HANDBOOK UNITED STATES DEPARTMENT OF COMMERCE THE UNIVERSITY OF ILLINOIS LIBRARY 330.951 U.n32.c- cop. 2. DEPARTMENT OF COMMERCE /(. . BUREAU OF FOREIGN AND DOMESTIC COMMERCE *' JULIUS KLEIN, Director TRADE PROMOTION SERIES—No. 38 CHINA A COMMERCIAL AND INDUSTRIAL HANDBOOK BY JULEAN ARNOLD Commercial Attache AMERICAN CONSULAR OFFICERS, and OTHER CONTRIBUTORS Supersede* Commercial Handbook of China, Miscellaneous Series No. 84, printed in 2 volumes in 1919-20 PRICE $1.75 PER COPY Sold by the Superintendent of Documents, Government Printing Office Washington, D. C. WASHINGTON GOVERNMENT PRINTING OFFICE 1926 - : /ov If rf.A-S 350. iZl (in l >Zc. / iLf Cc.b, 7, ' CONTENTS Letter of submittal. Page XV Part I Brief geographic description- 1 Area and population- 1 Climate_ 2 Distances from Shanghai- 2 Statistics relating to Provinces- 3 Anhwei- 3 Chekiang_ 4 Chihli_ 4 Fukien_ 5 Honan_ 5 Hunan_ 6 Hupeh_ 6 Kansu_ 7 Kiangsi_ 7 Kiangsu_ 8 Kwangsi_ 8 Kwangtung- 9 Kweichow_ 9 Shansi_ 10 Shantung_ 10 Shensi_ 11 Szechwan_ 11 Yunnan_ 12 Manchuria (three eastern Prov¬ inces : Shengking; Kirin; Heilungkiang)- 13 Chinese dependencies (Mon¬ golia; Sinkiang; Tibet)_ 14 Sketch of Chinese history_ 17 Earliest period___ * 17 Chow dynasty- 18 Tsin dynasty_ 18 Han dynasty_ 19 The Three Kingdoms- 19 Tang dynasty- 20 Sung dynasty_ 20 Mongol dynasty_ 20 Ming dynasty- 21 Manchu dynasty_ 22 Modern period_ 22 C Resume of the trade of China_ 26 Value of total trade- 26 Development of foreign trade_ 28 Leading articles of import- 30 Leading articles of export_ 34 Import and export trade in 1923 and 1924_ 36 General trade notes- 41 Trade with specific countries- 42 Trade with the United States— 42 Direct trade with foreign coun¬ tries- 44 Resume of the trade of China— Con. Page Trading ports_ 45 Carrying trade- 48 Shipping- 50 Import trade of China_ 52 Relative position of countries_ 52 Financing of imports_ 54 Authority to purchase_ 54 Confirmed credits_ 55 Handling shipping documents_ 56 Chemicals_ 57 Utilization in industry_ 58 Indigo, dyes, and colors_ 60 Foodstuffs_ 66 Wheat and flour_ 68 Cigarettes and tobacco_ 71 Cotton goods_ 76 . Raw cotton and cotton yarn_ 80 Woolen goods_ 84 Petroleum products_ 85 Kerosene_ 85 Fuel oil_ 89 Gasoline_ 90 Lubricating oil_ 91 Paraffin wax_ 92 Hardware_ 93 Market features_ 93 General import methods_ 94 Competition_ 94 Classes imported_ 95 Machinery and machine tools_ 97 Machine tools_ 99 Agricultural machinery_ 101 Flour milling machinery_ 101 Textile machinery_ 102 Knitting and sewing machines. 104 Electrical machinery and appli¬ ances _ 105 Automotive equipment_ 109 Passenger cars- 110 Motor trucks_ 112 Metals and minerals_ 114 Value of imports_ 114 Application in industry_ 116 Leading ports in mineral trade. 117 Lumber_ 118 Varieties imported- 118 Terms to dealers_ 120 Details of trade_ 120 Paper_ 121 Manufacture in China_ 121 Types imported- 121 Distribution methods_ 124 Miscellaneous imports_ 124 Sporting arms and ammunition. 124 Machine belting_ 125 Books and music_ 125 in 697649 IV CONTENTS Import trade of China—Con. Page Miscellaneous imports—Con. Building materials_ 125 China and earthenware- 125 Wearing apparel_ 125 Clocks and watches_ 126 Musical instruments_ 126 India rubber and gutta-percha manufactures_ 127 Leather_ 127 Artificial leather and oilcloth_ 127 Photographic materials_ 127 Stationery_ 127 Postal parcels and other items- 128 Market development- 129 Opening a house in China_ 130 Importance of personnel- 130 Salesmanship_ 131 Selling service with goods- 132 Representatives_ 132 Keeping the agent informed_ 135 Shipping in accord with instruc¬ tions- 135 Advertising_ 136 Silver exchange and prices- 137 Trade-marks_ 137 Serious effort necessary_ 138 Incorporation of American firms in China_ 139 American enterprises in China_ 139 American corporations_ 141 Courses open to American inter¬ ests_ 142 Incorporation under State laws- 143 Incorporation under Alaskan code- 143 Incorporation under Hongkong companies ordinances- 144 The China trade act- 145 Unincorporated companies- 148 Consular registration- 148 Currency, exchange, and banking_ 151 Currency- 151 Varieties in use- 151 Copper coins- 152 Silver_ 153 Paper- 157 Gold_ 160 Currency reform_ 160 Foreign exchange_ 161 Exchange quotations- 162 Bar silver- 166 Gold bars- 170 Banking- 172 Foreign banks- 172 Chinese banks- 173 Business of Chinese native banks_ 178 Financing through banks in China- 179 Credit conditions- 185 Export credits- 186 Import credits- 187 The comprador- 188 Exchange problems- 189 Page Advertising and merchandising_ 191 Package goods_ 191 Brand names_ 192 Distribution_ 193 Advertising methods and mediums- 