pootoo, Chusan, would all answer
the purpose well. But the thing will never be settled by committee
reports. It could be settled at once by any person or any company who
would establish an hotel on either of the islands, and make arrangements
for transport. We suspect the real hitch is, that there is not sufficient
demand to make such an establishment pay. The tide of summer emigra-
tion has set towards Chefoo j and an island hotel, depending as it would
entirely on summer visitors, could not exist on half-support.
Another matter of prime importance, in which we regret that no steps
have been taken, is that of harbour conservation. We pointed out last year,
in protesting against the construction of the C. N. Co.'s wharf off the
French Bund, how the course of a sluggish river had been interfered with,
to the serious detriment of its channel; and how usefully a dredger could
be employed in conserving the whole seaward course of the Hwangpoo, as
well as dredging the Woosung bar. Not only, however, has the completion
of this wharf been allowed, but no step has yet been taken towards defining
the Bund line, as a protection against future encroachment, or applying
machinery for the conservation of a deteriorating channel. What we think
has to be realised, is that our river, although draining a large extent of
country, has a force of current so slight as hardly to overcome any
adventitious obstacle; and that it needs mechanical assistance to enable it
* N.-C. Herald, Juno SOtli.


[30.]
to hold its own in the face of the mechanical and natural difficulties that
have been placed, and are ofteu arising, in its way.
Various changes have taken place in the fortunes of the steamer
companies running from this port. The year has witnessed the demise of
the U. S. N., which had better have wound up its affairs than adventured
on the coast, after it had been bought off the Yangtze. The new line
which had been started to compete with the P. M. S. Co. for the trade
between China and America, has also died, and its vessels are being run by
its older rival. The China Merchants' Steamer Company thrives by the aid
of its great subsidy; but the "Shanghai Steam" and "China Coast"
Navigation Compauies seem to hold their own against it notwithstanding,
on the Northern line. On the River, it has not yet made any serious
invasion; but the two great companies which now have the Yangtze
virtually to themselves, may expect it to encroach more aud more, and to
cut down ordinary freights with one hand, while carrying "tribute-rice"
at inflated rates with the other.
Japan. The chief incident in Japanese, as in Chinese, politics during the
past year, has been the Formosan difficulty which so nearly plunged the
two nations in war. We have already sketched the circumstances, in our
review of Chinese politics, so it is unnecessary to recapitulate them here.
What remains, to complete our record of the incident, is to note the
condition of affairs in Japan which had influence in bringing on the
quarrel.
The changes in the position of the Samurai, that ensued on the
revolution effected in the Government, have been recorded in previous
years. They had lost their prestige, and they were irritated by the
scheme for the commutation of their incomes, which the condition of
the State finances did not permit the Government to improve. To quote
the words of the Japan Mail:—"The swords of many of them, the last
relics of a waning prestige, had been pledged to afford temporary
sustenance for their wives and children. The old homes had been
broken up. One by one the small but cherished ornaments or necessaries
of domestic life had been sold, and each fresh sacrifice renewed the
bitterness caused by a revolution which was fast sweeping away privileges,
all the more fondly clung to because they represented the spirit of a
departing age." Their warlike instincts, too, had been aroused by the
brief but sharp struggle of the civil war, and their patriotism was chafed
by the insolence of Corea, and the injury done to their fellow-subjects,
the Liuchiuans, in Formosa. War in either quarter afforded an oppor-
tunity for mending their condition, and an outlet for their excitement.
We have, here, without doubt, an explanation of the pressure which urged
the Government to follow up unsatisfactory negotiations at Peking, by the
active step of an expedition to Formosa. Iwakura, who was one of the
strongest advocates for peace, was assailed and narrowly escaped
assassination in Yeddo. An insurrection, which occurred in February in
the provinces of Hizen and Saga, went further to convince the Govern-
ment that a great body of discontent existed, requiring either to be
conciliated or permitted to explode elsewhere. It is not surprising that


[ 31 ]
the Government, urged forward by these facts, should have given way
to the general desire to avenge the murder of the ship-wrecked Liuchiuans,
and entertained the project of colonising the Eastern half of Formosa.
We need not recapitulate the unsatisfactory negociations at Peking, which
seemed to countenance this course, nor the progress of the expedition
which eventually left Nagasaki either in spite, or in an advance, of a
counter-order dictated at the last moment by apprehension of the compli-
cations with China which the scheme might entail. The troops landed in
Formosa, subdued the guilty tribe, and were preparing to carry out the
ulterior object, when China roused herself to the point of demanding
their withdrawal. How nearly war ensued, and how war was averted
by the good offices of the British Minister, is a matter of record. The
Japanese bore themselves firmly throughout, and retired at length nnder
a convention which tacitly admitted that they had been right in the
enterprise they undertook. Japan agreed to evacuate Formosan territory
on the payment by China of Tls. 500,000, the estimated value of works
and barracks constructed in the island, and her guarantee to provide for
the future security of the Formosan coast.
It is likely that the Government gained strength at home from the
vigour of its action abroad. That it is gaining strength and solidity,
seems at any rate to be unquestioned. Popular it is not; taxes are heavy,
and the infinity of new regulations that have issued in pursuance of
the new order of things, still harrass the people. To quote again from
an able review of the subject in the Japan Mail:—" The spirit of centrali-
zation is too strong. The blood is, as it were, all demanded for the
service of the brain; the other organs and the limbs have not their
fair share of it, and thus they decline in strength and vigour. To give
one instance: The roads in olden times were maintained by the Daimios
out of their revenues; now these revenues are paid into the central
treasury, and are diverted towards the general purposes of government.
But roads have largely fallen into disrepair; every year they become
worse; and this causes great complaint. The unpopularity of the
Government is witnessed by the undoubted fact that the lower orders of
people in the provinces of Saga and Hizen strongly sympathized with the
insurgents in the late rebellion, and this is attributable to excessive
taxation, together with a disposition on the part of the State to
interfere irritatingly and unceasingly with the habits and customs of
the people." But there seems no doubt that much of the disaffection
which existed in the Empire at the time of the Saga outbreak, has since
disappeared, and it may be hoped that the existing uneasiness will
gradually subside as things gradually shake into their new places. The
changes which have been effected in Japan, in so short a time, are
sufficiently astounding. To expect that all these should happen without
causing uneasiness and dissatisfaction, would be to expect preternatural
wisdom in the rulers and preternatural resignation in the governed.
There is ample room for hope that, with patience on both sides,
existing evils will be remedied, and scope given to the new institutions
which have been so suddenly adopted. That the changes have been too
rapid, few will question. That many of the changes have been unwise—-


[ 32 ]
savouring rather of imitation than emultation—admits of equally little
doubt. What has surprised foreigners is, that those changes have been
so tacitly acquiesced in by the people. But this very acquiescence gives
assurance that a nation which had worked out a high civilisation of its
own, will eventually adapt itself intelligently to the new order which it is
now endeavouring to copy. Progress has been made in the construc-
tion of railways, and in extending the means of education. A desire for
representative institutions seems to be gathering strength, and is likely
soon to find expression. The attempts which have been previously
made in this direction failed; but it was hardly likely that a model
Parliamentary Government could be suddenly established in the place
of a strong feudal system. It took centuries, in Europe, to effect the
change; that Japan should experience difficulty in trying to make the
change in a decade, is scarcely surprising.
To sum up, in the words of the Mail review:—"The year closes
somewhat gloomily, for the commercial embarrassments among tho
Japanese are serious, and it may be some time before they are surmounted.
But it must be said that the advance made by the country during this
period is certain and indisputable. Those who fail to recognize this at
some moment of special discouragement—and there are many such
moments—should look back to its condition five years ago, when it was
just emerging from the weakness consequent on the Revolution. It is
idle to draw the two pictures. The contrast must be patent to every
honest mind. But the clearing of the land prior to sowing the new crop,
is hard and thankless work. Abundant hindrances are visible in all
directions, and abundant errors are made both by overseers and workmen.
Yet as the task progresses, the new crop springs up, and effaces the
recollection of toil, and mistakes, and previous disappointments. If the
Japanese are too often dilatory, capricious and uncertain, and betray
inherent faults which can hardly be eradicated without a change in
their whole nature, the foreign critic has his own errors, and should
learn from these by how dim a light he walks in his attempts to judge
truly, and with the generous consideration we all demand for our own
shortcomings, the steps of a career so unexampled as that on which the
people of this Empire have now entered."


[ 33 ]
1875.
Political. The past year has been an eventful one in Chinese politics, both
domestic and foreign, and its close leaves more than one serious question
that has arisen in its course, still pending.
The death of the Emperor Tungche, on the 13th January, was the
first incident of note. There seems to be some doubt as to the exact
nature of his illness; but small-pox was officially announced, and we need
not be too curious as to the truth of the diagnosis. He bad only been
married in the spring of 1873, and his Consort was pregnant at the time
of his decease. The absence of a direct heir seemed likely at one time to
entail dispute, if not conflict, about the succession. There were several
candidates whose claims could be urged with almost equal plausibility;
and the question was, whether the Imperial clan and the great nobles of
the Court would be able to agree upon a choice. Two cousins of the late
Emperor, sons of the Princes Tun and Kung, seemed to hold a foremost
rank; and the infant son of a prince named Tsai-che, who was adopted as
heir by the late Emperor Hienfung when still childless, but whose claims
were subsequently extinguished by the birth of a son (the late Emperor),
was also named. Then there was a possibility that the rival claimants
might all agree to await the birth of the Emperor's posthumous child.
But the Empresses Dowager (widows of Hienfung) upset all calculations,
and brought in an outsider whose election secured to them a new lease of
power. They caused the choice to fall on a son of Prince Chun, an elder
brother of the Emperor Hienfung, whom they adopted on their own and
their late husband's behalf, and thus caused to ascend the throne as a son
of Hienfung.
It will be seen that the young Empress Ah-lu-te, who would have been
the natural Regent during the minority of her husband's successor, had
the choice fallen on a child of a younger generation, was completely
effaced by this arrangement; and it was reported at the time that she had
committed suicide in disgust. The rumour was premature; but she died
in a short while—it was alleged of her own act, by continued refusal of
food—and with her the child who might have become a centre of intrigue.
In the meantime, the boy who had been pitched upon as the instrument
of the Empresses' ambition, was proclaimed and quietly accepted under
the title of Kwangsii. There were rumours, for some time, of material
dissatisfaction with the programme so energetically enforced; but they
died out, and no whisper is now heard of objection to the new regime.
The whole incident inspired a series of edicts and memorials, which will
be found in the volume of translations of the Peking Gazette, and deserve
perusal, as well for the quaint beauty of the language as for the interest
of the transactions they describe.


[ 34 ]
One cm-ious indication of the intrigues that had been going on, was
a collision between the Einpresses Regent and the Palace eunuchs. What
was the extent of their offence can only be surmised from the circumstances
of the time. It may have been that they pandered to the vices in which
the late Emperor is said to have been proficient. It may have been that
they took the opportunity of his death to indulge in political intrigue.
At any rate, they incurred the heavy wrath of the Regents, and two of
their chiefs were banished to the Amoor, to be given as slaves to the
soldiery, while four others were sentenced to be flogged and set to work
as grass-cutters in the Imperial park.'
Before the turmoil of ceremony and intrigue consequent upon the
death of the Emperor and his Consort, and the accession of Kwangsii,
was well ended, came news of the outrage in Yunnan, for which
England is still awaiting reparation, and which has still not been
investigated, ten months after the occurrence. But the incidents of
Mr. Margary's murder, and the negociations to which it gave rise,
belong more correctly to the history of foreign relations with China.
It will suffice to say that the hesitation of the Peking Cabinet to afford
reparation for this cruel outrage, nearly led on two occasions to the
withdrawal of the British Minister from Peking; and that the main-
tenance of good relations still depends on the effectual punishment of the
crime and its instigators.
The opening to trade of the Western frontier, which was the object
of Mr. Margary's journey, will probably be expedited by his untimely
death. The Western frontier of China has been hitherto guarded with
the jealousy that two wars have imperfectly broken through, on the East;
and events showed that, in maintaining this reserve, her rulers were in
perfect accord with Burmah, which drew close to China during the
excitement that followed the crime. The despatch of tribute to Peking,
which had been for some time suspended, was resumed; and the King
declared himself, in terms of abject flattery, the vassal of the Dragon
Throne.
The treaty negociated last year with Peru, was ratified in August;
and the incident gave rise to a protest in the N.-C. Herald, against the
position arrogated by Li Hung-chang at Tientsin. The existence there
of a Commissioner of Foreign Affairs, who could interpose himself as a
buffer between Foreign Envoys and the Central Government, is in itself
objectionable; and Li's high high rank and prestige have enabled him
to arrogate functions that trench on those of the Tsung-li Yamen itself.
This was apparent in the case of Dr. Elmore, who was impeded by Li, in
his journey to Peking, by preposterous demands for personal security for
the observance of the Peruvian treaty; and in the case of Mr. Wade, who
spent a month at Tientsin arranging with Li terms of settlement of the
Yiinnan outrage, which were shunned by the Peking Government, and had
to be fought over again where they should have been first mooted.
Turkestan has been another source of anxiety and of great expendi-
ture, to China, during the past twelve months. Not content with
quelling the rebellion in Shensi and Kansuh, the Peking Government
desired to reduce the Mahomedan tribes beyond the Wall, and to reconquer
the revolted provinces of Turkestan which have been welded into a
"N


[ 35 ]
kingdom by the Ataligh Ghazee, Tacoob Khan. These further efforts,
however, have been unsuccessful. It is said that Tso Tsung-tang, the
Viceroy of these North-west provinces, has lost 90,000 of the 130,000
troops who have been sent to him since the outbreak, there, of the
Mahomedan rebellion; and that 12,000 of the remainder have been
arrested by the Toonganie horsemen on their way to Khoten, and are
practically surrounded and destitute of supplies, in the middle of the
Great Desert. Tso himself, with only 25,000 or 30,000 men remaining to
garrison the frontier, cannot send reinforcements, and the force may be
given up as lost. Cold, want, and their active enemies will kill them
before Spring can permit the despatch of more troops to the scene of
action. It has been obvious, from the commencement, that China was in
no condition to attempt the reduction of Kashgar; and the attempt has
been fertile in embarrassment and disaster.
There can be no doubt the drain of supplies to the North-west has
combined, with the great outlay on arms, forts, and ships, to cause the
financial embarrassment which is disclosed in memorials from every
quarter of the Empire. Governor after Governor memorialises that his
exchequer is in debt, that the yield of taxation is declining; and the
Viceroy of Szechuen has lately pointed to the last recognised resort in
time of war—a forced contribution from the gentry,—in time of peace, as
the only means that would enable him to meet the demands upon his
treasury. And the harm does not end with the immediate requirements
of the Government. Extraordinary taxes open the door to extraordinary
peculation on the1 part of the officials upon whom devolves the collection.
A Government urgently needing Tls. 1,000 in excess of the regular
revenue, does not look too closely whether an extra hundred be not
collected and retained in the hands through which the thousand must
pass. One thing, however, is evident, that the possible limit of taxation
has been reached, and that new imposts serve only to decrease revenue by
choking trade. The complaint is rife not only where articles of foreign
commence are concerned, but is apparent as well in the effect upon purely
native trade.
With all this on their hands, however, it is said that Chinese
Statesmen are contemplating the possible necessity of sending troops to
Corea, to resist an invasion by Japan. The bad feeling which has long
existed between these two countries seems at length to have reached the
point of explosion, in an insult offered by the former in firing on the
Japanese gunboat Unyokan, while the latter was surveying in Corean
waters. The commander landed his men and destroyed the battery; but
the punishment appears insufficient to allay the public irritation in Japan,
and the recent despatch of Mr. Mori as ambassador to Peking, is believed
to have connexion with Corean affairs. Japan naturally wants to enlist
Chinese influence in persuading the Coreans to alter their bearing, or to
avert Chinese aid from them, in case satisfaction cannot be obtained
otherwise than by war.
Internally the Empire has been peace, and Li Hung-chang's scheme
for driving off foreign trade from the coast, by fighting it peacefully with
its own weapons, is in active work. The Chinese Merchants' Steam
Navigation Co. have increased their fleet during the year, by several


[ 36 ]
good steamers from England, and others are in course of construction.
That they injure Foreign Steamer Companies by the competition their
heavy subsidy enables them to maintain, is certain; but whether even
that subsidy enables them to work remuneratively to themselves is a
debated question. They declared a 15 per cent. dividend according to last
accounts; but experts blame the form of the accounts; and say that a
careful revision could be made to show a very different result. Time only
will show the extent of the Government support upon which the Company
can rely, and whether it is destined to expand or collapse. Whether the
scheme of killing the foreign carrying trade can be effected is, perhaps, a
question of millions. So far, the competition has not prevented foreign-
owned vessels from earning remunerative though lower freights.
Whether the competition shall be made more severe, and more extensive,
simply depends upon the willingness and ability of the promoters to waste
more money on the object. The scheme is a grand one, in a sense, but in
this nineteenth century seems a little too much behind the age to be
practicable.
In curious contrast to the complete accounts which have been
published, of Japanese proceedings in Formosa, are the confused rumours
which, only, have reached us, of Chinese doings in the island. A large
number of troops were sent over on the withdrawal of the Japanese, with
the ostensible object of reducing the savage tribes, and enforcing the
authority which it had occurred to the Chinese Government rather tardily
to claim. Of what they did, we know next to nothing. Rumours found
their way, from time to time, to Foochow, of hostile encounters, in which
the Aborigines were reported successful quite as frequently as their
opponents. On the other hand, the Chinese Commander is said to have
made some roads, and to have established some sort of authority in certain
of the districts. At the recommendation of Shen Pao-chen, the Imperial
Commissioner for Formosan affairs, some organisation of the country was
effected, some wise edicts were issued, and the Futai of Fohkien was
ordered to take up his residence in the island for its better governance.
The then incumbent of the post crossed over accordingly, but returned
last month, to die. The majority of the Chinese troops withdrew in the
summer, and passed through Shanghai on their way back to the districts
north of the Yangtze, from which they had been drawn.
The Chinese Government contracted a second loan, in the spring, of
similar amount to the first, but this time by private negociation.
Tls. 1,000,000 were lent by Messrs. Jardine, Matheson & Co., and
Tls. 2,000,000 by the Oriental Bank, at 10 per cent. No scrip was
offered on the market.
A series of important memorials * on foreign affairs and other
questions of state policy, addressed to the Throne by the Chief Mandarins
of the Empire, found publicity in August last. Chief among the subjects
advocated, were the appointment of Ministers to Foreign countries, and
that measures shonld be taken to select and train officials who might be
utilised in foreign matters when needed. The purport of the memorials
was that it was clearly time for China to relax her policy of concentration
within herself, and to take some note of what was going on around her.
* "N.-C. H."Aug. 7.


[ 37 ]
The views expressed were in many cases intelligent, and if given practical
effect would afford some hope of progress; but we have been so often
deluded by promises of the kind, that we suspend belief until we see the
proposals take more active shape.
Foreign Relations. The murder of Mr. Margary in Yunnan and the attack on
Colonel Browne's expedition, stand first in order of time as well as
importance, among the incidents of foreign intercourse during the past
year. In the beginning of August, 1874, Mr. Margary received instruc-
tions from H.M. Minister at Peking, to proceed overland to Yunnan, and
to join at Bhamo an expeditionary party under Col. Horace Browne,
which was coming from Rangoon to explore the trade routes between
Burmah and Yunnan. The expedition was undertaken with the full
cognisance of the Chinese Government, and both Mr. Margary and
Colonel Browne had Imperial passports. Mr. Margary also bore
despatches from the Tsung-li Yamen, explaining the object of his
journey, and requiring that he should be treated with consideration.
These instructions were obeyed, and his passport implicitly respected, on
the ontward journey. He succeeded in traversing China without
hindrance, and joined Colonel Browne at Bhamo on the 26th January.
Encouraged to believe that their own journey would be similarly
facilitated, the party—composed of Colonel Browne, Dr. Anderson, and
Mr. Fforde of the Indian Service; and Messrs. Allen and Margary of
H.M. Consular Service in China, with a body-guard of fifteen Sikhs,
besides 150 soldiers of the King of Burmah, who were to escort them to the
frontier—set out on their journey of exploration, about the 15th of
February. On the 17th, as they reached the fourth of the guard-houses
built by the Burmese Government near the frontier, reports of trouble
ahead began to reach them; travellers coming from Momein stating that
a force of 400 Chinese were assembled to dispute their passage at
Manwein. The report was disbelieved; but it was determined that
Margary should ride on to see if the road was clear, on the understanding
that he would push on to Manwein if all were well, and await the
coming of the party, but return at once if he saw signs of trouble. He
accordingly started on the morning of the 19th, with his writer and four
servants, but was unopposed, and wrote back in the evening to say that the
road was perfectly clear, and that he was going to press on to Manwein.
Rumours of tronble, however, continued to meet the main party, and on
the morning of the 22nd came a report that Margary and all his servants
had been murdered, and that 3,000 Chinese were advancing to attack
them. The appearance of Chinese soldiers on the neighbouring heights
soon confirmed the rumour, and dispositions were quickly made for
defence. A spirited sketch of the fight which ensued was given in the
N.-C. Herald of the 8th May. It must suffice, here, to say that the
Chinese were completely repulsed with some loss, and that the foreign
party succeeded in making good its retreat to Bhamo.
Reliable information reached them en route, of the murder of Margary
and his servants in Manwein. The exact manner of his death is not yet
clearly ascertained. It was at first stated that he was murdered in the
official yamen, then that he was speared in the temple in which he was


[ 38 ]
residing; but more lately, again, the first report has been revived on the
testimony of persons coming from Yunnan, who affirm that he was seized
and beheaded at an official banquet. Only his cook, who chanced to be
out in the town making purchases at the time, escaped, and succeeded in
making his way to Hankow. The testimony of Burmese who were residing
in Manwein, is clear that he was killed by order of officials who came
down with troops on the previous night from Momein, and "not by local
Shans or Chinese." The same witnesses affirmed that the heads of Mr.
Margary and of the Chinese who were killed, were taken up to Momein
(Teng Yueh chow), and there exposed on the walls of the town.
News of the outrage reached Peking at the end of March, and
H.B.M.'s Minister at once took the matter strongly up, insisting on the
despatch of a powerful British and Chinese Commission, to investigate
the occurrence; and on a guarantee that no one accused of participating
in the crime should be sentenced till the officers sent had an opportunity
of investigating the evidence. A threat of hauling down his flag induced
compliance with the request. Li Han-chang (Viceroy of the Two Hu)
was nominated a Special Commissioner; and passports were given for the
British officers to accompany him on his mission of enquiry. Mr. Wade
then came to Shanghai for the purpose of communicating with his
Government by telegraph, and to meet Colonel Browne, who had been
directed to come on from India for the purpose of communicating with
him. His Excellency took the opportunity also of visiting Hankow in
company with Admiral Ryder, in H. M. S. Vigilant, and to have an
interview with Li Han-chang, at his provincial capital.
A long interval now elapsed without any apparent progress towards
the exaction of reparation, and the delay in pressing matters to an issue
was severely criticised by the Foreign community, who apprehended that
the Yunnan Mandarins would take advantage of the interval to efface as
far as possible evidence of the crime. It was true they could not get rid
of the facts, but a very reasonable fear was entertained that they might
remove the officials more immediately concerned, instruct the people,
concoct a story, and arrange matters generally so as to make the task of
investigation more difficult. In the meantime, news came from Peking
that a memorial regarding the outrage had been received from the
Governor of Yunnan; and people were amused to learn that he averred
entire ignorance of the matter, and declared the first intimation of it
reached him from Peking—a tale which went to confirm the general
impression as to the line of excuse which the Chinese would take. All
such acts have invariably been attributed to popular outbreak, and in this
case, as at Tientsin, the suggestion of official complicity would of course
be equally repelled.
At length, on the 19th June, there appeared in the Peking Gazette a
notification that Li Han-chang had been appointed to proceed to Yunnan,
"to enquire into and settle a certain affair which had occurred in that
province;" without departure, however, as yet from the careful rule of
never mentioning foreigners or foreign politics in that publication. No
indication was given, of what was the special affair that called for so high
an appointment. At the same time news began to come from Yunnan, of
preparations to resist invasion; and troops were reported to be marching


[ 39 J
both, from Kwangsi and Szechuen towards the scene of the outrage. At
the same time, also, came a rumour of a secret memorial from the Governor,
taking credit for having effectually checked the British party, and under-
taking to hold the frontier inviolate against all comers—a report which
met with ready credence, as likely to express very sincerely the real facts
and ideas of the Governor, if not of officials higher than he who had
suggested the course pursued.
Eventually, in the beginning of August, Mr. Wade returned to
Tientsin, with the purpose, it was understood, of pressing certain definite
terms of settlement on the Chinese Government; and news of some
conclusion being come to, was anxiously looked for. His Excellency
delayed nearly a month at Tientsin, negotiating with Li Hung-chang,
who was apparently regarded as a plenipotentiary in the matter; and the
discretion of this procedure instead of at once going to Peking, was
somewhat keenly questioned. A report came down early in September,
that a substantial settlement had been come to, on the following basis :—
China to send a special Ambassador to England; to punish those guilty
in connexion with the Yunnan outrage; to give an indemnity for
Margary's murder; to open a trade route between Yunnan and Burmah;
to regulate the levy of lekin taxes; and to admit intercourse between the
British Minister and the recognised State Departments other than the
Tsung-li Yamen. But very shortly after, came news that the Government
shunned fulfilment of those terms, and that they had to be fought over
again at Peking. Whether Mr. Wade considered that he was really
dealing with a Plenipotentiary who had power to conclude a convention,
and was disappointed in this expectation; or whether he deemed it wise
to arrive at a basis of agreement with Li, as a high and influential
Minister of State, we shall have to await the appearance of the Blue Book
to decide. It seems unlikely that any other than the first consideration
can have determined him to spend valuable time at Tientsin. However
this may be, he proceeded to Peking on the 8th September; and the
first news after his arrival was of grave disinclination on the part of the
Chinese, to yield the terms required. The punishment of the Yunnan
officials, and the publication of matters relating to Foreign intercourse in
general, and to the Yunnan outrage in particular, were held to be the
special sources of difficulty; and late in September news was received
that Mr. Wade had threatened to withdrawn from Peking on the 30th of
the month, unless a satisfactory settlement was conceded. This was the
turning point.
Convinced that the British Minister was in earnest, the Chinese seem
to have shrunk before the contingency of war; and yielded eventually at
all points, though contesting each as they retreated. It is believed that
the advice of Li Hung-chang, who was visiting Peking at the time, to
take part in the Imperial obsequies, contributed materially to influence
their decision. On the 4th Oct., we learned that an edict* had been
published in the Peking Gazette conceding intercourse with the Great
Departments of State; and on the 13th, that matters were in a fair way
to a settlement, and that Messrs. Grosvenor and Baber, the British
Officials named to accompany the Mission of enquiry, were likely to set
* "N.-C. H." Oct. 7th.


[ 40 ]
out shortly for Yunnan. Five days later we knew that an edictf had
been published in the Gazette, referring to Mr. Margary's murder,
declaring the right of foreigners to travel in the interior, and requiring
Officials to take cognizance of the provisions of the treaty in this regard.
The appointment^ of Kwo Sung-tao, then provincial judge of Fohkien,
and a Mandarin of unexceptionable rank and antecedents, to go as
Ambassador to England, had been previously announced; and it was
understood that the punishment of the Yunnan officials guilty of instigat-
ing or conniving at Margary's murder, and the opening of the trade route
contemplated in his expedition, were promised. The danger of war was
now said to be averted; and Mr. Wade came down to Shanghai, where he
caused to be published a letter explaining the position he had taken in
regard to lekin taxation. The ground originally reported to have been
arranged with Li Hnng-chang at Tientsin was thus substantially covered.
Our present object is to simply give a concise record of events as they
happened; and it would be out of place, therefore, to repeat or comment
on the criticisms which were passed on these terms. They were
variously regarded, as people esteemed or depreciated the value of the
edicts which constituted a leading feature. The great complaint was that
nothing tangible had been attained. All was in the future; eight months
after the event, no step had yet been practically taken to bring Margary's
mnrderers to punishment, the value of the edicts remained to be proved,
and the report which the Chinese Government promised to have drawn
up, regarding the incidence of lekin taxation, put off all prospect of redress
into the far future. Time will best show the value of the convention, and
the wisdom of the criticisms.
The next fact we have to record, is the despatch of Messrs. Grosvenor,
Davenport, and Baber to Yunnan, to join Li Han-chang, who had left at
the end of August for the scene of the enquiry. They left Hankow on
the 5th October, and reached Shasi on the 25th Nov., Ichang on the 1st
Dec. ; and Kweichow-fu on the 13th Dec., up to which date all was well.
They had been carefully escorted, and had met with courtesy and
attention. Li Han-chang and his colleagues arrived in Yiinnan-foo on
the 13th November, and took immediate steps to provide themselves and
their Imperial Master with a theory of the outrage based on the
stereotyped pleas of lawless vagabonds, spontaneous uprising of the people,
and incapacity of the officials to restrain their subjects. At the same
time, the neglect of the Prefect to exercise this control, and the failure
of the Brigadier commanding the district to take cognisance of the
occurrence, or arrest those concerned in it, were admitted; and an edict§
was published in the Gazette of the 9th Deer., degrading both temporarily
from their posts, with a view to their examination.
Here the matter now stands. It remains to be seen whether the
Chinese hope seriously to palm off upon the British Minister, a tale
which requires him to believe the officials were ignorant and quiescent,
amid such events as a spontaneous assembly of the militia, and the
robbery and plunder of a British official within the very walls of
Manwein; or whether they purpose that Li Han-chang shall discover
traces of a conspiracy as the enquiry proceeds. In the meantime, this
t "N.-C. H." Oct. 21st. t "N.-C. H." Sept. 25th. § "N.-C. H." 6th Jan., 76.


[ 42 ]
are to become liable io both the moment they are landed? Yet, as a
matter of fact, a bale of Shirtings which has paid 5 per cent. for the
privilege of "import," is charged another 2| per cent. before it can be sold
in a Shanghai shop. Still, no definite action has been taken to repel the
levy; and surprise is expressed that, if the question can be raised in no
other way, the Council do not arrest the tax-gatherers as thieves—for
extorting money to which they have no right.
It is not, however, only at Tientsin and Shanghai that the excessive
taxation of trade has been subject of complaint. From every treaty port
comes the same murmur; and not only from treaty ports, but from the
inland provinces of the Empire, even, official protests have been addressed
to the Throne, showing that the limit of taxation has been reached, and
that revenue actually falls off in face of increased charges.
The most glaring of all cases, however, is the blockade maintained
by the Customs' cruisers around our colony of Hongkong. The insolence
of this proceeding is only equalled by the tameness with which the British
authorities submit to the infliction. If anybody has a right to tax
Hongkong trade, it is the owners of the island. But Hongkong is a free
port; and that the Chinese Government should be allowed to establish a
floating Customs' cordon around it, and levy taxes as though it were an
integral part of the Chinese Empire, is monstrous. Tet, this is what the
Hoppo of Canton practically does. The talk about protecting the revenue
of Canton is a pretext. It is when the goods enter Chinese territory, not
when they leave Hongkong, that his privilege of taxation commences;
and instances have been quoted of junks bound to Hongkong from
Formosa and the ports of Fohkien, seized and subjected to extortion by
his so-called revenue cruisers; though these are districts with which
he has no remote connexion, nor the most remote right to interfere.
The matter was referred home, and seemingly appreciated at something
like its real merit by the Secretary of State for the Colonies; but the
Foreign Office, misled, we fear, by H.M.'s Consul at Canton, shirked
interference, and damped the energy of Lord Carnarvon. We are glad to
see that Sir Arthur Kennedy has taken the opportunity of his visit home,
to press the matter again upon the attention of the Colonial Office; and
has apparently convinced it that some action is really necessary to protect
the trade of the colony. The tone of Lord Carnarvon's despatches is all
that can be desired; but there is still an unaccountable lukewarmness in
the attitude of the Foreign Office; though Sir Arthur Kennedy's recom-
mendations are so moderate and practical that the most philo-Chinese
delusionist can hardly find ground for objection. He proposes that the
Hoppo should be required to furnish a tariff of what duties are properly
leviable, with a statement of where and to whom they should be paid;
and that a Mixed Commission should be appointed to adjudicate upon
cases of taxation or seizure, in which the junks complain of excess or
injustice. Such a tariff has been often applied for, but never furnished;
and we can well believe that the Governor hits the nail on the head, in
suggesting that " the exaction of legal dues only would not justify the
maintenance of a blockading squadron. It would no longer pay!"
The irritation with which the proceedings of the Hoppo's cruisers


[ 46 ]
referred as the prime mover and instigator of the whole trouble at the
Promontory. Not only was his visit contemptuously refused; but the
whole party, comprising the two Foreigners, two boatmen, and Mr.
Henderson's boy, was straightway attacked by a mob of villagers, armed
with hoes, sickles, and bamboos, with which they inflicted severe cuts and
bruises on the unfortunate visitors. It was only by dint of hard running
that the Foreigners succeeded in getting out of their clutches. One of
their Chinese attendants seems to have been equally fortunate. But two
of the others were caught by the pursuers, and were sent back two days
later from the District Magistrate's yamen, bearing evidence of having
been "rather more than half murdered by the mob." So bad were
they, that they actually seem to have escaped further beating at the
yamSn, because they had been already so severely punished as to be unable
to stand more!
And all this happened within three weeks of a visit made by Mr. Mayers
to the Promontory, for the purpose of offering compensation to the widow
of the man alleged to have been shot by Fawcett, and during which it was
hoped Li Wu had been warned into better behaviour. We had not much
faith in the efficacy of that visit. Its effect could hardly fail to be- to
confirm the natives in the belief they expressed at Fawcett's trial, that the
light-house was a Foreign matter. In any case, the attack upon Mr.
Henderson and his party proves that the visit was an utter failure, if it was
hoped thereby to conciliate the villagers or to overawe Li Wu. The
villagers make a more savage attack than before; and few will doubt,
after Li Wu's antecedents and his contemptuous rejection of Mr. Henderson's
call, that that worthy was at the bottom of the riot. Li is the man who
caused all the trouble from the commencement, and so far from being
frightened, here is he instigating a more serious outrage than before, three
weeks after the warning that was to have restrained him. Yet we do not
hear that either Li or those concerned in the attack have been punished
for their misdeeds.
Early in June, a riot occurred at Chinkeang, which stopped short very
narrowly of serious consequences. The American Consul, Mr. Colby, and
his wife, were entering the Settlement on their return from an afternoon
walk, when they were greatly annoyed by some soldiers, who roughly
hustled them, at the same time using very disgusting language. A
Municipal policeman expostulated with them, and told them it was the
American Consul and his wife whom they were insulting. Instead of
desisting, however, they turned upon the policeman, and were using him
very roughly, when the British Consular constable come up to the rescue,
arrested two of the rowdies, and carried them off to the Consular jail. A
large crowd, among whom were many soldiers, at once began to assemble,
and endeavoured to force the gates of the Consulate, which were however
defended by Mr. Baber, the Interpreter in charge of the Consulate, aud
the Constable. As news of the affair spread, thousands of Chinese crowded
on the hill, the few British residents also making their way to the Consulate,
to stand by their Representative. Some soldiers had in the meantime gone
off to the barracks to summon their comrades in force; and Mr. Baber, on
his part sent in to the Taotai, to request assistance. Shouts of "Ta yaug


[ 49 ]
during the past year. One noteworthy incident has been the development
of the Woosung Tramway scheme. A company has been formed to caniy
out this design, and the road has been made; the material has arrived
from England, and the laying of the permanent way begun. The line is
not important in itself, but is interesting as the first sample offered to tho
Chinese, of a mode of carriage which has wrought such marvellous changes
in the condition of Europe.
The Telegraph Companies have signalised themselves by a step in
defiance of all economical experience, and which has made them very
unpopular with their clients. They have introduced various changes in
their tariff, which amount to nearly doubling the rate on all short messages,
and which will have the natural effect of decreasing telegraphy corres-
pondingly. While everyone else in the world is realising that small profits
on a large business pay better than large profits on a small one, they
have acted on the reverse principle, and adopted prohibitive charges which
must have the effect of lessening business. Rumours of an opposition line
naturally arise in consequence. We hope sincerely that they will be realised;
for, apart from the restrictive policy we have referred to, there is much
left to be desired in the general conduct of the business.
The Home Press has been awakened by the Yunnan outrage to a
greater interest in China than has been shown since the war of 1859;
and it is said that its unanimous recognition that full and complete
reparation must be had, went far in convincing the Peking Cabinet that it
would do wisely to yield to the demands of the British Minister. As our
readers are aware, there is an agency in London of the Imperial Maritime
Customs, not the least important of whose functions is said to be the
transmission by telegraph of political events that have interest for China.
The institution might easily work for good or evil; in the present case, if
we may credit political gossip, the former resulted. The more weighty
questions of Eastern policy that have since arisen nearer home, have
naturally eclipsed for a moment the public interest in Yunnan. But the
Chinese may take the hint of the despatch of British troops to Bhamo,
and of four first rate frigates to Shanghai, to show that the question is not
forgotten; and that England fully purposes to exact the reparation she has
demanded.
In China, the influence of the native Press has been increasing. It is,
of course, as yet, in its veriest infancy; but the indications are clear, of a
healthy and growing importance being attached to it. Our own knowledge
is, of course, confined chiefly to the Shunpao, which, under foreign manage-
ment, is still conducted with a sufficiently loose rein to let it be an
exponent of genuine native thought. We referred, in our Retrospect of
1874, to the Cantonese opposition which had been excited by its defence of
the actor Yang Yeh-liu and by its diatribes on the cruelty and injustice to
which he was subjected at the instance of the Canton Guild. The Weipao,
which was started by the Cantonese in their wrath at its utterances, died
a natural death in the spring, haviug had an effect precisely the reverse of
that intended by its founders. Instead of injuring the Shunpao, the
competition increased the circulation of the latter, whereas the Weipao
proved such a financial sieve, that its owners soon grew tired of the venture.