194 Campaigns_ 195 Mediums- 196 Advancing trade through motion pic¬ tures_ 201 The film an effective medium_ 201 Method of presenting subject_ 202 Human interest_ 203 Explanatory matter- 203 Exhibition and distribution of films_ 204 Bringing America to China_ 204 China's export products_ 206 Handling bills of exchange_ 207 Financing through confirmed credits_ 208 Basis of negotiations- 208 Domicile of bills_ 209 Exchange quotations- 209 Mineral products_ 209 Alum_ 210 Antimony- 211 Arsenic_____ 211 Asbestos- 211 Coal_ 211 Copper_ 212 Gypsum- 213 Iron- 213 Kaolin_ w _ 214 Lead and zinc- 215 Magnesite and talc- 215 Mercury_^- 215 Petroleum_ 215 Saltpeter_ 216 Silver_ 216 Soda_ 216 Sulphur and phosphate- 216 Tin___ 216 Tungsten, molybdenum, and manganese- 217 Animal products- 217 Bristles- 218 Cattle_ 218 Eggs_ 219 Feathers_i_ 220 Game_ 220 Hides, skins, and furs- 221 Livestock, other than cattle. _ 222 Musk*._ 224 Sausage casings- 225 Silk_ 225 Wool___ 227 Vegetable products- 228 Beans and bean products- 229 Camphor_ 230 Cotton_ 231 Hemp___ 232 Kaoliang and millet- 233 Lacquer varnish- 233 Licorice root- 234 CONTENT^ V ‘China’s export products^—Con, Page Vegetable products 1 —Con. Linseed_ 234 Nutgalls- 235 Peanuts and peanut oil- 235 Ramie and grass cloth- 237 Rhubarb_ 238 Rice_ 238 Sesame and rapeseed- 239 Tea_ 240 Tobacco_ 242 Tung oil- 243 Vegetable tallow_ 245 Walnuts_ v - 246 Wheat, flour, and bran- 247 Miscellaneous_ 250 Native manufactured products- 252 Carpets and rugs_ 253 Chinaware and porcelain- 253 Embroideries_ 254 Firecrackers_ 254 Furniture of rattan, reed, and sea grass_ 254 Hair nets_ 255 Hats_'_ 256 Lace_ 256 Mah-jongg sets_ 257 Mats and matting- 258 Paper_ 258 Pongees_ 259 Straw braid- 259 Umbrellas_ 260 Vermicelli- 260 Modern Chinese industries- 262 Conditions essential to industrial development_ 263 Corporate industry_ 264 Encouragement by Government_ 265 Japanese interests_ 265 Cotton manufacturing_ 267 Flour mills_ 267 Modern power plants_ 267 Metallurgical industries_ 268 Other industries- 269 Wages and living conditions_ 269 Increase in private wealth_ 270 Chinese students in America_ 270 China’s economic structure_ 272 Need of modern transportation_ 272 Individualistic development_ 275 Influence of western ideas_ 276 Chinese Government finance_ 280 Efforts to centralize control of revenues_ 282 Debts-!_ 283 Income_ 286 Debt consolidation plans_ 288 Available sources of revenue_ 288 Customs surplus_ 288 Salt surplus- 290 Other revenues_ 291 Total available revenue for re¬ habilitation_ 292 Government expenditure_ 292 Situation of the railways_ 293 The old consortium_ 297 Chinese Government finance—Con. Page The new consortium_ 297 The native consortium__ 298 Conclusion_ 299 Problems of foreign capital in China. 300 Railways in China_ 309 Historical survey_ 310 Developments since 1900_ 313 Changes brought by the war_ 315 Progress during period of the Republic_ 315 Statistics of principal lines_ 316 Management of Chinese railways. 318 Chinese Eastern Railway_ 318 South Manchuria Railway- 319 Chinese Government lines_ 319 Relative importance of lines_ 321 Property and equipment_ 322 Bridges- 322 Ballast_ 322 Purchasing of materials_ 322 Operating methods and organiza¬ tion _ 324 Transportation methods_._ 324 Pilferage_ 325 Rates_,_ 325 Chinese postal service_ 328 Domestic services_ 328 Sino-American postal arrange¬ ments_ 329 Customs treatment of parcels_ 330 Money-order service___ 330 Tariffs and internal taxes_ 331 Customs administration_ 332 Customs function_ 332 Customs valuations_ 333 Export tariff_I_ 334 Frontier customs tariff- 334 Future customs revision_ 334 Chinese customs procedure_ 334 Units of currency, weight, and measure- 334 Ascertaining values- 335 Filing protests against assess¬ ments_-_ 335 Invoices_ 336 Duty-free articles_ 336 Prohibited articles_ 336 Foreign goods imported from Chinese port_ 336 Foreign goods reexported to foreign country- 337 Foreign goods sent to Chinese port—,---*- 337 Foreign goods sent inland_ 337 Duty on native goods exported. 337 Chinese goods imported from - Chinese port_ 337 Chinese goods reexported_ 338 Bonded cargo- 338 Tonnage dues and certificate_ 338 Chinese factory products ex¬ emption—__ 338 Tientsin trade with Manchuria. 