[ 50 ]
Another native paper, the I-pao, was started on its ruins, but was so little
respectable in its tone or management that its early demise followed
naturally and quickly.
In the meantime, the origin of all the excitement, the actor Yang
Yeh-liu, is still kept in a Shanghai prison; although entitled, we believe, to
have been released a year ago, under the act of grace at the Emperor's
accession. Cantonese influence, however, is said to be still too strong for
iustice The girl whose passion for the handsome actor was the commence-
ment of the trouble, has been sold by the officials as second wife, to a
Chinese gentleman in the city. Her mother has been harried into suicide.
So the whole incident forms a cheerful picture of Chinese social enlighten-
ment and official purity. .
The Polytechnic Institution has progressed under the auspices ot its
founders. Funds have been freely subscribed; and a site has been bought
and a suitable building erected, in the Canton Road. This is nearly
completed and the promises of aid and contributions received speak well for
the future of the institution. The Museum recently founded in connection
with the Asiatic Society has also prospered greatly. Specimens have been
freely contributed by sportsmen, both in Shanghai and at the outports.
The Museum is becoming a valuable public institution; and the Asiatic
Society deserves well of the public, for undertaking the expense of its
maintenance. . , ... , .... -
The Hongkong and Shanghai Bank is the only new public building of
importance that has been opened during the year. But the acquisition of
new premises by the Municipality deserves record. For the past nine years,
the Council have tenanted buildings in Honan Eoad, leased by them m
1865 at a time when rents were at their highest point. This lease
terminated at the end of 1875, and the well-known Tunsin hong in Hankow
Eoad has been purchased from Messrs. George Barnet & Co. at a very
moderate rate, for a future habitation. This will enable a considerable
saving in expenditure, and places the Municipal offices in a more central
and convenient position. The new premises moreover are sufficiently
large to accommodate the whole of the public offices, which will now be
collated in one block. It is a sign of the change which is coming oyer the
Settlement, that the old premises in Honan Road are being pulled down
and the ground is to be covered with Chinese shops and hongs.—This growth
of Chinese houses within the Settlement has been, of late, a very marked
feature. The tendency is more and more to break up the old hong system,
and for assistants to be left to choose their own quarters; and the con-
sequence has naturally been a depreciation in the value of the larger houses.
A further tendency to migrate into the country, where the number of villa
residences is constantly increasing, has still further tended to depreciate the
value of foreign house property in the Settlement, and the preferential
erection of Chinese houses which give a better return on the money invested,
is a natural consequence.
We referred last year to the survival, by the Pacific Mail Co., of the
competition which had been started against them on the route between
China and America. But they were not left long in enjoyment of their
monopoly. A Japanese Company, under the style of the Mitsu Bishi Mail


[ 51- ]
Steamship Company commenced a determined opposition in the Spring, on
the Shanghai and Japan line, and succeeded in a few months in persuading
the Pacific Mail to retire from the contest, and to sell their local steamers and
property to their new rivals. The Mitsu Bishi has now possession of the
route, but it is rumoured that certain Japanese themselves purpose estab-
lishing shortly a competitive line.—On the American route, also, the Pacific
Mail have been subjected to the competition of the Oriental and Occidental
Company's steamers, which would become more rapidly favorite, if they
would indulge in the speed of which they have proved themselves capable.
The great drawback to the voyage is now the intolerable slowness with
which it is performed.
The low rates of fare induced by the competition in the Spring, had the
effect of diverting to Japan, the excursionists who usually seek a temporary
change from the Shanghai summer, in Chefoo; and hotel proprietors at the
latter port suffered accordingly. With the restoration of the passage money
to nearer its old scale, they will doubtless recover, this season, mu<jh of
their customary business.
The business of the Law Courts has been generally light during the
year; the only case of importance that has come before them, being the
suits arising out of the Ocean and Fusing collision. These had exceptional
interest, both from the circumstances of the case and from the form of
action taken. The British steamer Ocean and the China Merchants' Steam
Navigation Company's steamer Fusing came into collision in a fog off the
coast of Shantung. The latter sank immediately, and 62 out of 125 persons
on board were drowned; among those lost being several petty Mandarins.
Proceedings were at once instituted against the Ocean, but a curious question
arose at the outset, as to the mode in which the action should be brought.
Art. XVII of the Tientsin treaty provides that in cases of dispute between
Chinese and Foreigners, which cannot be amicably arranged, the Consul
"shall request the assistance of the Chinese authorities, that they may
together examine into the merits of the case and decide it equitably." But
the order in Council of 1865, establishing the Supreme Court of China and
Japan, expressly vested "all Her Majesty's jurisdiction civil and criminal
exerciseable in China," in the Supreme Court exclusively so far as regarded
Shanghai, and in the Consular Provincial Courts when beyond the Shanghai
Consular district. The Chinese Government ought, of course, to have been
notified of the change, which was merely one of form; but this was not
done, and the anomaly thus arose, that the treaty prescribed the constitution
of a Court from which the Order in Council had withdrawn all power.
The Chinese naturally demanded a Consular Court as prescribed by treaty;
the Consul replied that power had been withdrawn from him by the Order
in Council, and vested in the Judge. Eventually, the owners of the
Fusing consented to bring their action before the Supreme Court, which
decided, after an elaborate trial, that both vessels were to blame, and the
damage of both was accordingly ordered to be added together, and one-half
to be borne by each. But the case was not yet ended. The Chinese
authorities now renewed their claim for a Consular Court, to try a suit
for compensation, instituted by the relatives of those lost with the Fusing,
against the- master of the Ocean. In this case the Consul consented to sit;


[ 52 ]
and after an elaborate trial in which much curious evidence was gone into
regarding the means and income of the persons drowned, judgment was
given iu favour of the plaintiffs for Tls. 11,000, assessed at the rate of
Tls. 300 for each of 24 officials, and Tls. 100 for each of 38 of the
passengers and crew, lost with the sunken vessel.
The chief changes in the position of public companies have been the
recovery of the Hongkong and Shanghai Bank from the prostration into
which it had been allowed to sink, and the winding up of the Victoria Fire
Insurance and the China and Japan Marine Insurance Companies. The
first is certainly a subject for congratulation, and we do not think the two
last named incidents are causes for regret. The Hongkong Bank had
advanced money on a number of schemes originated in the Colony during
a time of rather inflated prosperity, but which proved to have no sure
foundation, and which eventually collapsed with heavy loss to the Bank
which had supported them. Notably, the Indo-Chinese Sugar Company,
which was profusely supplied from the Bank's funds, proved an apparently
bottomless well. Eventually however, the difficulty has been worked
through. After losing a million of its reserve, and having been unable for
two years to pay a dividend to its shareholders, the Bank has at last
recovered its position, and is able to declare a small dividend of 3 per cent.
on the half-year just ended. Shares, which had sunk, in a quasi-panic, to
29 per cent. discount, rose with a bound at the close of the year, and are
now quoted at 10 per cent. premium. The rise indeed seems almost
excessive, in view of the small dividend available; unless we reflect that
the low rate of exchange enables the shares to be laid down nearly at par
in London, from whence the great demand has come.
The shares of the Victoria and China and Japan Companies were both
quoted much below their real values, when it occurred to certain speculators
that it would be a profitable coup to obtain a controlling power and wind
them up. This was successfully done, with largely profitable results to the
originators of the idea; and, as the Companies were somewhat redundant,
their extinction will entail no inconvenience. The process of winding up
the Union Steam Navigation Company has gone steadily on, and is now
nearly finished. The China Navigation Company, which took its place on
the river, continues to work amicably with the S. S. N.; and the shares
of the latter company, which sank, together with those of other local
undertakings, during a period of depression verging on panic that charac-
terised the autumn of 1875, are gradually recovering the position in public
estimation to which they are entitled.
In Municipal matters, the subject of chief interest has been the decline
of receipts from Wharfage Dues, owing to the possibility which exists of
passing goods at lower rates through residents on the French Concession.
Several firms have availed themselves of this opportunity, each apparently
following the action of the other. "If every body pays, we will pay; but
we cannot afford to be handicapped against those who don't." The legal
right of the Council to collect the tax will probably be shortly tested. In
the meantime, it seems not to occur to the original recusants that they
have no moral right to avail themselves of the privileges of this Settlement,
at the expense of their neighbours. If they wish to enjoy the cheap rate of


[ 53 ]
Wharfage Dues prevailing on the French side, they should in all honesty go
and live there. It is to be seriously hoped that a solution of the difficulty
will be arrived at, not only because it operates seriously on the Municipal
finances, but because any shock to the system of Municipal Government,
which has worked so well, but whioh depends so greatly on the goodwill of
all members of the community, would be in the last degree regrettable.
The system of admitting, at Ratepayers' meetings, the proxy votes of
resident Ratepayers who declined personal attendance, has been definitely
ended; the amended rule having received the sanction of the Consuls and
of several Foreign Ministers.—The revision of the Land Regulations, which
has been so often discussed, is at a stand-still. An amended code was
offered by the Revising Committee, at the meeting of Ratepayers in May
last, but was dropped without discussion. It is, perhaps, the absence of
urgency which causes this apathy. The Regulations have hitherto been
found to work fairly well, but there are undoubtedly flaws and lacunes
which may at any time prove causes of serious inconvenience.
The inconvenience of the presence of Chinese tax-gatherers in the
Settlement has been referred to in a former chapter. We refer to it
again in connexion with Municipal matters, only to insist on the desirability
of excluding any other tax-collectors than those employed by the Municipal
Council itself, from our midst.—A resolution come to at the annual
meeting of Ratepayers, to make the Municipal year end with December
instead of March, has been put in operation, and will prove generally
convenient. To say nothing of the reasonableness of the change, the
former arrangement drove the annual meeting on to the verge of the busy
season, and embarrassed the Race holidays at the end of May, which are as
much an institution as the meeting itself.—The question of taxiug residents
without the limits of the Settlement, who now enjoy almost all the advan-
tages of Municipal Government without contributing to its burdens, has
again been brought prominently up for discussion by the insistancc of the
Council on their right to tax hired carriages running in the Settlement, but
owned by a resident without its limits. The justice of the claim was upheld
by the Mixed Court, and the desirability of extending the limits of Municipal
taxation to embrace residents on the Bubbling Well road and in other
quarters, is one especial reason for pressing forward the revision of the
Land Regulations.—The presence of the opium hulks has again been
subjeot of complaint, but they maintain their position in front of the Bund,
in defiance of oommon and esthetic sense.—An attempt to persuade the
Taotai to co-operate with the Council in deepening the Soochow Creek,
between the English and American Settlements, was somewhat curtly
repelled. Indeed, in more than one instance, His Excellency has shown
himself deficient in courtesy, and in a willingness to work reasonably in
concert with his neighbours.
The system of divided authority at Shanghai is, in fact, a great and
ever-present inconvenience. We see, however, no remote hope of an amal-
gamation of the several interests, however reasonable such a project would
seem. The American and English Settlements recognised the principle at
an early date, and work under one Municipal Government, with advantage
to both. The French have elected to govern their plot of ground by


[ 57 ]
While these things were going on in the North-West, in Central
China the provinces of Kiangpeh and Shantung, and in a less degree that
of Chihli, have been suffering from famine following upon a drought
which caused the failure of the crops and consequent impoverishment
and scarcity. Some measures of relief are being taken, hut the want of
good roads makes the carriage of rice to the distressed districts difficult,
and it is to be regretted the Chinese Government does not require the
people to earn food by developing the means of communication. Foreigners
also are contributing for the relief of the distressed people, and the
funds are being usefully distributed through the local Protestant mis-
sionaries, who are said in some cases to have been given money even by
Chinese, who trust to their honesty and object to have their contributions
taken toll of by official underlings. The most severe distress is evidently
in Shantung, where people are said to be dying by thousands, of famine.
We even hear of people going from Shantung to Manchuria in search of
work and food. There is great dearth also in Chihli and Kiangpeh, but
it is hoped that, by one means or other—by the migration of some and
by the distribution of relief among others, the people will generally be
able to sustain life. Thousands are flocking across the Yangtze into
the more prosperous province of Kiangsu. At Soochow alone 10,000 of
the unfortunates are said to be assembled, and more than 1,000 have
gathered at Shanghai; while a foreigner who recently passed down the
Grand Canal from Chinkeang reports having seen large numbers at
every city on its banks. These refugees are sheltered in straw sheds and
are given two meals of rice gruel per diem, which will suffice to keep body
and soul together till the spring enables them to return and again
endeavour to work their land.
The Chinese Government has given evidence of an advance in its
appreciation of foreign affairs, by appointing representatives to conntries
with which it is more intimately connected by commercial and political
relations. This step has been long urged upon Chinese statesmen by the
Foreign representatives at Peking; and we remarked in our Retrospect
of 1875, that a series of memorials advocating its adoption had been
addressed to the Throne by the chief mandarins of the Empire. The
despatch of an Embassy to Great Britain was one of the conditions exacted
by the British Minister in the course of negotiations for the settlement
of the Yunnan outrage; and the appointment of a Minister at Washington,
and Consuls at New York and San Francisco, for which posts also men
have been nominated, may probably have been hastened by the earnest
persuasions then addressed to the Chinese Government to admit a more
truthful view of their foreign relations and of their real position in face
of Western powers. There are other signs, too, that the vessel of State
is inclined to move, albeit slowly at first, and with many creaks and
groans, down the ways to which she has so long been rusted. Less than
ten years ago, the proposal to land a telegraph line at Shanghai was
refused. Now, the Great Northern line runs overland several miles on
the way to Woosung; and the Provincial Government of Fohkien has
actually caused a line to be constructed between Foochow and the Pagoda
Anchorage. The Government of the Two Kiang has been persuaded,
however unwillingly, to countenance and purchase the Woosung Railway;


[ 58 ]
and we do not despair that the little pioneer line will be allowed to
continue working, and be the precursor of others, when the year for which
its existence has been secured shall have ended. Already a tramway is
being constructed in connexion with the coal mines in Formosa; and Li
Hung-chang is said to wish one from the Chai-tang mines to Tientsin,
though Conservative influence has hitherto been too strong for him to
compass this innovation in the neighbourhood of the capital. But the
willingness to open mines and to work them by foreign appliances is in
itself a forward step; and there are signs of readiness to do this in
several parts of the Empire.
It cannot be denied that all this is progress; but the prospect is
marred by the anxiety of the Government to retain all enterprise in its
own hands and nnder its own immediate control. Private enterprise is
not only not encouraged, but hindered. It is the Government which
buys the railway, the Government which is about working the mines, the
Government which fosters the Steamer Company; and we cannot but
regard as unsatisfactory, measures which seek no sympathy from, and
extend no encouragement to, the people themselves. The railway is
bonght to get rid of the foreign proprietors, and with the avowed purpose
of eventually destroying it, however much we may hope that this purpose
will change; the so-called Chinese Merchants' Steamer Company was
created and is supported by officials, to undermine foreign shipowners;
and a further step in this direction has been now taken, by the purchase
of the steamers, plant and premises of the Shanghai Steam Navigation
Company, which has so long had a chief share in the trade of the Yangtze.
One consideration, however, must not be lost sight of. The Government
is educating the people in spite of itself; and is admitting and establishing
the very innovations which excite its hostility when proffered by foreign
hands. It is said even to entertain the idea of creating a mint, and
nothing more than the absence of a proper coinage marks the low
standard of Chinese civilisation. Alone in this respect among the nations
to which she professes herself so superior, China may well think it is
time to provide something better than the strings of copper cash and
unwieldy lumps of silver which alone serve her as media of exchange.
But it is very questionable whether the corruption of her officials and the
laxity of her organisation will enable her to issue and maintain a more
manageable currency. The people have not sufficient confidence in the
honesty of their own rulers to accept a coin as possessing the value it
professes to have, merely because it bears the Government stamp; and so
universal is the system of squeezing, that we can hardly conceive a mint
honestly worked to be within the bounds of (Chinese) possibility. That
the reform will be effected some day, we may be sure; but the difficulties
in the way appear to be very great; and we are driven every year more
and more to regret the shortsighted policy which led to the closure of the
Hongkong mint, whose coinage would gradually and certainly have made
its way in China and supplied the crying want.
Still, as we said before, though with much creaking and groaning,
the rusty machine does show symptoms of yielding to the pressure that is
being brought to bear. The question in the minds of foreign, and indeed
it would appear of some Chinese statesmen, is whether the whole structure


[ 59 ]
may not collapse in the unwonted effort. Some of the more enlightened
among the high officials of the Empire undoubtedly recognise the need
for internal reform, and the advantages of the scientific appliances to
which Western nations owe so much of their power and prosperity. Li
Hung-chang appreciates the value of railways, and, as we have intimated,
was even willing to construct a tramway in the neighborhood of Tientsin,
but the Conservatism of the capital was still too strong for him. The
mere fact of such a project being entertained, however, by the most pro-
minent Chinese statesman of the day, is in itself an indication that the
time when such things will be tolerated, is approaching. As the older
generation passes away—men who, like the late-Emperor's tutor, Wojen,
hate both foreigners and their appliances with a deadly traditional hatred
—others come into power who are gradually becoming familiarised with
the innovations; and are half willing to accept and apply what they
cannot deny is good, and to which they cau only object that it is not
Chinese. Just as, in England, Toryism as it was understood fifty years
ago has died out even among the most Conservative classes; so the
Woj^ns and Wenseangs of China are departing and making room for a
generation of statesmen who have been brought more or less in contact
with foreigners, and are half prepared to view with favour the innova-
tions which are being pressed upon their notice. The remark is constantly
made of such a Viceroy or a Governor—" He is not personally hostile,
but fears the mass of conservatism behind him." It is much to be able
to say even this; and we may hope that the leaven of enlightenment
which is here indicated will tend gradually to leaven the whole mass.
Constant pressure from without, however, is needed, not only to ensure
movement but to hold what has been gained. Transit Passes, for instance,
are gradually effecting a reduction in the inland barrier taxation. Pro-
vincial Governments have in some places reduced this to a scale which
shall render the Pass unnecessary, in order to secure the whole of the
revenue which the Central Government would otherwise1 obtain. But,
abolish the system of transit passes, and the old scale of taxation would
be immediately re-established. Yet it may be that in time the Passes
will establish a rate of dues from which it will be impossible to return to
the old system of extortion. So in respect of railways and steamers.
The latter may be considered already established; if foreign influence
were suddenly destroyed in China, no attempt would now be made to
revert to the traditional junk. And it may well be that even the railway
will so far establish itself, during the year of life that has been secured
for it, that the officials of the day will continue to tolerate its existence.
We repeat that the selfish tendency of the officials to retain all enterprise
in their own hands and to work it for their own profit, is an unsatisfactory
feature; but they are none the less establishing changes which will some
day pass beyond their immediate control.
Foreign Relatione The negotiations for the settlement of the Yiinnan outrage
occupy the first place in the history of Foreign relations daring the past,
as they did during the previous, year. We recapitulated in our last chapter
the earlier steps which had been taken by the British Minister, to secure
reparation for Margary's murder, and the insolent attack on Colonel
Browne's party. Li Han-chang had been sent to Yunnan to investigate


[ 60 ]
and report upon the case; and Messrs. G-rosvenor, Davenport, and Baber
had been delegated on behalf of the British Government to attend the
enquiry. Certain subordinate officials had been degraded, and a few
savages were under arrest on the ostensible charge of having been con-
cerned in the outrage.
We are still without an official report of what took place at the
enquiry, and strangely little has leaked out indirectly, of the manner in
which it was conducted. We are left to infer, however, that it was
carefully misdirected by the Chinese, so as to screen the real instigators
of the crime; no one higher than a few local mandarins having been
inculpated. And Sir Thomas Wade emphatically declined to accept the
sacrifice of the savages who were offered for execution as the actual
agents. Circumstances, in fact, which came publicly and privately to
light both in Yunnan and at Peking, led irresistibly to the conclusion
that the outrage had been instigated from the capital, and that even the
Governor of the Province was himself but a subordinate agent of higher
powers.
It is unnecessary to recapitulate here the evidence that the attack
was officially organised, and that the tale put forward by the Tsung-li
Yamen, of savages moved by a prospect of plunder, was so false as to be
really an aggravation of the offence. The letters addressed by Burmese
residents in Manwein to their countrymen with Colonel Browne, would
alone be proof against such an allegation. Two days before the event,
these men wrote that 3,000 or 4,000 men were being collected to surround
Colonel Browne's party, and that they were instructed by the officials, who
had come down from Momein, to warn the Burmese to separate them-
selves, on the 23rd Feb., from the Englishmen, as on that day the party
would be attacked, and the Chinese wished them to keep out of the way
of danger. We know enough of official routine, in a country where the
commonest incident is reported from mandarin to mandarin till it reaches
the highest or lowest in the series, to be sure that, independently of the
letter delivered to him by Mr. Margary, such an incident as the issue of
passports for a British expedition to enter Yunnan was made the subject
of elaborate communication to the Governor, and that the officials under
his control would be clearly instructed in the course they were intended,
to pursue. Prince Kung avers, in fact, that copies of every document
bearing on the subject which passed between him and the British Minister
were forwarded for the Governor's information. Yet, certain officials in
the Momein prefecture organised an attack upon the expedition, and
murdered one of its members. We required to know by whom this act
of war was done. Who were the instigators? Was it due to the hostility
or carelessness of the instructions sent by the Yamen to the Governor;
or to the hostility or carelessness of the Governor himself; or to the
hostility of some local official? The Governor himself was responsible
not only in theory, by Chinese law, for such an act of violence within his
jurisdiction, but must be held so in fact for not securing the safety of
British officers, travelling under Imperial passport, who were officially
announced and expected. We may rely, as we said before, in a country
where every incident becomes the subject of elaborate official report, that
the Prefect of Momein was not left in ignorance of the intended visit of


[ 61 ]
Colonel Browne's mission; and we may be equally sure that the Prefect
would not dare, either on his own responsibility, or in defiance of instruc-
tions, to oppose it by force as it was opposed. In either case, he would
have been sacrificed at the outset, readily, gladly, to appease the anger of
England. The fault then recoiled upon the Governor. Had he been so
careless as to omit giving instructions to his subordinates? or had he
given secret instructions to repel the threatened intrusion, by force if
necessary? He would be responsible in either case; but would the Central
Government protect him at the risk of war, if he werethe originator of a
crime committed against their will and in defiance of'ISheir instructions?
Yet la Han-chang's first memorial expressly exculpated him. We are
driven, then, to look higher still for the source of the crime, and to
suspect the inspiration as emanating from Peking itself,—a secret instruc-
tion neutralising the promises made to the British Minister. If therefore
the central Government declined to produce the author, they must them-
selves accept the responsibility; and tender such an apology and make such
ample reparation as should atone for the past, and satisfy the English Govern-
ment and Nation that such outrages are not likely to recur in the future.
It seems to have been in this spirit that Sir Thomas Wade re-opened
negotiations, after learning from Mr. Grosvenor the result of the enquiry.
He told the Peking statesmen in plain words that it was the Imperial
Government he held responsible, and that he would only accept Buch
reparation as might be afforded by the Government itself for its perfidy.
And a distinct intimation was given that he had the emphatic support of
the British Government in his demands, by the despatch of four powerful
frigates—the Narcissus, Immortalite, Newcastle, and Topaze, under the
command of Admiral Rowley Lambert, to reinforce the sqnadron already
in Chinese waters. The Chinese were, however, evidently still slow to
accept the hint, for the British Minister abruptly withdrew from Peking,
in the month of June, and it became apparent that the necessity of
exacting reparation by force of arms was more than ever imminent.
Nearly coincidently with Sir Thomas Wade's arrival in Shanghai, the
British delegates returned from Yunnan; and an opportunity was afforded
for an oral explanation of the circumstances of the enquiry. Soon after,
Mr. Grosvenor was despatched to report in person to the Foreign Office
in London.
Sir Thomas Wade's departure from Peking seems at length to have
convinced the Government of the gravity of the situation ; for tentative
efforts were soon after made to re-open negotiations. At first it was
rumoured that Shen Pao-cheng, the new Viceroy of the Two Kiang, had
been commissioned to approach the British Minister with this object; but
a clear intimation was given that such a step would be useless unless his
commission were really plenipotentiary; and this was seemingly not the
case, as the Viceroy did not pursue his endeavour. Soon afterwards,
however, it became known that the Grand Secretary Li Hung-chang had
been delegated to re-open negotiations, with full powers to effect a settle-
ment, and that a conference would shortly be held at Chefoo, between the
two Ministers.
But it would not have been China, if a final effort had not been still
made to escape this concession to the Barbarians^ If Sir Thomas Wade


[ 63 ]
throughout the Empire. This document, together with the Imperial
edict approving the settlement and expressing regret for the occurrence,
was to be embodied in a proclamation to be posted in every city, town,
and village throughout the Empire. The right to send a Mission from
India to Yunnan was re-affirmed, and the appointment of a British
Resident in the province, and the opening up of trade across the frontier,
were stipulated for. An indemnity was to be paid to the families of the
officers and others killed in Yunnan, on account of the expenses occasioned
by that outrage, and on account of various outstanding claims of British
merchants. And an Embassy was to be sent to England, bearing an
Imperial letter expressing regret for what had happened in Yunnan; the
text of the letter itself having been submitted for Sir Thomas Wade's
previous approval.—The second section tends to improve the conditions
of official intercourse, and stipulates that measures shall be taken for the
more effective administration of justice.—The third provides for the
extension of commercial intercourse by the opening of the Yangtze to
Ichang, with the additional riverine port of Wuha in Anhwei, and the
right of call for foreign steamers at two additional ports in Anhwei, one
in Kiangsi, and three in Hukwang. Two additional ports are to be
opened on the coast—viz., Wenchowin Chekeang, and Pakhoi in Kwang-
tung. The right of foreign goods to travel inland on payment of 2| per
cent. transit dues, irrespective of ownership, is affirmed, and certain
other points in connection with the transit system are more clearly
defined. The right is conceded to the British Government of stationing
a Consular agent at Chungking; and the intention is asserted, of sending
a mission of exploration to India through Thibet. The exemption of
foreign goods from lekin dues within the limits of the foreign Settlements
is recognised; and a Commission is to be appointed to enquire into the
blockade grievance at Hongkong.
Our purpose here is to record rather than to comment upon the
incidents of the year. But we may remark that the points in the Con-
vention which have been most keenly criticised, are the indemnity and
the inferential recognition of lekin outside the Settlements, by the stipu-
lation that it shall not be collected within their limits. It is admitted
that the task of following the goods and endeavouring to protect them
from lekin, in inland cities, would be exceedingly difficult; but the protest
of illegality would operate as some check on exactions, while the implied
recognition is an encouragement to taxation. The mention of monetary
compensation in connexion with Margary's murder is condemned as a
mistake, and the sum named is inadequate to meet the claims of British
merchants alone arising out of the wrongful action of Chinese officers.
Dissatisfaction is also felt by many, at the failure to trace the crime up
to a specific source, and exact the definite punishment of some responsible
individuals. But it is obvious that, if the assumption be correct that the
inspiration emanated from Peking, this would be an almost impossible
task; and the best course lay in exacting from the Imperial Government
such reparation as could be fittingly exacted, and in requiring measures
tending to remove the danger of such outrages for the future. The other
stipulations have general approval, although opinions of course differ as
to the probable extent of their value.


[ 65 ]
be given, that such an amount of drawback duty was dne, and that thia
certificate should be accepted at the Custom House in payment of import
duty as occasion arose. Practically the system works fairly conveniently.
Merchants get a drawback certificate one week, and tender it in payment
of duty the next; so the privilege of receiving coin instead of paper will
probably not be very largely availed of. It is, however, manifestly fair
that when a man has paid money he should be entitled to get back money,
and not paper, if he wishes; and this he will be entitled to do after the
1st day of the third year of Kwangsii—that is to say, the 13th February,
1877.
The opening of the little railway .to Woosung claims a prominent
place in the history of 1876; and the occasion is opportune to put on
record the circumstances under which the project was conceived and
carried into execution.
Every one knows that the Mandarins have always opposed railways,
as they do any other innovation. To suggest the subject to them was
simply to invite refusal; to urge the advantage that has resulted from
their introduction in Europe was to evoke the reply that no doubt they
are suited to the conditions of European countries, but they are not suited
to China. It is an easy way of getting rid of the subject, and saves all
trouble of argument and thought. At the same time, the Chinese people,
though naturally sharing to some extent the characteristic exclnsiveness
of their rulers, are quite capable of appreciating the advantages of steam
carriage when it is made patent to them.
It was with this conviction that certain gentlemen conceived the
plan, a few years ago, of constructing a short railway from Shanghai to
Woosung. It was useless endeavouring to obtain the formal assent of the
Chinese authorities, but it was thought that a railway once constructed
on land duly acquired by purchase might be tolerated, and serve as a
model for the instruction of the people. The then Taotai of Shanghai,
who chanced to be an enlightened and well-disposed man, was acquainted
privately with the design, and said he would offer no difficulties during
his term of office, but that he should be away before the enterprise was
completed, and—a/prea lui le deluge. Land was accordingly bought all
along the distance between Shanghai and Woosung, of sufficient width to
form a broad "carriage road," as the project was publicly called; and
the land having been acquired and levelled, a company was formed for
the purpose of laying a permanent way and acquiring the necessary stock
to form a railroad.
By the end of June the line had been finished for one-half the distance,
and the people showed such great interest in the work that it was
determined to open it as far as the village of Kongwan, without waiting
for the completion of the undertaking. On the 31st June, accordingly,
the Managers invited as many of the ladies and gentlemen of the Settle-
ment as the six carriages, which formed the total rolling stock of the
Company, could accommodate. It is needless to say that every one
accepted the invitation; and punctually at half-past five p.m., as we wrote
in describing the event, "the first passenger train in China began to glide
out of the station, amid the cheers of those assembled on the platform."
The country people had become to some extent familiarised with the


[ 66 ]
sight, from the frequent passage of ballast trains during the few previous
weeks, bat a string of carriages crowded with foreign passengers was
another startling novelty, and it was curious to see them cease from their
labour and gaze with astonishment as the train passed by. The interest
shown, however, was clearly in the sense of enjoyment rather than hostility.
Kongwan was reached in seventeen minutes, and here the company
alighting found an ample supply of champagne, which had been hospitably
provided by the contractors to celebrate the event. After half-an-hour's
stay, during which the whole proceedings were watched with intense
curiosity by crowds of the neighbouring villagers, the engine was once
more attached to the train, and in fifteen minutes the passengers found
themselves back at the Shanghai Station.—The first railway in China had
been opened!
For two or three following days, free trips were given to all the
Chinese who could squeeze themselves into the carriages as the trains
started from either terminus; but these were an inappreciable minority
of the numbers who crowded to avail of the opportunity. Even when
regular traffic was commenced, there was no falling off in the anxiety to
travel. Every train was filled with excursionists who appeared to thoroughly
enjoy the novel mode of conveyance. The enterprise, however, was not
destined to continue working so smoothly: and we cannot do better than
adopt the succinct narrative of the Shanghai correspondent of the Times,
of the subsequent proceedings.
The local officials soon began to show active hostility, tod within a
month a man was run over under circumstances which were strongly
suggestive of suicide, and naturally suggested a further suspicion that the
officials might be privy to the act. At any rate, the utmost use was made
of the accident. The Taotai made all possible capital of the case, and
claimed life for life—the life of the engine-driver for the life of the victim.
The idea of course was absurd, as it was shown at the inquest that the
man had done all in his power to avert the accident; but the British
Minister thought it well that the Chinese should be gratified with a
formal trial, and, at his instance, a committal on a charge of manslaughter
was applied for by the British Vice-Consul, who was present at the
inquest. It is needless to say that the proceedings went no further than
the Magistrate's Court. The driver was acquitted at once, but the hostility
of the officials was in no way appeased.
In the meantime, it became known that the officials were contem-
plating a resort to their well-known recipe of a mob riot; the peasantry
were to be incited to tear up the rails, and so accomplish the stoppage by
violence; and in order, no doubt, to prevent a collision which would have
rendered any subsequent arrangement more difficult, Sir Thomas Wade
advised—with a force which of course, under the circumstances, amounted
to a request—that the working should be suspended. The request was
obeyed, and on the 24th of August the trains were stopped after about
six weeks' active and remunerative work.
It was hoped Sir Thomas Wade would take occasion to settle the
railway question at Chefoo, together with other pending difficulties; and
though he did not make it the subject of a formal agreement, he expressed
a sufficiently cogent wish to see the line working, to bring about that


[ 68 ]
convenient, diplomatically, to refer to this precedent in case of future
accidents.
In accordance with this agreement, the purchase money was eventually
fixed at Tls. 285,000; and certain regulations* having been drawn up for
the safer conduct of the traffic, the line was re-opened for traffic on the
1st December; and, except a passing misunderstanding with the country-
people, who claimed the privilege of working on it within their district
to the exclusion of outsiders, has since been working quietly and success-
fully. It is earning a remunerative income, and there is a very fair likeli-
hood of its being continued by the Chinese after it has been finally handed
over to their control. If this be so, the object of the promoters—that of
introducing railways into China, will have been successfully accomplished;
for we cannot believe that a practical people will be long satisfied that a
means of locomotion so speedy and convenient shall be confined to the
nine miles of country between Shanghai and Woosung. Sooner or later
—and sooner, we confidently anticipate, than many people venture to hope
—we look for the extension of the present railway to Soochow, and the
further development of the system. If foreigners were allowed to prose-
cute the enterprise, next year might see the commencement of the
undertaking. Chinese capital would be willingly offered, and Foreign
money would not be wanting now the difficult first step has been gained.
But the Chinese people do not trust their own Rulers; they will not
attempt to make a line as a private joint stock undertaking, and the
absence of this sense of security must militate to delay railway extension
—unless, indeed, it be taken up as a Government enterprise.
The Carisbrooke case, which occupied a prominent place in our last
retrospect, was settled during the summer by the infliction of a mitigated
penalty of Tls. 5,000. It will be remembered that the Carisbrooke, a
British steamer running between Singapore and Hongkong, was seized by
the Chinese Revenue cruiser Peng-chao-hai, on the 12th June, 1875, for
landing a few passengers who had with them twelve chests of opium, on
the coast of Hainan. The charge was laid under Art. XLVII of the
Treaty of Tientsin, which lays down that "British "merchant vessels are
"not entitled to resort to other than the ports of trade declared open by
"this treaty. They are not unlawfully to enter other ports in China, or
'' to carry on clandestine trade along the coasts thereof. Any vessel
"violating this provision shall, with her cargo, be subject to confiscation
"by the Chinese Government." The case was tried at Canton, before a
Court composed of the Hoppo and H.B.M. Consul; and, as Sir Brooke
Robertson demurred to the sentence of confiscation which the Hoppo held
had been legally incurred, the question was referred to Peking; the ship
being in the meanwhile released under bond, but the cargo detained in
custody. At Peking, we believe, the British Minister also protested that
the sentence of confiscation would be out of all measure harsh and unrea-
sonable, in view of the trifling fault of which the Garisbrooke had been
guilty, and in view especially of the fact that steamers had been doing
what she had done, for a long time past, without interference. Eventually
a fine of Tls. 5,000 was agreed on.
* N.-C, Herald, December, 1876.


C 69 J
It was admitted at the time, that the CarisbrooJce was technically in
the wrong, under the wording of the treaty, in calling at a place other than
an open port; and it was not to be expected that she would get off scot
free. We say technically in the wrong, because there can be no doubt
Articles XVLII and XLVIII were framed to meet a totally different
class of cases. They were not directed against regular traders which
might touch at places on the coast not open by treaty; there was no
coasting trade in those days, such as has now grown up; if there had
been, and such a case as the Carisbrooke's had been foreseen, we may be
sure that some provision or some penalty would have been arranged, of a
very much less sweeping nature than the "confiscation" which is alone
mentioned in the treaty. What the clauses were intended to prevent,
was wholesale trading, such as a vessel freighted with opium making a
special voyage to an unopened port, with the object of disposing of the
whole cargo; a very different thing from a ship halting to land passengers
who have with them a little cargo (in the present case ten chests of
opium) in which the ship owners have no interest whatever. It may be
questioned, therefore, whether the reduced fine of even Tls. 5,000 was not
excessive, for a purely technical irregularity. But a harder penalty ensues
in the Carisbrooke's case than even the fine of Tls. 5,000. The ship was
released, under bond, soon after the Customs enquiry, but the cargo was
kept possession of by the Customs; and was, we cannot doubt, very
seriously damaged when it was eventually released after a year's detention.
Here again we come back to the intention of the Treaty, which clearly
was to attach cargo intended to be smuggled; but the cargo intended to
be smuggled in the present case—if there were any such intention, even,
on the part of the passenger owners—was only the twelve chests of opium
landed at Hainan. The remainder of the freight was for Hongkong,
Canton, and Swatow, and should, in all justice, have been released directly
that fact was established. That it should have been treated otherwise, is
an act of outrageous injustice to its perfectly innocent owners, who are
punished by its detention and deterioration for a fault in which they had
not the slightest share.—The altered conditions of trade have, in short,
obviously made necessary some regulations defining the purport of the
articles under which the Oarisbrooke was accused, and which were evidently
framed with an object quite different from that which they were, in the
present instance, made to serve.
The case had, however, one good effect; it led to the immediate
opening of Kiungchow, the capital of Hainan; which had been allowed
to remain shut for sixteen years after its declaration as an open port by
the Treaty of Tienstin. Kiungchow was formally opened on the 1st
April, and experience so far has gone to show that it has good commercial
capabilities. The import and export trade have rapidly increased with
the facilities for carriage afforded by steamers; and it is thought the
opening of Pakhoi, on the opposite coast of Kwangtung, will tend still
further to develope the carrying trade by making it worth the while of
steamers to ply regularly between Hongkong and the two Western ports.
It has been suggested that the port of Hai-an, on the mainland on the
opposite side of the Strait, might be usefully opened as dependency of
Kiungchow, as Keelung is of Tamsui in Formosa, or Takow of Taiwan.