338 VI CONTENTS Tariffs and internal taxes—Con. Page Internal taxes__ 339 Varieties- 339 Summary_ 341 Trade-marks, copyrights, and pat¬ ents _ 343 Trade-marks- 343 Copyrights_ 346 Patents_ 347 Treaties regarding reciprocal pro¬ tection_ 347 Trade-marks, copyrights, and pat¬ ents in Hongkong- 348 Official aid_ 348 Americans in China- 350 American population in China_ 350 Rights of American citizens_ 352 Treaty of 1844 _ 353 Treaty of 1858_ 355 Treaty of 1880_ 355 Commercial treaty of 1903- 356 American courts in China- 357 Organization_ 358 Jurisprudence and legislation_ 362 Judicial procedure in China_ 366 American consular officers in re¬ lation to American claims_ 366 Claims against Chinese citizens- 367 Claims against foreigners_ 368 United States Court for China- 368 Other extraterritorial courts_ 368 Infringement of trade-marks, pat¬ ents, and copyrights- 369 Trade organizations_ 370 Chinese guilds and chambers of commerce_ 370 Guilds___ 370 Chinese chambers of commerce- 376 Foreign chambers of commerce_ 378 National organizations_ 381 The comprador_ 384 Changes in trade methods_ 384 Position of the comprador_ 384 The bank comprador_ 386 Agreement for services_ 388 Form of agreement_ 388 Chinese social customs and eti¬ quette- 392 Respect for ancestors_ 392 Social customs_ 393 Amusements_ 394 Dress- 395 Etiquette- 395 Chinese names_ 397 Persistence of traditions_ 398 Keeping well in China_ 399 Point of view_ 399 Health inspection_ 400 Immunization_ 400 The gastrointestinal tract_ 401 Flushing- 403 Clothing_ 404 Insect bites_ 404 Protection from sun_ 404 Mental attitude_ 404 Part II Pag# Canton consular district_ 407 Location and area- 407 Population_ 407 Cities_ 407 Agriculture_ 408 Manufacturing aud industrial de¬ velopment _ 409 Home industries_ 409 Manufacture of matches_ 410 Rubber-sole factories_ 410 Tanneries_ 410 Copper mills_ 410 Brick kilns_ 411 Cement plant_ 411 Marine engines_ 411 Ice-making plants_ 411 Minerals and mining_ 412 Labor conditions_ 414 Transportation and communica¬ tion- 414 Waterways- 414 Railways_ 416 Roads_ 417 Summary of methods of trans¬ portation_ 417 Telegraphs, cables, and wireless- 417 Postal facilities_ 418 Shipping and warehousing facili¬ ties- 418 Cargo-handling facilities_ 419 Warehouse and storage facili¬ ties- 419 Public works and utilities_ 420 Electric-light plants_ 420 Waterworks- 420 Tramways_ 420 Conservancy and reclamation works- 420 » Import and export trade- 421 Import trade_ 421 Export trade_ 423 Banking facilities_ 426 Local currency situation_ 426 Advertising and merchandising_ 427 Travel facilities_ 427 Trade organizations_ 428 Property values and rents_ 429 Taxes and other assessments- 429 Living costs_ 430 Changes in trade conditions_ 430 Hankow consular district_ 432 Location and area_ 432 Population- 432 Cities- 433 Physical features- 433 Agriculture_ 434 Minerals and mining- 436 Manufacturing and industrial de¬ velopment_ 437 Labor conditions- 438 Transportation and communica¬ tion_ 438 Waterways_ 438 Railways_ 439 CONTENTS VII Hankow consular district—Con. Page Transportation and communica¬ tion—Con. Roads- 441 Average costs of transportation. 441 Telegraphs- 442 Telephones_ 442 Postal service- 442 Shipping and warehousing facili¬ ties_ 442 Harbor facilities- 442 Warehousing and storage fa¬ cilities _ 443 Public utilities_ 443 Electric-light plants- 443 Waterworks_ 444 Tramways_ 444 Conservancy and reclamation works_ 445 Import and export trade_ 445 Money, banking, and credit- 449 Advertising_ 449 Travel facilities_ 449 Trade organizations- 450 Property values and rents_ 450 Taxes and other assessments_ 451 Living costs- 451 Changes in trade conditions_ 452 Hongkong consular district_ 453 Location and population_ 453 Manufacturing interests_ 453 Labor conditions_ 454 Transportation and communica¬ tion- 454 Railways_ 454 Roads_ 455 Telegraphs, cables, and wireless service_ 455 Telephones_ 456 Postal facilities_ 456 Shipping and warehousing facili¬ ties- 457 Harbor facilities_ 457 Dock accommodations_ 457 Cargo-handling facilities_ 458 Warehousing and storage facili¬ ties- 458 Public works and utilities_ 459 Electric-light companies_ 459 Waterworks_ 459 Tramways_ 459 Reclamation projects_ 460 Import and export trade_ 460 Changes in trade of Hongkong during past decade—1_ 461 Money, banking, and credit_ 462 Banks_ 462 Financing of exports from United States to Hongkong_ 463 Powers of attorney_ 464 Currency and coinage_ 464 Advertising and merchandising_ 465 Trade organizations_ 466 Property values and rents_ 466 Taxes and assessments_ 466 Living costs- 467 • ° Mukden consular district_ 468 Location and area_ 468 Population_ 468 Cities_ 468 Agricultural and animal products. 469 Minerals and mining_ 470 Manufacturing and industrial de¬ velopment_ 473 Labor conditions_ 475 Transportation and communica¬ tion - 475 Waterways_ 475 Railways- 476 Roads_ 478 Telegraphs, cables, and wireless service_ 479 Telephones_ 479 Postal facilities_ 480 Shipping and warehousing facili¬ ties- 480 Harbor facilities_ 480 Warehouse and storage facilities 481 Public utilities_ 481 Electric-light plants_ 481 Waterworks_ 482 Tramways___ 482 Conservancy and reclamation works- 482 Import and export trade_ 483 Internal taxes_ 488 Money, banking, and credit_ 488 Banks___ 488 Local currency_ 489 Credits_ 489 Trade organizations_ 490 Property values and rents_ 490 Living costs- 491 Shanghai consular district_ 492 Location and area_ 492 Population- 492 Cities- 492 Agriculture and fishing_ 493 Minerals and mining_ 493 Manufacturing- 493 Cotton manufacture_ 493 Silk manufacture_ 495 Flour milling_ 495 Shipbuilding and engineering works- 495 Cigarettes- 495 Oil mills_ 495 Electric light and power plants. 496 Match factories_ 496 Cement and brick works_ 496 Egg products- 496 Tanneries_ 496 Iron and steel_ 497 Aerated water_ 497 Electrical equipment_ 497 Yeast- 497 Breweries_ 497 Labor conditions_ 497 Transportation and communica¬ tion- 498 Waterways- 498 VIII CONTENTS Shangai consular district—Con. Transportation and communica¬ tion—Con. Page Railways- 499 Roads- 500 Methods of transportation in Shanghai_ 500 Average cost of transport_ 500 Telegraphs, cables, and wireless service_ 501 Telephones_ 501 Postal facilities_ 502 Shipping and warehousing facili¬ ties_ 502 Ocean steamship services_ 502 Harbor control_ 503 Port accommodations_ 503 Public frontage_ 505 Harbor communications_ 505 Bonded warehouses_ 505 Wharfage and storage charges- 506 Railway connections_ 500 Public works and utilities_ 507 Electric-light plants- 507 Waterworks_ 507 Conservancy and reclamation works_ 507 Tramways_ 507 Bus lines_ 508 Motor cars and trucks_ 508 Import and export trade_ 508 Money, banking, and credit_ 509 Banks_ 509 Currency_ 510 Exchange brokers_ 511 Credits_ 511 Powers of attorney_ 512 Advertising methods and facili¬ ties_ 513 Travel facilities_ 513 Trade organizations_ 514 Living costs_ 514 Recreation_ 515 American community organiza¬ tions in Shanghai_ 515 Changes in trade conditions in past decade_ 516 Land procedure in Shanghai- 517 Right of land tenure_ 517 Method of acquiring land_ 517 Transfers_ 519 Land values and development in Shanghai_ 519 Tientsin consular district_ 522 Location and area_ 522 Population_ 522 Cities_ 522 Agriculture_ 524 Minerals and mining_ 524 Coal mines- 525 Iron_ 527 Manufacturing and industrial de¬ velopment _ 527 Cotton spinning_ 527 Flour mills_ 627 Cement works_ 528 Carpet industry_ 528 Match factories_ 528 Tietsin consular district—Con. Manufacturing and industrial de¬ velopment—Con. Page Glass factories_ 528 Other industries_ 528 Labor conditions_ 528 Transportation and communica¬ tion - 529 Waterways_ 529 Railways_ 530 Roads_ 532 Costs of transport_ 533 Telegraphs, cables, and wireless service- 533 Telephones_*_ 533 Postal facilities_ 534 Shipping and warehousing facili¬ ties- 534 Public works_ 535 Electric-light plants_ 535 Waterworks_ 536 Tramways- 536 Conservancy works_ 536 Import and export trade_ 537 Imports- 537 Exports_ 540 Chinwangtao trade_ 542 Money, banking, and credit_ 543 Banks_ 543 Credits_ 543 Local currency situation_ 545 Advertising_ 545 Merchandising methods_ 546 Travel facilities_ 546 Trade organizations_ 547 Property values and rents_ 547 Taxes and other assessments_ 548 Location of business establish¬ ments_ 548 Living costs_ 549 Educational facilities_ 551 Significant commercial and eco¬ nomic changes_ 551 Amoy consular district_ 552 Location and area_ 552 Population_ 552 Cities_ 552 Education_ 553 Agriculture_ 554 Fisheries_ 554 Manufacturing_ 554 Labor conditions_ 555 Minerals and mining_ 555 Transportation and communica¬ tion_ 556 Waterways- 556 Railways- 556 Roads_ 556 Telegraphs and cables- 556 Telephones_ 556 Postal facilities- 557 Shipping and warehousing facili¬ ties- 557 Amoy harbor- 557 Port charges_ 558 Cargo-handling facilities- 558 Storage facilities- 558 CONTENTS IX Amoy consular district—Con. Page Public works_— 558 Electric-light plants_ 558 Waterworks- 559 Import and export trade- 559 Exports_ 560 Imports_ 561 Money, banking, and credit_ 563 Banks_ 563 Local currency- 563 Credit_ 563 Merchandising methods_ 563 Advertising_ 564 Trade organizations- 564 American interests- 565 Living costs- 565 Changes in trade conditions in recent years_ 565 Antung consular district- 566 Location and area- 566 Population_ 566 Cities_:- 566 Agriculture_ 567 Sericulture-i— 568 Forestry and lumbering- 568 Minerals and mining- 568 Trapping and fur trade- 569 Manufacturing and industrial de¬ velopment_ 569 Labor cml-^zis- 570 Trans 11:and communica- tic _ 571 Wat( .: 571 Raih '7 -_ 572 Roadi_ 572 Telegiaphs- 572 Telephones- 573 Postal facilities- 573 Public utilities- 573 Electric-light plants- 573 Waterworks- 573 Tramways_ 