[ 70 ]
Hai-an is the shipping dep6t for the sugar produced in the Leichow
peninsula, which is its chief staple of trade, and if it were made a port
of call steamers could pick up the sugar there at once, and the expense,
risk and delay of bringing it across the Strait in junks, be avoided. In
any case Kiungchow bids fair to do a fair business on its own merits;
it is only to be regretted its opening was not claimed earlier, and such
misunderstandings as that of the CarisbrooJce avoided.
Another case which has been settled during the past year, is that of
the German schooner Anna, which had been the subject of some angry
negotiations both at Peking and with the provincial authorities of Fohkien.
The Anna sailed from Amoy in September, 1875, with a cargo of sugar
for Tientsin; but the Chinese mutinied on the voyage, murdered the
master and mate, threw the bodies overboard and carried off the vessel
to the island of Pih-seang. No interference seems to have been offered
by the local officials, to whom it must have been patent that a Chinese
crew could not be honestly in possession of a foreign ship ; and when
the facts had come to light and the German authorities claimed that
justice should be done upon the offenders, great backwardness was still
shown in bringing them to trial and in punishing the petty officials who
had connived at the plunder. The German Government did well to
insist on the authorities performing their duty in this respect, and it is
little to the credit of the latter that so much pressure was needed to
compel them to perform an act of obvious justice. Eventually four of
the mutineers were arrested and three condemned to death; compensation
for the ship and cargo was exacted, and satisfactory promises were given
for the punishment of the petty officials.
The case was very similar to that of the British lorcha Mandarin,
whose Chinese crew murdered the master on her way from Chinkiang to
Shanghai, in the year 1873, and carried off the vessel to Soongmen on
the coast of Chekeang. Two Consular officers were despatched in search,
and succeeded in discovering her traces, but the voyage was interrupted
by the gunboat running short of coal, and the case seems to have been
subsequently abandoned. Nearly three years after, evidence of the
Mandarin having been seen at different times on the coast was placed
before the British Minister, in a sufficiently definite form to require that
a thorough search should be again instituted; and H. M. S. Thalia undertook,
in January last, to carry out the purpose. She failed to discover the
whereabouts of the missing vessel, but enquiries made at various points
along the coast were pretty conclusive that she was afloat and trading in
the hands of natives between non-treaty ports. As a consequence of
discoveries made during the cruise, several men were arrested at Soongmen,
who were shown to have been concerned in the disposal of a considerable
part of the cargo; the chief purchaser in fact being a connexion of her
lowdah. These men were taken to Ningpo, brought to Shanghai, and after-
wards sent back to Ningpo, where all trace of them appears to be lost. We
have heard nothing more of the matter for months past, and it seems to
have been again allowed to drop just as success seemed within reach. The
spasmodic and inconclusive proceedings of the English authorities in this
case contrast unfavourably with the energetic action of the Germans, which
secured satisfaction within eight months of the occurrence of the crime.


[ 71 ]
Another trouble connected with shipping, though of a different
character, has occurred at Chinkeang. The Commissioner of Customs,
or some member of his staff, conceived the idea in the early part of the
year that the China Navigation Co.'s hulk was causing harm to the
Bund, by directing the current of the river against its face; and an order
was issued directing its immediate removal. A report obtained from a
Civil Engineer, showing the impression to be totally unfounded, failed to
hinder the decision; nor was the interference of H. M. Consul, who pro-
posed a reference of the question to Peking, of greater effect. On the
20th May, an order was issued prohibiting the use of the hulk for the
purposes of landing or discharging cargo, thus practically stopping the
Company's business, as there is no other available site. Two officers of
H.M. Navy were specially delegated to survey the spot, and agreed that
the hulk was perfectly harmless: but that what was doing harm was a
remnant of the old Bund Wall in its immediate vicinity, which did cause a
deflection of the current against the Bund and ought to be destroyed. The
Commissioner, however, was still obdurate, and one of the most tyrannical
acts that we have lately heard of, remains unremedied. The claim of the
C. N. Company for damages on this account alone would absorb a consi-
derable portion of the Tls. 200,000 at which Sir Thomas Wade fixed the
indemnity due from the Chinese Government under all heads, last autumn.
Serious outbreaks against missionaries and their converts occurred
during the year, in Anhwei and in Szechuen, resulting in the latter case
especially in much destruction of life and property. Early in the year,
an address which report ascribed to the Literary Chancellor of Szechuen,
was circulated among the literati, speaking against foreigners in language
with which the pamphlet called "Death Blow to Corrupt Doctrines," the
famous memorial of Wojen, and other similar effusions have familiarised
us—and urging a jehad for their extermination. Hostile placards and
assemblies followed quickly upon its promulgation, and hostile action
against the Christian population as naturally followed these exhortations.
The district on the north of the river, immediately opposite Chungking,
seems to have been the especial theatre of disturbance.
Writing on the 24th April, our informant stated that 300 houses had
been pillaged, demolished, or burned; that 14 Christians had been massa-
cred, of whom two had been burned alive; and that even the pagans had
had four men killed and some houses destroyed, for trying to help their
Christian neighbours. So far from endeavouring to check these outrages,
it is alleged that the Magistrate of Kiangpeh caused to be published on
the 22nd April, to the sound of gong, that whoever aided the Christians
should be treated like them. Nor had the Taotai of Chungking shown a
greater inclination to restore order. He had issued no proclamation, nor
taken any efficacious step for that purpose; the natural result being that
the rioters thought the mandarins favoured them and grew in boldness.
A rumour was even afloat that the Militia of Kiangpeh were to be
assembled in arms, with a view to carry the attack into Chungking. But
the townspeople were said to be alarmed at the prospect, and to be afraid
that the rioters, in pillaging the numerous Christians of Chungking,
might accidentally include some non-Christian houses in the programme.
A meeting of notables was accordingly held, with a view to request the


[ -72 ]
Taofcai to do his duty and protect all alike from further outrage. In the
meantime, business was suspended, strangers being frightened at the
rnmonrs which were travelling far and wide in the province. For, at a
distance, it was reported that Chungking was already besieged by the
insurgent rioters.—For some time longer the outrages went on; but
eventually, the representations made at Peking by the French Minister
impelled the Central Government to interfere. The Peking Gazette of
Oct. 28th contained an edict directing the officials to do their duty; and
as we have not heard lately of further trouble, we presume order has been
restored.
The disturbances in Anhwei broke out later in the year, and appear
to have been connected with the extraordinary "Paper-man" excitement
which we described under our Political heading. The outbreak is attri-
buted to the machinations of a military mandarin (who had also a literate
degree), named Fang Tong-lin. He commenced by giving expositions
of the famous edict of Kang-hi, and invented the term " Shen-jen Kiao,"
or "Religion of the Holy Man" (Confucius), in opposition to that of
"Tien-chu Kiao," or "Religion of the Lord of Heaven," which is the
common appellation of the Roman Catholics. He put forth placards
bearing also the inscription " Tien, Ti, Kiun, She, Tsin"—Heaven, Earth,
Emperor, Master, Parents, as a brief summary of principles. These were
largely circulated, and favours and protection were promised to those
who joined the sect, while wrath was threatened against those who
adhered to Christianity. If this man was the head, a Honan man named
Ho-kiu seems to have been the hand of the conspiracy. It would take
too long to explain the steps by which he worked up the excitement that
culminated in the outbreak. The tales of paper-men, tail-cutting, and
other sorceries, were cleverly applied to the missionaries and their
followers; and with a band composed principally of Honan men, Ho-kiu
perpetrated, on the 13th of July, a hideous outrage at Lotsen. A (Chinese)
priest was murdered; the body was stripped, mutilated, and burnt; and
two of the catechumens were also assassinated. The girls in the school
on the mission premises were distributed among the chiefs of the band,
and the church was pillaged and partly destroyed. The school also was
burned. But here we come to one of those curious circumstances which
seem always to furnish a sort of excuse for the extraordinary tales which
are from time to time circulated about missionaries and their converts.
Before the fire, Ho-kiu found, in a chest, some paper figures of angels,
which the native Christians have a custom of attaching to branches of fir
or palm, on Palm Sunday. These were, of conrse, a great "find." He
carried off the box, added a queue to its contents, and then spread the
report that he had found on the mission premises these terrible papermen
which caused so many disasters; and the queue enclosed in the chest was
of course convincing proof of the guilt of the- priest Wang, who had been
murdered.
The riot at Lotsen was only the first of a series. Converts were
massacred, or had to fly to the hills; their houses were pillaged, churches
were palled down. The Mandarins were inert in the face of the storm,
either sympathising with the rioters or not caring to attempt to stem the
current. Fang Tong-lin caused a proclamation to be widely posted,


[ 73 ]
exhorting the Christians to repent and renounce the religion they had
embraced, if they cared for life. A number of the catechumens listened
and recanted; but the older Christians remained firm. The tail-cutters
were active, appearing before the Mandarins and accusing the missionaries
of having paid them to exercise their turbulent industry. The climax
was at Shooeytong, which was the missionary head-quarters of the district.
There was the general dep6t of the materiel of the Ning-kwo district—
library, chapels, furniture. On the 24th of July, the Shooey-tong estab-
lishment was razed to the ground. The buildings were pillaged, and their
very foundations disappeared. Among the plunder was a pillow, stuffed
with hair, which was of course declared to be a collection of the hair of
queues cut off by the missionaries and their agents! The body of a child
-who had been killed by some malefactor was lying in one of the rooms,
and was of course declared to be there for the purpose of furnishing
medicine and sorcery. In a corner of the garden was the coffin of an
Italian priest. This was torn open; the body stripped, decapitated, and
given to the dogs. But it is sickening to enumerate the atrocities com-
mitted under the eye of officials who seem not to have lifted a finger to
stay the riots. The active representations of the missionaries, of the
French Consul-General, and of the French Minister, at length induced
the higher authorities to bestir themselves in the matter, and order was
restored, the damages were made good, and the priests re-instated.
General. The past year has witnessed several changes among official resi-
dents. Sir Edmund Hornby, who had landed in Shanghai eleven years
previously, to found Her Britannic Majesty's Supreme Court of China
and Japan—retired in May, at an unusually early age, to enjoy the hand-
some pension awarded to him after long and varied service.—Three
months later, the Consular service lost one of its members by the death
of Mr. William Hyde Lay, who had for some time filled the post of
H.B.M. Consul at Chefoo. Mr. Lay died at the early age of forty years,
twenty-three of which he had passed in the Consular Service.—And later
on, at the close of 1876, Mr. Walter Henry Medhurst, whose name had
so long been a household word in China, left us, happily still in the
enjoyment of full health and strength, to take in England the rest which
he had so well earned by thirty-six years of active service. Mr. Medhurst's
name has been associated with many of the prominent incidents of
British intercourse with China since the campaign with resulted in the
treaty of Nanking and the opening of Shanghai and four other ports to
British trade ; and those who know him best have always given him
credit for having the best interests of his countrymen at heart, and
striving to the utmost of his power to enforce their treaty rights against
the "fanciful, shifty and obstructive" policy of the native officials with
whom he was called on to deal. Mr. Medhurst's departure was sincerely
regretted by the large majority of foreign residents in Shanghai; and a
valedictory address and handsome testimonial were presented to him on
the occasion.—Earlier in the year, the Consular body had suffered another
loss by the removal of Mr. George F. Seward, who had for many years
held the post of United States Consul-General at Shanghai, and who was
promoted to the post of Minister at Peking, vacated by the death of Mr.
Avery. Mr. Seward was succeeded by Mr. J. C. Myers.—Sir Thomas.


[ 74 ]
Wade left for England at the close of November, and the occasion was
taken, at Shanghai, to present him with an address expressive of the high
respect which his countrymen generally entertain for his marked ability
and erudition, however much they may differ from the political views
which seem too often to leave undue latitude to the vexatious policy of
the Chinese.
Besides the Convention of Chefoo, two new treaties have-been made
public during the year, tending to improve commercial intercourse in the
Far East—viz., the French treaty with Annam, which opens the ports of
Hanoi and Haiphong in the Gulf of Tonquin; and the Japanese treaty
with Corea, which opens to Japanese trade several ports in that hitherto
secluded country. It remains to be seen whether other nations will follow
the lead of Japan in seeking intercourse with this remote people. It
seems, at present, to be a very moot question whether the game is worth
the candle, whether the country is not too poor to be worth the endeavour
to open up commercial relations.
A serious drought which prevailed during the summer over a great
portion of the north of China, has resulted in a scarcity growing over
large areas into actual famine. Large districts of Cliihli, Shansi, Shan-
tung, Honan, and the north of Kiangpeh are suffering. Numbers of the
population have collected round the great cities where there exist means
for their relief, or have migrated to the more prosperous districts south
of the Yangtze. The distress among those who remain is spoken of as
terrible; and the mortality oven among those who are in some measure
cared for by the authorities, is said to be very serious in the Northern
districts. Those who have come south of the Yangtze fare better ; the
lesser severity of the climate renders their suffering loss severe; and
though the modicum- of shelter and food provided for them is small, it is
sufficient to keep life in them till the return of spring. Foreigners have
contributed freely to alleviate the distress, and considerable sums have
been entrusted to the missionaries, especially in Shantung, to relieve the
prevailing suffering. Heavy snow-falls during the winter have remedied
the drought of. the previous summer, and inspired hopes of a good
harvest during the ensuing season.
The fluctuations in the value of Silver during the year have been
amongst its most notable incidents, and,- having thoroughly puzzled
experts during its course, leave them in nearly equal uncertainty at the
close. Opening at 5s. 7-|d. to 5s. 7|d. for six months' sight bills, by the
first mail in January, the rate of exchange fell to 5s. 0|d. in the middle
of July, recovered to 5s. 10jd. towards the end of August, fell again to
5s. 1d. towards the end of September, and rose again to 6s., which
however it touched only for a few minutes, in the middle of December;
closing finally on the 28th December at 5s. 7d., or within |d. of the
opening rate of the year. The fact seems to have been that the demone-
tisation of silver in Germany, coupled with exaggerated reports of the
yield of the California mines, created a panic which led to unjustifiably
low rates, from which there was a natural rebound. The tendency seems
now to be to settle down to a moderate rate, and general impression points
to 5s. 6d. as a probable minimum.


[ 76 ]
1877
Political. By far the most important incident in Chinese domestic affairs
has been the famine which, continually spreading in extent and severity,
threatens to partially depopulate large areas in the Northern provinces.
Shantung, which suffered so terribly last winter, appears to be at present
in better circumstances; but Shansi is suffering more severely than did,
last year, its sister province; and the drought which deprived its popula-
tion of the means of subsistence has prevailed also over the greater portions
of Shensi, Chihli and Honan. The Government has been roused to
unwonted exertion by the magnitude of the calamity; decree after decree
has appeared in the Peking Gazette, appointing special commissioners
and urging the local officials of the distressed provinces to take measures
for the relief of the sufferers. Large quantities of grain and sums of
money considerable for so poor a Government, have been appropriated.
But the organisation of the Chinese Government is utterly inadequate to
cope with a disaster of such magnitude, and the want of roads opposes
most serious difficulties to the transmission of such relief even as it is able
to afford. The sums officially allotted scarcely equal the total even of
those subscribed by private charity in England for the relief of the famine
in India ; and it is beyond hope that the private subscriptions, which here
also are not wanting, can have reached a tithe of the amount which the
Government of India has expended in grappling with a visitation less
wide in its range than that under which China is now suffering. It is to
be feared that terrible loss of life will have to be recorded before the
advent of summer can cause the earth to yield its accustomed crops; and
the sufferings of the people in the meantime must be sadly aggravated by
the rigour of a winter more severe than we have experienced since the
season of 1861-2. With all this distress, however, we hear of no political
disturbance, and of very little brigandage. Probably, indeed, the distress
is so great, the country so utterly bare of food, that the people could not
congregate and move about in bodies even if they were so inclined.
Amid all this distress, however, the Government has found means to
carry on the war in the North-West, and its generals have lately achieved
some signal successes. The capture of Manas in the late autumn of '76—
news of which had not yet reached ns when writing our Retrospect of
that year—was followed by a temporary lull. During the past summer
active operations were resumed; and after one severe defeat at Harashar,
which the Mahomedans were apparently not a position to follow up, the
Imperialists seem to have recovered themselves and made a dashing
advance into Kashgaria, as far as the cities of Aksu and Ushi, some 700
miles beyond their base of operations at Turfan. It is said that the
treachery of Hakim Beg,—whom rumour accuses of having poisoned the


[ 77 ]
late Ameer, Yakoob, with a view to usurp the reins of Government—has
greatly facilitated this advance; that, finding himself unable to make
head against the son of his late Ruler, this chief surrendered the districts
he occupied to the Chinese, before seeking refuge in Russian territory.
Such action would be consistent with Oriental policy, and would help to
account for General Lin Kin-tang's daring advance into Kashgaria.*
There can, at any rate, be no doubt that the dissensions which followed
the death of the late Ameer greatly facilitated Chinese operations. It
remains to be seen whether Knli Beg has the power or the energy to avail
himself of the opportunity to strike a blow at their communications,
which might convert the successful raid into a crashing disaster. The
expenditure entailed by this war has been a drain upon the resources of
the Empire, which they are ill able to bear. Time and again reference
has been made, in memorials from Provincial Governors, to the difficulty
found in supplying the required contributions; and even absolute inability
is sometimes pleaded.
A foreign loan of £1,600,000, equalling about Tls. 5,000,000, was
resorted to as a partial relief to the Viceroy Tso's embarrassed finances;
and after prolonged negociations, having for their object to obtain from
the Imperial Government effective recognition and security, it was suc-
cessfully floated, through the Hongkong and Shanghai Bank, in December.
The loan is secured on the revenues of the Shanghai, Hankow, Ningpo,
Foochow and Canton Customs, and was issued to the public at 98 and
interest 8 per cent. The operation must have been an expensive one for
the Government and a profitable one for the Bank, which receives 10 per
cent., while paying 8, and makes besides a handsome profit on the
exchange. Declining, moreover, equally with the Bank, to take the risk
of exchange in respect to repayment, the Government allows a large sum
to Wu Sing-nan, a great Hangchow banker who has acted as its financial
agent in the transaction, and who takes for this consideration a risk which
seems quite likely to be a profitable one.
But though willing to borrow money from others, the Chinese
Government declines to coin any of its own. It has bluntly and absolutely
rejected a suggestion said to have been made to it conjointly by the
foreign Ministers at Peking, in favour of establishing a Mint and a
civilised coinage. It will be remembered that a hint was given by the
Chairman, at a late meeting of the Chamber of Commerce, that the
Government was believed to be well disposed towards the establishment
of a Mint, and that an expression of opinion by the Chamber would
strengthen the hands of foreign Ministers in advising that course. Now,
however, that the advice has been at length given, the hope turns out to
have been utterly fallacious. Two things are, above all, necessary to
maintain the purity of a coinage—excellence of workmanship, and a
sufficiently strong and far-reaching executive to detect and punish forgers.
China enjoys neither condition. Her previous attempts at coinage have
been made by casting; and of course afford a premium for imitation
which the Government is too weakly organised to repress. The skill
could be procured from Europe, if China were not too jealous to employ
it; and perfection of workmanship is in itself a great safeguard against
* V. N.-C. HtrcM, 17th January, 1878. ~


[ 78 ]
forgery: but the improved administration of the law, which would repress
such attempts, is less easily supplied.
The obstinacy or conscious impotence of the Chinese Government in
this respect, as in that of railways, contrasts strangely with the enterprise
of Japan. While Peking Statesmen refuse to entertain the idea of a Mint,
and decree that the people shall be satisfied with wretched little coins of
which 1,200 barely equal the value of a dollar, Japan has successfully
introduced all the machinery and appliances for the most elaborate minting
processes. And having engaged European artificers and teachers to found
the institution, she has learnt from them, and succeeded now for some
years in carrying on the coinage independently and in maintaining a
perfectly high standard of purity and excellence. Similarly, Japan has
accepted, extended and successfully worked a railway system, while
Chinese Statesmen have covered themselves with eternal ridicule by tearing
up the little nine-mile.railway which foreigners had constructed for their
enlightenment between Shanghai and Woosung. Our last Retrospect
explained the terms of the agreement come to between Mr. Mayers and
the Viceroy Shen Pao-chen, in the autumn of 1876, at Nanking. The
railway was sold to the Chinese for a trifle over the cost price, and was to
be at their entire disposal at the- expiry of a year from the date of the
understanding. It was hoped that the success and evident appreciation
of the undertaking shown by the natives, and, above.all, the force of
custom, would have ensured its continuance. But Shen Pao-cheng decreed
otherwise. The affair seems to have been left in his hands, as an incident
within his discretion as Viceroy; and he has carved for himself a name
in history by tearing up the line, for transfer to his more enlightened
colleague Ting Jih-chang, Governor of Fohkien, who purposes to establish
it in Formosa.
The empty talk of progress which philo-Chinese are always found to
put forward, falls flat in face of damnable fact. If the Woosung railway
had continued running to the present day, we should have thought better
of the mining projects expressed in a pamphlet published last autumn by
the manager of the China Merchants' Steamer Company, Mr. Tong King-
sing. We give credit to this gentleman himself for an enlightenment due
to his Singapore education; we believe even that his patron, Li Hung-
chang, is in favour of the introduction of foreign appliances in the shape
of machinery and tramways for the purpose of developing the mineral
resources of the Empire; but even the Grand Secretary is hampered by
the instinctive jealousy of foreigners which weighs like an incubus on
even the most enlightened of his class; and he is absolutely controlled by
the mass of solid stupid sulky conservatism which distinguishes the greater
number of his colleagues and finds exjoression in such acts as that of the
Viceroy Shen Pao-cheng.
Only in Formosa—which, as an out-lying island, seems to have been
selected as a sort of corpus vile on which experiments may be made without
detriment to the sacred soil of the mainland—have such pestilential
abominations as telegraphs, foreign mining engineers, and, prospectively,
the iron road and locomotives found toleration. English miners are em-
ployed in the mines at Kelung; a line of telegraph has actually been erected
in the island under the auspices of Ting Jih-chang j and the same high


[ 79 ]
official has taken over Shen Pao-cheng's condemned railway with the
object of replanting it on his island dependency. Let ns hope that this
small spot of leaven will gradually leaven the whole lump.
The mainland has not yet got beyond arsenals and steamers; and if
these can be considered in one way evidences of progress, in another the
picture is qualified by a strong dash of retrogression. The primary
object of the arsenals was to acquire arms with which to repel foreign
intrusion, and the steamers were bought to drive foreigners off the coast
by a competition which should render traffic ruinous. So far, their success
has not been great. Instead of killing their English rivals, the China
Merchants S. N. Co. have reduced themselves to a state of weakness
which has obliged thern to make an agreement with the China Naviga-
tion Co. to share the carrying trade.
One sensible improvement has been the introduction of steam launches
instead of the old gunvessels, on the rivers of Kwangtung. But this again
is not a measure of progress tending to dovelope the resources of the
country, as would be done by the opening of mines and the introduction
. of railways and of merchant steamers on inland waters; thongh it
certainly strengthens the hands of the executive by furnishing a more
efficient police.
One measure which was forced on them by Sir Thomas Wade, the
Chinese do seem to have accepted frankly and to be willing to extend;
that is the system of foreign embassies. Required to send an envoy to
England, they have since voluntarily sent representatives to Berlin,
Japan, and America; and we can scarcely doubt that a country with
which they have such delicate relations as France—through her pro-
tectorate of Roman missions—will soon be similarly distinguished. These
envoys must eventually exercise a marked influence on the tone of their
colleagues in China. Not from the deceptive mouths of foreigners, but
from the lips of their own confreres, will these at last hear described the
civilisation, wealth and comfort to which Western nations have attained,
by the aid chiefly of those scientific appliances which it seems to be the
great anxiety of Chinese statesmen to repel from their shores. Slowly,
perhaps, but surely, the leaven must tell, and the way be opened for the
improvements which would raise China and her industrious inhabitants
to a high scale in wealth and comfort.
With the introduction of more rapid means of communication, and
the dissemination of newspapers, cases of oppression and misgovem-
ment such as are too frequently recorded in the pages of the Peking
Gazette would become less and less possible; and such visitations as the
famine which is now devastating whole provinces of northern China
would be infinitely mitigated in severity.
Foreign Relations. The year has been an uneventful one as regards foreign
relations with China; the only noteworthy incidents arising from the
gradual carrying iuto effect of the Chefoo Convention. His Excellency
Kwoh Sung-tao arrived in England in the course of January, and had
an early audience of the Queen to present the Emperor's letter of apology
for the Yunnan outrage. More recently he has presented bis credentials
as resident Ambassador. He has travelled and seen much since he
-left China, and to judge from the specimens which have been made public


[ ai ]
fortunes. They are sites of a considerable native trade; but if this trade
is to be developed so as to be of value to foreigners, capital and energy are
required, to collect produce which used to permeate through other channels.
Both are natural outlets for tea-producing districts; but such teas as now
find their way to foreign markets do so through other channels, to Foochow,
Ningpo, and Chinkeang. In the past year these teas had been already
contracted for, and followed their old routes. If foreign capital is employed
next season, they can probably be collected at the new emporia; and will
presumably be laid down there at a cheaper price, in view of the shorter
distance to be travelled. The opening of Pakhoi is perhaps more important,
happening as it did nearly coincideutly with that of Kiungchow in Hainan,
and that of Haiphong in Tonquin. The three ports together afford oppor-
tunities for an all round carrying trade which encourage steamers, and
the facilities of carriage thus afforded are the best guarantee for the develop-
ment of whatever trade the newly-tapped districts may afford.
Under the clause allowing the British Government to send officers to
Chung-king to investigate the conditions of trade in Szechuen, Mr. Baber
started for that province early in the year, and his arrival was sigualised by
the issue of a proclamation explaining the circumstances of his visit, and
warning the people not to behave rudely to him nor do him injury, either
at his residence or during his visits outside; he had come for purposes of
commerce, had no connexion with missionary enterprise, and people were
therefore not to be alarmed by his presence. And the instructions seem to
have been fully obeyed. Whether owing to the proclamation, or to Mr.
Baber's own tact, or to the native good sense of the Szechuenese, he seems
to have travelled far and wide in the province without molestation; and Mr.
Gill, who accompanied him on his journey, has passed through Yunnan,
crossed the frontier at the scene of the late outrage, and arrived safely in
British Burmah.
But while the major portion of the Convention has been thus given
practical effect, nothing has been done towards settling the points which
were left open by that agreement for future decision. The British Govern-
ment has not sanctioned the new arrangement in regard to opium. The
Commission has not yet been appointed to enquire into the Hongkong
complaint of interference with its trade by the Canton Revenue cruisers; nor,
except in the case of Shanghai, has the stipulation for the exemption of
foreign imports from lekin within the boundaries of the foreign Settlements,
been yet given effect. However useful in itself, the value of this provision
was more than neutralised by the unavoidable corollary that, if a special
provision was necessary to prevent lekin being collected in the Settlements,
the Chinese were at liberty to collect -it outside of them. This inconve-
nience must of course have been patent to Sir Thomas Wade, and the
reason why he agreed only, as in the case of opium, "to move" his
Government to consent to the restriction. It is believed, however, that the
other foreign Ministers demurred to a concession so obviously retrograde,
and this is probably one reason why the assent of the British Government
has been withheld also from this stipulation. In the meantime, at the
instance apparently of the German and the United States Ministers, the
exemption has been piit iu force so far as the Foreign Settlements of


[ 82 ]
Shanghai are concerned, without prejudice to the ulterior claim. The effect
of this exemption has been good, and is fully explained in the commercial
section of our Retrospect.—In other respects, revision of the German
treaty, which has been under the consideration of M. von Brandt and of the
Tsungli Yameu during the past year, does not seem to have made much
progress.
The Spanish Minister has succeeded in negociating a treaty with China
during the past year, the precise terms of which have nut, yet transpired.
—Practical effect has also been given to that negociated some time ago by
Dr. Elmore, for Peru, by the inauguration of a system of emigration to the
latter country, under the auspices of Messrs Olyphant & Co.
The demonstrations of hostility to missionaries, which assumed such
serious proportions in 1876, have been much less frequent or important
during the past year. In fact, an attack upon two Protestant missionaries
ill July last, at Wuchang, is the only serious offence of the kind we
have had to chronicle. A missionary was walking in the neigh-
bourhood of the parade ground, where a number of students were
practising archery. No sooner did the foreigner appear in sight than a
band of these restless spirits made a sudden onset upon him by means of
their favourite mode of attack, a shower of stones. Closely pursued, the
gentleman thus assailed took refuge first in a garden, and then in a house,
whose friendly doors were thrown open to him. But the mob commenced
pulling down the walls about the heads of the inmates, and the foreigner
was compelled to leave the place. After a while he reached home seriously
bruised and wounded, having two of his front teeth broken, and attired in
the dress of a friendly Chinaman, his own clothing having been torn to
shreds. Meanwhile his colleague, hearing news of the attack, had left the
Mission House to go to his friend's assistance. Upon his coming into sight,
the brave young defenders of their country commenced a second attack
with renewed vigour. Expostulation was useless, and this gentleman was
compelled to seek shelter in a police station near at hand. But the doors
were almost immediately broken open by the mob, and the missionary was
struck to the ground by a blow from a heavy beam, which resulted in
fracture of the shoulder bone together with other serious injuries. The
matter was taken up by H.B.M. Consul, and after much pressure twenty-
nine men were arrested, of whom eight were proved to have been participa-
tors in the riot. The question of their punishment was referred to Peking,
and we have not heard what was the ultimate decision. It was, however,
almost a sufficient punishment that the culprits should have to endure for
months the horrors and indignities of a Chinese prison.
We referred last year to the piracy of the lorcha Mandarin, effected by
her Chinese crew as she was on her way from Chinkiang to Shanghai, in
1873. Various inconclusive attempts had been made to trace the vessel;
and all hope of discovering her had been well-nigh abandoned,—when, in
April last, a foreign pilot thought he detected the lorcha, in Chinese disguise,
at the newly opened port of Weuchow. He reported his conviction to the
Acting Consul, Mr. Warren, at whose request the Taotai seized the vessel
till further enquiry could be instituted. Mr. Main (the brother of the late
owner) was requested to come down and inspect her; and the result


[ 83 ]
of his examination perfectly convinced him that she was the veritable
Mandarin. Great pains had been taken to disguise her, but men who have
been familiar with a ship are not easily deceived. A pilot and a Custom-
house officer now stationod at Wenchow recognised some chequered work
in the cabin floor and fittings. They knew it well, having been often on
board with the late Captain; and Mr. Main himself identified the foreign
work of the hull and the old canvas sail which, although much worn, was
still the original one. The absence of any trustworthy papers, and the
inability of the present owner to give any plausible account of how she
came into his possession, afforded strong corroborative evidence of the
identity of the vessel. It is little to the credit of the Chinese authorities
that they should have allowed a vessel after which this hue and cry was
ntised, to trade for four years on the very portion of the coast where her
presence had been so often accused, and where they had been again and
again requested to search her out. Even now this discovery has been made,
however, the matter seems again stagnant. It was referred to Peking, and
nothing of course has been since heard of it!
Gonerni. We mentioned in our last retrospect, that the severe competition
between the Shanghai Steam Navigation, the China Navigation, and the
China Merchants' Steamer Companies for the trade of the Yangtsze, had
resulted in the sale of the former to the native Company. The purchase
money for the ships, plant and property was Tls. 2,000,000, of which
one-half was to be paid before the end of February, and the remainder by
instalments extending over five years. A special meeting of shareholders
was held on the 15th January, at which these arrangements were sanctioned;
and on the 1st March a portion of the Kinleyuen wharf and eleven of the
steamers were transferred to the Chinese flag. All the remainder, except
the Honan, have since followed, as subsequent payments on account have
been made; and this steamer and a portion of the real estate only are now
retained by the S. S. N. shareholders as security for the remaining instal-
ments.
The Directors of the Chinese Company celebrated their acquisition, in
language which was justly criticised, as a stride towards the exclusion of
foreign ships from the coasting and riverine trade. This was the avowed
policy of its patron Li Hung-chaug, at the outset of the project, and was
affirmed in the Directors' report of the transaction in language which
ignored the existence, to say nothing of the power, of the China Navigation
Company as a rival. A year's experience, however, induced a remarkably
altered tone. The Directors admitted, in their last report, that the severe
rivalry they had experienced had prevented the realisation of the expected
profits, while their balance sheet showed that they had failed to attract new
shareholders, that they were working with a very large proportion of bor-
rowed capital, and that they had not yet been able to write off anything to
depreciation of their fleet. At the close of the year, however, the suicidal
competition which had been maintained was closed by an agreement
between the two companies to revert to the rates which had previously
been in force when the S. S. N. and C. N. Cos. practically shared the
Yangtsze traffic. The year, therefore, opens with better prospects for both;


[ 84 ]
though the re-appearance of the small steamers which used to annoy the
great companies, iu the old days of higher freights, is seriously threatened.
We remarked last year, iu connexion with the Yangtsze traffic, upon
the tyrannical interference by the Harbour Master at Chinkiang with the
China Navigation Company's hulk at that port, which was alleged on most
imperfect testimony to be causing harm to the Bund by directing the
current of the river against its face, and the removal of which was impera-
tively ordered, to the serious inconvenience of the Company's traffic. The
matter was eventually referred to Peking, and the hulk has been allowed to
resume its place; we do not hear that the question of damages sustained by
the Company, on account of the interference with their traffic, has been yet
settled.
The year has passed without any attempt to improve or even to conserve
the channel of the Hwangpoo, the deterioration of which is becoming a
serious menace to the interests of the port. Valuable suggestions have been
made by two Dutch engineers, Messrs Escher and de Byke, by Major
Bridgeman, r.b., and by Mr. G. J. Morrison, c.e., for an improvement of
the river in its lower sections, by which it is thought that the deterioration
of the upper channel would be checked; but nothing is done, though the
paramount necessity for dredging, more especially at Pootung point and
other places opposite the foreign Settlement, is patent to the most casual
observer.
We have commented elsewhere upon the destruction of the Woosung
Kailway which, under the circumstances, assumed the proportions of a
political act. It is satisfactory to learn, however, on apparently good
authority, that the line "will be left open as a road, though not as a
railway. What measures, if any, will be taken for its repair, we have yet
to learn. Th& value of the line is far greater in either capacity to Chinese
than to foreigners, as the traffic in that direction between Shanghai and the
large villages along the road to Woosung is very considerable. The Viceroy
Sh6n had however shown so much hostility to roads, eveu refusing to allow
a small extension of the pleasure roads in the immediate neighbourhood of
the Settlement, that it had been feared he would go the length of relegating
the very soil of the railway back to purposes of agriculture.
Towards the close of the year, news was received that Mr. French,
who formerly held the appointment of Judge at Sierra Leone, had been
nominated as successor to Sir Edmund Hornby, as Chief Judge of the
Supreme Court of China and Japan. We have not yet, however, heard any
date fixed for his departure to take up the post. Owing to Mr. Goodwin's
prolonged and serious illness, Mr. R. A. Mowat has been really doing the
-work of Chief Judge in the China Branch of the Court throughout the year;
while the duties in Japan have been carried on by Mr. Wilkinson as acting
Law Secretary.
The project of disestablishing the Supreme Court, and appointing a
legal Consul-General at Shanghai, was seriously considered by the Foreign
Office during the year; but wiser counsels prevailed; and though the
British Consulate at Shanghai is to be raised to the dignity of a Consulate-
General, the idea of amalgamating the two services has been abandoned.—
Another innovation which does seem to have been decided on, appears to us


[ 85 ]
very mistaken; that is, the erection of all the minor treaty ports into full
Consulates, but on a lower rate of pay than has previously existed, and
a reduction in the scale of salaries at some of the older ports. The
principle of making the officers in charge of small ports Consuls, instead of
ViceConsuls, may be a wise one, as the Chinese thiuk much of nominal
rauk; but the proposed reduction in the salaries attached to the higher
appointments is assuredly an error; it tends to discourage the best men
already in the service, and to deter others from entering.
The Margary Memorial Fund has been raised to an adequate amount,
and a plan for the intended monument has been approved; but no decision
has been yet come to as where it shall be erected. A proposal to place it
in the Public Garden has been rejected, on the rather strained plea that
the land was surrendered by the Taotai on the express understanding that
it should not be built on. By far the best alternative site appears to us to
be the Cathedral Compound.





[ 1 ]
C O M M E R C I AJ_.
18 7 3.
Silk. -yye haye to review, in 1873, one of the most disastrous years ever
known to all concerned in the Silk trade of Shanghai. Th.e value of
our produce on consuming markets has steadily declined throughout,
until the aggregate fall averages about 30 per cent; and the losses which
this heavy depreciation must in any case have entailed, have been
increased by the fact that the only noticeable check to the downward
course of prices occurred at the most unfortunate possible moment, just
before the new season's Silk began to arrive in Shanghai in the end
of May, causing our market to open hurriedly and excitedly and at
prices which involved serious losses. The results of the year have,
therefore, been considerable loss to Chinese dealers, very heavy loss to
exporters, and it is believed scarcely a better result to speculators,
dealers, throwsters and manufacturers in consuming countries.
The gradual but continuous increase in the quantity of Silk exported
from Shanghai, as the producing districts recover from the effects of the
great Rebellion, would naturally have led us to expect some reduction
from the high prices which have ruled through years of scarcity. But
a steady annual increase of 7 or 8 per cent in quantity would not of
itself have been sufficient to cause the heavy fall in values which we have
mentioned, and the chief causes of this must be looked for elsewhere.
The greatest of these is the deterioration in quality of China Silk,
arising chiefly, we believe, from insufficiency of skilled labour in the Silk
districts, or rather of labour enough to wind the Silk crop well by Chinese
methods. It is well known that the Chinese never kill the chrysalis
before winding Silk from the cocoon^—whence the brilliant whito colour
of much of the North-China Silk, a characteristic which belongs only
to Silk wound from live cocoons. This, especially if the weather is hot,
necessitates the whole of the Silk crop being wound off in a few days,


[ 2 ]
otherwise the cocoons would be spoilt by the chrysalis coming to life
and forcing its way out as a moth. But the population of the Silk
districts was so much reduced during the Rebellion, that there are not
left a sufficient number of competent hands to wind a large crop. So
long as the production was only sufficient to allow of an export of
30,000 to 40,000 bales, the reduced number of workers was sufficient
to wind most of the Silk carefully and well. But the quantity of
Silk produced has increased more rapidly than the number of reelers,
and hence for some years past the Silk crop has been reeled hurriedly,
that is, has been made coarse and foul. There seems, therefore, little
chance of any great improvement in the size and cleanness of our Silk,
until either we have accidentally small crops from bad weather or disease
among the Silkworms; or until there is a considerable increase in the
skilled labour of the Silk-growing districts; or until improved machinery
is introduced to wind at least a part of the crop; or until the Chinese
can be induced to kill a portion of their cocoons, from which afterwards
they can reel fine and clean, if dull-coloured Silk, leaving so much to be
wound from live cocoons as they can afford time to wind well. Until
one or other of these things happens, it would seem as if China Silk,
I notwithstanding the splendid intrinsic quality of its thread, must be
I content to rank among the coarse and cheap Silks of commerce.
V^ There are other causes besides that which we have named, for the
deteriorating quality of our Silk. A year ago, we showed how mischievous
had been the effect of the speculative gambling in Silk "to arrive " which
was begun in 1871, but which is now happily almost discontinued.
The practice of selling great lines of Silk to arrive, by chop names, with
a consequent inordinate demand for well-known chops, which had to be
bought on a market where there is such excessive competition as in
Shanghai, inevitably led to a deterioration of standards. The Chinese
dealers, also under the pressure of severe competition, tried to pass off
the lowest and cheapest Silk they could under cover of chop names, and
hence came a gradual but constant lowering of the character of nearly
all the best-known marks. But we have seen that the whole crop was
deteriorating, therefore there was each season a smaller proportionate
quantity of Silk suitable for being packed under good chop names. These
two causes coming together, have resulted in a most serious decline in
the character of all known chops, some having gone off only in proportion
to the general falling-off in quality, some in a much greater degree. As
compared with the China Silk of four years ago, it is estimated that
the intrinsic value of the most generally recognised chops has depreciated
to an extent which cannot be estimated at less than from Is. to, in
extreme cases, 3s. per lb.
Naturally, the Silk which, even in Chinese eyes, was unfit to be
packed under any known chop, ranges every season lower and lower in
quality. A few years ago nearly all China Silk could be easily worked
and used by a consumer at some price, and in times of scarcity it paid


[ 3 ]
throwsters best to work the lower qualities. Hence these were much in
favour, especially with speculators, and many orders were sent to China
for the lowest Silk of any class, particularly of Tsafclee, at a certain price.
The Chinese, seeing this, have naturally enough experimented as to what
would on this market pass current as Tsatlee, with results which must
in many instances have been highly gratifying to them. They have
reeled more and more of their Chincum Silk and other Taysaams as
Tsatlee, or have mixed them with Tsatlee, until the class of Chincum
especially has almost disappeared from our export. But in former
years the lowest grade of Tsatlee was worth, according to fashion, from
Is. to 3s. more than a fair Chincum; therefore they could afford to drop
the lowest quotation of Tsatlee one or two shillings, and yet be actually
getting rather more for their Silk than they were before.
It is on these coarse and spurious Silks that the heaviest losses
have in general been made. A speculator or merchant looks at the
difference in value now between No. 3 and the commonest Tsatlee, sees
that this is much greater than it was some years ago, and is very apt to
draw the inference that the common Silk is relatively cheap, unless he
has sufficient acquaintance with the article to fully realise what an
entirely different thing it is from the common Tsatlee of former years.
Also, the abundance of common and mixed Silks has a strong tendency
to make a Silk-Inspector unconsciously over-rate the classes next above
the lowest; he sees so much Silk which is unmistakeably common, that
to make some distinction he is apt to call the better parcels No. 5, and
to elevate a true No. 5 into a No. 4i\ to 5; to adequately describe much
of the Silk of this season it would have been necessary to introduce at
least two classes below No. 5, calling them respectively by some such
names as "inferior," and "very inferior." But worse even than the
bad quality has been the extraordinary mixing of entirely dissimilar Silks
in the same parcel; a good muster-bale often professing to represent a
run of which hardly any two bales were alike in colour, quality, size
and cleanness, and of which therefore different parts were to a consumer
entirely different articles, and fit only for different uses.
We have dwelt at some length on the quality of Tsatlee, because
that Silk forms the bulk of our export. In several other classes the
deterioration has been equally marked, notably in Hainings and re-reeled
Silks. Kahings and some other Taysaams have kept up their character
much better, but they have suffered severely from the abundance and
cheapness of Canton Silk, and also from the prevailing fashions in Europe
having been entirely opposed to the use of all full-sized Silks.
This is the third great reason for the heavy fall in values during
the year, and it follows partly but not altogether from the two we have
named. Increasing quantity, we have seen, has been the principal but
not the only cause for deteriorating quality; and deteriorating quality
has been the chief but not the only cause for fashion having in great
measure deserted China Silk. It has not been the only cause, for there


t 4 ] .
has been a general spirit of economy all over the world which has been
opposed to the extensive use of such an article of luxury as Silk." Also,
the great speculations on the London market during the last few years
having not only prevented prices falling slowly and naturally, so as to
balance increasing quantity and lower quality, but having also main-
tained them at an unnatural level through the Franco-German "War, it
resulted that when the consumption of Silk goods in France was seriously
reduced and prices for them fell in consequence, manufacturers had
recourse first to the system of weighting Silk heavily in the process of
dyeing (the increase in weight being, especially in Black Silks, frequently
100 to 200 per cent), and then to the production of mixed goods in
which Silk was used only for the organzine or warp, the tram or shoot
being Cotton or Woollen. Such improvements were made in the
manufacture of these mixed goods that they rose rapidly in favour, and
hence during the past two years the consumption of tram, that is one-half
of the whole consumption of China Silk, has been nearly annihilated.
This almost entire disuse of China Silk tram came simultaneously
with the increasing coarseness of the great bulk of our Silk, which made
it unfit to be used for anything else than tram. Therefore, when the
downward tendency of prices became too strong for speculators to resist,
and large quantities of Silk began to be offered for sale, it was found
that there were literally no buyers for the coarse Silks which formed
the great bulk of the stock of Chinas. Forced sales were then made at
prices some shillings below nominal quotations; the consequent fall of
the market brought fresh embarrassments, which in turn led to the
forcing-off of fresh quantities of Silk; throwsters and manufacturers
found the value of their stock in hand rapidly falling even while it was
in the process of being worked; until at last the whole trade became
utterly impoverished and disorganized. And now China Silk has to gain
back for itself the position as tram in the manufacture of Piece Goods,
which has been taken by Cotton and other substitutes—-a task which,
under present circumstances, involves its being offered at very low prices,
so low as to actually tempt fashion back to pure Silk goods.
It is more difficult to account for the heavy fall on those fine China
Silks which are suitable for organzine. This can only be explained partly
by the general disorganization of the market, partly by the distrust with
which consumers have come to view all China Silk, and partly also by
the improved reeling of Japan Maibash, the better grades of which
have this Season been the favourite class among consumers of fine-sized
Asiatic Silks.
It will naturally be said that many if not all of these facts should
have been, at least to some extent foreseen and allowed for by buyers
on this market; that what we knew of the state of the Silk Trade was
quite enough to make us refuse to buy Silk here in face of such a
combination of unfavourable circumstances, except with a fair margin
on its value in consuming markets. This is perfectly true, and was in


[ 5 ]
fact pointed out by several buyers at the opening of the new season.
That, instead of having some margin to provide against dangers arising
from the exceptionally critical state of the trade, we actually paid for
the new Silk in June fully 5 per cent over its then value. in London, can
only be accounted for:—
1st.—By the excessive competition which is the bane of our trade;
and especially by the competition for Chinese consignment business. This
is now done for very small commissions ; and native dealers, also competing
severely with one another, are of course only too willing to shut their
eyes to the quality of their own produce, and to hold or profess to hold
more sanguine views of foreign markets than are justifiable, if they can
by sending a portion of their Silk on consignment induce foreigners to
buy the rest, and so support values here.
2nd.—By the considerable fall from the prices of recent years—
which, as we have tried to show, appeared much greater than, taking
quality into account, it really was. This tempted many buyers to enter
the market in the belief that, after the disastrous season of 1872-73, Silk
had fallen to a level at which it was safe to operate.
3rd.—Even many of those who were most fully alive to the danger
of the increasing coarseness of our Silk, thought that thereby the value
of the few fine parcels would be enhanced; a hope which, as we have
seen above, has from several causes been disappointed.
How much of the blame of the sanguine over-speculation which has
marked the year lies at the door of purchasing houses in Shanghai, and
how much with the capitalists and banks who compete to give facilities
for it, is not a question which it lies within our province to discuss. That
the trade must eventually right itself is certain, but undue haste to
recover the losses of the past few years will only delay its doing so. It
cannot be too fully or generally recognised that, so long as our Silk
continues coarse, we must pay for it only the price of coarse Silk. If
this is not done, further disasters are inevitable; if it is done, it will
relieve us of some part of our excessive supply by greatly encouraging
the Chinese consumption of Silk, it will prevent losses to foreigners, and
it will give Chinese the strongest possible motive to improve their produce;
and when we have improving instead of deteriorating quality, there will
be a brighter future before the Silk Trade of China.
A noticeable feature in the year's trade has been a great increase in
the direct export to the Continent of Europe, France and Italy having
both given a decided preference to Silk imported direct over that bought
on the London market, and having even done a good business on their
own markets, in the special classes they wanted, at 3 to 5 per cent over
London rates. This is no doubt due partly to a natural desire to get
exactly the Silk they want bought for them on the market which offers
the largest selection, and also to get it in the exact state in which it leaves
the producing country. When taken to a London warehouse, the custom
is that all the bales be opened and the books stripped of the floss


[ 6 ]
"caps," which are so great a protection against damage from bales being
rubbed; these caps, which are of little value compared with the protection
they afford the Silk, are retained as perquisites by the warehousemen;
and then one bale of each run is, as a rule, seriously damaged by being
kept open for a week or more, for the necessary but not always tenderly
performed process of inspection. We quote from Mr. E. Holdaworth's
circular of 18th December 1873 :—
"That the Continental consumers prefer buying direct shipments, to
"Silk sent to their market from London, is a well-known fact to those
"sellers who supply them. It has long been their complaint that Silk
"received from London after it has undergone the 'working'process,
"is generally more or less damaged, and great quantity of threads broken,
"&c.; hence their acknowledged preference, even at rather higher prices,
"for direct shipments. This pernicious system of 'working' the Silk
"may be also the cause of such frequent cuts for 'damage,' which appear
"so often in the London account sales of Silk!"
This growing tendency in the trade to pass into the hands of
Continental consumers, who by paying high prices here are able to
attract the most useful Silks of the season, has and must continue to
have a most depressing influence on the London market. For it both
lowers the average standard of the Silk which is sent to London, and so
brings discredit on all parcels offering there; and also it entirely deprives
London during the greater part of the year of that Continental demand
which used to exercise a most important influence in sustaining its prices;
English consumption alone being quite unable to cope with, and being
certain to be crushed by the great mass of Silk arriving there in the first
few months of the season.
The trade to America has kept up to a fair average, but has not
reached the exceptional figures of 1872; the wants of that market have
been as usual almost confined to re-reeled Silks, and the results are said
to have been somewhat less unsatisfactory than on shipments to Europe.
We give comparative figures of the export to various markets for
the last three years :—
1871. 1872. 1873.
To England 35,579 bales. 38,259 bales. 33,616 bales.
„ the Continent 10,317 „ 12,223 „ 16,217 „
„ America 2,677 „ 4,142 „ 2,714 „
Total 48,573 bales. 54,624 bales. 52,547 bales.
The fall in prices of different classes during the year has been as
follows; we take the three points of 1st January, 1st June or opening of
the new season, and 31st December. The Shanghai sterling cost given
includes the usual charges; with 5 % for inspecting and merchant's
commissions on both sides; freight on the 1st January Tls. 5, and at
the other two dates Tls. 3 per bale; and loss in weight 4 % on new
season's Silk, 3 % on Raw Silk shipped at the other dates, and 1 %
on Re-reels:—


C 7 ]
Value in London. Cost In Shanghai.
1st Jan. 1st June. 31st Dec. 1st Jan. 1st June. 31st Dec.
Ex. 6/1 Ex. 6/1 Ex. 5/9
Tls. Tls. Tls.
Chop No. 3 Tsatlee 28/6 25/6 21/9 560=29/1 510=26/8 475=23/4
Bed Peacock , 24/0 20/6 17/6 480=25/0 415=21/9 385 = 19/0
Common 21/6 17/0 14/0 410=21/5 340=17/11310=15/4
Fatmow's No. 2 Haining ... 24/9 23/0nom. 19/6 500=26/0 440=23/1 400=19/8
Market No. 1 Rer. Haining 28/0 25/0 21/6 560=28/7 450=21/9
No. 2Kahing 25/0 21/0 17/9 495=25/9 415=21/9 380=18/9
„ 3Chincum 19/6 17/6 14/3 420=21/11 300=14/11
Average Shaouhing 19/0 16/6 13/0 345=18/1 275 = 13/8
Laeyang 18/6 14/3 12/0 340=17/10 285 = 15/1 260 = 12/11
The business done during the several months of the year has been
briefly as follows :—
January.—The year opened with settlements so far for the season of
1872-73, 49,500 bales, and stock in Shanghai, 2,000 bales. During the
month 2,500 bales were settled and stock was a little reduced, prices
showing little or no change.
In February, 1,500 bales were settled, and prices fell Tls. 5 a 10 per
picul, closing at Tls. 545 a 555 for Chop No. 3 Tsatlee and Tls. 465 for Red
Peacocks. This was much over quotations from Europe, London telegrams
having advised a fall of 1s. a Is. 6d. since the beginning of the year.
March.—About 1,500 bales more went forward at gradually
declining rates, closing quotations being Tls. 520 a 530 for Chop No. 3
and Tls. 450 for Red Peacocks.
April.—Settlements this month were 800 bales, a large proportion
as usual, at the close of the season, being yellow Silk. For standard
classes there were no quotations, and only 200 bales remained in stock.
May.—The shipment of these 200 bales closed the season of
1872-73 with a total Export of 55,952 bales.
v. 1871-72 59,820 „
1870-71 33,609 „
1869-70 42,829 „
1868-69 46,609 „
1867-68 41,439 „
1866-67 28,171 „
Of the disastrous nature of the season's business, we need add
nothing to what we have said above. It had involved several failures of
well-known houses both in Europe and here, and it seemed likely that if
ever great caution was again to be seen in China it must be at the
opening of the new Silk season. Unfortunately, just before the new
Silk came to market, a revival of speculation occurred in London,
professedly based on the expectation that the European crop v,ould be
short, but to a great extent, as has since been believed here, encouraged
by large holders of Silk in London, who wished to prevent their stocks
being undersold by very cheap new Silk.


[ 8 ]
Early in June, therefore, our market opened at prices much over
what had been expected a few weeks before, and which showed such
handsome profits to Chinese dealers, that Silk came to market very
freely, and during this month 6,000 bales were settled, 8,000 bales
remaining in stock. The opening rates were Tls. 505 a 515 for Chop
No. 3 Tsatlee and Tls. 415 a 420 for Red Peacocks (which had cost up
country in the end of May about Tls. 380). The demand at first ran
entirely upon known chops; and market Silks, especially the lowest
classes, were almost neglected. Before the end of the month, prices had
begun to fall, and they closed at Tls. 470 a 490 for Chop No. 3, and
Tls. 395 a 400 for Red Peacocks.
During July, the market remained steady, and 8,000 bales were
bought. Attention was suddenly turned to common Silk, and a large
quantity of very inferior second crop Tsatlee was bought, costing down
to Tls. 295. Stock was increased to 9,000 bales.
August.—Common Tsatlees up to No. 4£ continued much in favour,
and for these prices showed little change, the bulk of the shipments
costing from Tls. 300 a 360. Better Silks declined Tls. 10 a 20, closing
at Tls. 460 a 480 for Chop No. 3, and Tls. 375 a 380 for Red Peacocks.
Settlements were 8,600 bales, making a total of 22,600 bales in three
months, v. 30,000 bales to the same time in the previous season. Stock
was 8,500 bales.
September.—The market continued to decline, and closed generally
Tls. 10 a 20 lower, No. 3 Tsatlee being quoted Tls. 445 a 465 and Red
Peacocks Tls. 365. Common Tsatlee was still in favour, the apparently
low quotation of Tls. 290 bringing forward many buyers. Settlements
were 6,600 bales, and stock at the close 8,000 bales.
Early in October, advices of a slight speculative movement in
London excited our market, and prices rapidly advanced Tls. 15 a 25,
closing at Tls. 460 a 480 for No. 3, Tls. 390 for Red Peacocks, and Tls.
315 for the lowest Tsatlee. Settlements were 9,500 bales, and stock
was reduced to 7,500 bales.
This speculation in London was based on a sudden increase in
deliveries, which soon turned out to be due merely to an exceptional and
limited demand for Silk tram in the Ribbon trade of Coventry, and
which has not been maintained.
November.—Advices of the unfavourable reception of common Silk
in London caused the demand to turn upon medium Silks, especially
upon such well-known chops as Gold Lion and Kue Kee's. Prices
showed little change, the quotations at the end of the month being:
No. 3 Tsatlee, Tls. 455 a 475; Red Peacocks, Tls. 385 a 390; common
Tsatlee, Tls. 320. Settlements were 5,300 bales, and stock 6,500 bales.
Throughout December, the market was very dull, but prices were
fairly maintained, showing a fall of only Tls. 5 a 10. The closing rates,
which we have already given, show a fall of about Tls. 100 per picul
during the year; in addition to which, the lower exchange reduces the


[ io ]
away with, and business was conducted, on a much more satisfactory foot-
ing. Opinions at the time differed considerably as to the quality of the
crop, which was however pronounced by the trade at home as being
rather above the average of late years. The first purchases were made for
shipment by the Ulysses, advertised to leave Shanghai on the 22nd of
May, via Canton, it being expected by shippers that she would arrive
several days before the first direct steamers. These expectations were,
however, not fulfilled, her teas being placed on the market four days
later than the Venetians cargo. Prices were, as usual at the opening,
on a very high scale, ranging from one to two taels higher than last
season for Oopacks and Oonams, and about four taels for Ning-chows.
The extreme prices paid by Russian houses for teas from the latter
district, debarred for a time any operations in them on the part of buy-
ers for London. The P. & O. steamer Venetia was the first to leave,
getting away on the 24th May, followed two days later by the Agamemnon,
taking together 4,650,000-lbs.
On their arrival at Home on the 12 th July, their cargoes were
received with great caution on the part of the trade, the same dull feeling
and want of animation characterising the reception of the first arrivals as
it did the previous year. Buying at first went on slowly, at prices
ranging from 1s. 9d. to 2s. 6d. per lb. These prices showed a slight
profit to shippers, and were due to the moderate supply arriving at the
time—the late opening of the Foochow market being the chief cause.
The small profits made on first crops were, however, more than balanced
by the losses on second crops, which were bought in China about the
middle of July at figures considerably over what they had fetched at
home last season, the quality being inferior.
The result to these teas could scarcely have been expected to have
been different, with the enormous supply sent forward and forced on the
market at one time. The effect, though at first anything but remunera-
tive, was ultimately beneficial to the shipper on this side, as it led to a
lower range of prices being given for the remainder of the crop which,
bought at reasonable prices, is now (by latest accounts from London)
showing much more favourable results. One very noticeable feature in
the season just closed, is the very small quantity of low country tea
packed. For several seasons past, these teas have not been remunerative
to the packers, showing to them a return as bad as they have done
to the shippers. Teas of this description that have been brought down
for sale here, have been made up with much greater care and have been
much freeer from coarseness than they have been for many years—this
fact, no doubt, accounting for their better reception at Home.
Looking back, we have, on the whole, great reason to congratulate
ourselves on the happy combination of unforeseen and unexpected
circumstances which have tended to make the past season, if not so good
as we could have wished, yet a great deal better than it might have been.
First, we had the late opening of the market and the consequent delay


[ 15 ]
excessive taxation on trade, and against it even the natives have of
late been loudly complaining; there has been great distress in the North,
because of the overflowings of rivers and the submersion of vast tracts
of cultivated land; there has been protracted drought in the south,
and no little interruption and detriment to trade from that cause; there
has been the rottenness of mildew produced by the "whited sepulchres"
of Manchester,—we thank their honest Bishop for the designation;
there have been a plethora of supply and an inordinate desire on the part
of producers to keep a surplus stock always on hand; there has been a
very abundant Cotton crop in this and the neighbouring provinces. In
short, Nature and Art have gone hand in hand in compassing the ruin
of the importer, as well as that of the article which he vends.
Let us take first the Inland Transit system? We said in our
Retrospect for 1869—" In the arrangement of the transit duty system,
they—the mandarins—have never, so far as we know, been consulted;
and as it deprives them of a large portion of their incomes they have
bitterly and successfully opposed its working. We cannot expect them
to view our trade with approbation while the principle on which it is
conducted means to them the abstraction from the provincial revenues
of large sums which they consider their own, for the benefit of the
Peking Government." To judge from the extraordinary decrease in
the quantity of passes taken out last year as compared with 1872, the
active opposition here foreshadowed must be in full operation. From
Ohinkiang last season, the wails in respect of the losses trade was
sustaining by the disallowance of Passes, were so loud and prolonged
as to create a belief that the foreign merchants there were sufferers
beyond all others. But it may comfort them to know that Shanghai
is not more favored. The following comparative table of Inland Transit
at this port, will illustrate the truth of our remark :—
6. Shirtings. W. Shirtings. T-Cloths, Drills. Camlets. Lastings Lustres all Long Span. Stripes
and Crapes, kinds; Ells. Cloths, &c.
1872—pes. 85,870 19,140 163,768 6,280 4,080 2,095 7,535 8,620 6,501
1873— „ 87,639 1,900 71,541 4,365 1,460 1,290 1,560 1,300 2,685
Even the Shanghai native merchants have been ventilating their
grievances against Barrier Taxation. They have petitioned the Taotai
for redress. Can he or will he grant the prayer of their petition, or will
he refuse and so compel them to refer the matter to Peking? Foreign
Ministers at any rate need hesitate no longer. They have now evidence
that the trading class of China is with them, and that the foreign
merchant does not stand alone in his outcry against the injustice suffered
through the excessive exactions of the Mandarins.
We come now to the business of Shanghai as seen through the
medium of The Customs Gazette. Shanghai is emphasized, not that we
wish to make the trade appear less than it really is; but because in the
interests of truth it is our duty to point out that, had it not been for the
help accorded to us by the Japan markets, we should have had even a


[ io ]
worse tale to tell to-day. This at least is applicable to the articles of
Grey Shirtings and Velvets, the deliveries whereof at this place, but for
the increase in the re-exports to Japan during last year, would have been
smaller by between 70,000 and 80,000 pieces of the former and 6,000
a 7,000 pieces of the latter. With these exceptions, the following table
may be taken as indicating the balance of the trade of 1873 as compared
with that of 1872.
Piecos. Value Tls.
Grey Shirtings Decrease in round numbers 200,000 380,000
T-Cloths
White Shirtings
Sheetings
Spots and Brocades White .
Long Ells
1,400,000 1,900,000
35,000 70,000
50,000 120,000
12,SC0 27,000
6,300 37,000
2,534,000
Pieces. Value Tls.
Jeans Increase in round numbers, 33,000 64,000
Drills „ „ 85,000 212,000
Spots and Brocades Dyed „ „ 1,200 3,000
Chintzes „ 11,000 14,000
Lustres „ „ 14,000. 52,000
Camlets , „ 12,000 177.000
Lastings „ „ 11,500 120,000
Handkerchiefs „ „ 10,000 5,000
Spanish Stripes and Woollens „ 20,000 190,000
Turkey Reds , „ 6,"00 11,010
Velveta „ „ 30,000 210,000
1,158,000
Balance Decrease Tls. 1,376,000
£400,000 sterling is not a very alarming percentage upon a
trade whose gross value approximates closely to eight millions, but when
taken in connection with the fact that the importer has lost money on
nearly every article he has touched, it becomes a matter of more serious
importance. Had demand or consumption been curtailed by high prices,
or had ruinous rates diminished the supply, the decrease would have
been intelligible enough; but it has arisen from neither of these causes,
and the more we seek for a reason the more bewildered we become—
principally because we find the loss occurs in T-Cloihs, an article the
increase in which in former years was so steady and so marked, as to
carry with it the impression that the native cloth was fast being
supplanted. In autumn, when it was found almost impossible to dispose
of long held goods, the falling off in the deliveries was by general consent
attributed to an abundant cotton crop and the consequent cheapness of
the native cloth; but statistics prove that the decrease was heavier in
proportion during the six months ending 30th June last, when fears were
strong that the cotton crop would be a failure, than it was during the
latter half of the year. So that a solution of the difficulty must be sought
for elsewhere. The Chinese have said that a piece, or a quantity of their
own cloth costing the equivalent of a piece of fine 7-lbs. T-Cloths, lasts
twice as long as the latter, and is otherwise—as in repairing for instance
—much more economical. If this were strictly true, however, there
would be an utter end to the trade; but as at the close of the year there


[ 19 ]
of moistui-e into the Yarn or Cloth," together with "deliberate moistening
of the cloth by means of damp storage," but "the excessive sizing of cloth
for the purpose of producing weight "and cheapness" is only mildly
characterised as "dangerous." Why the Committee stopped short of
condemnation here also is rather mysterious, but explainable perhaps
under the hypothesis that size has sold to better advantage in China than
pure Cotton.
"We have enlarged upon this oversizing or mildew question, simply
because it is one of such vital importance to the trade that it demands a
special and lengthened notice in our Retrospect; and because in our eyes
it is no justification, nor is it an extenuation even, to plead that
comparatively better prices have ruled here for weighted or mildewed
cloth than for the genuine article. That this has been the case there is
no denying. At the same time it must not be overlooked that, lately,
there have been complaints coming to us from all parts in the North of
China and from Japan, against goods so doctored; and hence the
presumption that our local buyers have been acting either in ignorance,
or with the deliberate intention of imposing upon the actual consumers.
The coming year will probably determine which of these presumptions is
the correct one.
Of Grey Shirtings, the deliveries of 1873 have exceeded the receipts
by about 700,000 pieces, while of Drills the trade have imported nearly
300,000 pieces more than have been delivered, and the stocks of each,
article at the close of the year stood respectively at 540,000 and
397,000 pieces, against 1,300,000 and 125,000 pieces last year. In
Shirtings the decrease in the stocks has extended throughout the whole
year, but it became most marked towards the close, when the Japanese
demand was at its height. About the end of September there was a
supply of all weights in Shanghai—exclusive of unreported cargoes—of
fully a million pieces, and holders' hearts began to fail them, as, notwith-
standing the diminished shipments from home, the prospects of working
off so large a stock to the Chinese alone, before business closed for the
season, grew fainter and fainter. But Japan came to the rescue, and in
the course of the three months—October, November and December—
relieved our market of little less than 400,000 pieces. Under the influence
of that unexpected relief prices rallied from Tls. 1.96, the quotation
for Dewhurst's best 8£ lbs. Eagles on 26th September, to Tls. 2.034, the
price on 1st December; and fair to good common chops benefited to
nearly a similar extent.
Orey Shirtings.—The early part of the year was characterised by
the customary Northern demand and the speculation in anticipation
thereof—during which, and influenced also by better news from the River
ports and a weakening sterling exchange, there was a gradual advance
in the value of every kind of 8J-lbs. cloth from Tls. 1.81 a 1.94 per
piece at the close of 1872 to Tls. 1.95 a 2.02 on 26th February. The
first Northern steamers left shortly afterwards, and then a lull followed.


[ 20 ]
Extreme quietness succeeded the opening activity, and with only two or
three breaks—when something like excitement ruled—the market
oontinued in a lifeless state during the next six months. Business so to
speak had to be forced; inducements had to be held out to buyers; and,
as if matters were not already bad enough, Mildews began to accumulate,
and the risk of keeping them was so great that holders were very glad
to realise them at any price. To add to the misfortunes of the foreign
merchant too, there was first a scarcity of water in the northern canals,
and then the floods. Afterwards we had prolonged drought in our own
immediate neighbourhood, money was scarce and dear with us, our
receipts were heavier than our deliveries, and everything went against
the importer of Grey Shirtings.
And yet, in the face of so many impediments, and throughout the
whole of this period of depression, the weekly clearances of all weights
were far oftener over than under 100,000 pieees. The early steamers
had scarcely gone, however, when rates dropped to the opening level for
common, and below that for Dewhurst's and other crack chops. Nor did
they rise much over it until mid-September, when diminishing supplies
and the unexpected demand from Japan strengthened holders and placed
them on a more satisfactory footing. With such a trade passing, it
seems strange that prices were kept so low during the latter part of the
year. Stocks were heavy certainly, at the commencement, but not so
heavy at any time as to cause any serious apprehensions to importers;
and there is little doubt, had they been confident in the preserving
qualities of much of their wares, they would have been able to secure far
better results. A few could boast of untainted goods, but even they
were powerless to sustain the market against those who were less
fortunate, and whose most pressing interest it was to rid themselves of
Mildew. Then sized and wax-&aisheA cloths arrived in quantity, and
were readily sold to the trade at paying rates to the importers; and these
descriptions acted powerfully against the dealers in honest cloth who,
until the frauds were detected by the inland buyers, were, so to speak,
forced to float with the tide and accept the prices tendered, or to close
their doors altogether. Sized cloth, we have been assured, has been
imported at a laying-down cost of under Tls. 1.75 per piece, and more
sales than one of them have been effected at very nearly that rate, and
paid. The principal selling price, however, ranged from Tls. 1.82 a 1.92,
the highest figure being obtained for rather better quality, and the
purchases were sent to Japan. For 7-lb. Shirtings, 1873 has been a
disappointing season. Prospects were not unfavorable by any means at
the opening. Stocks were low, and they had not been so excessive
during 1872 as to lead to any fear of over supplying the inland markets;
but after last Spring demand was satisfied, trade languished, stocks
accumulated, and prices fell until they reached Tls. 1.66 for Dewhurst's
best cloth. That was the lowest point, and it occurred in June.
Matters, however, did not improve much during the latter half of the


[. 21 ]
year, and from July to December the highest point reached was Tls. 1.70
per piece, the average rate being Tls. 1.69 for Eagles. 6-lbs.—Fair
prices were realised from February to June, but afterwards the demand
fell off, and this weight had also to be quitted at a heavy loss on laying-
down cost. 10-lbs.—At the beginning of January, the quotations were
Tls. 2.40 a 2.55 per piece with a fair enquiry from the trade, and ere a
fortnight had passed holders had succeeded in raising rates by fully 5
cands. per piece. Towards the end of February prices had improved
still further, and Tls. 2.62 was the quotation for Dewhurst's best cloth;
but a reaction set in then, and before the end of May more than Tls. 2.40
could not be obtained. This low rate was the result of heavy forced
sales of mildewed goods. When the market was relieved of these, it
immediately became healthier and steadier, and good cloth was soon
saleable again at Tls. 2.45, gradually advancing until it touched Tls. 2.53,
which was the value of Tunsin (Dewhurst's) Eagles on 31st December last.
T-Cloths.—After what we have said in a previous part of this
Retrospect in reference to this textile, there is no need for us to do
more now than to invite attention to the annexed table of prices, and
to say that although these were below cost, that was the most unhealthy
and unsatisfactory feature in the trade, during the first six months of
the year. The clearances were at no time equal to those of 1872, but
during the months of July to December last, the position became worse
and worse, until at one time, to use an expression of our Market Report,
T-Gloths were only conspicuous by their absence from among the week's
transactions in Piece Goods.
White Skirtings.—The imports of 1873 were 385,000 pieces, against
a consumption of 525,000 pieces, which reduced the heavy stock—viz.,
204,600 pieces—with which business closed in 1872, to 64,000 pieces on
31st December last. The deliveries were mostly for the northern ports,
and by far the heaviest portion of them was cleared during the six weeks
ending on 16th April, the Customs Gazette indicating clearances
aggregating 147,000 pieces, fully one quarter of the trade of the year.
But the spring seems to be always the best season for White Shirtings,
and while the demand goes on prices generally touch their highest point.
Thus on 1st January the quotations were Tls. 1.85 a 1.95 for ordinary
64 Reeds, and Tls. 2.05 a 2.18 for best ordinary and for Dewhurst's
chop, but in the beginning of April they had risen to Tls. 2.07 a 2.20
and Tls. 2.25 a 2.30 per piece respectively. While in May and down to
end of the year, we find little variation on Tls. 1.85 a 2.00 for the
former, with a range of Tls. 2.10 a 2.25 for the latter. From May to
October the price for best chops remained stationary at Tls. 2.10 a 2.15,
but improved to Tls. 2.22^ a 2.25 in the course of the next three
months. The market for the other reeds and qualities of White
Shirtings, is usually governed by the business in 64 Reeds, and therefore
we do not here particularise 56s, 60s, and 72s, other than to note the
fact that an unusually small trade was done in the highest reeds last year.


[ 23 ]
English. Sheetings the price dropped from Tls. 2.80 a 3.20 in January
to Tls. 2.15 a 2.25 in December, and difficulty has been experieneed
throughout the whole year in selling this article. Mildew has seriously
prejudiced the market for English cloth.
Fancy Cottons.—With few exceptions this class has also lost money
to the foreign merchants, many of whom have continued to import more
as a bait to bring the natives around, with a view to buying other
imports, than with a view to or under any expectations of profit. There
are several staple articles, the trade in which rises to a respectable total
value, and which find a market throughout the year. Amongst them we
place Brocades—dyed, Spotted Shirtings, Chintzes, Turkey Bed Shirtings,
Velvets and Handkerchiefs, but the other fabrics that go to make up this
branch have their times and seasons, and it is folly to endeavour to sell
them when the demand is off. At the beginning of the year the articles
enumerated returned small profits to the importer, but as time drolle on
the result was to the bad. Notably amongst them appears Velvets,
which shewed a selling rate of Tls. 0.27 a 0.30 per yard at the opening,
and which before six months had elapsed, had suffered a decline of about
a mace per yard. As compared with the consumption of 1872, the Velvet
trade of 1873 contrasts very favorably, but during the former year
business was kept down by the want of supplies, nearly all the cloth
manufactured in England having been directed to Germany. Japan has
been the chief outlet for our surplus Velvets during the season just closed.
Chintzes.—The clearances are about 20,000 pieces less than the receipts,
the respective figures being 273,000 against 293,000, and the stock of
1872 has been increased to the extent of the difference. By the last
returns of the Chamber of Commerce it was computed at 104,000 pieces.
Brocades and Spotted Shirtings dyed.—The total deliveries of these
amount to 94,700 pieces, against an importation of 92,400 pieces, and
the range of prices has not been a wide one. Brocades have ruled
pretty steadily at Tls. 2.75 a 3.00 per piece, and for Dyed Spots, where
there was a sale for them, the dealers have paid from Tls. 2.45 a 2.65
per piece. But Dyed Spots have not been in favor and the trade in them
has been insignificant. They are mentioned in connection with Brocades,
from the fact of imports and deliveries often being grouped together and
so confounded in the Customs Gazette statistics. Turkey Beds.—About
110,000 pieces of these sum up the trade of the year. On the other
hand the importations have been 126,000 pieces, yet notwithstanding
this excess rates have been maintained at a remunerative point generally,
while some of the preferred chops have been eagerly bought by the
dealers at prices which give a very fair profit. We commence 1874
with a supply of nearly 40,000 pieces, and some expectations from
floating cargoes.
Woollens. No particularly striking event has marked the woollen trade of
1873. The clearances, as compared with those of 1872, have increased,
but (Long Ells excepted) the imports have more than kept pace with


[ 26 ]
PRICES.
1st December.
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1st October.
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1st July.
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• • c • … t- c- - ~~~~ ~ ~ ~ ~ ： ~）; （???????:??
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º £ < :*: : : : : : : : : : : : £, s （±，±，±，±，±），
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Źſs????????? egº3;&33;?xe
- - ~a - - - ~- - - - - - cu cºa- cºn cae cºa cºn cºn caeu
1st April.
<c ca rº- c mae mae c ^ <c c <c mae mae do o<> o23:333
mae tº ~ ~ ~ ~ ~ ~ ~ ~º ~º ~o ~o ~o ~o ~; ~ ~~- - ~~~
c < c c mae mae c t - c c c do c c mae maec.
- - - ~a - cºa cºa cºm - - - - - cu cºa cºn cºa cae cºa cºa cºa cºa cu
1st January.
c c - c c c do o mae c c ^ c ^^c.hae • • •
ſº s : : : : : : : : : : : : : := s • c • • • • •
- - - - - - - - - - - - - -<>- - - - - - -
§ 3; （?!?!?!?!? 23 § 3;??;? 243 ſe º 333 ºſº
mae so do cae （c t， do mae - cºa cºn cae mae do t-- rº- do c < c r ----
TABLE OF IMPORTS AND CLEARANCES.
Stocks on
31st Dec. 1873.
Pieces.
|
|
540,000
~
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$ $ $ :=E 3 5 5 5 5±§ 3
Źë £5 #5: È;&$ $ $ $ 5 % ž
Quotations of T.T.B.
+
Quotations of C.P.H.
+


i 29 ]
1874:.
sat When reviewing the course of this Market in 1873, w« attempted
to give a summary of the various causes which had led to the great
decline in the value of Silk during that year, viz., increasing supplies
both here and in Europe, deteriorating quality, a natural reaction from
the over-speculation of several previous years, and a spirit of economy
throughout the World, and most notably in France and America, which
greatly restricted the use of this article of luxury. Although the fall in
values during that year amounted to no less than Tls. LOO per picul, or
from 20 to 30 per cent., a depreciation which, in a trade characterised
by such extreme competition as this, entailed enormous losses on all
concerned in it, yet, as it has proved, we were not even then at the end of
the decline. Before the disastrous Season of 1873-74 closed, prices had
dropped another Tls. 60 per picul, or 15 to 20 per cent., and the value of
China Silk was on the average less than two-thirds of what it had been
only a year and a half before, while common Silk of nearly all classes
was worth barely half its previous value.
So great was the disorganization of the trade in Europe, that Silks
bought here even at this great decline showed heavy losses on arrival
there. On the panic-stricken Markets of last July and August in London,
Tsatlee Silk was forced off by Auction at 14s. for Red Peacock, and
10s. a lis. for the lowest grades, which in January 1873 had been worth
21s. 6d. a 22s. 6d. This proved, however, to be the turning point of
the market, and we have since seen a fair increase in consumption, a
recovery of 5 a 10 per cent. in values, and a trade which, so far as the
present Season has gone, has on the whole yielded a fair commission to
Exporters,
It is much to be regretted that there is, as yet, no perceptible
improvement in the reeling of our Silk. The Crop of 1874-75, like
those of the two preceding Seasons, has been coarsely and irregularly
wound and imperfectly cleaned, which is the more unfortunate as the
demand of consuming markets has been entirely for fine-sized Silks.
Coarseness of size has not been by any means confined to the lower
grades, for many of the best known Chops have shown a great deteriora-
tion in this respect. Hence best Chop Silks have as a rule given poor
results to Exporters, and would now appear to be unduly high in
proportion to lower qualities. On 1st January 1873, best Chop No. 3


[ 31 ]
had abundant evidence how quickly any rise in prices gives immediate
oheck to the growth of consumption, and any considerable advance at the
present time would perhaps be the greatest calamity that could happen
to the trade. Trench consumers appear to have appreciated the altered
position of Silk much more accurately than London merchants. The
advices of the former have apparently been generally to buy freely as
long as prices were about the basis of Tls. 295 a 310 for Red Peacocks
and Tls. 355 a 370 for No. 1 Gold Lion, and these Silks as a rule must
have given a fair return. Fair profits have also been made by Shanghai
houses who picked up cheap parcels at quiet moments of the market.
But the bulk of the orders sent out from London have been during
excited bursts of speculation, when Chinese were able to dictate their
own terms, when this market was forced up to Tls. 325 a 330 for Red
Peacocks, and Tls. 385 a 395 for No. 1 Gold Lion, and Silk bought at
this range has shown a loss on arrival.
Another remarkable feature of this season is the unprecedentedly
large Stock which has been held in Shanghai, and which in August
reached no less a figure than 19,000 bales. This is said to have been
caused by the fact that Native Banks and Pawnshops in the country had
lost so heavily from losses on unreclaimed Silk during the previous two
years, that many of them refused any longer to advance on the produce.
The fluctuations in the value of different classes of Silk during 1874
have been approximately :—
1st Jan. 1st June. 81st Dec.
Ex. 5/9 Ex. 6/1 Ex. 5/9
Chop No. 3 Taatlee 475 400 410
Red Peacock 385 300 315
Commonest , 310 220 230
Fatmow's No. 2 Haining 400 325 335
Market No. 1 Re-r. „ 450 370 380
No.2Kahing 380 290 305
No. 3 Chincum 300 230 250
Average Sliaouking 275 220 235
„ Laeyang 260 205 225
The business done in the several months of the year may be
summarised as follows :—
January.—Settlements to date for the season 1873-74 were 47,100
bales, and Stock 6,000 bales. Chop No. 3 Tsatlee was worth Tls. 455
a 475, Red Peacocks Tls. 385, and the commonest Tsatlee Tls. 310.
The market throughout the month was quiet, with prices tending down-
wards, closing at a decline of from Tls. 10 on best Silks to Tls. 30 on
common sorts. Settlements amounted to only 2,300 bales, and stock at
the close was 5,500 bales.
February.—The same quiet tone prevailed, and only 1,900 bales
were bought at a further small decline, leaving 4,000 bales in stock.
The closing rates were Tls. 440 a 460 for Chop No. 3, Tls. 350 a 355
for Red Peacocks, and Tls. 280 for common Tsatlee.