574 Conservancy and reclamation works_ 574 Export and import trade- 574 Exports_ 574 Imports_ 575 Money, banking, and credit- 577 Banks_ 577 Local currency- 577 Credits-* 577 Advertising_ 578 Travel facilities- 578 Trade organizations_ 579 Property values and rents- 579 Living costs_ 579 Changes in trade conditions in recent years- 580 Changsha consular district- 581 Location and area_ 581 Population- 581 Cities_ 581 Agriculture__ 582 Minerals and mining_ 582 Antimony_ 582 Lead and zinc_ 583 Tin_ 583 Changsha consular district—Con. Page Minerals and mining—Con. Tungsten and bismuth_ 584 Iron and manganese_ 584 Arsenic- 585 Quicksilver _ 585 Gold and silver_ 585 Coal and coke_ 585 Other minerals_ 586 Trade in minerals_ 586 Manufacturing and industrial de¬ velopment _ 587 Labor conditions_ 588 Transportation and communica¬ tion- 589 Waterways _ 589 Railways - 589 Roads- 589 Telegraphs_ 590 Telephones_ 590 Postal facilities_ 590 Public utilities_ 590 Electric-light plants_ 590 Waterworks_ 591 Shipping and warehousing facili¬ ties- 591 Harbor facilities_ 591 Cargo-handling facilities_ 591 Warehousing___ 591 Export and import trade_ 591 Exports___._ 592 Imports_ 593 Money, banking, and credit_ 596 Banks_ 596 Local currency_ 596 Credits- 597 Advertising_ 597 Trade organizations_ 597- Travel facilities_ 597 Property values and rents_ 598 Living costs_ 598 Changes in trade conditions_ 598 Chefoo consular district_ 599 Location and area_ 599 Physical features_ 599 Population_ 599 Cities_ 600 Agriculture- 601 Crops and yields_ 601 Peanuts_ 602 Trade in agricultural products- 602 Grape culture_ 602 Livestock_ 602 Agricultural methods_ 603 Minerals and mining_ 603 Manufacturing and industrial de¬ velopment _ 603 Hair nets_ 603 Bobbin lace_ 604 Silk_ 604 Peanut oil_ 605 Bean cake and oil_ 606 Vermicelli_ 606 Wine_ 606 Deep-sea fishing_ 607 Labor conditions_ 607 X CONTENTS Chefoo consular district—Con. Transportation and communica- Page tion- 607 Transportation_ 607 Telegraphs, cables, and wireless service_ 608 Telephones_ 609 Postal facilities_ 609 Shipping and warehousing facili¬ ties- 609 Harbor facilities_ 609 Storage facilities_ 610 Public works and utilities_ 610 Electric-light plants- 610 Waterworks_ 610 Harbor improvement_ 610 Export and import trade_ 611 Exports from Chefoo_ 612 Exports from Lungkow- 613 Imports through Chefoo- 613 Imports through Lungkow- 615 Money, banking, and credit- 616 Banks- 616 Local currency_ 616 Credits_ 616 Merchandising methods_ 617 Advertising- 617 Trade organizations_ 617 Travel facilities- 618 Hotels_ 618 Living costs_ 618 Property values and rents- 618 Chungking consular district_ 620 Location and area- 620 Climate_ 620 Population_ 620 Cities_ 620 Agriculture- 621 Minerals and mining- 622 Coal_ 623 Iron_ 623 Salt and petroleum_ 623 Mining methods_ 623 Manufacturing and industrial de¬ velopment _ 623 Silk_ 624 Wood oil_ 624 Other industries_ 624 Arsenal and mint- 625 Summary_ 625 Labor conditions_ 625 Transportation and communica¬ tion- 626 Waterways- 626 Railway projects_ 627 Roads- 627 Telegraphs, cables, and wireless service- 628 Telephones_ 629 Postal facilities_ 629 Shipping and warehousing facili¬ ties- 629 Harbor facilities_ 629 Warehousing and storage_ 630 Public works and utilities_ 630 Electric-light plants_ 630 Chungking consular district—Con. Public works and utilities—Con. Page Conservancy works_ 631 Irrigation works_ 631 Export and import trade_ 631 Exports- 632 Imports_ 634 Money and banking_ 636 Banks_ 636 Local currency_ 636 Advertising_ 637 Trade organizations_ 637 Travel facilities_ 637 Living costs_ 638 Trade of Tibet_ 638 Dairen consular district- 640 Location and area_ 640 Population_ 640 Agriculture- 640 Minerals and mining- 641 Manufacturing and industrial de¬ velopment_ 641 Labor conditions_ 642 Transportation and communica¬ tion_ 642 Railways--- 642 Roads_ 643 Telegraphs, cables, and wireless service-—- 643 Telephones_ - 644 Shipping and warehou - - ties- 644 Tort accommodatioi - 644 Cargo-handling faci . — — 645 Storage facilities- — 645 Public works and utiliuoj - - 647 Electric-light plants- 647 Waterworks- 647 Tramways- 647 Conservancy and reclamation works_ 648 Export and import trade- 648 Exports- 649 Imports- 649 Recent developments in foreign trade- 650 Money, banking, and credit- 650 Banks_ 650 Local currency_ 651 Quotations and credits- 651 Merchandising methods- 651 Advertising_ 652 Trade organizations_ 652 Travel facilities_ 652 Property values and rents_ 653 Taxes and other assessments_ 653 Living conditions_ 654 Changes in trade conditions_ 654 Foochow consular district_ 655 Location and area_ 655 Population_ 655 Cities_ 655 