[ 32 ]
March.-— In consequence of a slight recovery on the European
Markets, a large business was done, and prices advanced Tls. 10 a 20,
but in the end of the month there was a reaction, and they closed
somewhat lower than before. Holders took advantage of this spurt to
move off nearly all the remaining good and fair Silks in stock, and
only 1,500 bales were left in Shanghai. The last quotation for Red
Peacocks of this season was Tls. 345.
In April, 2,300 bales of common Silk were settled at continually
drooping prices, and early in May about 400 more went forward, closing
the season with an Export of 57,000 bales. The results of the earlier
part of this crop were indicated in our last retrospect, and we need
only add that the last 10,000 bales shipped since 1st January, although
costing comparatively very low, must have lost on the average about 20
per cent.
June.—The market for new Silk opened very quietly on the basis of
Tls. 300 for Red Peacock and Tls. 235 for common Tsatlee, being a fall
of Tls. 100 a 115 from the opening rates of the previous Season, which
in turn were Tls. 60 a 80 below those of June 1872. In consequence
of continued unfavourable advices from Europe, very little was done for
the first three weeks, and prices declined Tls. 5 a 15. A large demand
then sprang up, and the month closed with a most excited market at a
rise of Tls. 30 a 40 from the lowest point, Chop No. 3 being worth
Tls. 395 a 415, Red Peacocks Tls. 325, and common Tsatlee Tls. 255.
Settlements were 7,500 bales, and Stock 5,000 bales.
The shipments of this month arrived to very bad markets in
Europe, and if sold on arrival must have left considerable losses. The
only exceptions were the coarser sorts of Taysaam, which were bought
here at low prices, and of which there was a very small stock, both in
London and on the Continent.
July.—The excitement in our market very soon subsided, and
although a large steady business was done, the course of prices was
uniformly downwards, and we closed about opening rates. Arrivals from
the country were so enormous as to stagger the confidence which had
been felt in the lowness of prices, and although 13,000 bales were
settled, stock at the end of the month had increased to 17,500 bales.
In August, the disastrous advices received from London, where large
unreserved auction sales were being held, greatly restricted buying for
that market, and of 9,500 bales settled, the greater part were for the
Continent. Prices touched the lowest point we have yet seen, viz.: Tls.
365 a 385 for Chop No. 3, Tls. 295 for Red Peacock, and Tls. 225 for
common Tsatlee. These Silks, arriving to the active speculative markets
of October, paid on the average nearly 10 per cent. Stock showed a
slight reduction, and after touching the highest figure of 19,000 bales,
remained at the close 15,000 bales, supplies from the country having
fallen off in consequence of the lowness of our prices.


[ 33 ]
September saw an advance of Tls. 20, and on some classes, especially
common Tsatlee, as much as Tls. 40 per picul, but this was not main-
tained, and the market closed qnieter at Tls. 390 a 400 for No. 3,
Tls. 30-5 for Red Peacocks, and Tls. 245 for common. The business
done amounted to 12,000 bales, and stock was 13,000 bales.
Early in October, a large speculative movement in London caused
an active business, and prices rapidly advanced Tls. 20 a 30; and
although the demand died away, holders continued firm at Tls. 420 a 430
for No. 3, Tls. 335 for Red Peacock, and Tls. 270 for common Tsatlee,
being the highest point touched as yet this season. Settlements were
11,000 bales, making up the large figure of 53,000 bales in five months.
Stock remained nearly unchanged.
November.—Buyers refused to go on at the high range of prices
established, and as holders remained firm, the settlements for the month
reached only 1,200 bales, stock being increased to 14,000 bales. Closing
quotations were only Tls. 10 below the highest point of October.
December.—During the first half of the month, the same quiet
tone prevailed, and prices declined Tls. 5 a 10. A better demand has
since sprung up, and this fall has been recovered, the market closing
steady. This month's business amounting to 4,600 bales, the total to
date for the Season is 58,800 bales. Stock has been reduced by about
1,200 bales Taysaam being sent back into the country for Chinese use,
as also 300 bales Haining to be re-reeled, and is now about 9,000
bales. Total supplies for the Season are variously estimated at from
70,000 to 72,500 bales, and it will chiefly depend on the course of
prices during the remainder of the Season which of these figures is more
nearly correct.
Tea. jn reviewing the course of the Black Tea market during the past
year, it cannot be said to offer much subject for congratulation. A
season in which the London market, from its exceptionally favorable
statistical position, offered a more than usually promising prospect,
has been ruthlessly and recklessly sacrificed by the unreasoning impatience
of shippers, and their obstinate adherence to the time-honored, but worn-
out, tradition, that an interest in first shipments, on any terms, is sure
to be profitable. This again caused such undue competition for first
arrivals from the country, before any accumulation of stock was per-
mitted, that at the very commencement a range of prices was established
unwarranted by the experience of former years, and which, though
saved from resulting disastrously by that same exceptional position of
the article, had its effect in causing a high standard of price during the
whole season. It is true, it might be argued, that this favourable position
did justify a bolder action than usual; but as it cannot be known at the
opening of the market how much tea is coming forward, and as the
reduction in stock it had taken years to arrive at, might be neutralized


[ 34 ]
in a few months by increased production, and consequent heavy ship-
ments, this argument falls to the ground.
It was calculated that when the first of the new teas arrived home
the stock of Congou in London would be smaller than had been known
for many years; and this expectation was confirmed when the Board of
Trade returns to the end of June were published. It was then found
that the stocks of Congou in bonded warehouses were :—
lbs.
On June 30, 1874 33,000,000 or 34 months consumption.
Against „ 1873 41,000,000 „ i\
1872 49,000,000 „ 6
1871 50,500,000 „ 5
1870 58,000,000 „ 6J
1869 49,000,000 „ H
1868 45,000,000 „ 51 „ „
1867 63,000,000 „ 74
1866 70,000,000 „ 10
1865 68,000,000 „ 9J
The first arrivals at Hankow took place on the 23rd May, when
16 chops were shown, and on the same day three parcels, Cheong Sow
Eye teas, were purchased at Tls. 37 a 37.50, or about 4 Taels over the
opening rates of the previous season. The standard of price having
been thus established, settlements were continued on the same basis
during the next fortnight, by which time nearly the whole of the first
crop, amounting to one-third of the whole season's export of Black from
Northern Ports, had been settled. Teas from inferior districts realized
proportionately high prices. The following table will shew the compara-
tive prices of the two seasons for the first 22,000,000 lbs.
1874. 1873.
Costing 2/6 a 3/6. 2,300,000 lbs. 1,500,000 lbs.
2/0 a 2/6. 7,600,000 „ 5,600,000 „
1/6 a 2/0. 11,600,000 „ 13,600,000 „
1/1 o 1/6. 500,000 „ 1,300,000 „
22,000,000 lbs. 22,000,000 lbs.
The quality of the crop, with the exception of the Ningchows, was
hardly up to the average, but the teas from this district were probably
the best that have ever come forward, their quality almost justifying
the excessive rates that were paid for them. Most of these kinds were
taken for the Russian market.
The first vessel to leave was the Agamemnon, on the 26th May,
but she was unfortunately delayed through grounding in the river, and
left eventually on the 28th; followed by the Glenartney on the 29th,
and the Qlenfalloch and Hongkong on the 31st May. The rates of
freight, and the rate of exchange, ruling up to the time of the departure
of the last steamer were as follows:—
1874 Freight by steamer £5.10. Exchange 6/3 a 6/3J
1873 „ „ 5.00. „ 6/3 a 6/4
1872 „ „ 5 00. „ 6/4 a 6/7


[ 35 ]
The sailing-vessels Ada and Cutty Sark loaded at £4. 12s. 6d. a
£5. Os. Od. per 50 feet.
The Glenartney's was the first cargo of new tea put on the London
- market, where with so bare a stock it could not meet with other than a
ready demand; and, had it not been that prospective profits had been
discounted in China, and already gone into native hands, must have
given a most satisfactory out-turn. As it was, cost on this side had
been so high, that willing as dealers wore to pay full prices, they were
not prepared for the excessive rates necessarily demanded to cover China
cost; and consequently contented themselves with buying for their
immediate requirements. It was a fact pregnant with significance that,
while they refrained from making offers high enough to cover prime cost
of really good teas, they took freely almost anything that was offered
for price with very little regard to quality. The loss of the Gordon
Castle, however, helped the position of the high cost teas, and these were
gradually quitted at prices for which the most that can be said was,
that they did not lose much. Common grades by the first two ships,
and occasional parcels of well bought fine teas, paid fair profits.
By the first week in June, the great scramble in Hankow was over,
and on the 9 th, the Shanghai market was opened. Prices were about
on a par with Hankow rates, with the exception of a few remaining
parcels of fine teas, which were bought shewing a loss on Hankow offers.
During the whole of the latter part of June, however, supplies were
scanty, and business consequently restricted, for second crop teas had
not yet had time to arrive, while the first crop was already exhausted,
and never before has the interval between the first and second crops
been so distinctly marked. The latter began to come forward about the
first week in July, and found buyers up to 27 Taels for Oopacks, and
33 Taels for Ningchows. The quality of these teas was by no means
good, but arrivals were so scanty, partly owing to the large quantity
settled in Hankow, that teamen were easily enabled to maintain rates,
which averaged fully 2 Taels above those of the previous season, were
equal to the prices of 1872, which resulted so unfortunately, and were
Tls. 5 a 6 higher than those ruling in 1870 and 1871. During the
early part of August there were much freer supplies, but daily settle-
ments were so large that stocks never reached over 35,000 chests, against
a maximum of 42,000 chests in 1873, 56,000 in 1872, 66,000 in 1871,
and 100,000 in 1870. Third crop teas began arriving about this time,
and were eagerly taken at full prices. As each batch of musters was put
on the market, a steady and continuous falling away in quality was
apparent; and by the end of September it was evident the season was
drawing to a close. From this date till the middle of November, when
the last muster was shewn, arrivals were small, and the season finished
at the earliest date on record. The total export of Congou from Northern
ports aggregated 77,200,000 lbs., which was divided as follows :—


[ 30 ]
1874-75 1873-74 1872-73 1871-72
To Great Britain 68,000,000 lbs. 63,500,000 lbs. 65,000,000 lbs. 70,500,000 lbs.
„ America 1,000,000 „ 800,000 „ 1,300,000 „ 2,000,000 „
„ Australia 600,000 „
„ Continent 4,000,000 „ 4,700,000 „ 4,100,000 „ 1,900,000 „
„ Siberia v. Tientsin 3,600,000 „ 6,800,000 „ 5,000,000 „ 2,200,000 „
77,200,000 75,800,000 75,400,000 77,200,000
During the year there had again been a considerable amount lost at
sea, which reduced the, actual quantity of black leaf Congou available for
consumption.
Were lost with
In 1874-75. The Canton and Gordon Castle 2,518,130 lbs.
1873-74. ,, Drummond Castle and Singapore 4,550,621 ,,
1872-73. „ Parnassus, Lahloo, and Lalla Rookh 3,875,389 ,,
The greater portion of the above export has already arrived in
Eugland, and although no serious losses have been made, the result to
shippers has been very bare. The most satisfactory out-turn was on
common teas early in the season, a few "on fine" Ningchows, which
were bought shortly after the opening of the Shanghai market, and the
earlier shipments of medium second crop teas. While the worst results
have been on inferior second and third crop teas, especially clean common
Oonam kinds, which, falsely called Oonfaas, were bought at Tls. 19 a
22, and in many instances could only be quitted at a loss of 1d. to 2d.
per lb.
The proportion of tea shipped by steamer and sailing vessels, hag
been more in favor of the latter this year than last. Many shippers
anticipated that by the time of the arrival of the sailing vessels the
market would have recovered from the weight of shipments crowded
forward by steamer, and that their teas, being of earlier growth and
consequently better quality than those arriving at the same moment by
steamer, would have the preference, and realize full rates. This antici-
pation has, with a few exceptions, proved fallacious. The great bulk of
the business at home seems to be done in the first few months after the
arrival of the new tea. After that, with the exception of an occasional
spasmodic period of speculation, dullness prevails. Stocks decrease
month by month, without assisting matters. Prices drag and droop, and
there are no signs of life in the mai-ket till the next arrival of new teas
sets things going again. There can be little doubt, also, but that teas
shipped by steamer arrive in better condition, and fresher, than those
by sailing vessel. The proportion of tea (Black and Green) shipped by
steamer and sailing vessel from Shanghai and Yangtze ports to the
United Kingdom, is as follows :—
In 18741875
Steamer. 53,500,000
Sailing Vessel.
24,500,000
14,500,000
30,500,000
Total.
78,000,000
„ 1873-1874
57,500,000
72,000,000
.. 1872-1873
45,500,000
76,000,000
X


[ 37 ]
During the past year Foochow teas have been recovering the position
they had so long lost. After the bad crops of 1868, 1869 and 1870,
red leaf Teas fell into disfavor with the home trade, and the prejudice
against them was so great that, till within the last two years, black leaf
teas were taken in preference to red leafs, even when the latter were
palpably superior to the former. During the last two years, however,
this prejudice seems dying away. This has had an effect decidedly
adverse to Northern Teas, which is increased by the excessive export
from Foochow.
A new element of loss to shippers, has been becoming prominent
during the past season, and this is the risk they incur by the scandalous
•way in which their property is treated by nearly every line of steamers
from Shanghai, with the exception of those belonging to Holt's and the
Mail Companies. It has been found lately that many outside steamers
deliver a portion of their tea so burnt and dried up through being stowed
near the boilers, that heavy claims are put in by the retail buyers of the
tea for difference in sample. There is no hope of obtaining restitution from
the ship, as no proof can be maintained. An instance was advised a few
mails ago, in which an invoice was sold and gave £150 profit, but on
inspection a great many of the chests were so dried up that instead of a
profit the loss is nearly £200. In another line the owners have the
vessel put into dock and work overside, so that it is generally two or
three weeks before the lower tiers of teas come to light; and even
samples can only be obtained with difficulty, application to the owners
themselves being met with the utmost discourtesy and contempt.
Another item is the careless way in which Singapore cargo is taken in
without any pains to separate it properly from the tea. Captains of
steamers leaving China, and calling at Hongkong and Singapore and
other ports for freight to fill up, place essential oils, pepper, &c., &c.,
and such like deleterious matters, on the top of the tea; and whole
cargoes are not unfrequently deteriorated 1d. a 2d. per lb., through this
cause. It is so difficult to enforce any claim on this account, that
instances frequently are allowed to pass without notice. But the remedy
lies on this side; and that the evil is allowed to continue without protest,
is characteristic of the way in which business is usually conducted in
China.
Green Tea. On reference to the second paragraph of our retrospect of
last year's business, we cannot but marvel at the report we have now to
present to our readers, it being for the most part a recital of continuous
losses and disastrous results to all concerned in the Trade.
At the close of season 1873-74, profits were advised on October and
November shipments of 3d. a 4d. per lb. These advices had the usual
effect of bringing forward extra supplies of the leaf, which being
shipped off at the equivalent of London rates,—on the advanced scale—


[ 38 ]
met a reacting market, and lost heavily. Some expectation was formed,
therefore, that opening ratos of the current season would be reasonable;
the moderate stocks held in London and New York also afforded some
confidence to operators at this time.
The increasing popularity of Japan Teas in America has stimulated
their production considerably; so much so, as to interfere seriously
this season with ordinary calculations regarding the shipments of Green
Tea from this Port. The preference now given to steamers for early
shipments direct to the States, caused such an excess in the supply at
an early period, that the results were simply ruinous, further impetus
being given to the downward course of the market by Importers forcing
off their Teas without reserve. This state of affairs in America had its
effect upon the London market, and many shipments were realized there
which were originally intended for New York.
Stocks in London were exceedingly moderate on the arrival of New
Pingsueys, but any advantage to be derived therefrom was entirely
dissipated by the dreary prospect in America, combined with the excessive
quantities offered without reserve immediately on arrival. To the
present time, the London market has gradually declined with remarkable
consistency, and at the latest dates shews no signs of reaction. On the
other hand, the American market has advanced, owing presumably to
the prospect of a duty being imposed, and we think in some measure
to a long pause in arrivals. Still, it has not more than reached the level
of the English market, and although the advance amounts to the
equivalent of about Tls. 6 per picul, quotations continue to shew a loss
on shipments of first crop fine grades of Moyunes, Teenkais and
Pingsueys.
Musters of New Pingsueys were shewn in bulk about the 20th June,
and buying almost immediately commenced, much to the surprise of
the natives, at prices some three to four taels above their anticipations,
and certainly beyond what they could possibly expect from the position
of the consuming markets; anxiety to secure early arrivals by first
steamers in New York and London being the incentive to buyers. The
decided improvement in the liquoring qualities of the teas, seemed such
as to entitle them to a good reception by the Home Trade. This
however, was more than counteracted by a general want of style and
an unevenness of colour. A strong and advancing market was reported
-until the departure of the Pacific Mail of July 3rd; then a somewhat
easier tone caused a decline of Tls. 2 per picul. The fact of there
being two large steamers on the berth direct for New York, again
induced firmness and a slight recovery from the decline in prices.
About the second week in July, a few Taiping and some Hoochow
Teas were offered, and eagerly taken at fully last year's prices; the
quality was improved in liquor, while in the leaf signs of hasty manipula-
tion were apparent. At the close of the month, the arrivals were 40,000


[ 39 ]
half-chests in excess of the previous season; settlements being only
50,000 half-chests against 40,000 half-chests, leaving the exceptionally
heavy stock for this early stage of the season of 50,000 half-chests,
against 21,000 half-chests. The new Teenkais and Fychows began to
arrive on the 23rd July, and a chop was immediately settled at the
extreme quotation of Tls. 47 per picul; the quality of these teas was
good in the cup, and decidedly superior in make and appearance.
During August, the market declined 2 to 3 taels, leading to a large
business for London and America. Moyunes arrived towards the close
of the month, and met with eager competition, at rates on a par with the
previous year; the quality was of a fair average. Telegraphic advices
of first sales of Pingsueys in New York caused these grades to be
neglected, except by a few sanguine operators for the London market.
In September, prices gradually declined, until a fall of fully Tls. 5
was established on all grades. Settlements were again heavy, although
far behind supplies, the latter coming to hand with conspicuous rapidity;
leaving a stock on the 20th of 73,000 half-chests, against 35,000
half-chests.
The Export to England stood at 3,500,000 lbs., against 5,300,000
lbs., and to America 6,750,000 lbs., against 2,350,000 lbs.
Later, the favorable position of London statistics attracted buyers
for that market, which arrested somewhat the decline consequent upon
the extreme depression advised from New Tork, where the new imports
were losing an average of 10 cents per lb.
The opening of October presented less disparity between supply and
demand. Arrivals had fallen off considerably, and thus verified to
some extent the Native reports of an unusually early season. A large
business was reported the first week or two, at rather firmer prices.
Before the close, however, the market receded Tls. 2 per picul, on account
of advices giving bad news and serious losses all round. Pingsueys
were left in the shade during the month.
Of November, there is little to remark, beyond a small but steady
business—without change in prices—chiefly for London, that market
being comparatively higher than New York. Prom the latter, the losses
reported were in many instances 12 to 15 cents on Teenkais, and 20
cents on Pingsueys.
In the first week of December, a crisis appears to have been reached
in New York, influencing this market to such an extent that Moyunes,
Fychows, and Teenkais were bought on more favorable terms than
has been known for years, the reduction from the opening of the season
being from 8 to 10 taels per picul. This continued until the 13th, when
Reuter telegraphed "New York market firmer," giving a stronger tone,
and this was followed by a rapid rise in New York quotations to the
extent of 10 cents from the lowest point. In the meantime holders here
gained confidence, and with the aid of some hurried transactions for the


[ 40 ]
Pacific Mail, succeeded in establishing a rise from the lowest point of
two to three taels on common to medium, and four taels on fine to finest.
The year closed with a strong although not very general demand, and
an appearance of considerable firmness. Pingsueys remained neglected,
owing to the enormous losses still advised from all the consuming
markets.
Stocks 96,000 half-chests, against 33,000 half-chests.
The lateness of the present season compels us to halt here in our
review, which is professedly of the year rather than of the season. In
previous years the crop has been sold off earlier, and writing some weeks
after the close of the year we have been able to give a complete sketch
of the season's operations. This year however large stocks still remain;
and we must close our review somewhat abruptly with the end of
December's operations.
Piece Goods. Another year has been numbered with the past, and although
in its results to the importers it has been less unsatisfactory than some of
its predecessors, it has left behind it traces neither few nor insignificant
of the old complaint. It is by no means a pleasant thing for us to have
to reiterate the same story year after year; and in the interests of our
follow countrymen engaged in the Piece Goods trade with China, we
heartily wish that fortune would smile on their endeavours to disseminate
the blessings of our Western Civilization throughout this Empire,
notwithstanding that those blessings do occasionally contain the germ of
mildew and other equally undesirable substances. But, while the causes
remain, we fear that the "good time" for our merchants is still remote.
However, our duty in the present paper is with the past, not to speculate
on the future, although we cannot refrain from stating that so long as
the supply exceeds the requirements, and while so much official opposition
to the introduction of our wares into the interior is experienced, tho
results to our trade cannot differ greatly from those obtained in recent
times.
Now, in regard to the first of these causes, the stocks of manufactures
on hand on 31st December last, as shewn by the Returns published by
our Chamber of Commerce, compare favorably with those of 31st
December, 1873; which argues either a diminution in the importation as
compared with the consumption, or an increase in the quantity taken off
by the country at large; and we believe it will be found when the figures
are compiled, that there has been an actual increase in the deliveries of
many articles during the past year. At the same time, the receipts, in
most instances, have been fully equal to tho demand, and only in a very
few have stocks decreased through a modification in the home shipments.
Thus, "short stocks" have been the exception, and it has frequently been
provided for long before, in the ordinary course, it could have effected
business. Moreover, tho natives have taken good care that they should
not suffer grievously in this respect. They knew too well in advance
what things were likely to be wanted, and when. Besides, as a rule,
they are fully aware whether there is a sufficiency in store for them to
choose from, and if there appear the slightest probability of a scarcity,


[ 41 ]
they create a fictitious activity, buy sparingly, and bull prices until the
bait has been swallowed and their interests thoroughly served, by that
desire to be rich which prompts nearly every foreign importer simulta-
neously to telegraph for the particular article in question, and hence a
plethora is always secured. And in reference to the second cause—official
obstructiveness. It is now more rampant and defiantly paraded than ever.
The Transit Pass in many districts has become food for the historian.
True, around the Treaty Ports the Pass has still some influence, but in
the far-distant interior it is useless, and worse than useless, for the
authorities ignore it, and some of its predecessors have been ruined by
their obstinacy in claiming the rights supposed to be covered by it. The
Mandarins, and notably those of Chung-king and Kwei-f oo, on the Upper
Yangtsze, either cannot, or they flatly refuse to realise the fact, that
foreign manufactures do not change their character with a change of
ownership, even although they be accompanied by corroborative proof in
the shape of a Transit certificate, and in those districts foreign-owned
foreign merchandise does not always enjoy immunity from the exactions
of the Likin farmers. Even now there is some foreign-owned cargo
detained at one or other of those barriers, and a British firm at Hankow
is at the present moment prosecuting a claim at Peking for a sum of
about Tls. 18,000, loss by detention, extra freightage, deterioration, and
damage, sustained, last Spring by and through the action of those in
charge of the barriers on the borders of Kwei-chow and Szechuen. Be
it remarked that this claim for actual loss occurred on goods costing
little more than double that figure, so that the owner suffers to the extent
of nearly fifty per cent. on cost price. In all this we have the varification
—and far earlier than we looked for—of the utterings in our Retrospect
for 1873. We then said: "The native is afraid to adopt it, and although
"respects is still paid to the foreigner's pass the time is not far distant
"when that too will be ignored by the barrier authorities." It is true
that latterly the goods belonging to the firm alluded to have been
permitted to pass the barriers, on production of the certificate of owner-
ship, but this permission has, as it were, been wrenched from the
collectors of Likin, and only after repeated remonstrance to Peking
against the injustice perpetrated. But the evil does not rest here.
Foiled in their attempt to detain and squeeze bond fide foreign-owned
cloths, the mandarins, or their myrmidons, throw every obstacle in the
way of the carriers, and ultimately they have adopted a system of
espionage that surely demands examining into. Discrediting the terms
of the Transit Pass, and in order to find out the real owners of the
merchandise covered by it, they have stopped mails, overhauled the
letters, and where their suspicions have been confirmed, dire have been
the consequences to their unfortunate countrymen.
Such is the purport of the news that has from time to time reached
us from Hankow; and the state of trade in the Upper Yangtsze districts
for many months past has been such as to induce a belief in the truth of
our information.
Now all this shows plainly the absurdity of any arrangement for the
unmolested transit of our manufactures through the inland provinces of


t 42 ]
China, to which the distriot authorities are enforced strangers. They
will not be bound by any such. A certain annual tribute is demanded
for thom by the Central Government. They receive and accept their
appointments calculating on an income from foroign trade to enable
them, in part, to fulfil their agreements with Peking, and we humbly
submit they are not altogether to be condemned if they so jealously, and
seemingly too jealously, guard their incomes, more especially since they
have seen that the foreign representative can be made to take action in
favor of his countrymen only when in a measure he is forced to do so.
And in support of the immediate foregoing, we point to the altered state
of affairs in this province wherein we dwell. Here the mandarins have
taken the management of the transit under their own wings. The Pass
is no longer required. A more favorable arrangement has been intro-
duced. By the Pass system a bale of Grey Shirtings pays Tls. 2 Haekwan,
or half the import duty to be franked to Soochow. By the new arrange-
ment, whereby a sum of Tls. 20,000 is accepted annually by the local
powers from the Guilds, in lieu of all inland squeezes on foreign mer-
chandize passing from hence to Soochow—a bale of Shirtings costs not a
little of that sum—and it finds its way to the cities beyond—Hangehow,
Hoochow, &c.,—on a total payment of Tls. 1.20 Shanghai Sycee. Of
course there are the Municipal dues of the terminal city still to be paid,
but those are legally leviable, Pass or no Pass, and in no way affect the
question at issue. Unless, therefore, our own authorities are prepared
with a better system than that adopted by the natives, we should advise
a passive acquiescence therein, as the dealers have found it the cheapest
and most convenient; and under it our district trade has made wonderful
strides during the bye-gone twelve months. In all this, let it not be
imagined for a moment that we approve of the meddling of the mandarins;
but we insist upon it, that until they are consulted, or until they receive
their own proper share of the transit dues, they will continue to thwart
or obstruct the smooth working of any transit scheme—however good—
that may be adopted by the Central Government and the foreigner.
Then the standard of some of Cotton fabrics has been lowered,
whether intentionally by the manufacturer we are unable to say, but
circumstantial evidence points towards wilful adulteration. Undoubtedly
low classed and heavily sized goods have paid the importer better, or have
lost him less, than genuine cloths have done; and without doubt also, the
natives, attracted by the wide differences in the prices of the spurious
and honest material, have dealt more liberally in the former. But we do
not undertake to determine how far the end is justified by the means, and
the future must be left to decide whether the warning thrown out by the
Chairman of the Shanghai General Chamber of Commerce at the annual
meeting of members held on 5th January, has any foundation in fact. He
characterized "the deteriorating quality of much of the goods now sent
"to China from Manchester as being specially a further source of loss to
"the importer, and one which might react in a very unfavorable way
"upon the industry of Lancashire," and he hinted at the probability of
the establishment in Shanghai of spinning and weaving machinery after
the example of similar institutions in India, the working whereof had


C 43 ]
been eminently successful. Thus Lancashire had better look to her
laurels. .In the earlier half of 1873, adulterated Cottons sold for nearly
as much as the more comparatively pure articles, but towards the close of
that year it was prognosticated that such a state of things was fast
approaching a climax, and, taking an 8j-lb. Grey Shirtings as the subject
of our illustration, it is not too much to say that the past year has
witnessed the complete fulfilment of the prophecy. For sometime two
mace per piece was considered a great difference in the quoted rates for
lowest to best chops, but as the year progressed, and while Dewhurst's
Eagles and Mendel's best chops were maintaining a value of Tls. 1.87 a
1.92 and Tls. 1.95 a 2.00 per piece respectively, the lowest grades and
chops fell to Tls. 1.60 a 1.62, or a drop of 2m. 6c. a 2m. 8c. per piece as
against one mace to 3 a 5c. on the opening rates in January; and mildews
of the inferior classes have occasionally been sold at an allowance of one
mace to one mace and a half upon these figures. The concerned in such
low productions know best whether the trade has been a lucrative one.
To the outsider it seems that a prime cost of 7s. 6d. a 7s. 9d. per piece
requires rather more than Tls. 1.60 (six months' sight sterling being only
5s. 9d. per tael) to yield a profit. But perhaps we are mistaken.
Enlightment on this point is courted, and meanwhile here are the figures
on which our ideas are based.
Invoice of 50 Bales 8{-lbs. Grey Shirtings. Manchester to Shanghai.
2,501 pieces a 7s. 7Jd. per piece £ 953 10 2
!Nett in 3 months.
CHARGE!* (MANCHESTER).
Making up 1,500 pieces a Id. each £10 8 5
Packing in good tarpauling 14s. per Bale ... 35 0 0
1 zinc and wood sample case G 0
Fire Insurance 9 0
BillStamp 10 0
40 13 5
£1,000 3 7
London Charoes.
Entry and Bill of Lading £ 7 6
Freight a 45s. and 10 % primage 26 5 9
Do. on musters 5 0
Railway carriage 14 10 5
Postages, petties, &c 110
Marine Insurance on £1,300 a 30s. & Stamps 20 0 0
62 9 8
£1,0G2 13 3
Add for Interest say 8 m/s a 5 % per annum 32 1 9
£1,094 15 0
a 5/9 per Tael Tls. 3,807.82
Shanghai Charges.
Import Duty H. Tls. 200 a 111.40 Tls. 222.80
Wharfage dues—Municipal 5.00
Landing, Postages and petties, say 4.38
Fire Insurance and Rent Nil-
232.18
Tls. 4,040.00
or nearly Tls. 1.62 per piece.


[ 45 ]
nominal sum for landing charges, rent, Fire Insurance, Ac., but nothing
for commissions on either side, the cost appears to be Tls. 1.92 per piece,
sterling, exchange being taken at 5s. lOd. per Tael. Now the averages
of Dewhnrst's best chop throughout the year have been as follows :—
Cost f. o. b. in London. Selling price in Shanghai. 6 m/s Bank Bill.
Per piece, 9s. 8id. Tls. 1.93J Per Tael, 5s. lOd.
These averages are made up from the weekly circulars, and cover 50
quotations ; and we think they fairly indicate the course of the trade, and
fully prove that the results have not been favorable to the importers.
The highest selling rate, Tls. 2.05 per piece, was touched in January, and
the lowest, Tls. 1.88, in September. The highest home cost, 10s. 8d., was
registered in May and June; and the lowest, 9s. 6d., in July, oscillating
between that figure and 9s. 9d. right on to the end of Dec.; whilst the
highest and lowest exchanges, 6s. 1d. and 5s. 8d., were quoted, the former
in June, and the latter in January and October. Space does not admit
of our noticing the countless other chops which come to this place, and
which, on account of their low price or high quality, bespeak the attention
of our dealers. Nor is it necessary that we should do so in the present
volume, for although nearly every owner considers his own particular chop
better than that of his neighbour, and although occasionally he may have
made a better sale by reason of his chop's renown, or by sacrificing some
other article to his hobby, scarcely one of them, if a constant and regular
importer, can say that his 8J-lb. Shirtings has contributed materially
towards his sustenance since 31st December, 1873, or that the results
have differed much from those of the two examples we have selected.
The business in the lighter weights has been equally unprofitable. At
the beginning of the year, 7-lb. common to best were saleable, in small
lots only, at a range of Tls. 1.50 a 1.68 per piece, and these rates, by the
aid of an incipient speculation, in anticipation of the customary spring
trade, were maintained for about six weeks or two months after the season
opened. But the demand either would not or could not come. At all
events, it never appeared; and hence the early settlements had to be
filtered, as it were, out to the consumers, at a heavy loss to the specula-
tors. Further, once fairly started, quotations rapidly fell until, on the
5th of June, we find the lower qualities selling for Japan "at very low
prices," say Tls. 1.35 a 1.36 por piece. From that date onward there
was little change, either in the current rates or in the amount of business
going on. Fortunately, however, stocks were not very excessive at any
period of the year, and when anything beyond the ordinary "hand to
month" sort of enquiry prevailed, or when a "special" chop was wanted,
the effects were at once perceptible in a stronger market and stiffer rates.
Towards the close of the year, for instance, the Japanese sent over
considerable indents for Dewhurst's Red Peacocks, the supply of which was
speedily exhausted at the enhanced value of Tls. 1.45 a 1.46 per piece.
Collie's Spread Eagle chop likewise received a fair share of attention
from our Japanese friends, but the finest descriptions of 7-lb.—


L 46 ]
Dewhurst's Eagle—have been in rather a woful plight all through the
season, being barely quotable at Tls. 1.52 per piece at its close. Some
mildews of the last make were sold about the beginning of winter at
Tls. 1.46^ per piece. In pleasing contrast to the foregoing, it has to be
mentioned that Heavy Shirtings have done well for the importer. For
the first quarter of the year there was nothing noticeable about them or
their position, other than what is usual in spring. The supply was
moderate, but the demand was freely met by holders, who did not
anticipate the prolongation of business till over the summer and autumn.
At the end of May, however, an enquiry suddenly sprung up, and all the
available goods on the spot were eagerly settled by native speculators,
on the basis of Tls. 2.48 a 2.50 per piece for Dewhurst's Eagle chop;
and, before the end of June, these same speculators had the entire control
of the market, being able eventually to resell their Dewhurst's Tunsin
chop at Tls. 3.03 per piece. Later on, the arrivals of floating cargo, sold
at the first burst 'of the enquiry, and of additional unsold parcels,
telegraphed for at the same time, began to influence the position, and the
price in the Chinese quarters dropped to Tls. 2.85 per piece for best
cloth. Moreover, as the ruling rates to the foreigner, being a good mace
per piece below the selling rates of the speculative settlements, still
showed a very fair profit, expectants thrust their expectations upon the
dealers, and so brought about a further decline of 1 a 1| mace per piece,
the reduced figure of Tls. 2.60 a 2.62 per piece for Eagles being the
closing quotation of 1874. A good many of these Heavy Shirtings have
been used by our local consumers, but their destinations par excellence
have been the districts fed though Ningpo, Hankow and Kiukiang. A
large portion also went to Newchwang, whence the most glowing accounts
in regard to the Oorean requirements, reached us on the 6th of July.
Messrs. Knight & Co. at that time wrote that their "hopes of a border
trade with Corea are to be realised," and other merchants predicted great
things. Moreover, the reported sale of Tunsin chop, at Tls. 4.80 per
piece, at the Corean fair held either late in October or in early November,
looks confirmatory certainly of the high expectations formed, and is worth
noting here in connection with this fabric and the Corean trade. The
wants of Japan, which again have been very large—the exports hence to
that country being pieces, against 556,000 pieces in 1873—have
been supplied out of 7 and 8£-lb. weights, chiefly the commoner qualities
of the latter; and the trade in them has been carried on mostly by the
Chinese, who, as a general rule, have been the gainers.
The following is a comparative statement of the Grey Shirtings
passing through Shanghai during the past three seasons, and of the
stocks remaining on hand at the close of each year:—
,„_. Imports. Deliveries Local and Re-export. Stocks.*
J?74 Pieces 5,750,000 5,147,000 1,195,910
i°!° 4,420,000 6,145,000 540,170
1872T^^ 4,425,000 5,345,000 1,284,580
* As per the Returns published by the Shanghai General Chamber of Commerce.— lVMte Shirtingi.