Agriculture_ 656 ‘Rice__ 656 Tea_ 656 Fruits_ 656 Other products_ 657 CONTENTS XI Foochow consular district—Con. Page Timber cutting- 657 Minerals and mining- 657 Manufacturing and industrial de¬ velopment _ 658 Transportation and communica¬ tion_ 659 Waterways_ 659 Roads_ 660 Telegraphs, cables, and wireless service_ 660 Telephones_ 660 Postal facilities:_ 660 Shipping and warehousing facili¬ ties- 660 Cargo-handling facilities- 661 Public works and utilities- 661 Electric-light plants- 661 Conservancy works- 661 Export and import trade_ 662 Exports- 662 Imports_ 663 Money, banking, and credit- 665 Banks- 665 Local currency_ 665 Credits_ 665 Merchandising methods_ 666 Advertising- 666 Trade organizations- - 666 Travel facilities- 666 Hotels_ 667 Property values and rents_ 667 Living costs_ 667 Changes in trade conditions in re¬ cent years_ 667 Harbin consular district- 669 Location and area- 669 Population_ 669 Cities_ 669 Agriculture- 670 Stock raising- 670 Forests_ 670 Minerals and mining_ 670 Manufacturing_ 671 Labor conditions_ 672 Transportaion and communica¬ tion- 672 Waterways- 672 Railways- 673 Roads- 673 Telegraphs, cables, and wireless service_ 674 Telephones_ 674 Postal facilities_ 675 Shipping and warehousing facil¬ ities - 675 Port accommodations_ 675 Cargo-handling facilities_ 676 Warehousing and storage_ 676 Public utilities- 676 Electric-light plants_ 676 Motor-bus service_ 677 Export and import trade_ 677 Exports- 677 Imports- 677 Harbin consular district—Con. Page Money, banking, and credit_ 678 Banks_ 678 Local currency- 678 Credits_ 679 Powers of attorney- 680 Advertising and merchandising_ 681 Trade organizations_ 682 Travel facilities and hotels_ 682 Property values and rents_ 682 Taxes and other assessments_ 683 Changes in Harbin trade condi¬ tions in recent years_ 683 'Currency_ 683 Chinese Eastern Railway_ 684 Kalgan consular district_ 686 Location and area- 686 Lakes and rivers_ 686 Climate--- 687 Population_ 687 Cities- 688 Agriculture- 689 Livestock- 689 Horses- 689 Camels- 690 Cattle- 690 Sheep- 691 Minerals and mining_ 691 Coal- 691 Iron- 692 Gold_ 693 Copper- 693 Other minerals_ 693 Mines_ 694 Manufacturing_ 694 Labor conditions_ 695 Transportation and communica¬ tion- 695 Waterways- 695 Railways- 696 Roads- 697 Telegraphs and wireless service- 698 Telephones_ 699 Postal facilities_ 699 Warehousing and storage facili¬ ties- 700 Public works and utilities_ 700 Electric-light plants- 700 Export and import trade_ 701 Exports'-w_ 701 Imports- 702 Money, banking, and credit_ 703 Banks- 703 Local currency_ 703 Credits_ 703 Advertising_ 704 Trade organizations- 704 Travel facilities--- 704 Hotels- 704 Property values and rents- 705 Living conditions_ 705 Nanking consular district- 706 Location and area_ 706 xn CONTENTS Nanking consular district—Con. Page Population_ 706 Cities_ 706 Agriculture_ 707 Minerals and mining_ 709 Iron_ 709 Coal_ 710 Manufacturing and industrial de¬ velopment _ 711 Labor conditions_ 712 Transportation and communica¬ tion- 712 Waterways_ 712 Railways_ 713 Roads_ 713 Telegraphs, cables, and wire¬ less service_ * 715 Telephones_ 715 Postal facilities_ 715 Shipping and warehousing facili¬ ties- 715 Harbor facilities_ 715 Warehouse and storage facili¬ ties_ 717 Public works and utilities_ 717 Electric-light plants_ 717 Waterworks_ 717 Tramways- 718 Conservancy and reclamation works_ 718 Export and import trade_ 718 Exports_ 718 Imports- 719 Money and banking_ 720 Banking facilities_ 720 Local currency_ 720 Advertising_ 721 Travel facilities and hotels_ 721 Trade organizations_ 721 Property values and rents_ 722 Living costs- 722 Changes in trade conditions in re¬ cent years_ 723 Swatow consular district_ 724 Location, area, and climate_ 724 Population_ 724 Cities_ 724 Agriculture_ 724 Minerals and mining_ 725 Manufacturing and industrial de¬ velopment _ 725 Labor conditions_ 725 Transportation and communica¬ tion- 726 Waterways_ 726 Railways_ 726 Roads_ 726 Telegraphs, cables, and wire¬ less service_ 726 Telephones- 726 Postal facilities_ 726 Shipping and warehousing facili¬ ties-- 127 Public works and utilities_ 127 Electric-light plants_ 127 Waterworks_ 127 Other public works_ 728 Swatow consular district—Con. Page Export and import trade_ 728 Money, banking, and credit_ 730 Banking facilities_ 730 Local currency_ 730 Credits_ 731 Advertising- 731 Trade organizations_ 732 Travel facilities and hotels_ 732 Property values, rents, and taxes. 