[ 47 ]
White Shirtings.—An increasing trade in this fabric has to be
recorded; the year 1874, in its consumptive deliveries overtopping those
of any previous period it has been our privilege to review. The Com-
parative Statistics stand thus:—
Imports. Deliveries. Stocks.
1874 pieces 573,000 586,000 50,810
1873 385,000 525,000 64,900
1872 527,000 560,000 204,600
1871 540,000 442,000 244,600
Moreover, the business has been fairly steady throughout. The fluctua-
tion in prices has not been great, and a fair ordinary 64-reed—which,
like its congener the 85-lb. in the Grey, comprises by far the greatest
portion of the deliveries—when a market existed, has always commanded
a reasonble value. Dewhnrst's best Eagle—Taeping—was never quoted
under Tls. 2.15 per piece, against the opening and maximum rate of the
year, Tls. 2.25 per piece; and the more ordinary cloths seldom showed a
wider difference, excepting when the system of weekly auctions of sound
goods was instituted last summer. At that time, and for two or three
months subsequently, demand was at a very low ebb, and the forcing of
business under the circumstances was followed by its natural consequence.
A chop which was worth Tls. 1.93 a 1.94 in May, had fallen as low as
Tls. 1.80 in August, and this was all the more to be regretted considering
the very favorable position of stocks during the greater part of the season.
For two months afterwards, enquiry languished, but then the demand
came, and under its influence every available parcel was quickly taken
up. Prices at once rebounded to their earliest level, and dealers were
eager buyers for distant arrival at the advance indicated by the following
quotations, taken from our Market Reports from 1st to 31st December,
viz., Tls. 1.90 a 2.05 for common chops, and Tls. 2.17| for Dewhurst's
Taepings. White Shirtings are closely allied to the unbleached article,
and the causes which influence the trade in the one very frequently affect
the other. Thus 52 a 60-reed, like the 6 and 7-lb. Grey Shirtings,
have been very difficult to move in quantity from year's end to year's
end, while in conformity with the better business in heavy Grey Shirtings,
the finer counts of bleached cloths improved materially as the season
advanced, and yielded fair profits to those engaged in their importation.
T-Cloths.—There is one point, and one only, on which favorable
comment can be made, and that is the decrease in the stocks that has
been gradually taking place since 31st December, 1873. On that date,
the Chamber of Commerce Returns showed 1,260,000 pieces of all weights
in godown and on board ship in harbour, whereas at the beginning of the
present year the stock by similar returns appeared to be only 487,600
pieces, or say 600,000 pieces, allowance being made for the goods held by
those firms who did not furnish statistics. But this diminution was
powerless in raising the very low rates current at the opening of last
season, and after two or three ineffectual efforts to establish higher
quotations, holders, accepting their destiny, sold out as opportunity
offered; and many an one seemed thankful for the riddance, although it
was like the parting of old friends, and cost him severe pangs to see
them go. And were they not old and dear friends, or had they not the


[ 48 ]
right to be styled as such? Yea, verily, for some of them had been
quietly reposing in their owners' warehouses for years, and every year
they became dearer and more expensive still. But against this decrease
in stocks, there has been a serious falling off in the comsumption of
T-Gloths within the past two years, much to the disappointment of the
importer as well as to his loss; and no satisfactory conclusion as to its
cause has yet been arrived at. We noticed this fact in our Retrospect
for 1873; mentioning that general opinion was disposed to ascribe it to
the plentiful cotton-yield of the previous autumn, notwithstanding that
statistics were rather against the supposition. The depression prevailing
in the T-Cloths market, however, and the great abundance and cheapness
of native cotton and cotton-cloths throughout 1874, give force to the
previous belief, and so in the absence of any better reason, we accept the
native cotton idea as the true solution of the mystery. In connection
with the foregoing, the following comparative statement of the statistics
for the past six years may prove of interest to our readers:—
Imports. Deliveries. Stocks.
on 31st Dec.
1874 pieceB 1,675,000 2,327,000 487,660*
1873 1,685,000 2,283,000 1,259,500
1872 4,650,000 3,597,000 1,782,300
1871 3,680,000 3,246,000 1,063,600
1870 2,556,000 2,946,000 570,000
1869 2,716,000 2,115,000 None published.
The diminution of the stocks, as we have already said, is the only
satisfactory point noticeable in the T-Cloth position, for business was flat
at the opening of the year, and quotations low, and this was pretty well
the ruling state of matters until its close. In our earliest report, 7th
January, no mention is made of the article, while in the next, quotations
were altogether omitted and the market was thus described: '' Transactions
"are again trifling, and consist chiefly in the class of Mexican 7-lb.
"obtainable at about Tls. 1.35 per piece. There is a slight enquiry for
"fine 7-lb., and Tls. 1.60 is the rate named; but it is somewhat difficult
"to define the buyers'meaning of 'very fine,'and so we can give no
"particular chop as the basis for sellers to work upon; small lots of
"Dewhnrst's M.T. 8-lb. have found a market at Tls. 1.70 per piece;"
and again about six weeks later, our weekly report states: "A sale of
"6-lb. Mexican T-Cloths is such a rarity now-a-days, as to-deserve a
"special record." That same transaction consisted of 1,000 pieces only,
and the price realised was Tls. 1.32| per piece, against a laying-down
cost of about a mace higher. In March, although there was a more
extensive business going on, and an advance of 3 to 5 c. per piece
established in the value of 7-lb. we were compelled to record the dis-
satisfaction still prevailing amongst holders who "generally, are under the
'' impression that before long they will see a more satisfactory trade and
"better prices."—By the 1st of April, however, the dealers had "returned
"to their old offers of Tls. 1.35 or inside Tls. 1.40 for ordinary Mexican
"7-lb." Nor could they be included to operate largely, unless on better
* Calculated to be short about 100,000 pieces, the supposed holdings of those firms who disapproved
of the annual oollection of the stocks of imports by our Chamber of Commerce, from whose list the
above stock column is taken.


[ 49 ]
conditions, during the remainder of the year; and, on 31st December,
and for some weeks previously, we find that class quoted at Tls. 1.30 per
piece. We conclude our T-Cloths' review with the following quarterly
range of prices for the different weights and qualities:—
1st July. 1st April. 3rd July. 7th Oct. 31st Dec.
6-lb. Common, per piece $1.01 a 1.06 1.04a 1.07 1.05al.l0 1.09a 1.13 1.05 a 1.10
6-lb. Mexican, 1.13a 1.20 1.17a 1.25 1.16al.30 1.16a 1.30 1.15a 1.25
7-lb. Mexican, 1.31 a 1.37 1.35a 1.55 1.38a 1.57 1.31 a 1.55 1.30a 1.55
7-1 b. Common, 1.13al.20 1.13al.l8 1.15 a 1.25 1.20 a 1.25 1.18 a 1.22
8-lb. Common to Good, 1.55a 1.70 1.55al.70 1.70a 1.88 1.60a 1.80 1.53a 1.70
The improvement in 8-lb. cloths at midsummer was owing to an
enquiry that set in about the beginning of June, and to the very moderate
supply of the article on hand. Towards the middle of that month, heavy
sales of hard and floating cargo were registered; but after that time the
demand moderated, and when the goods began to arrive freely, prices
reacted, reaching their normal level by the middle of November. Mildew
has had no small share in keeping the lighter weights of T-Cloths at such
a low range during 1874. But the Mildew in many instances was more
in consequence of prolonged holding than of any primary adulteration in
the manufacture, and it occurred mostly in those classes of 7-lb. Mexicans
which are more particularly alluded to, and which in former years were
crowded upon this market from home, to an extent far heavier than the
country could bear. Of course, there have been cases of Mildew in more
recent arrivals, but the damage of which we speak, and which we believe
to have been partly instrumental in depressing the market values of the
year, was the result of excessive production and the consequent accumu-
lation on this side.
Drills.—The opening of the market was exceedingly disappointing
to holders. It is true that the year was inaugurated by heavy sales, but
the rates paid and accepted were simply ruinous. When the autumn
trade of 1873 terminated, quotations of ordinary quality—14 a 15-lb.
English Drills were Tls. 2.48 a 2.58 per piece, and these figures even
were somewhat below cost. But the stock was heavy, and supplies from
home were constantly pouring in. Hence sellers became frightened, and
most of them made haste to realise. Buyers had everything to them-
selves, and it is not surprising that they managed in a very brief space
of time to get prices down to "Tls. 2.30 per piece for fair ordinary
15-lb., or its equivalent for the lighter weights." Moreover, on the 21st
of January last year, we find it written: "A sale of 7,000 pieces fine
"15-lb. English Drills (Dewhurst's) at Tls. 2.35 distant clearance—has
"been the event of the week. Indeed there has been little else done,
"although similar quality has been in constant demand. Such a decline
"was rather unexpected, and holders generally are not yet prepared to
"accept it." Nevertheless, most of the business of the year was done at
or under those quotations, and a 15-lb. of fairly passable quality was
auctioned in May at Tls. 2.18 per piece. However, the final results to
importers, as the season advanced, were not so deplorable as at the
commencement. The cost in Manchester had lessened considerably; the
shipments from Europe and America were on a reduced scale, the home
trade being scared by the unsatisfactory accounts from this side; and


[ 50 ]
native consumption continued large; our stocks became more manageable.
And so the importer of 1874 frequently sold his goods at a profit, not
great certainly, but it was cheering to him to have something in his
hands with which he could do a little good.
The English manufacture occupies by far the most important position
here now, and to a great extent it rules the market. American cloth, by
reason of the regulated supply, commands fancy prices so to speak, and
the Dutch 13 a 14-lb. rank after the same weights of English. During
1874, however, the imports from Holland also decreased very materially.
The accumulations of the latter at the close of 1873, the peculiar and
unaccountable absence of demand, and the high cost of production last
year, acted as deterrents to shippers. Besides, to say nothing of the
impossibility of selling at reasonable rates as compared with those paid
for the English textile, many a holder was for a long time fettered by
limits from home; and when sales became practicable the unlimited few
closed with the earliest offers they received, selling out at from Tls. 2.00
a 2.10 per piece in May, up to Tls. 2.20 a 2.30 per piece in December.
Hankow, which is the chief emporium for Dutch Drills—at least it has
proved itself so in bye-gone days—has this season taken off but a small
proportion only; whether because of the limits placed on most of them,
or whether owing to the Likin difficulties, we are not in a position to say;
but the fact remains, that the usual Hankow spring enquiry was not
experienced last year, and the trade in the article stood still, until the
heavy decline indicated by the above figures attracted the attention of
the .Northern dealers, who entered the market in autumn, and whose
operations gradually established the prices current when winter set in.
Of American Drills, it is only necessary to remark that they suffered in
common with the other descriptions, although probably not to so great
an extent. The market opened in April at Tls. 3.75 for P.M.CD. Dragon
chop, declining to Tls. 3.47| towards its close. The cheaper makes were
mostly wanted, and fair quantities of them changed hands from time to
time on the basis of Tls. 3.30 a 3.40 per piece.
A falling off in the business of Drills has to be noted, but under this
heading we have already trespassed too far, and will now close the
subject, leaving the following comparative statement to explain what we
had intended to say further :—
Imports. Deliveries. Stocks.
1874 pieces 561,000 777,000 244,000
1873 1,315,000 1,056,000 397,000
187-1 1,010,700 971,000 124,700
1871 710,640 788,000 104,000
Jeans.—The importer of Jeans has not gone altogether unrewarded,
neither have the natives suffered on that account. Moreover, consump-
tion has outrun the importation, and 1875 commences with as low a stock
as we have seen for a number of years past. The opening quotations for
ordinary to good medium qualities were Tls. 1.75 a 1.90 per piece, but
the average selling prices of the year were considerably higher than these
figures. In fact, excepting on one or two occasions, there was no business
done so cheaply. In March, the standard quotation for English 8-lb.
Jeans was Tls. 1.8G a 2.06, receding in June to the opening rates,


C 51 ]
recovering themselves shortly afterwards and maintaining an average
value of Tls. 1.84 a 1.95 per piece throughout the remainder of the year.
In Dutch Jeans transactions were neither extensive nor important, and
seldom did the rates realised cover cost. Quotations were fairly steady
throughout, the extreme points being Tls. 2.23 in January, Tls. 2.05 in
spring and early summer, and Tls. 2.20 in autumn and winter. Of
American Jeans there were not any importations :—
Imports. Deliveries. Stocks.
1874 pieces 308,000 328,000 253,000
1873 387,200 365,000 96,700
1872 396,500 333,000 88,400
1871 187,000 189,000 39,500
Sheetings.—Against an importation of 25,200 pieces of all kinds,
there was a delivery of 82,000 and the heavy supply with which the year
began was reduced to 1,700 pieces at its close. The enquiry set in at the
end of last winter, and continued—with only short-lived intervals of
quiet—until most of the northern dealers left for their homes in
December. The stock of 31st December, 1873—viz., 50,000 pieces—
together with the slight accessions it received from time to time by fresh
imports, was worked off long before autumn, at prices—opening at
Tls. 2.10 a 2.20 per piece for fair to ordinary descriptions of 14 a 15-lb.
English Cloth, and going as high as Tls. 2.60 a 2.80 as the demand
continued and as the supply got into fewer hands. The later arrivals
were taken off as quickly as they were placed on the market, and many
of them sold as high as Tls. 3.00 per piece. It is needless, almost, to say
that the results of the business done during the first half of 1874 was
unfortunate for holders, but although hope whispered better things,
despair—the offspring of former experiences—was the stronger sentiment,
and, there being no sign of any future improvement, it counselled progress
with the goods on hand. Further, there was Mildew amongst the stocks
—and Mildew in Sheetings is a very serious matter, when a sale is being
negotiated—and that too impelled owners to realise as fast as they were
able. In early autumn, however, and on to the closing of the northern
trade, things changed, and the out-turn of the few parcels of English
Sheetings from time to time received, showed a little profit to the
importer. American Sheetings.—The business of 1874 was transacted
between the months of February and July, and every lot that came to
hand was easily placed at Tls. 3.20 a 3.40 per piece. In the course of the
month last named, stocks were entirely exhausted, and they were not
replaced during the remainder of the season; but it became known in
December that there were 500 bales (10,000 pieces) in the "Golden
State," from New York—arrived January, 1875—and the northern men,
through their deputies, made offer several times of Tls. 3.75 per piece
for the lot without avail. We may mention here that the parcel has
since been sold at that figure.
Fancy Cottons.—This term embraces a great variety of articles, and
the list, which to no small extent is dependent on the ingenuity of
money-makers, is yearly being added to. There are certain standards,
such as Velvets, Turkey Bed Shirtings, and Gentian Shirtings, in which
the only important alteration or improvement attempted is the shade of


[ 52 ]
colour, and quality of the cloth; and there are others—viz., Brocades,
Damasks, Handkerchiefs, and Chintzes,—whose designs and assortments
are subject to the caprices of fashion or taste. The trade in these has
not varied greatly in its nature or extent from that recorded in previous
years, although it must be conceded that, on the whole, the balance is
against 1874. The consumption of some articles has fallen off, while
that of others has increased. Take Turkey Reds for instance. The trade
requirements of 1873 were satisfied with 110,000 pieces, while, during
18/4, upwards of 130,000 pieces went into consumption. The respective
importations of these two years were 126,000 pieces and 98,000 pieces,
the deficiency between the imports and deliveries of last season being
supplied out of the heavy stock on hand at its commencement. On the
other hand, Velvets, Chintzes, and Brocades show a decrease, but with
regard to the first, this is easily accounted for by the larger direct
shipments from home to Japan. In all these articles, too, as well as in
the article of Velveteens, there has been a heavy falling off in the supply,
so that the position of our merchants, at the beginning of 1875, cannot be
regarded as much worse than it was at the opening of last year. In
Handkerchiefs, the business has expanded considerably, the deliveries for
1874 being computed at 245,000 doz., against 126,000 doz. in 1873, and
by reason of the very moderate importations during last year—under
170,000 doz., the stocks on 31st December were reduced to 73,000 doz.,
against 150,000 at the close of the previous twelve months. Amongst
those Fancies which are only occasionally quotable, we find Blue Mottles
or Denims, Printed Cashmeres—which of late has almost taken the rank
of a standard, and from which rank on the other hand, Dyed Spotted
Shirtings have well nigh disappeared.—Muslins, plain and figured, and
Dimities. These last two fabrics, a few years ago, held a much higher
place here than they seem to do now, and had it not been for the help
accorded us by Japan, the sales—of Muslins more particularly—on this
market last year, would have been very insignificant indeed. The
deliveries of Muslins for the period under review amounted to only
38,000 pieces, against receipts of 31,000, the deficiency being supplied
from the remainings of 1873, and the Dimity statistics are even less
favorable, the imports being in excess of consumption by 6,000 pieces.
A similar remark, but stronger in degree, is applicable to Damasks, the
difference against consumption being 14,000 pieces.—And as with the
general decrease, so has it been with the returns to those concerned in the
trade. Turkey Bed Shirtings is about the only article that has done any
good. The year was opened by sales "to arrive" at rates which showed
a very fair margin of profit, and throughout its course the importer of a
fair to good quality and current chop seldom found much difficulty in
disposing of it on favourable terms. A contract for 2,000 pieces 3-lb.,
of the approved description, to arrive in March, was entered into in
January, at Tls. 2.20 per piece, and business was done in the same
import as it arrived on market during the year, at figures little short of
that, much to the satisfaction of the proprietors of the chop. It was
otherwise, however, with some importations of narrow width and inferior
chops. Such could be passed off only in times of great scarcity and of
excited demand, and these might—not inappropriately—be likened unto


C 53 ]
"angels visits." The owners were forced to sacrifice, and that word
occasionally signifies loss. Of Velvets and the other manufactures that
make up the class comprehended under the heading of Fancies, it is
unnecessary to say more than that the foreign dealers in them—with
very rare exceptions—have had little reason for desiring to continue in
the business. Indeed, several confess that, were it not for the fact that
the possession of some fancy work occasionally brings dealers about,
and so ministers to or facilitates some more important sales, they would
give up the trade at the earliest opportunity.
Woollens.—The year 1874, like many of its predecessors, has not been
a profitable one—at least so say some of those who have been interested
in Woollens. Both foreigners and natives unite in saying that the balance
of trade has been against them. The Western provinces have again been
blessed with most bountiful harvests, and everything connected with the
internal prosperity of the country has favoured the introduction of our
Yorkshire manufactures amongst the Chinese people; but the Li-kin has
cast its withering influence over the trade, ruining the natives, and
creating general dissatisfaction. To this cause, principally, is ascribed the
falling off in the consumption of woollen goods, during the past year. In
1873, when the Mandarins were less exacting, the trade made wonderful
progress; and strong hopes of a still increasing business were entertained
at the beginning of last year. But those hopes have not been realised—
nor in our opinion, will any permanent good be experienced until the
internal transit is better regulated, and the natives are more considerately
treated by their authorities. So far as we can see, there is nothing, save
Camlets, amongst the chief woollen imports whose position contrasts favor-
ably with those of previous seasons, and the statistics of Camlets show an
increase in the deliveries of only 4,000 pieces over those of 1873. But
the following table speaks for itself on this subject:—
Camlets. LoDg Ella. Lustres Plain and Figured. -
Imports. Deliveries. Imports. Deliveries. Import*. Deliveries.
1874 pieces 79,000 81,420 79,800 90,000 175,000 196,600
1873 „ 85,300 77,130 77,000 120,000 293,000 273,000
1872 , 57,800 65,100 82,900 126,000 192,000 262,000
1871 „ 67,000 73,400 105,000 125,000 117,000 197,000
Spanish Stripes. Broad & Med. Cloths. Lastings.
Imports. Deliveries. Imports. Deliveries.
1874 74,200 96,700 1874 46,000 37,000
1873 119,000 106,000 1873 51,000 47,000
1872 26,000 35,000
1871 45,000 38,000
And this untoward state of matters has happened under circumstances
which, had the trade otherwise been allowed free scope, have been
exceptionally favorable to consumption. We refer more especially to the
system of auctioning sound goods that was instituted here at the end of
May last. By that system, a constant weekly supply of Camlets and
Spanish Stripes, and of Long Ells occasionally, was placed on the market,
and sold. "Without reserve" is the principle on which these auctions are
conducted, and buyers at them regulate their prices according to the
requirements of the day. If a good demand prevails, they compete, and


[ 54 ]
ran up rates pretty close to actual market value ; but if times be dull, they
combine to secure the goods at figures on which they imagine there
cannot be any loss in the future. A great thing in favour of the system
is that the chops sold are all well known and approved ones, and some
them are the exclusive property of the auctioneers. Thus there is nearly
always a market for them, or if there is not, they are bought and held
until one arises, and so it often happens that other importers are unable
to make any progress whatever. In times of scarcity, of course, the
general importer can readily dispose of his wares, and he invariably
obtains higher rates than are paid at the auctions, but the amount of
business he can do is small as compared with what is put through at the
weekly sales, which certainly have now a fair hold of the sitnation; in
illustration of this we present our readers with the following aggre-
gate :—
Sales at Auction from Re-exports and local Balance, the business
29th May to 31st deliveries for same done by all other im-
December. period. porters for same period.
Camlets 25,000 51,000 26,000 pieces.
LongEIls 10,200 67,000 56,800 „
Spanish Stripes 11,000 43,000 32,000 „
We do not profess to enter into the question as to whether the results
of these auctions are encouraging, but, judging from the groanings of
the general trade, we conclude that they might be a little more satisfactory
without doing the auctioneers any serious harm. Long Ells have been
short in stock throughout the year, and at times, when wanted, there were
scarcely any—save the commonest descriptions to be found, but notwith-
standing this, they have seldom risen in value so much as to yield a profit
on cost. Camlets, Spanish Stripes and Medium Cloths likewise have given
discouraging out-turns; indeed, this may be said of almost every descrip-
tion of Woollen Goods in which business has been transacted here during
1874; the results to the importers of Figured Orleans, of the lower qualities
more particularly, being very unfavorable. For many months, inferior
makes have been saleable only at a heavy sacrifice, and even the fined
kinds have frequently had to be forced off. Special chops, designs any
assortments—have sometimes done a little good, but the profits they
have shown are but "drops in the bucket," as compared with the losses
sustained by importers generally. The cause of this collapse is rather
difficult to determine. Some say, and we think there is reason in what
they do say, that it originates in the abundance and cheapness of silk
which is now within the reach of many natives who formerly were
contented with Figured Orleans, and who, consequently, now dispense
with them. In this article, a growing trade with Japan has to be recorded,
and to that country we are indebted for the lion's share of business done
in Plain Lustres during 1874. Black Lastings, too, have been frequently
shipped hence to the Japanese markets, but the qualities taken have, as
a rule, been inferior—costing from Tls. 9.50 to 10.50 per piece,—and the
final sales of them seldom did much more than cover these figures,
shares. In reviewing the Share market for the year, we think it well to
give a separate statement of the extreme fluctuations of each of the
principal stocks.


C 55 ]
In addition to the general depression in trade, we have had competi-
tion tending to lower the value of several stocks. Holders of shares in
our local bank have suffered considerable loss, and the same may be said
of holders of steamer shares. Two of our steamer companies are in
liquidation, and since the close of the year Bank shares fell to 20 per
cent. discount. .Among Marine Insurance Companies, North-China and
Chinese Insurance shares have risen, while Yangtsze and China and
Japan shares have fallen. There is not much change to be noted in Gas
or Fire Insurance shares. Wharf shares, which were much depressed
during the year, have since risen above par. The Shanghai and Pootung
Foundry and Engineering Co. was wound up early in the year, the
shareholders receiving a return of 50 per cent. on the capital.
Hongkong and Shanghai Banking Corporation.—After the new-year
holidays, business opened at 49 per cent. premium, and advanced on 14th
January to 50 per cent. premium cash, and 50| per cent. premium for
31st January. Afterwards the price gradually fell, until shares were sold
at par on 5th October; after which it rose a little, and they were sold
at 2 per cent. premium on 31st December.
The accounts shew $191,768.91, as the net profits for the year,
which is not quite 4 per cent. on the paid-up capital. This includes the
profit on the Chinese Imperial Government Loan. And, in addition to
these small profits, a sum of $1,115,000 was set aside to meet bad debts,
made up as follows:—
Balance of profits from 1873 $ 26,290.53
Prom profits for 1874 188,709.47
„ Keserve Fund 900,000.00
$ 1,115,000.00
This compares very unfavourably with the result of business in 1868,
when, with a capital of $3,000,000, the profits were $690,975.54, or over
23 per cent.; or in 1871, when $705,785.85 were earned, with an average
capital of $4,250,000, or over 16 per cent.; but the bank has of late
been extraordinarily unfortunate, and when trade recovers, as it must do
some day, we see no reason why it should not, with its excellent business
connection, under proper management, again pay good dividends.
Shanghai Steam Navigation Company.—The market opened at 111
cash, cum December dividend, and the shares reached, in March, 121|
cash, and 127 for Slst August. Afterwards the price gradually fell to
80 on 31st December
The net profits for the year were 184,823.96
over 8 per cent, on the capital.
Dividends amounting to 7 per cent, were paid 157,500.00
Leaving to be carried to reserve 27,323.96
The reserve fund now stands at 650,803.63, being nearly 29 per cent. on
the capital.
Competition with the China Navigation and the China Merchants'
Companies depressed this stock; but now that an arrangement has been
made with the former to run amicably on the river, the prospects of the
Company are again good. The Directors have been impressed with the


[ 57 ]
landlords at the expiry of the lease. The income of the Company is
thus secured until 1887.
Pootung Dock Company.—The market opened at 95, and the price
declining during the year, closed at 85. The accounts stand thus:—
Available balance from 1873 209.74
Net profits for 1874 9,708.57
Dividends 10% 9^400^00
Available balance to 1875 518.31
This dock was originally leased to the tenants of the Old Dock,
from 6th December, 1872, to 30th September, 1876, at a yearly rental of
Tls. 10,000, clear of all taxes, and payable half-yearly in advance. At
last meeting of the Company it was agreed to grant an extension of the
lease for 10 years, on the same terms, the tenants having the option of
terminating the lease on 30th September, 1881. The income of the
Company is, therefore, certain until that date.
Shanghai Gas Company.—Shares were sold in February at 139, and
advanced to 145 in June. They were sold in December at 144.
Dividends amounting to 11 per cent. have been paid for 1874. The
report has not yet been published. The shares in this Company have
maintained a similar high value since 1871. They appear to be a
steady, safe, investment.
Compagnie du Qaz.—The shares were quoted 63 in January, and
gradually advanced during the year, closing at 70. Dividends amounting
to 11 per cent. were paid. Like Shanghai Gas shares, these have remained
at a high price. The Municipality are the Company's best customers,
and if they succeed in annulling their agreement with the company,
which it seems the Council wishes to do, it will entail loss on the
shareholders.
North-China Insurance Co., 1872-74.—The price was 400 in January,
and advanced to 410 in March. They were quoted 3C5 (ex dividend of
Tls. 60 in March) on 31st December. The latest published account is to
30th June last. At that date the
Premia collected was 2,071,950.52
Losses paid 1,022,842.32
Net profits 897,312,49
that is 299 per cent. on the paid-up capital in 2| years. Out of this had
been paid
As dividend 258,038.63
Carried to reserve 221,961.37
Leaving at Cr. of working account 417,312.49
The shareholders have since received a dividend of Tls. 300, making
in all Tls. 460 and 12 per cent. on contributions. When the history of
our local institutions comes to be written, this Company will occupy a
prominent place in it.
Yangtsze Insurance Association.—Business was done in January at
710, (cum Dec. dividend), and 670 (ex dividend.) The price advanced
to 710 in March, but afterwards declined. • It was 610 in December.
Dividends amounting to 15 per cent. were paid to the shareholders in
1874, and the contributors for 1872-73 received a return of 22 per cent.


[ 58 ]
on premia. The reserve on 30th September, 1873, the date of the last
account, stood at Tls. 200,000—33j per cent. on the capital. The shares
in this association will probably not rise much in value, because, after
paying the shareholders 15 per cent. interest on capital, the balance of
profits is distributed among contributors of business.
China and Japan Marine Insurance Co.—The market opened at 93,
advanced to 105 in April, and then gradually declined, closing in December
at 78. The last balance-sheet, dated 30th June last, shews:
At reserve Tie. 52,000.00
At working account 51,663.70
Tls. 103,663.70
Up to 15th October, there were claims paid or pending amounting
to 92,000, against which Tls. 62,000 of premia had been collected. A
return of 11 per cent. on premia was made to contributors during 1873.
This Company has suffered much from exceptionally heavy losses, and
consequently must find it difficult to compete with the other local
offices in returns on contributions. To its own action, in commencing
the system of paying to contributors of business a certain proportion of
the profits, this state of things is however in great measure due.
Chinese Insurance Company.—Business was done in January at 187
(cum December dividend), and the price advanced to 203 in April. It
was 190 in September, and 200 in December. Interest at 12 per cent.
was paid to shareholders for 1874, and 23 per cent. to contributors for
1873. The accounts for 1874 have not yet been published. After
payment of 12 per cent. interest to shareholders two-thirds of the profits
of the Company will be returned to contributors of premia. This
measure is necessary in order to secure business. The value of these
shares, therefore, is not likely to increase much for some time.
Hongkong Fire Insurance Company.—The price of these shares was
558 to 560 in January {cum December dividend), and 500 in February,
(ex dividend.) Rates fluctuated a little during the year, and at its close
the quotation was 530. The accounts shew:—
At reserve 451,774.00
At working account 1874 233,784.87
685,558.87
over 171 per cent. on paid-up capital. A dividend for 1873, of $51.75 per
share (25.875 per cent.), and a return of 23.94 per cent. on contributions,
were paid to shareholders on 24th ultimo. This Company, being able to
make such large returns on contributions, must continue to compete
successfully with home offices, and do a large business. Its losses have
hitherto been very small.
Victoria Fire Insurance Company.—Business began at 116 in January,
and the price advanced to 126 in June. It reached 129 in November,
and 126 on 31st December. The accounts shew:—
At reserve $ 179,821.83
At working account, 1874 50,275.48
$ 230,097.31


[ 59 ]
or 76.7 per cent. on paid-up capital. Interest at 12 per cent. was paid to
shareholders for 1874; and for 1873, dividends of 4j per cent. on capital,
and of 15 per cent. on contributions, have since been paid.
China Fire Insurance Company.—Shares were done at 128 in January,
and the rate gradually advanced to 137 in October. The closing rate
was 134. The balance sheet shews:—
At reserve $ 248,614.30
At working account, 1874 69,870.39
$ 318,484.69
or 79.62 per cent. on paid-up capital. Interest at 12 per cent. for 1874,
has been paid to shareholders, and 14.87 per cent. on their contributions
for 1873. The premia collected by this Company, and by the Victoria
Fire Insurance Company, have been decreasing. This might be antici-
pated, when we note the fact that home offices take risks at similar rates,
and make a return of 20 per cent. when the premium is paid.
Shanghai and Hongkew Wharf Company.—Shares were sold in
January at 120 cash, and 124 for 30th April. Rates gradually declined
to 81 on 10th December, but advanced to 90 by the end of the year.
Net profit for 1874 (6.71% on capital) 14,429.16
Dividends (5%) 10,750.00
To reserve 2,872.98
This wharf has not realised, of late, the good prospects with which it
started. Competition and dull business have combined to depress its
earnings. 1f the proposed amalgamation with the wharves under the
management of Messrs. Jardine, Matheson & Co. is carried out, there is
every prospect, however, of a successful future.


[ 60 ]
IS 1 5.
Silk. The principal feature of the year under review, is that of direct
Exports of Silk (there has been a large increase both to the Continent and
to America, and a large decrease to London) and the most satisfactory that,
notwithstanding this, the deliveries of North-China Silks from the London
Warehouses have been gradually increasing.
The following are the figures for the last four years :—
Export to 1875 1874 1873 1872
Bis. Bis. Bis. Bis.
London 26,236 33,846 33,616 38,259
Continent 35,347 28,054 16,217 12,223
America 7,458 4,127 2,714 4,142
69,041 66,027 52,547 54,624
Deliveries from London
Warehouses. 1875 1874 1873 1872
Bis. Bis. Bis. Bis.
Chinese 38,378 37,118 34,370 30,285
Cantons 6,622 6,832 8,380 11,341
Japans 6,528 8,154 8,195 10,483
Bengals 2,647 2,824 4,849 5,443
54,175 54,928 55,794 57,552
From these figures it would appear, not so much that there is an increase
in the general consumption of silk, as that North-China silks—viz., Common
Tsatlees and Taysaam sorts, are, at present prices, able to compete success-
fully with Cantons and Bengals; for the increase of the former, comparing
the past year with 1873, almost exactly counterbalances the decrease of the
two latter. The result of this on the London market has shown itself in the
large and steady decrease that has taken place in the stocks—notwithstand-
ing pretty heavy transhipments from the Continent—
From 29.322 Bis. Chinas (excluding Cantons) on 1st Jan.
To 21,203 „ „ „ „ 1st June.
To 16,646 „ ,, „ „ 1st Dec.
A good steady market might reasonably have been looked for at home under
these circumstances; but many causes combined to prevent such a desirable
result. In the early part of the year, importers again betook themselves to
the public auctions to get quit of their holdings, and dealers took advantage
of these to supply themselves, buying on the open market only such parcels
as seemed most suitable to their requirements; thus, through the early
months of the year, quietness prevailed; and on the 1st June the value of
No. 3 Tsatlee was rather lower than on 1st January; while Common Tsatlee


C 62 ]
Continent, and consisted chiefly of Medium Tsatlees; while for the London
market, the demand seemed to run on Taysaam silks. In Chop silks,
Koofong Sings No. 3 were taken at Tls. 400; Ku Kee Chin Jan at Tls. 340;
Blue Elephant at Tls. 33^; Chin Yuen Sing's Kahing Gna Ling at Tls. 315;
and Common Tsatlee at Tls. 255. Very heavy rains all through this month
acted deleteriously on the second crop, and the estimate of the total yield
was reduced to 75,000 bales. Stock 13,000 bales.
July.—Discouraging advices from the Home markets had the effect of
weakening prices, more especially for the better classes of Tsatlees, while
Common Tsatlees nearly maintained their value, and an advance on
Taysaams took place, owing to the native demand for these classes. Settle-
ments were on a free scale, although checked/or a time by the enforcement
on the part of dealers to sell only for cash on inspection. They amounted
to 12,300 bales, but owing to the very free receipts from the country, stocks
increased to 17,000 bales.
August.—A much smaller business was done during this month, but
prices, in spite of continued bad accounts from Home, continued firm; and
as the conviction gained ground that the total available Export would not
exceed that of last year, prices gradually hardened, and at the close showed
an advance of Tls. 5 on Tsatlees and Tls. 10 on Taysaam sorts. Settlements
for the month, 5,900 bales; Stock 16,000 bales.
September.—At the commencement, a strong effort was made on the
part of holders to force up prices, but with only partial success; and towards
the close the market quieted down to the prices ruling in August. Koofong
Sings No. 3 were settled at Tls. 400; Blue Elephant, at Tls. 325; and
Chin Yuen Sing's Gna Ling at Tls. 327|; or an advance on this Silk of
Tls. 12| over June rates. Settlements for the month, 7,600 bales; Stock
16,000 bales.
October.—Rather better accounts from home led to a Blight advance,
especially in medium Tsatlees, while Chops remained comparatively neglect-
ed. The American demand also improved, and considerable settlements
were made for that market at an advance of Tls. 5 to 10 on Bereeled Silks;
but towards the close quietness again prevailed, and but little change can be
noted over the rates ruling last month. Settlements were 7,200 bales, and
Stock 13,000 bales.
November.—A fair business was again done for America, at rather
lower rates, and Chop Tsatlees also sustained a fall, Koofong Sings No. 3
being settled at Tls. 392|; Blue Elephant at Tls. 322J ; and Red Peacock
at Tls. 315. Settlements 6,700 bales; Stock 11,000 bales.
December.—During the early part of the month, only a moderate
business was done at a further decline on Chop Silks, Koofong Sings No. 3
Tsatlee being taken at Tls. 390; Blue Elephant at Tls. 317£; these rates
drew the attention of buyers to these Silks, as they compared favourably
with the prices asked for Common and Medium Tsatlee, viz., Tls. 270 to 280
for the former, and Tls. 290 to 310 for the latter; and a slight advance took
• place on them towards the close of the month. Settlements were 7,300
bales, making total Settlements for 1875, 70,500 bales, and for season
1875/6, 57,000 bales; leaving a Stock of 6,500 to 7,000 bales, to which a
further addition of 5 to 6,000 bales was looked for.


[ 63 ]
Tea—Black Leaf congous. A retrospect of the Black Tea season of 1875-6,
must again be a record of an unsatisfactory and disappointing business,
the more so because at the commencement of the year the favourable
position of tea—the largely increasing deliveries, the reduction of
stocks to what was considered a reasonable compass, and other causes—
pointed to a promise of success more than usually brilliant; how vain
this promise was is now well known, and proves more than ever that
the conditions of the tea trade have altered from what they were in
old days. The most palpable reason for non-success in operations in
the leaf is, of course, the yearly increasing rapidity with which it is
produced and sent forward, the supply for the whole season being
compressed into a few months; but it would be thought that this
should not make much difference, so long as the eventual total supply
was not in excess of the consumption; as in that case the merchant
would only have to wait till his turn came. But importers are beginning
to find that they dare not hold. The knowledge of how extremely
perishable and deteriorating an article it is, asserts itself more year after
year; and although this fact appears to be persistently ignored by buyers
in China, it exists to an extent that would not be credited by any one
who sees the reckless way shipments are hurried forward. It is an
actual fact that, year after year, teas which have been long held, sell 25
to 30 per cent. lower than their valuation on arrival; and that that
decline in value can be distinctly traced to deterioration in quality, and
not to any fall in market; and yet the buyer of that tea will, in the
following year, give instructions that his shipments should be held unless
they come out. Importers in England are beginning to realize the fact,
and are as anxious to get rid of their teas, as buyers in China are to
secure them, which naturally results in dear purchases on one side and
cheap sales on the other. There is another cause, however, which above
all others militates against the success of China teas, and this cause
cannot be brought too prominently forward, and is one which is worthy
of the gravest attention. It is the important position Indian Teas are
taking in England. Buyers in China are apt to attach much too small
importance to the rapidly increasing trade in Indian teas. But it must
be remembered that nearly every pound of it is fine tea; its manufacture
is improving year by year, both in quality and quantity. Next season,
it is estimated the import into England will be 28,000,000 lbs.; and at
the rate it is now increasing, in another ten years, it may confidently
be anticipated that the export from India of good and fine teas will not
be far short of one hundred million pounds.
In giving a brief resume of the business of the past year, we must
premise that Ningchow teas are now taken so exclusively for Russia, that
they may be looked upon as distinct from those suitable for England,
as though they were a different class of goods altogether. The teas
arrived in bulk in Hankow and Kiukiang at an earlier date than was
ever before known—first arrivals taking place in Kiukiang on the 9th
May, and in Hankow on the 12th idem. The market was first opened at
Kiukiang for Ningchow teas, destined for the Russian market.
Purchases were made on the 8th May, and during the next two weeks
a large business was done in these kinds, both there and in Hankow, at
-


[ M ]
September 1st.—Third crop teas arriving slowly ; few except common
shewn in Shanghai. Prices shewed a considerable advance on those of
August.
October 1st.—No leas except common, after this date. Prices
maintained.
November 1st.—Stocks small, and only a moderate business; foil
prices paid for all except common, which where bought at very low
prices. Season closed by December 1st.
In England, July 1st.—Position of stocks most favorable ever
known.
Stock of Tea 58,000,000 lbs. Of Congou 32,000,000 lbs.
Against 1874 61,000,000 ,, 36,000,000 „
1873 71,500,000 „ 43,000,000 „
1872 80,000,000 „ 53,000,000 „
1871 90,OOJ,000 „ 56,000,000 „
Glenartney arrived 5th. Only 4,000 a 5,000 packages sold. Trade
disappointed with quality of crop. Dragging and declining market till
10th, when Glenearn arrived. Large auction sales, and heavy arrivals.
Lower scale of prices established than had been current since 1869.
August 1st.—Market still declining till 18th August, when medium
teas began to get scarce. And as reports of second crop teas advised the
crop a failure, an advance of 3d. to 4d. per lb. took place in teas at
about 1s. 4d., and a smaller rise in other grades except common.
Common kinds declining. Finest in small demand. Deliveries very
large.
September.—Strong demand for medium teas up to 1s. 6d. Second
crop teas arrive per Venetia, and being of the class most in demand are
freely taken. Common Black leaf, lid. On Fine and Fine teas difficult
of sale. Deliveries continue on a large scale.
October 1st.—Medium teas still in strong request, and very full prices
paid. Good medium and fine wanted up to 1s. 9d. Little business above
this price. Common Black leaf 10d., in large supply and declining in
value. All teas held more firmly than usual in expectation of war with
China. Less business towards the end of the month. Cutty Sark arrived
with first teas via Cape. Very heavy deliveries.
November 1st.—All classes of teas weaker. Common Black leaf,
9^d. Moderate demand for medium at a halfpenny decline; demand
very slack for on fine and fine, but importers holding firmly. Deliveries
again very large.
December 1st.—Common Black leaf, 9d. Market quiet before
Christmas. Importers anxious to quit fine and finest grades held since
July. But no demand for these kinds at their prices. The quality of
these teas having undoubtedly deteriorated from being kept, till they rank
no better than good medium. Prices for medium teas, especially second
crops, still maintained; deliveries for month small.
January.—Telegrams advise medium Black leaf firm. Others
declining. Common Black leaf declining. Stock 107,000,000 lbs.
Afloat, 25,000,000 lbs. Import of Indian tea for 1875 shews an increase
of 6,500,000 lbs.
It will be seen that the tendency of the market has been entirely
favorable to medium teas, while common and fine are quite neglected.


[ 68 ]
The future position of tea is good, and in Jnly next stocks will be
even lighter than last year, and may be pretty accurately estimated
as follows :—
Stock as per Eeuter's telegram January 1st, 1876 107,000,000
Afloat 25,000,000
Old Tea unshipped 2,000,000
Arrivals of New Canton Tea before July 1st, 1876 3,000,000
Import of Indian Tea to July 1st, 1876 12,000,000
149,000,000
Less 6 months' consumption, at 15,000,000 90,000,000
59,000,000
Less discrepancy between "Reuters" telegrams and Brokers
Circulars apparent for past 4 months 5,000,000
Stock of Tea July 1st, 1876,in United Kingdom 54,000,000
The rapidity with which teas can now be placed on the London
market via Canal, renders this reduction in stocks of no valne. Indeed
it is possible stocks might be reduced another 20,000,000 lbs. under
existing circumstances, and yet new arrivals, if shipped in large quantities
and arriving at one time, might not be benefitted one cash.
Green Tea. A reference to our last year's retrospect of the course of this
market, will show a generally unsatisfactory course of events, as
regards this class of tea. The shipments for 1874 and 1875 were
nnprecedentedly large, 12,500,000 lbs.; and it would have appeared
little short of miraculous that purchases made under the influence of so
great an over-supply could result other than ruinously, which they
unfortnnately did.
The new Pingsueys began to arrive at the latter end of June, and
proved of very poor quality, the appearance of the teas being much
against them, and the cup quality coarse and flavourless; perhaps no
such poor yield had before been produced. Buyers held aloof for some
time, holders asking prices far beyond the value of the produce. On
the 9th July, the first parcels were shipped, probably on joint account
with the natives, at prices showing a decline of perhaps 25 per cent. to
30 per cent. from the opening rates of season 1874 and 1875. Later on,
two chops were purchased for America, at Tls. 31, showing no change in
values. In June, a few of the new Taipings were shipped to England,
at a decline of about 25 per cent. on the prices given for early purchases
the previous year.
The first musters of Fychows and Tienkais arrived on the 14th July,
but it was not till the 10th August that "Wo Hung" chop was settled
at Tls. 36, say 50 cents laid down in New York, or about 7 cents over
American telegraphed values. At the end of August, Tienkais showed a
fall of 2 a 3 Taels, at which price a fair business was transacted. Moyunes
at this time were arriving very sparingly, and parcels of good medium,
class were purchased at Tls. 27 a Tls. 30.
The Galley of Lome, the first direct steamer to America, cleared on
the 28th August, with 1,100 tons of Green Tea, and filled up at Amoy,
by which date three sailing vessels were advertised as loading for New
York.


[ n ]
Shanghai staple has nevertheless settled down to just 50 per cent, above
that of a year ago; so that importers of cotton manufactures are now
relieved from the competition of extremely low-priced r#w material.
Amongst the causes of the unprofitable results of the trade to importers
cannot be numbered excessive shipments, which have, indeed, been on a
scale of singular moderation. In few instances have they exceeded the
total deliveries, and in some, notably in Grey Shirtings, they have fallen
far short of them. The result is a considerable diminution of stocks,
which are, notwithstanding, sufficient to meet all probable requirements,
having regard to the facilities for replenishing them afforded by the
telegraph and the Suez Canal. This moderation, however, is most
noticeable during the first half of the year, since shippers appear to have
been anxious to forestal the profits they anticipated as a consequence of
their reticence, and lost little time in supplying the expected deficiency—
with a most disappointing effect upon prices. These experienced a decline
of about 5 per cent. on Grey goods in the course of the second half of the
year; whilst the outturn was rendered still more unfavourable by the
uninterrupted fall in Exchange, to those, at least, who adhered to the old
style of remitting in sterling; those who preferred to be drawn upon from
London against the cost or proceeds of the goods at "Exchange per
endorsement," have had a great advantage in selling, many invoices just
coming out, which could not have avoided a smart loss if remitted for in
sterling bills after the proceeds had been cashed. This method of provid-
ing for the cost of goods has of late years been coming into increased
favour and is assuming considerable proportions. It seems attractive to
importers, because upon a falling Exchange market the advantage has
been on their side. Much of its attractions may vanish, should the tide
turn the other way, and Exchange commence to rise steadily. It may be
granted, however, that such a contingency is remote; and it is quite
possible, besides, that this method may suit the banks in these days of
telegraphic transfers, as it enables them to utilize their balances without
incurring the expense of moving about treasure in order to lay down
funds in advance of the produce shipping season. The decline in the
value of silver dims the hope of a profitable trade in imports for the
future; competing, as Piece Goods do, with native manufactures, arise
in the tael selling rate, proportionate to the diminished exchangeable
value of Sycee, cannot be looked for.
Our market has been much indebted to Japan, during the year under
review, for taking off our surplus stocks of Grey Shirtings, Velvets, and
Figured Lustres. This proceeding was facilitated by the low rates of
freight ruling whilst a severe competition was being carried on by the
Mitsu Bishi and Pacific Mail steamer companies. Now that the whole
trade is in the hands of the former company, this outlet is much restricted.
As Japan, too, appears bent on carrying on war with Corea, her pur-
chasing power is likely to be much diminished.
Among the incidents of the trade may be noticed the proclamation of
the Customs' Taotai at Tientsin, in March, respecting an additional likiii
tax on native goods. The Chinese engaged in the Piece Goods trade at
Tientsin closed their hongs; and bale goods, in the absence of sufficient
storage accommodation, were allowed to accumulate on the bund. The


[ 72 ]
foreign Consuls remonstrated with the Taotai, who declared that his
proclamation did not apply to foreign goods, but the dealers were not
satisfied until the Territorial Taotai and the Viceroy had interfered, and
placed matters on their former basis.
It is understood that the native dealers have not been doing a suc-
cessful business, a circumstance which may afford comfort to importers,
if it is any consolation to have companions in misfortune; but which is
likely to lead to a want of buoyancy in the market for some time to come.
In our retrospect of 1874, we described the new arrangements made
by the Cotton Goods Guild for freeing goods from inland dues by an
annnal payment, as far as this province is concerned. It is difficult to get
thoroughly trustworthy returns of our local deliveries; and to this cause
may be attributed, amongst others, the constantly recurring discrepancies
in the Chamber of Commerce stocks from the figures as stated by us
during the currency of the half-year. But there is reason to believe that
the arrangement has had the effect of largely stimulating local deliveries,
and this in a province which grows its own cotton, and has a large
surplus for exportation. Here is a clear proof, were any needed, that the
true cause of the dullness of the Piece Goods trade, as of every other in
China, is the burdensome exactions of the Mandarins. Not only do the
barrier squeezes and inland dnes restrict the area from the open ports
beyond which imports cannot penetrate, but they also impede the move-
ment to those ports of native produce, with which alone the consumers
can find the means to purchase our goods.
The prevalence of mildew is as marked as in previous years, and,
beyond reiterating our opinion that the effect upon the trade is damaging
in the extreme, it is useless to enlarge upon the subject, which has not,
in the meantime, assumed any novel phase.
Orey Shirtings.—Imports for the year amounted to 4,280,047 pieces,
and deliveries to presumably 4,770,000; leaving stocks at 736,000 pieces,
as per Chamber of Commerce returns ; against in 1874, imports 5,528,000,
deliveries 5,146,000 and stocks 1,222,000; the moderation in imports
during 1875 has thus reduced stocks 486,000 pieces. Prices opened at
Tls. 1.6.0 for commonest 8J-lbs. to Tls. 1.9.2 for best; and Tls. 1.3.5 to
1.5.3 for 7-lbs. The course of prices was as follows :—
8|-lbs. 7-lbs.
Tls. m. c. Tig. m. c. Tls. m. c. Tls. m. c.
31st March 1.6.6 to 2.0.0 1.4.5 to 1.6.0
2nd July 1.5.8 to 1.9.4 1.3.5 to 1.5.2
6thOetober 1.6.4 to 1.9.0 1.4.1 to 1.5.5
29th December 1.5.7 to 1.9.0 1.3.0J to 1.5.6
Imports having reached on the respective dates 944,000,—2,072,000,—
3,298,000,—and 4,280,000 pieces. The Collie failure had the effect of
slightly weakening prices in June, but, as the goods were, it may be
presumed, sent here to be sold, the worst that could happen would be that
they should be sold, and in a retrospect it is needless to attach too much
importance to an incident that created much stir at the time. 6-lbs,
Smrtings have been dealt in to an extent about equal to 7-lbs., and have
at length attained to the dignity of a regular quotation; the value at the
commencement of the year was Tls. 1.3.0 a 1.3.4; the highest range of


[ 74 ]
and receded to Tls. 2.3.5 a 2.4.5; thus being the only Plain Cotton that
could boast of an advance in valae at the end of the year. American
Drills were held for a long time above the views of buyers, but business
was done in the Spring at Tls. 3.4.7| for P.M.C.D., and Tls. 3.4.3 for
other chops; in July, prices receded to Tls. 3.3.0 for P.M.C.D.; in August
transactions were reported in the same chop at the same rate, and at
Tls. 3.2.6 a 3.2.8 for auction sales of damaged cargo. Pagoda chop, a
lower quality, was done at the same time at Tls. 3.2.5. The fabric then
became dull of sale, till late in September they were booked at 5 and 10
cents lower; the next month considerable transactions took place in
P.M.C.D.; at prices gradually declining to Tls. 2.9.2J, ex brokerage;
holders refused to go on at this rate, and subsequently rates recovered to
Tls. 2.9.5 and Tls. 3 per piece, which latter may be regarded as the
closing quotation.
In European cloth, the strange preference of the dealers for 14-lb.,
at only 2 a 4 candareens lower than 5-lb., deserves notice.
Sheetings.—Transactions were impeded early in the year for want of
stock of English; arrivals were quickly taken off at Tls. 2.9.0 a 3.0.2|;
but in July they receded to Tls. 2.8.0 a 2.8.7^, and were soon on
offer without finding buyers. Sales took place in the autumn at Tls. 2.5.5,
and at the close of the year quotations were Tls. 2.4.0 a 2.5.5.
Americans were sold early in the year at Tls. 3.7.5; but, in the autumn,
prices declined to Tls. 3.5.5, and closing quotations were no more than
Tls. 3.3.5 a 3.4.0. Imports of this textile were 152,000, against 27,000
in 1874; deliveries 103,000, against 79,000; and stocks 110,000, against
1,680 in the previous year.
Jeans.—The range of prices was as follows :—English commenced at
Tls. 1.8.5 a 1.9.5, advanced to Tls. 2.0.0 for the best, and then
deolined until touching Tls. 1.5.7 a 1.7.8, at which they remained at
the close of the season. Some business was done in Dutch at Tls.2.1.0 a
Tls. 2.2.0 per piece, quotations remaining at that figure the whole year
through. American Jeans have not been imported.
Fancy Cottons.—The trade in these cannot have been in any way
satisfactory to importers. The results were anything but encouraging, and
a very important falling off has to be noticed in deliveries, which were—
Oi In 1875 Against in 1874.
Dyed Shirtings 51,000 47,379
Spots and Brocades 77,700 94,000
Damasks, Dyed 16,500 20,540
Chintzes 174,700 210,182
Turkey RedShirtings 97,000 128,247
Velvets 52,600 47,267
Velveteens 15,700 11,868
Handkerchiefs 211,000 243,373
Muslins 39,000 38,017
Dimities 14,500 14,610
It will be seen that amongst the few articles showing an increase are
Velvets and Velveteens; the first of these were re-exported to Japan, to
the extent of 14,700 pieces, so that a decline on the consumption of this
country may be inferred. The statistical position of some of these fabrics
is, however, favourable, owing to moderation in imports. The stocks, at
the commencement of the years 1875 and 1876, were of


1875. 1876.
Brocades and Spots ................................. 31,000 Pieces 27,000 Pieces
Chintzes .................... 85,674 ,, 73,817 ,,
Handkerchiefs ... --- - - - 72,776 ,, 36,809 ,,
Muslims ................................................ 11, 100 , , 2,900 , ,
The course of prices has been, as a rule, against importers, although no
important changes have occured.
Quotations were for—
30th Dec., 1874. 29th Dec., 1875.
Handkerchiefs, Blue .............................. 0.4.5 a 0.5.2 0.4.8 a 0.6.0
Brown..... .... 0.4.0 a 0.4.2 0.4.0 a ...
WhiteSpot Shirtings.... ... 2. 1.0 a 2.2.0 2. 1.0 a 2.2.3
Dyed do. ..... ... 2.4.5 a 2.5.5 2.5.0 a 2.6.0
White Brocades........... - - - 2.2.5 a 2.3.5 2. 1.0 a ...
Dyed do. ................... ... 2.6.0 a 2.9.0 2.5.5 a 2.6.5
Dyed Damasks ................... ... 4 4.0 a 4.7.0 4.0.0 a 4.5.0
Gentiam Shirtings................ 2.3.0 a 2.6.0 2.2.0 a 2.2.5
Chintzes—Assorted... 1.2.5 a 1.4.5 1.3.0 a 1.4.5
Blue...... -- 1.2.0 a 1.2.5
Brown | 1.3.0 a 1.3.5 iº. i. 6.6
Scarlet................ . 1.4.0 a 1.4.5 l. 3.0 a 1.4.5
Printed Twills, 24 a 25 yards . ... 2.0.0 a ... 1.9.0 a 2.2.0
50 a 52 yards ..................... 3.7.0 a 4.0.0 4.0.0 a 4.4.0
Turkey Reds 2% a 31bs............. 1.7.0 a 2.0.5 1.6.0 a 2. 1.5
Do. Best............... ........... ... 2.3.0 a 2.3.5 2.3.0 a 2.3.5
Velvets—Black 22in. .............................. 0.1.8%a.0.2.0% 0.1.6%a.0.1.9%
Velveteens—Black 18in........ --- ... 0.1.4 a 0.1.5 0.1.2 a 0.1.5
26in. ....... 0.1.9 a 0.2.0% 0.1.9 a 0.2.1%
Blue Denims ...................... ... 0.0.3%a.0.0.6 0.0.4 a 0.0.5
Dimities, 37in. ........ 1.3.0 a 1.4.0 1.2.0 a 1.3.0
4lin. ........ ... 1.4.0 a 1.4.5 1.4.0 a 1.5.0
Muslins ................................................ 0.7.0 a 0.7.2 0.8.0 a 0.8,5
Woollens.—The most important feature of the Import trade in Woollen
and Worsted goods is the system of selling by auction, instituted in May,
1874, and which has received an important development in the year under
review. There are now two firms holding weekly auctions, the ranks of
the auctioneers having been joined by an importing house which offers
principally goods bearing the C.P.H. chop. At these auctions there
were disposed of
Bearing a proportion
to total deliveries of
Pieces. in 1875 against in 1874.
Camlets............. --- ...... 41,780 46.3% 48.22%
Long Ells ... . 31,200 33.3, 15.6 , ,
Sp. ś • - - - - - - - - - - - - - - - - - - - ......... 24,846 44.2, 25.5 , ,
Lastings ........................................ 8,140 17.4, ---
The quantities of other descriptions sold in the same way were
insignificant, but we place them on record. Of Mahommedan Cloths,
1,680 pieces were disposed of, and of Medium Cloth 228 pieces. Besides
these, a small quantity of Cotton goods found buyers at these auctions;
and for the purpose of future comparison, we enumerate them here.
Grey Shirtings to the extent of 226,300 pieces, or 6.9 per cent. on total
deliveries, passed into consumption through the medium of the hammer;
and there were knocked down—2,800 pieces of White Shirtings; 46,200


[ 76 )
pieces of T-Cloth; 920 pieces Domestics; 9,560 of Drills; 7,350 of
Jeans; and 1,160 pieces of Velvets. As regards Woollens, other
importers profess themselves unable to compete with the auctioneers.
Whether these latter are doing a profitable business is difficult to
determine; but as the prices thus obtained rule the market, the trade
appears to be gradually going into their hands. The result has not,
however, been to increase the trade in the goods, as the following
comparison in deliveries will show—
1875. 1874. 1873. 1872.
Spanish Stripes.................
Broad and Medium Cloths... : 89,000 97,000 96,700 ...
Camlets 83,066 81,420 77,130
91,000 120,000 126,000
40,000 51,000 26,000
Lustres—Plain and Figured.... 212,000 228,000 273,000 262,000
Stocks were mostly in a favourable position at the end of the year
—being in
1875 against in 1874.
i. Stripes ............................................... 4,596 10,574
Medium, Habit and Broad Cloths....................... 12,380 10,140
Camlets ......................................................... 16,930 21,960
Long Ells ....................................................... 9,553 7,010
L*tings ........ .............................................. 11, 101 12,410
Do. Crape.......................................... ..... 8,515 9, 170
Lustres–Plain................................................ 12,590 4,050
Do. Figured ............................................ 35,086 128,526
Do. Crape ....... - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 22,260 4,200
There has been little variation in prices; quotations were, on
30th Dec., 1874. 29th Dec., 1875.
Camlets, S.S................................ 13.0.0 a 13.5.0 12.5.0 a 13.2.5
Medium and Broad Cloths ............ 0.7.5 a 1.6.5 0.8.5 a 1.6.5
Spanish Stripes........................... 0.5.6% a 0.5.7% 0.5.6 a 0.5.8
Long Ells ........................ . ... 7.3.0 7.3.5 7.3.7
Scarlet CPH........................... : . 3.0 0, ... .3.5 a 7.3.7%
Assorted Do. .............................. 7.1.0 a ... 6.8.0 ---
Lastings.................................... 10.0.0 a 12.0.0 9.5.0 a 11.5.0
Crape Lastings...... .................... 4,8.0 a 9.0.0 4.0.0 a 8.0.0
Orleans—Figured........................ 2.8.0 a 4.5.0 2.5.0 a 4.0.0
Crape Lustres ........................... 3.4.0 a 3.9.0 2.9.0 a 3.2.0
It will be noticed from these figures, that the gain in consumption
as regards the only articles which show an increase in deliveries, over
last year, viz., Camlets and Lastings, has been at the cost of a
concession in prices. A feature in the Woollen trade worthy of remark,
is the increasing favour in which Cloth of German manufacture is held;
it seems to be gradually supplanting Russian cloth, owing to its greater
cheapness.
shares. Unsatisfactory as the year 1875 may have been to Importers and
Exporters, it has been still more so to holders of Shares, and nothing
short of disastrous to sellers.
The range of prices at the commencement must be considered to
have been moderate enough, looking to the intrinsic value of the
stocks, as shown by the published reports. Nevertheless, a severe fall
took place in most of them, during the course of the year, but the


[ 77 ]
somewhat unreasonable depression was recovered 'ere its close, and
quotations rose again to abont the level on which they started, while in
many instances the market showed a higher value. This result may be
regarded as of a very solid character, since speculation has been entirely
absent; and, in consequence, the market has accordingly suffered all
through from a want of buoyancy, which has pressed severely upon those
desirous of selling, or compelled to do so. The annual savings of
Foreigners in China, not engaged in speculative business, must, although
of late much diminished, still amount to a considerable sum; yet but
little fresh money has gone into shares. This is not owing to an
abundance of more attractive or lucrative opportunities of investment.
Neither land nor houses are easy to buy, and banks offer no more than 5
per cent. for fixed deposits, with the longest notice of withdrawal. Nor
has there been any important increase in the amount of that class of
investment offering a certain income and solid security, such as Municipal
Debentures and Government Bonds. Although the Chinese Government
was again a borrower, the loans were not offered to the public. The
Municipal Council offered a loan of small amount; a large proportion
of which, however, went out of China, home capitalists being prepared
to outbid local investors for this class of security. These latter must
inevitably, therefore, be thrown back upon the local joint stock
companies, which afford an ample field for judicious investors, as the
total paid up capital of the local stocks habitually quoted amounts to
more than Tls. 10,000,000. A review of their reports will show that they
have all been doing, if not a brilliant, at any rate a sound, business, which
pays expenses and leaves a small dividend to shareholders. The
dividends have not as a rule been such as investors in this part of the
world have been accustomed to expect; they are, however, quite as good
as could be obtained, in bad times, from similar property in other parts
of the world. Residents in China had better divest themselves, without
loss of time, of any lingering hopes that may be entertained that the
country will again prove an El Dorado to lucky adventurers; and settle
down to the conviction that here, as elsewhere, steady industry
and economical living are the only roads leading to competency and
riches.
It must be admitted that but little judgment has been shown by the
public of Shanghai in Share investments. The fact may be explained,
however, by want of familiarity with the subject. A Share market is an
institution of quite recent origin in Shanghai. It was not until six years
ago that a regular system of dealing in Shares sprung up at this port.
1ts organisation was speedily followed by a state of high speculative
excitement, based upon the most exaggerated estimates of the future
prosperity of the companies whose Shares were dealt in. The reaction
which set in four years ago has continued, constantly depressing prices
until the autumn of last year. Upon a review of the position of the
various stocks, no sufficient justification can be found for the excessive
depreciation. Although the different businesses which they were formed
to conduct, are experiencing the effect of dull times and dwindling trade,
they have succeeded in earning moderate dividends, and have fair
prospects for the future.


[ 78 ]
The year 1875 witnessed the entire extinction of one Company—
The North-China Steamer. Its sole remaining property (it conld scarcely
be called an asset), the steamer Yuen-tze-fei, was lost in March, whilst
returning to Shanghai npon the expiry of her Manila charter. The loss
was not inopportune, as it would have been difficult to have chartered
her again, and impossible to work her at a profit. The result was an
account rendered to the shareholders, showing an amount due to the
general agents of about Tls. 2,500, which was waived by the latter in
consideration of the long series of misfortunes of the former.
The present year will doubtless witness the removal from the Share
Lists, of quotations for the Union Steam Navigation Co., the Victoria
Fire Insurance Co., and the China and Japan Marine Insurance Company.
The first named is in the last stage of liquidation, present quotations
being only Tls. 3 per share.
Upon the failnre of Messrs. A. Heard & Co., the general agents, the
shares of the Victoria Fire Co. of Hongkong immediately took a start
upward; from $125 they advanced within a couple of months to $160
per share. As the funds of the Company are securely invested under
the control of the directors, the shareholders lost nothing of moment by
the failure of their general agents; and, as the assets when divided
promised a much more lucrative return than could be gained by carrying
on the business, the opportunity of liquidating offered an irresistible
temptation. A syndicate of shareholders rapidly acquired a sufficient
majority of votes, and the process of liquidating was carried out
without much opposition. The risks were all reinsured; but, as some
policy-holders were unwilling to surrender their policies, a portion of
the funds had to be retained until the termination of the risks.
Inspirited by the success of the Victoria Fire shareholders, a
majority of those in the China and Japan Marine Insurance Co. determined
npon pursuing a similar course. The business of this company, although
not disastrous, did not make a return to the shareholders at all, in the
opinion of the discontented majority, commensurate with the risks they
ran, nor, in fact, equal to an ordinary rate of interest on their capital.
The average dividend for a series of years was calculated at 6| per cent.
per annum, while, as the contributors had been getting hardly anything
at all, no elasticity in the business could be anticipated. Indeed, meagre
as was the return to contributors, shareholders seemed to think that their
interests had been sacrificed in favour of the former. A meeting was
held, in which liquidation was carried by a majority of votes, but the
directors strangely considered that it was their duty to resist the
verdict of a decisive majority. A series of adjourned meetings followed,
until at length the directors, after having in vain endeavoured to
reorganise the business on a mutual basis, gave way. The shares at
once advanced to $108, a price which still represents the popular
appreciation of their value. At the beginning of the year, the stock was
quoted at Tls. 77, but the prospect of liquidation caused it gradually to
rise to Tls. 91, and, upon a settlement of the question being arrived at,
to Tls. 108; as high as Tls. 110 having at one time been touched.
We will now to proceed to examine the position of the different
stocks.


C 79 ]
Hongkong and Shanghai Banking Corporation.—After the New-Year
holidays, business was done in Bank Shares at 2 per cent. prem., and it
is curious that they were at the same quotation at the end of the year.
In the meantime, however, very important fluctuations had taken place.
The appearance of the Report for the last half of 1874, speedily sent
prices down to 15 per cent., and 20 per cent., discount; the tendency
continued downwards, with occasional rallies, till Shares were parted with,
at 30 per cent. discount in August. The first half-year's report did not
give confidence in Shanghai, and, at the very low rates ruling during the
summer, our local holders parted freely with their Shares. It is believed
that some 10,000 Shares have been removed from the Shanghai register
during the year, leaving only the small quantity of 2,000 held here. A
very large quantity have gone to Europe, and it is said that two-thirds of
the stock stands on the London register. As the new shareholders are
probably more or less connected with the trade of China, it may be hoped
that this large export of the scrip will not injure the goodwill enjoyed by
the corporation as a local institution. The report under notice was more
favourably regarded at home, and under the influence of orders from
that direction prices rapidly advanced during September and October to
4 per cent. discount. Another rise was established at the end of
December—during Christmas week, 2 prem. was touched. The report
for the latter half of the year showed a profit on the working account
sufficient to pay a dividend of 3 per cent., the first since February 1874,
and to clear off all the losses carried to Contingent Account. The total
profits for the year amounted to $485,000, or nearly 10 per cent. on its
capital; $278,000 was carried to Contingent Account, making $1,393,000
absorbed by bad debts since 1873. The Directors state that all bad and
doubtful debts, old and new, are fully provided for by the amounts
retained in the Contingent Account, leaving the Reserve Fund ($100,000)
untouched. There seems no reason to doubt that the prospects of the
Bank are good, although the present market value of the Shares, as
compared with that before the report, indicates that the shareholders are
disappointed.
Shanghai Steam Navigation Company's Shares opened (in January
'75) at 78 ex div., and declined to Tls. 70; but, upon the publication of
the report for 1874, prices rapidly advanced to Tls. 84. The advance
was not long maintained, and quotations gradually receded to Tls. 60 in
August. The cause of this decline, the lowest point touched for nine
years, may be traced to a wide-spread impression that the Reserve Fund
was not securely invested and that the river traffic had greatly fallen off.
The first impression was not well founded, as it appears that Tls. 277,000
are invested in United States Bonds, held by Messrs. Baring, Bros. & Co.
on behalf of the Company, and Tls. 110,000 in the Hongkong and
Shanghai Bank. The second is unfortunately true enough;,but, as
notwithstanding the dull river trade, the Company has succeeded in
making seven per cent. on its capital, besides carrying Tls. 15,000 to
reserve, the excellent position of the S. S. N. Co., as regards connexion
and economy in working, should be apparent. The report for 1875,
besides the results just mentioned, shows assets of Tls. 126 per share,
after writing down the steamers to what the Directors consider a very


t 83 ]
surplus on "the working of 1875. Its business experienced an increase
during 1875, and the Directors state that it continues to augment
during the current year. Some considerable return is anticipated from
salvage claims. The company was dissolved by effluxion of time on 31st
Dec. last, but is carried on by general consent of the shareholders. The
reserve fund remains at $51,000, making the value of a share $234,
whilst quotations have ranged from $188 to $220.
Union Insurance Society of Canton.—The report of this office for
1874 was published last September, and disclosed a total net premium
income for that year of $773,648; the claims paid were unusually heavy,
leaving only $27,000 to be divided as profits. The working of the first
half of 1875 was more satisfactory, since the accounts showed a profit, as
far as could be ascertained, of $311,958.
Besides the Marine Insurance Offices we have already mentioned,
there is the Canton Insurance Office, of which no particulars are published.
—The Chinese have also established a Marine Insurance Office of their
own. It is in connection with the China Merchants' S. N. Co., and has a
paid-up capital of Tls. 200,000; claims are to be regulated according
to the practice of English average customs. The establishment of every
native association for trading purposes is looked upon with jealousy by
many foreigners, who appear to doubt the capacity of Westerns to sustain
competition with the Chinese in any branch of trade in which the latter
may engage. There are others, however, who are ready to welcome
every effort on the part of the Chinese to conduct their business in
foreign fashion, as likely to improve our mutual relations, and tend to an
increase of trade between us. This company takes a line of a certain
amount upon every C. M. S. N. Co.'s steamer that leaves the port. Its
total business amounts to some Tls. 5,000 per month, whilst the aggregate
premium income of all the foreign local marine insurance offices, referred
to above, reaches a sum of Tls. 3,000,000 a-year.
Hongkong Fire Insurance Co. quotations opened at $530, and advanced
to $537-| cum dividend; after payment of the dividend of $51, the
shares were quoted at $500, from which they fell to $470, the lowest
quotation for this stock for five years. Nothing but scarcity of money, or
profound distrust of shares as investments, can account for this
extraordinary decline in a stock, the reserve fund of which has been
increasing year by year, which has not paid less than nine per cent. on its
market value, and the business of which is sufficiently large to enable it to
sustain losses of considerable magnitude without affecting its satisfactory
progress. The report for 1875, recently presented to the shareholders,
showed that the business of 1874 left a net profit for that year of
$187,700; which was appropriated of paying a dividend of $46.19 per
share (or $23 per cent. on paid up capital), a bonus to contributing
shareholders of 21.273 per cent. on contributions, and adding to reserve,
$55,428, increasing it to $507,202. The working account for 1875 showed
a balance of $218,624 in favour of the company, of which $20,000 has
already been lost. It will require losses of $38,000 more, falling upon
irsks belonging to 1875, to reduce the next dividend to 8 per cent. on the
present market price. The value of the assets of the company were equal
to $453| per share at the close of 1874; calculating 80 per cent. of the


[ 88 ]
could exact what price be pleased, and thus the market was raised Tls. 50
or more in a day on a single small transaction.
.It is to be hoped that the losses of last September will check this
class of business, or that commission buyers here will agree not to hold
themselves responsible for not buying for unlimited orders, if in their
judgment their so doing would unreasonably excite the market. This
would not entail much loss of buying commission, as the quantity ordered
without limit on an excited market is almost always small, and these
trifling orders are often sent merely as a bait for consignments.
The extraordinary prices now established showed a total rise from
opening rates of Tls. 300 a 360 per picul, or about 100 per cent., and were
the highest Tael quotations ever known in Shanghai. There had been
considerable speculation during this great advance, both among foreigners
and Chinese; results to the former had been uniformly profitable, but
few of the latter were prudent enough to sell out in time, and many of
them must lose very heavily on the Silk which they bought at this
extreme point.
The enormous increase in the value of Silk of course attracted every
bale which could be bought in the country. Common and coarse Taysaam
of all classes, Silk of previous seasons' crops, Yellow and Wild Silk, were
all poured into Shanghai. Chinese consumption was curtailed to supply
the export demand, and it became evident that, instead of 55,000 bales,
the quantity to be sent forward must be fully 75,000 bales. Raw Haining
Silk, which had disappeared from our export for two years, began again
to come to market, its value in Europe having increased by 100 to 150
per cent.
Notwithstanding the rapidity with which Silk was sent forward,
arrivals from the country were on so great a scale that there were still
18,000 bales in stock here in the first days of October. Then an abrupt
stop was put to buying by telegrams announcing that the European
markets had collapsed, under the fear of war and the altered prospects of
supply.
During the whole of October and November, business was almost
entirely suspended. In the closing month of the year, it has been
resumed on a moderate scale at Tls. 100 to 180 below the prices of
September. The year closes with the heavy stock of 20,000 bales unsold
in Shanghai, and with apparently every prospect of a further decline in
prices.
The following is the export to various markets, as compared with the
previous season :—
To England. To Continent. To America.
1876—June 1 to Dec. 31 23,431 bales. 83,913 bales. 2.345 bales.
1875— „ , 20,680 „ 29,109 „ 5,301 „
It will be noticed that the proportionate quantities sent to England and
to the Continent of Europe do not vary materially, while the export
to America shows a heavy falling-off. The American Silk-dealers unfor-
tunately sold a large part of their stock to London speculators early in
the rise; and as the re-reeled Silks which they chiefly use do not come to
market for a month or two after the opening of the season, they were


[ 90 ]
produce also found purchasers. The business of this month and July was
probably about evenly divided between American and English buyers.
During the latter part of July a considerable business continued to
be transacted in Ping-sueys, principally for shipment to England, at
gradually declining rates, until they touched a point about on a par with
the quotations existing at the corresponding period of the previous season.
One chop of Tienkai, Wo Hung by name, was settled at an exceedingly
high price, Tls. 37, and the harm done to the market even by an insig-
nificant quantity by this indiscreet action is scarcely to be over-estimated.
August was quiet until about the 23rd, the great advance in
Exchange having reduced transactions to the narrowest limits, and
almost the only business done was in Fychovv, two or three chops of which
were settled at Tls. 24 a 25. During this period of comparative inaction,
Teamen continued firm holders, and demanded a price as high as Tls. 34
a 36 for their best Tienkais, which was one much beyond the ideas of
buyers. Musters of Moyunes began to arrive, but few we.re shown on
the market. In the last week of this month large purchases of Ping-
sueys were made for the English market. The Teas were principally
common and good medium kinds, and showed some decline on previous
values. Concerning the quality of the New Tienkais and Moyunes, we
can say little in their favor. It was thought and hoped that the bad
results in the home markets (brought about in a great measure by the
wretched quality almost from first to last of the Moyunes and Tienkais
of the previous season), would have made themselves felt to the Tea
Hongs, and from them to the producers, and brought about some improve-
ment under this head.
We regret to state, however, that the lesson appears to have been
very nearly thrown away upon the grasping native, for the produce of
this season scarcely showed any improvement upon that of last. Indeed,
some Moyunes bearing well known names were simply wretched in quality,
and a disgrace to their makers. It is a matter of no wonder that, when
such produce reaches America, buyers there universally condemn such
manifestly "scamped" productions, and sigh for the honestly made
Moyunes of twenty years back. The American trade is perfectly sound-
upon that point, and the lessened shipments of Foochow, Oolong, and
Shanghai Green Tea year by year augur distinctly the practical extinction
of the trade within a very few years, unless some great and unlooked-for
improvement takes place in the manufacture of the article. In the early
part of September a moderate business was transacted. Two chops of
Tienkai were taken at Tls. 32| to Tls. 33, and further transactions were
afterwards reported in the same class at from Tls. 28 to Tls 32. It was
not until the middle or end of September, however, that business became
pretty general, and a decline in the Tael price, in conjunction with a
lower exchange, brought about this. The lowest cost purchases of the
season were made during the middle of this month, and as the end
approached Teamen became firm holders, and demanded and obtained an
advance of fully two Taels on the earlier purchases. The Bengal, the
first direct steamer for New York, cleared on the 19th Sept., at which
date the Olenartney, for the same destination, was also reported fully
engaged.