732 Living costs- 732 Tsinan consular district_ 733 Location and area_ 733 Climate_ 733 Population- 733 Cities_ 734 Agriculture and livestock- 735 Grains_ 735 Cotton_ 735 Peanuts_ 736 Tobacco_ 736 Beans- 736 Other crops_ 736 Stock raising- 737 Agricultural methods- 737 Minerals and mining- 737 Mining_ 738 Manufacturing and industrial de¬ velopment - 740 Labor conditions- 741 Transportation and communica¬ tion- .741 Waterways- 741 Railways- 741 Roads- 742 Summary of transportation- 743 Telegraphs, cables, and wireless service_ 744 Telephones_ 744 • Postal facilities- 744 Public works and utilities- 744 Electric-light plants- 744 Waterworks and tramways- 745 Export and import trade_ 745 Exports_ 745 Imports_ 746 Money, banking, and credit_ 747 Banks_ 747 Local currency_ 747 Credits_ 748 Advertising and merchandising_ 748 Advertising__ 748 Merchandising methods_ 748; Trade organizations_ 748 Property values and rent_ 749 Taxes and other assessments_ 749 Living costs- 749 Changes in trade conditions during recent years_ 749 Tsingtao consular district- 750 Location and area_ 750 Population- 750 Cities- 750 Agriculture- 751 Forestry_ 751 Manufacturing and industrial de¬ velopment- 752 Minerals and mining_ 754 CONTENTS XIII Tsingtao consular district—Con. Page Transportation and communica¬ tion_ 754 Waterways ,- 754 Railways—_- 754 Roads_ 756 Telegraphs, cables, and wire¬ less service- 757 Telephones- 757 Postal facilities_ 757 Shipping and warehousing facili¬ ties- 758 Harbor facilities_ 758 Cargo-handling equipment_ 759 Warehousing_ 759 Shipping, practice at Tsingtao— 760 Public works and utilities- 761 Electric-light plants- 761 Waterworks- 762 Export and import trade- 762 Exports_ 763 Imports_,_ 764 Money, banking, and credit- 765 Banks- 765 Local currencies- 765 Credits_ 766 Powers of attorney- 767 Advertising_ 768 Trade organizations_ 768 Hotels_ 769 Property values and rents_ 769 Taxes and other assessments_ 770 Living costs_ 770 Changes in trade conditions in past decade_*- 771 Yunnan consular district_ 772 Location and area- 772 Yunnan consular district—Con. Page Population- 772 Cities- 772 Agriculture_ 773 Minerals and mining- 773 Manufacturing and industrial de¬ velopment _•- 775 Labor conditions- 775 Transportation and communica¬ tion___ 775 Waterways- 775 Railways_ 776 Roads_ 776 Telegraphs, cables, and wireless service_ 776 Telephones_ 777 Postal facilities- 777 Shipping and warehousing facili¬ ties- 777 Public utilities_ 777 Electric light plants_ 777 Waterworks_ 777 Foreign trade_ 778 Exports_ 778 Imports- 779 Banking and currency_ 780 Banks_ 780 Local currency_ 780 Advertising and merchandising_ 780 Travel facilities and hotels_ 781 Trade organizations_ 781 Property values and rents_ 781 Changes in trade conditions in recent years_ 781 Appendix- 783 China trade act_ 783 Chinese weights and measures_ 792 ILLUSTRATIONS Page 1. Steamship President Jefferson leaving Shanghai- 16 2a. China’s foreign trade, 1864 to 1924 (logarithmic scale)- 28 2b. Same (arithmetic scale)- 29 3. Transporting petroleum products to interior_ 86 4. Truck with chassis built in Tientsin_ 113 5. Hongkong and Shanghai Banking Corporation’s building in Shanghai_ 158 6. Interior of Chinese banking institution, Shanghai- 176 7. Native bank order- 181 8. Advertising American cigarettes_ 198 9. Modern Chinese flour mill_ 249 10. Native cart on primitive road- 273 11. Automobile on new type motor road_ 277 12. Railway map-facing_ 317 13. International Banking Corporation’s building in Peking_ ; _ 387 14. Order of seating at Chinese dinner_ 396 15. Pearl River Harbor, Canton_ 415 16. American consulate general, Canton_ .428 17. Grocery department, Shanghai department store- 494 18. Robert Dollar Building_ 504 19. Entrance to Robert Dollar Building_ 518 20. Campus, Tsing Hua College_ 523 21. Part of plant of Yenching University_ 550 22. Reinforced concrete warehouse_ 646 23. Bridge of Ten Thousand Ages, Foochow_ 659 24. Family gristmill of country people_ 708 25. Coolies constructing road_ 714 General map Inside back cover. : * . ■ * ' ' ■ ' LETTER OF SUBMITTAL Department of Commerce, Bureau of Foreign and Domestic Commerce, Washington, October J, 1926. Sir: There is submitted herewith a Commercial Hankbook of China, prepared under the supervision of Julean Arnold, United States commercial attache at Peking. This book is designed to supersede the current handbook on China, which was prepared by Mr. Arnold and issued by the Bureau of Foreign and Domestic Commerce in 1919. Publication of the present work is in answer to a large and wide¬ spread demand. Interest in China in this day has become world¬ wide, not so much because of the political movements which have drawn public attention to that country as because of a general recog¬ nition of China’s growing importance in the commercial and eco¬ nomic development of the trading nations