[ 92 ]
sooner shippers realise this great fact the better for themselves. The
Japan trade is growing rapidly. A few years back the export for the
entire season amounted to only 8,000,000 lbs., whilst last year the figures
assumed the large proportions of 25,000,000 lbs. The supply of Green
Tea from China a few years ago, was as much as 32,500,000 lbs. This
year it bids fair not to exceed 25,000,000 lbs., of which possibly nearly
two-thirds will be shipped to America and the remainder to England. It
will be thus seen that the one trade is a rapidly growing one, whilst the
other is languishing, and has for years been a steady source of loss to
those engaged in it.
Fiece Good«. It is long since we have had to record a year which has been
on the whole satisfactory to importers of textile fabrics. The position of
most of these articles of import was favourable enough at the beginning
of the year, and the results would probably have been much more satis-
factory had it not been for a very powerful disturbing element—the
violent fluctuations in Exchange. Importers speedily lost all confidence
in the value of Silver, were afflicted with a mania for remitting at any
rate which bankers might offer, with hardly an attempt to extort at least
the laying down cost of silver remittances, when it was obvious enough
even to the most careless observer that bullion was scarce and hardly
procurable, besides being urgently needed. Instead of making sales on
the customary terms for delivery, and waiting for an opportunity of
availing of the urgent needs of the foreign banks, which have been for
the most quite bare of silver, the general plan has been to press sales for
cash, an operation that can, for the most part, be effected only at a
sacrifice, and to hasten to secure bank drafts quite irrespective of the
supply of covering remittances available to bankers. These latter, although
absolutely without silver, or borrowing the metal from the native banks
at exorbitant rates of interest, from 7\ to 30 per cent. per annum, took
advantage of this ill-judged eagerness to lay money down at very favour-
able rates compared with the concurrent quotations of Silver at home and
the expenses of laying it down. In former times, the import of goods was
regarded in a great measure as a means of laying down funds for the
purchase of exports. Now, a number of banking institutions which bring
but little capital into the country levy a tax upon the proceeds of imports,
which are paid for by Chinese bank orders, which become available in
payment for exports drawn against under documentary credits. The
trade in imports is to a great extent dissociated from that in exports,
and it is doubtless inevitable that it should be so generally; but in an
exceptional state of things such as has prevailed in 1876, it is desirable
that some discretion to remit in produce should be allowed. So far as
China is concerned, Silver has not depreciated, as many remitters have
found when purchasing articles of export other than Silk.
In fact, as far as imports are concerned, Silver may be considered to
have been appreciated in value; the available supplies were inadequate to
the wants of trade, and prices must have shrunk accordingly.
There can be little doubt that demand for consumption was much
restricted by the scarcity of money in this place, which, it cannot be
disputed, is the commercial metropolis of China. Nor can this scarcity
be attributed entirely to the unusually large quantity of silver required to


[ 95 ]
year were Tls. 2.0.0 for 9 lbs. to Tls. 2.6.0 for Dewhurst's Best 10 lbs.,
rose to Tls. 2.2.0 a Tls. 2.8.5 in March, and sank at the close of the year
to Tls. 1.8.0 a Tls. 2.45.
T-Cloths.—A slight increase over 1875 in deliveries has to be noted,
the total being 2,748,897 against 2,620,000 in the previous year. Imports
were 2,820,688 against 2,790,274 in 1875; stocks, 31st December, 1876,
841,200 against 779,530 in 1875. Prices have followed the course of
Shirtings, but the rise was not so marked, and the fall has been more so;
quotations showing a decline of about 20 per cent. during the whole year,
and about 30 from the highest point; with the exception of best 8-lbs.
cloth, in .which the depreciation is much less.
White Shirtings have been in steady demand, total deliveries being
nearly the same as last year—viz., 612,069 pieces, against 621,000, in
1875; imports having been 619,702, stocks have naturally hardly varied,
being now 128,800 pieces. This steadiness in demand, however, has been
accompanied, and perhaps maintained, by an important fall in prices,
amounting to about ten per cent. since the beginning of the year. As
Grey goods were quoted in Manchester about the same at the latter
period as the former, whilst exchange is only about one per cent. in
favour of remitters, the article would appear to be in an unfavourable
position, and an exhibition of firmness on the part of holders seems called
for. About half of the deliveries go to Tientsin, and the famine in the
North has doubtless told against results of shipments thither, although it
has not against their bulk. Prices for 64-Reed were at the commence-
ment of the year Tls. 1.8.5 a Tls. 2.0.0, rose to Tls. 1.8.5 a Tls. 2.0.5, and
declined to Tls. 1.5.5 a Tls. 1.8.0, the closing and lowest quotation.
Drillings.—A very large increase in imports and deliveries, amounting
to about 50 per cent., is to be noted in Drills. The American fabric has
again taken a very large share in the trade. It is not supposed that the
results are remunerative, but it is well known that the production, stimu-
lated by protection, of cotton mills in the United States is too great for
home consumption, and markets have to be found elsewhere. To such
considerations, rather than to satisfactory account sales, may be attributed
the large quantity of American Drills and Sheetings now appearing on
this market. In these goods, as in all other cotton fabrics, the difficulty
in China is not to do a large trade, but a profitable one. If the goods are
sent here, they can usually be sold—at a price.
Deliveries of all kinds were 1,297,890 pieces, against 741,941 in 1875,
imports 1,171,207 against 716; whilst stocks are 152,500 against 289,187
in 1875. The course of prices has been as follows :—
1st Jan., 1876. 31st Dec, 1876.
T.m.c. T.m.c. T.m.c. Tjn.c.
American 15-lbs 3.0.0 nom. 2.7.0 to 2.9.0
Euglishl4al5-lbs 2.1.8 to2.3.5 1.8.0 to 2.0.0
„ finetofinest 2.4.0 „ 2.8.0
Dutch 13 a 141-Idb 2.3.5 „ 2.4.5 2.0.0 to 2.2.0
Highest. Lowest.
American 3.1.0 to 3.2.0 2.6.5 to 2.7.0
English 2.1.8 „ 2.3.5 1.8.0 „ 2.0.0
„ fine to finest 2.4.0 ,, 2.8.0 2.2.5 „ 2.4.0
Dutch 2.3.5 „ 2.4.8 2.0.0 „ 2.2.0


[ 97 ]
Woollens.—The trade in these goods continues to dwindle away; and
an increasing share of it falls into the hands of the auctioneers. These
enterprising merchants sold of the following goods n 1876 :—
Bearing a proportion to
total deliveries of
Pieces. in 1876 against in 1875.
Camlets 44,690 56 % 46.3 %
LongElls 23,920 26 „ 33.3,,
Spanish Stripes 32,772 53 ,, 44.2,,
Lastings 3,740 8.79,, 17.4,,
In proportion to the total deliveries of these kinds, the auction sales this
year were 38 per cent. all round, against 33 per cent. in 1875. An
increasing quantity of Cotton Goods are sold in the same way, notably
Grey Shirtings, of which 566,150 pieces were knocked down, being a
proportion to total de- liveries of 11.63 per cent. against 6.9 per cent. the
previous year.
Deliveries for the year have been of
Pieces. Against in 1875.
Spanish Stripes .. )
Bni and Md...". \ 97,937 89,000
Cloths )
Camlets 80,299 92.400
Long Ells 91,520 90,000
Lastings 42,558 47,000
Lustres, Pin. & Fig. ..... 167,107 212,000
Showing an increase of the most trifling description in Long Ells, and one
of about 9 per cent. on Cloth, which may be attributed chiefly to an
increase of the German article, which is mostly a mixture of Cotton and
Wool. The decline in this trade is probably to be accounted for by
cheapness and abundance of the raw material here. Wool of different
descriptions is now being exported to England from the North of China,
which indicates that it is cheaper here than there. Prices show a decline
upon the whole during the period under review. They were on
1st Jan., 1876. 30th Dec., 1876.
Camlets Tls. 12.5.0 a 13.5.0 12.2.5 a 13.0.5
Md. and Bd. Cloths „ 0.7.5 a 1.6.5 0.7.0 a 1.4.0
Sp. Stripes „ 0.5.64a 0.5.7*0.5.2 a 0.5.8
Long Ells Scrlt. C.P.H 7.3.0 6.8.0
Do. Assorted „ 7.1.0 6 8.0 a 7.2.0
Lastings ,, 10.0.0 a 12.0.0 8.7.0 a 12.2.0
Crape Lastiugs „ 4.8.0 a 9.0.0 4.0.0 a 8.0.0
Orleans, Pig „ 2.8.0 a 4.5.0 2.5.0a 3.6.0
Crape Lustres 3.4.0 a 3.9.0 3.0.0 a 3.5.0
Stocks are reduced to a very small compass indeed; it is useless to give
any figures; the Chamber of Commerce stocks are not an absolutely
trustworthy guide to them, because it is known that large quantities of
goods are held by Chinese under their own control, and are not included.
On the other hand, so many tricks have been played in the matter, that
we are not much inclined to. take it as an absolute fact that there are
10,000 pieces of Figured Orleans in stock, when statistics require none
at all.


[ 98 ]
1877
Piece Goods. ^ few words upon the Chefoo Convention in its bearing npon
the commercial relations of foreigners with China will not be out of
place by way of introduction to this Retrospect; the more so because our
remarks will be a narration of facts rather than a disquisition or
dissertation upon the wisdom which framed the Convention, or npon its
suitability to foreign wants.
The points of the Convention that more immediately affect foreign
manufactures are—
First.—The opening of sundry ports on the great River Yangtsze
and elsewhere on the coast of China.
Second.—The tax lekin and its abolition; and
Third.—The Inland Transit question and its adjustment.
The foreign merchant has waited long and patiently for the attain-
ment of these objects. In his opinion they are essential alike for the
successful development of his trade with China, and for the amelioration of
the Chinese people themselves; and now that their importance has been
acknowledged, and the acknowledgment has received embodiment in
Treaty documents, it will rest with the future to determine whether the
results are to equal expectations.
The ports that claim Shanghai as their fountain-head, or distributing
centre, are, primarily, Wenchow in Chekiang, and Wu-hu in An-hwei;
and, subsidiarily—throngh Hankow—Ichang, in Hupeh, which last place
has now, though almost in name only, displaced Hankow as the terminal
point for the foreign navigation of the Yangtsze.
The opening of these places, thus far, has not been productive of much
benefit to any one. Still, in the opinion of the Committee of the Shanghai
General Chamber of Commerce, that achievement should be accepted as
a step in the right direction, forming as it does "the one valuable
"stipulation in the whole Convention," for, "instead of assuming that
"foreign intercourse with China is an evil that requires to be guarded
"against," H.B.M.'s Government, through "the Convention, has
'' virtually acknowledged that it is a good which requires to be cultivated,"
and this same acknowledgment has been hailed by most commercial men
connected with China with the liveliest feeling of satisfaction.
Second on tbe list comes lekin, the most convenient and most
expansive of all Chinese taxes. It is leviable at all times and under every
conceivable pretence. In one form or another it is welL-nigh universal in
the land. Ostensibly it is made to do duty "for the support of troops (or


[ ioo ]
"interior" as meaning anywhere beyond the boundaries of those Settle-
ments, and in the clause "but this immunity from taxation applies to
"foreign goods only while in the foreign Settlements;" and they
threatened to migrate in a body to the more favored Settlements if they
were not put upon a footing of equality as regards taxation—lekin or
otherwise—with their brethren already domiciled herein. Nor was their
threat ineffectual. Feng had to make a virtue of necessity. He con-
sented to the admission of foreign manufactures into the city and its
suburbs, free from any charge for lekin.
At Wenchow, however, where public opinion is less pronounced, lekin
is a plant of extraordinary luxuriance. There the Collectors bask
in the sunshine of prosperity and power. They permeate everywhere.
Nothing escapes them. The treaty-protected establishment of the for-
eigner is scarcely safe from their visits; and his trade, which was giving
forth fair signs of promise, has been strangled.
And at Newchwang, the lekin proclivities of the authorities have
lately shewn signs of a vigorous life. Moreover, they are so comprehensive
there that "neither natives nor foreigners can evade the impost." With
manufactures, therefore, the only method to "induce sales is to guarantee
"the extra squeeze." *
From Wuhu we have not received any complaint, because, perhaps,
there is as yet no "special" correspondent located there to chronicle
passing events; and, for a length of time past, the other Outports have
been dumb on the subject of lekin, possibly from a feeling that their
grievances were not more likely to be attended to under the Convention
than they were before. But, doubtless, the officials of other districts cling
as fondly to their perquisites as do those at the stations named above, and,
if the collection of these in the old-fashioned way is denied them, there
are other means within their reach, whereby they not only silence public
outcry, but make things minister to their needs.
In evidence whereof let us examine
Third, the Inland Transit system, the adjustment of w hich is
supposed to be fixed by the Convention. Hitherto, the ntmo81 that
can be said of the clause dealing with Inland Taxation is, that
it operates as a check upon the rapacity of the local officials. Nothing
more. The Mandarins quietly evade the foreign arrangement, and
in this they carry with them the consent or approval of the native
merchants. But these latter need not be taken into consideration in
connection with the working of the Treaty, since they invariably,
and most naturally, favor most the system which most favors them, and
this the evasion undoubtedly does. Take, for instance, the trade
between Shanghai and Soochow. There is an agreement (so merchants
say, and they ought to know) between the dealers and the Soochow tax
farmer, whereby the sum of Taels 13,000 per annum is guaranteed to him.
That is shared by him with his fellow in Shanghai; and if the
receipts for inland taxation—based upon the following tariff—exceed that
amount, the surplus is to be returned annually, fro rata, to the various
contributors, of whom and of whose contributions an accurate account is
Btuh Brot.' circular of 20th Docember, 1877.


[ ioi ]
kept by an officer appointed for the purpose. The tariff may thus be
summarised:—
y.»». c
Shirtings—Grey and White, Drills, Jeans, and 36-in. T-ChtJis 0 0 5 per pes.
T-Clotlis—32 in., Chintzes and. T. Red Cambrics 0 0 4
Shirtings—Dyed, Spots and Brocades 0 0 6
Velvets and Velveteens 0 13
Spanish Stripes 0 3 3
Medium and Broad Cloths 0 4 3
Lastings (Woollen) 0 15
Lustres, of all kinds 0 10
Camlets 0 3 5
Long Ells 0 14
of Soochow currency, which is at a premium of 2 per cent. upon the
currency of Shanghai. Some of these charges exceed the half import duty
fixed by the Treaty and the Convention, but all become modified when
taken in connection with the return of surplus above-mentioned. More-
over, in cases where no commutation obtains, such as hence to Kiahing,
Hoochow, Hangchow, &c., the Taotai at Shanghai, through his own
office, issues Transit Passes on Treaty terms (half import duty, which he
appropriates and probably shares with the various officials in the interior)
that are just as effectual, and far better respected at the barriers than are
those which bear the seal of the Foreign Custom House; and thus the local
official triumphs, fills his own coffers, and wins golden opinions from his
countrymen. And if such things are done under our own eyes, is it
unreasonable to conclude that the same system of evasion is successfully
practised elsewhere? Nor can such arrangements any longer be objected,
to as detrimental to foreign trade, inasmuch as they press more lightly
thereon than has any other plan yet devised, or likely to exist under the
present fiscal constitution of China;—and before any radical change in
that takes place, China must pass through seas of trouble, trouble that will
shake the foundations of her Empire. The cry of the foreigner has ever
been directed against the Mandarins, their insatiable greed, and their
pig-headed obstructiveness;—but has it ever occurred to him that those
worthies have, all along, been struggling for only that which by right o£
purchase belongs to them—the inland taxes of their respective jurisdic-
tions—and of which the centralisation or Treaty scheme directly robs
them? And is it surprising that they should continue inimical to a
system which threatens their ruin? Many years ago, when reviewing
the foreign Piece Goods trade of Shanghai, we wrote that any system
of inland taxation—no matter how wise or light it might be—that
excludes the local and provincial authorities from receiving and
sharing its revennes, would not prosper; and everything that has
happened since then has gone to confirm our opinion. "Indeed, the
"provincial authorities are recognising the necessity, if they would retain
"the control of this portion of the revenue, of reducing their local
"imposts to about the level of the Treaty Transit Due; for where this is
"the case the merchant prefers to pay the slightly higher lekin in order
"to avoid petty annoyances and delays to which the Barrier Officials,
"exasperated on finding the dues already paid, can always contrive to
*


[ 105 ]
offered upon this market in the spring and summer of 1876, was refused
hy the dealers because of the discoloration or red mildew that appeared
in the cloth. Now this red mildew has been unnsually prevalent hero
during the last season, and it has been very heavily discounted by the
natives, who say that its oils or producing elements prevent the cloth from
taking on their vegetable dyes so readily and evenly as do ordinary
sea damages, or even as do goods that are slightly tainted with
mildew fungus proper. That may or may not be true, but we have the
authority of the Customs "Reports on Trade in the Treaty Ports in China
for the year 1876 " for saying that there is a growing preference amongst
the natives for their own cloths, and, to quote the words of the Acting
Statistical Secretary, Mr. Hippisley, "this preference has, undoubtedly,
been increased, to no inconsiderable degree, by the distrust entertained
regarding foreign cloths which has been engendered by the wholesale
adulteration of these productions on the part of the Manchester manu-
facturers."
But while condemning the vicious practices of the home folks we
should listen to the plea they have to urge in their justification. We
should not ignore the fact that it has paid them better to adulterate than
to be honest. In other words, filled stuffs, because of their comparative
cheapness, have until quite recently been preferred by the Chinese and
Japanese, with whom honest cloths have been altogether at a discount.
The American manufacturers, who—and to their everlasting honor be it
spoken—have steadily set their faces against extra sizing, adulteration,
and those, to us unknown, chemical adjuncts that promote weight,
mildew, &c. can in their own experience testify to the truth of this.
Their trade with China has lately expanded in a wonderf ul manner, but
it has not by any means been a profitable business, and those engaged in
it have received but a small modicum of encouragement to carry it on;
unless, indeed,inducement be found in the facts that the output of the Amer-
ican mills is overrunning home consumption, and that the markets of North-
ern China offer a readier sale and better terms for a portion of the surplus,
than do their other dependencies. In this matter of adulteration,
therefore, the Chinese are not altogether blameless. It is impossible to say
what might have been, had the natives never been treated to filled goods;
but such manufactures did come, and the taste for them was created;
hence the origin of the evil, and its continuance. The great injustice
in the business is that innocent importers in China, and innocent owners
wheresoever situated outside the Manchester warehouses, should bo
saddled with the whole loss, and that redress should be so obstinately
denied to them. Consequently the thanks of all such have been earned by
Mr. Provand for the resolute stand he has made, which—if it do
nothing more—will probably determine once for all who has to bear the
loss, and will enlighten us on many points connected with the process of
doctoring on which we have hitherto been in "outer darkness."
On the 20th April, 1877, attention was directed in The Shanghai
Trade Report to the expansion of the American soft goods trade
with North China, and to the importation by the Americans of a new
fabric—termed Continental Sheetings—bearing a close resemblance to
English made Heavy Shirtings. Upon their own terms the Chinese took
s


[ 107 ]
Hippisley's theory falls to the ground, and we are as far as ever from the
solution of the mystery which enshrouds our import trade in Piece Goods.
It must, however, be very gratifying to the American people to find
that, notwithstanding the unsatisfactoriness of their trade pecuniarily, the
outlet for their Domestics in China is extending so rapidly—to find that,
in spite of famine, taxation, and the many other obstructions against
which foreigners in this country have to contend, the offtake by China of
their manufactures is increasing, while the consumption of China's own
productions, and of others of the same genus—the products of English
industry—is falling off. After all, may it not be found that honesty is
the best policy, and that a perseverance in their past and present course
of action may yet land the Americans on the safe side of values also?
Sterling Exchange has not seriously affected the action of Piece
Goods importers during 1877. The excitement prevailing and the high
rates current at the close of 1876 continued, but with a slackening and
downward tendency, until the beginning of March; after which and
throughout the year the fluctuations between 5s. 6d. and 5s. 4d. per Tael
for Bank Draft at 6 months' sight on London were very trifling. At the
same time, what between the outbreak of the Russo-Turkish war, the
uncertain condition of Frenoh politics, and the, in a great measure, con-
sequent depression in onr Silk market, the Indian Famine and Exchanges,
etc., people were often very anxious; and. their anxiety occasionally
resulted in sales which certainly had an air of foolishness about them at
the time, and which, not infrequently, were received in anything but a
contented spirit at home. Read by the light of subsequent events, how-
ever, the sales were seldom far wrong; and the bewildered, timid China
merchant, whom the retrogressive course of the market, and sometimes
of exchange, had set upon the highest pinnacle of indifference, was enabled
to smile at the ravings of his disappointed constituents.
One word more! How has it fared with the native traders in Piece
Goods during 1877? To this question the answer is, not very well. It
has not been all plain sailing with them any more than it has been with
the foreign merchants. At the beginning of the year, being filled to
overflowing with goods—85-lb. Grey Shirtings principally—forced upon
them by the auctions, they sustained heavy losses through untoward
markets and depreciation by mildew; and in their subsequent efforts to
recoup themselves they were not invariably successful, notwithstanding
that their efforts embraced other articles than those which inaugurated
thoir misfortunes. Except on two or three occasions (settling times),
money has been comparatively easy amongst them at this place, but its
abundance and cheapness here have been counteracted and rendered
inoperative by the dearth of it in the consuming districts and by the
numerous banking failures in the interior, as also by the condemnation of
the small Copper Cash currency and consequent advance, all over the
Empire, in the value of the large or officially sanctioned coin. Indeed,
things generally have combined to frighten our dealers, to kill the spirit
of speculation within thom, so to speak; and their continued wail has been
of the unsatisfactory state of trade throughout the country. Individuals
there are, whose accounts will shew up fairly enough at the close of their
year, but these are they who possess a good command of ready money,


[ 116 )
per yard for ordinary Lie Woman quality, and the bottom Tl. 0.14% per
yard was touched in November. The average value of the year was
about Tl. 0.1.5% per yard. Stocks on 31st December, 11,267 pieces.
In regard to the other articles of Fancy nomenclature, it is not
necessary to say much, beyond the tale told by the statistics attaching
to each. That reads as follows:–
1875. 1876. 1877.
Pieces. Pieces, Pieces.
Chintzes, ........................ offtake............... 174,700...... 162,700...... 125,000
Brocades and Spots, ......... do. .............. 77,700...... 51,800...... 39,500
Damasks, ........................ do. ............... 16,500...... 14,000... ... 12,800
Dyed Shirtings, ............... do. ........... ... 51,000...... 37, 100...... 21,246
Velveteens, ..................... do. ............... 15,700...... 11,900...... 11,386
and so on.
The diminution which these figures depict is of itself serious enough,
but it becomes infinitely more so when taken in connection with the fact
that the supply has continued on a scale anticipatory, more or less, of a
better and larger business. It may be averred that in all this the consumer
has gained great advantages, but in the interests of truth it must be said
that there have been times when the native middlemen had better have
kept out of the business; the results of their purchases on the spot and
of their indents from home having, as a rule, been bitterly disappointing
to them. In fact, of the latter kind of transactions, there are at this
moment Chintzes and Handkerchiefs held by the natives, on which, unless
things change for the better, they stand to lose from 15 to 20 per cent.
In 1876, there was a good trade in Imitation Cashmeres, Printed
Twills, and some merchants were well repaid for their ingenuity in
catering for the tastes of our dealers; but these, in 1877, seems to have
gone the way of every other thing, and for a length of time past a selling
quotation for the article has stood out amongst the passing business like
an oasis in the desert.
WoollBNs.—The trade of 1877 does not present any new feature or
anything calling for extended comment. Of Spanish Stripes, Medium
Cloths, and Lustres—plain and craped—the clearances are less than they
were in 1876, but those of Camlets, Long Ells, Lastings and Figured
Orleans are larger; totals being as follow :—
1876. 1877.
Pcs, PCs.
Camlets ................. ........................ 80,800 ........ ... 88,300
Long Ells ....................................... 92,100 ............ 96,600
Lastings ............... ........................ 42,700 ............ 45,900
Lustres–Figured.............................. 128,700 ............ 141,000
, Plain.................................... 25,400 ............ 16,200
2, Crape ................................. 13,355 ............ 9,600
Spanish Stripes................................. 61,600 -- - - - - - - - - - - 46,700
Medium Cloths................................. 36,400 - - - - - - - - - - - - 32,200
the income all the while being fully commensurate with the outgo.
We have had a highly sensitive market throughout the year, and we
shall see a continuance of violent fluctuations unless a little more


| 119
|
Table A.—DELIVERIES of PIECE GOODS through and from Shanghai
for the years 1875, 1876 and 1877 –
Grey Shirtings......... - - - - - - - - - - - - - - - - - - - PCs.
T-Cloths ......... • * * > y
White Shirtings ... • * * * *
Drills, all kinds ................................. 9 x
Jeans, > * --- ------------------ 3 y
Sheetings, , , ...... - - - - - - - - - - - - - 22
Dyed Shirtings ................................. 3 *
Brocades and Spotted Shirtings, White , ,
> y Dyed... ,
2 3 y
Damasks, Dyed ............................ ... 3 x
Chintzes .......................................... • ?
T. Red Shirtings................................. x 5
Velvets.................................... ....... 3.2
Velveteens ....................................... 3 *
Handkerchiefs ................................. l).oz.
Muslims ...... ... Pcs.
Dimities ......... • - - , ,
Spanish Stripes ...... .................... .... * *
Médium and Broad Cloths .................. 22
Camlets, English and Dutch … ',
Long Ells........ ......................... • * * > *
Lastings ............ - - - - - - • * * * >
Crape Lastings ... 2 x
Lustres, Plain......... y
,, Figured 3 y
,, Crape 3 *
1875,
4,554,000 ...
2,405,000 ...
619,000 ...
742,000 ...
346,600 ...
90,800 ...
42,000 ...
77,000 ...
18,000 ...
180,000 ...
94,000 ...
54,000 ...
14,000 ...
211,000 ...
40,000
14,500
54,300 ...
31,000 ...
85,000 ...
93,700 ...
45,900 ...
11,900 ...
28,000 ...
177,300 ..
29,000 ...
.
1876.
4,876,000 ...
2,764,000 ...
612,400 ...
1,301,000 ...
326,000 ...
149,000 ...
37,000 ...
41,800 ...
14,000 ...
162,800 ...
94,400 ...
61,700 ...
11,900 ...
209,000 ...
58,700 ...
11,900 ...
61,600 ...
36,400 ...
80,800 ...
92,100 ...
42,700 ...
5,500 ...
25,400 ...
128,700 ...
13,300 ...
1877.
4,370,000
2,301,000
578,500
947,300
268,400
255,214
21,400
39,800
13,800
125, 100
132,650
62,400
11,700
267,900
29,000
11,500
46,700
32,200
88,300
96,650
45,900
5,000
16,200
141,200
9,500
Table B.-IMPORTs of PIECE GOODS into Shanghai for the years 1875,
1876 and 1877.
Grey Shirtings ---
T-Cloths ....................
White Shirtings
Drills, all kinds
Jeans, 3 y
Sheetings, , ,
Dyed Shirtings y -
Brocades and Spotted Shirtings, White , ,
Dyed
3 * 3. 3 y * *
Damasks, Dyed ................................. 9 3
Chintzes .............................. - - - - - - - - - - - - 3 *
Turkey Red Shirtings .................. ... * >
Velvets....................... • * * * >
Velveteens ...... • * * > y
Handkerchiefs ... Doz
Muslims ............ ........Pos.
Dimities .......................................... 2 3
Spanish Stripes ................................. y 2
Medium and Broad Cloths .................. 2 3
Camlets ................................ ......... 2 o
Loug Ells................. 5 *
Lastings ................. 92
Crape Lastings
Lustres, Plain
9 y Figured
22 Crºpe....................................
1875.
4,280,047 ...
2 790,274 ...
666,571 ...
716,391 ...
496,906 ...
152,933 ...
72,938 ...
24,720 ...
46, 104 ...
15, 134 ...
159,921 ...
111,709 ...
55,010 ...
22,763 ...
181,702 ...
34,499 ...
9,380 ...
49,929 ...
35,841 ...
83,616 ...
92.676 ...
45,783 ...
5, 109 ...
42,687 ...
84,497 ...
19,263 ...
1876.
5,234,716 ...
2,820,938 ...
626, 199 ...
1, 172,967 ...
247,596 ...
115,320 ...
15,594
12,811 ...
43,577 ...
8,320 ...
112,670 ...
107,965 ...
49,878 ...
12,373 ...
195,081 ...
62, 123 ...
7,539 ...
60,627 ...
44,756 ...
71,648 ...
90,952 ...
38,329 ..
1,898 ...
20.243 ...
92,050 ...
3,563 ...
1877.
4,922,517
2,694,020
681,833
1,002,742
384,259
372,089
21,302
5,090
41,804
19,295
155, 112
111,238
67,970
15,350
562,855
33,089
5,549
50, 160
36 153
95,317
101,320
63, 100
6, 170
11,697
165,472
13,121


[ 121 ]
silk. It was natural that, after the excitement and exaggerated inflation of
1876, the succeeding year should be one of disappointment and depression
in the Silk trade. The years 1876 and 1877 have almost repeated the
experience of 1856 and 1857. In both cases, a sudden and great rise in the
value of Silk gave enormous profits to all concerned in the trade, which in
most instances were destined only to be swept away by the succeeding
reaction. The chief difference has been that in the earlier years the
fortunes of one season were lost in the next, while in the later the fluctuations
were both more violent and more rapid, the rise and fall, although belonging
to different years, coming within the limits of the same season.
Apart from the fact that Silk had risen to an unusually high point, the
causes of the recent great decline in value have been :—
The conflict between political parties in France, which for months has
paralysed her Silk trade;
The outbreak of war in Europe, which naturally stopped speculation on
all markets;
The increase in supplies for export from the East in 1876-77 over
original estimates, caused by the attraction of high prices, on which we
remarked in our retrospect of 1876;
And, lastly, the restriction of consumption resulting from high prices
and from the discredit thrown on Silk fabrics by increasing adulteration in
Europe. The falling-off in Silk consumption in England is shown by the
following figures of deliveries of China Silk from the London warehouses :—
In 1875 36,634 Bales.
„ 1876 33,837 „
„ 1877 22,032 „
From Lyons, accurate figures are not easily obtainable ; but the decrease
there appears to be even greater.
The increasing adulteration of Silk fabrics, which has been carried to a
great extent in Lyons, has had the natural effect of reducing consumption.
This subject has lately attracted much attention in Europe, and has been
fully discussed in numerous letters to the Times, and in a leading article in
that journal on 26th November last. If, as that article suggests, the
Legislature should interfere to prevent the further sale of " solidified dye,
supported by a slender frame-work of silken threads," under the name of
pure Silk Goods, we may hope that the result will be a healthier Silk trade
in the future.
The year 1877 opened with prices in Europe about 2s. below the
highest speculative point which they had touched three months before, the
London quotation for Blue Elephant being about 26s. The Shanghai
market was nearly on the same level, and the favourable position of
statistics (had consumption been maintained on its previous scale) led to a
considerable business here during January. This, however, was soon stopped
by the rapid falling-off in European deliveries. Month after month showed
constantly diminishing figures, until in April, London deliveries had fallen to
1,200 bales v. 3,600 bales in the previous September.


[ 124 ]
We append a table of prices and statistics of the business done in
Shanghai (luring each month of 1877:
Quotation for
Quotation for
Quotation for
Exchange for
Stock
Settlements
Month.
Chop No 3
Blue
common
6/ms.
in
during
Tsatlee.
Elephant.
Tsatlee.
Credit*.
Shanghai.
the month.
Taels.
Bales.
Bales.
January 1st..
580 a 810
550 a 560
480
5s. 8Jd.
20,000
4,500
February ,, ..
530 a 550
610 a 520
440
5s. 10iL
15,000
1,200
March .n ..
460 a 190
420 a 430
360
5s. Sid.
13,500
3,000
April „ ..
May „ ..
470 a 500
430 a 440
370
5s. 5d.
10,500
8,800
410 a 440
890 a 400
340
5s. 5Jd.
7,000
500
June „ ..
nominal
nominal
nominal
5s. 6d.
7,000
300
July „ ..
450 a 470
415 a 425
370
5s. Sid.
B.SOO
1,500
August „ ..
nominal
410 a 420
350
5s. 5d.
17,000
8,700
September,, ..
nominal
855 a 365
295
5s. Sid.
17,000
3,500
October ,, ..
440 a 460
40 . a 410
335
5s. 6d.
16,000
7,500
November,, ..
450 a 480
415 a 425
350
5s. 6d.
18,500
1C.0OO
December „ ..
440 a 470
415 a 425
365
5s. 6d.
15,000
14,000
„ 81st..
450 a 480
125 a 435
375
5s. Bid.
10,000
..
Black Tea. During the inevitable flight of Tea buyers in the early part of May,
and even when they had assembled in Hankow, less excitement was observable
than usual. This, added to the very disastrous results of the past season,
was considered an omen of caution and consequently moderate prices, which
it was fairly thought might lead to a profitable business in the face of
moderate stocks in the consuming markets.
Ningchows were first offered on May 17th, and buying immediately
began on the basis of about Tls. 10 per picul under the previous year's
prices. Other district leaf arrived on the 19th, when it was seen that the
crop of Oonams and Oopacks was very inferior, causing an advance in finest
Ningchows of three to four Taels. Oopacks, Oonams, and Oanfas opened
from three to four Taels per picul under the year before, and shipments
were rushed forward with even more than the customary rapidity, owing
chiefly to the fact that natives met the market freely, particularly for the
common to medium grades which were bought at unprecedentedly low cost
for first crop Teas; finest and choice parcels advanced considerably as the
inferiority of each district became more marked.
The foregoing sketch of the Hankow campaign would point to a fair
prospect notwithstanding the large shipments, as it might not be altogether
unreasonable to conclude that the Home Trade would be prepared to hold
stocks at prices to show a fair remuneration on those paid. The reception,
however, of the Teas in London soon dissipated any such view, and it was
at once seen that the season 1877x1878 was not going to be a relief to the
serious monotony of recent years, but rather that it was to be distinguished
for extremely low cost in China and a percentage of loss at home distressingly
large.
The system of auction sales "without deserve" was adopted more than
ever, at home; and the haste to quit any cargo of low cost exhibited by
Importers, was reduced to an absurdity.
We may remark here that, as in every season, there were profits made
on Teas from some districts. These were a few Ningchows, Tow-yun Oanfas,
Kintucks, and the new district of Loongchun. Prices in London continued
to decline for all common and low medium kinds, while in good medium


[ 127 ]
The following figures shew the total shipment of Congou, including
dust, and how distributed :—
1877-78. 1876-77.
To United Kingdom 72,750,000 75,439,310
,, Russia direct 4,092,007
,, ,, and Continent, via United Kingdom 33,450 58,091
„ Russia via Tientsin 8,215,000 7,000,000
„ United States 2,132,464 2,246,502
„ Lost at Sea 556,039
83,130,914 89,991,949
Green Tea. Operations during the season just closed exhibit results, of a
most unsatisfactory nature, particularly considering the fact that the
greater portion of the period under review has been characterised by
really moderate quotations here, and a statistical situation in the consum-
ing markets favorable to an extent we have rarely seen—from which can
only be drawn the conclusion that Green, Teas are slowly, but surely, going
out of consumption.
During the early part of the season, Teamen were very confident in
estimating a deficiency in the crop of 15 per cent.; and even to the close
of October, they stated the falling off would be 10 per cent. Final
figures, however, show only a slight decrease in "weight," although the
number of half-chests is 20,000 less than last year. We would remark
here that this evident increase in pounds may arise from the better
quality of the yield; but, whether this be the case or not, it will be well
if buyers give more attention to such significant signs while the seller
persistently estimates supplies by the number of packages.
Total arrivals we estimate as follows, in half-chests:—
1877x1878. 1876x1877.
Country Teas 315,000 336,000
Pingsueys 103,000 96,000
Shanghai Packed 8,000 14,000
426,000 446,000
From the above figures it will be seen that notwithstanding the low range
current throughout for Pingsueys, supplies continue to increase.
The unprecedentedly low rates current recently for country grades,
together with the excessive losses suffered by Teamen of late years, have
brought about what has often been talked of—the establishment of Hongs
to a large extent for the manufacture of leaf into Congou, which, if
successful, will have the effect of seriously diminishing supplies of Green
during the coming season.
Pingsueys were first offered on the 14th of June, and on the 16th
the pnrchase of a chop grading only medium was reported at 33 Taels.
That this was considered a very full rate was evidenced by an immediate
decline of Taels 2 @ 3, on which basis a fair business passed chiefly for
America. Quotations were about 8 Taels under the previous season's
opening, and the quality somewhat inferior. A fair enquiry existed to
the close of the month, at slightly declining prices. A chop of Taiping
was offered and only elicited a bid of 22 Taels, against 28 Taels the year
before.


[ 128 ]
In the early part of July, American purchases for the steamer
Olenorchy kept the market steady, notwithstanding a languid English
demand. About the 15th, business began in Fychows, Taipings, and
Kemuns, at from 23 @ 27 Taels, the latter figure being given for fine
Kemuns. Transactions throughout the month in country Teas were
small, as the "style " thus far was considered disappointing. Teenkais
were offered on the 26th, but no business transpired in these during the
month, which closed with a general decline of Taels 1 @ 2 per picul, and
a dragging market.
Nothing of importance was done in August till the 7th, when Teen-
kais opened at Tls. 30j, being about Taels 3 under the previous season.
By the middle of the month, Moyunes had been offered; and on the 22nd
business began at Taels 31 @ 31| for finest to choice. It now became
apparent that deficiency in make and appearance was a special feature
throughout the whole crop. Hoochows were taken from Taels 23 @ 24,
being full rates as compared with country Teas. Stocks were accumulating,
and although the Export to England remained moderate, to America it
was assuming dangerous proportions. Holders, however, exhibited much
firmness, in view of the reduction in supplies at this time so confidently
anticipated. At the close of the month, stocks had reached 65,000 half-
chests, and the Export stood as follows :—
1877x1878. 1876x1877.
England 1,719,042 lbs. 2,550,964 lbs.
America 2,835.508 „ 1,029,103 „
After the first week in September, holders of Pingsueys became anxious
to realize, and considerable purchases were made at a fall of Taels 2,
principally for the States, country Teas being meanwhile quiet, but
firmly held. Later a brisk demand arose for the fleet of Canal steamers on
the berth for New York, which resulted in a large trade at about the
following prices, viz :—
Good Taipings and Fychows Tls. 19 @ 21
Fine Fychows and Teenkais 25 @ 27
Fine to Choicest Moyunes ,, 254 @ 30
At one time holders succeeded in establishing an advance of 1 @ 2 Taels,
but as the steamer tonnage became exhausted a speedy reaction set in,
causing the month to close heavily with a stock of 110,000 half-chests.
October began with a falling market, and it is worthy of note that
fine lines of Moyune had reached a very exceptionally low range. Later
on, American buyers operated more freely, and holders kept up a
remarkably bold front in face of excessive stocks amounting to 114,000
half-chests. On the 31st October, the Export was as follows:—
1877 x1878 1876 x1877.
England 3,396,455 lbB. 4,854.320 lbs.
America 7,172,987 „ 6,083,899 „
During November, settlements were heavy and on the whole prices showed
bnt little variation. Pingsueys were in small stock and limited demand,
with strong symptoms of the season's supply being nearly exhausted.
Notwithstanding the heavy settlements of the month, 55,000 half-chests,
it closed with a stock of 100,000 half-chests.








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