throughout the world. Competition for China’s trade has grown keener with every year since the World War. In 1914 China’s total foreign trade was valued at $604,600,000; in 1920, the peak year in valuation, because of the high price of silver, its gold value exceeded $1,616,000,000; and in 1924 it amounted to $1,450,000,000, an increase of nearly 150 per cent in 10 years. Americans are especially interested in China’s development, not alone because of the friendly relations that have uniformly existed between the two peoples from their earliest contact, but because their commercial intercourse in the last 10 years has developed almost unprecedentedly, and the future seems to promise an even greater measure of economic relations between them. Our trade with China totaled a value of but $64,000,000 in 1914; in 1920 it reached $338,- 500,000; and in 1925, in spite of seriously detrimental conditions, it still exceeded a value of $263,000,000. China, next to Japan, is our best Asiatic customer, and one of our foremost sources of those raw materials which we have been unable to produce for ourselves, such as raw silk, tea, and wood oil. It has been recognized as of first importance, then, that American merchants and manufacturers should have at hand and in convenient form as comprehensive and recent information about China as could be compiled. This book is an earnest effort to supply that need. In XV XVI COMMERCIAL HANDBOOK OF CHINA its preparation Mr. Arnold, in addition to his own more than 20 3 r ears of experience in China, has had the hearty cooperation of all our consular officers in China and of the several authorities whose names head many of the special articles it contains. The valuable assistance of each of them is hereby gratefully acknowledged. Much of the general information contained in the two volumes of the earlier handbook has been retained in the present work, which has been condensed into one volume. In addition there are a num¬ ber of new subjects, as of more recent significance, considered in de¬ tail, notably that of the incorporation of American firms in China, with special reference to the China Trade Act. In each instance the information given is believed to be of real practical value, and it is the earnest hope of the Bureau that this handbook will afford to the exporters of the United States a back¬ ground for their study of the basic trade potentialities of the impor¬ tant and ever-interesting Republic of China. The colored map at the end of the volume has been revised and corrected by the publishers in cooperation with the Bureau of For¬ eign and Domestic Commerce. Respectfully, Julius Klein, Director of Bureau . To Hon. Herbert Hoover, Secretary of Commerce. COMMERCIAL HANDBOOK OF CHINA PART I BRIEF GEOGRAPHICAL DESCRIPTION By Commercial Attache Julean Arnold The distance from the coast of China to the coast of California is about twice the distance from San Francisco to New York. The northern latitude of China’s territory corresponds with a line run¬ ning through southern Canada, and the southern latitude with a line traversing southern Mexico. From east to west China extends over a distance similar to that between the Atlantic and Pacific coasts of the United States. AREA AND POPULATION Since China has not yet carried out a proper land survey or census, the area and population of its territory can be given only as estimates, as in the following table (figures for certain other coun¬ tries are added for purposes of comparison) : Regions China proper, including the three Manchurian Provinces Mongolia---- Chinese Turkestan______ Tibet...----- Total, Chinese territory_ South America_ United States, exclusive of dependencies Japanese Empire___ France (continental)__ Population Area in square miles Total Density per square mile 1,897, 000 436,000,000 238 1,370, 000 2,500,000 ' 2 550, 000 1, 200, 000 2 465, 000 6, 500, 000 14 4, 282, 000 446, 200, 000 104 6, 850, 000 60, 000, 000 8 3, 620, 000 110,000, 000 30 260, 000 80, 000, 000 307 207, 000 40, 000, 000 150 The population of the great Yangtze Basin is estimated at 200,- 000,000. The Yangtze Delta, comprising an area of 50,000 square miles, or about that of the State of Illinois, has an estimated popula¬ tion of 40,000,000. Two-thirds of China’s population is concen¬ trated in one-third of its area, being densest along rivers and in coastal regions. Mongolia, Turkestan, and the three Manchurian Provinces offer vast areas of fertile lands for settlement and mineral wealth for development, but lack of adequate means of transporta- l 100020°—26-2 2 COMMERCIAL HANDBOOK OF CHINA tion and protection against brigandage have discouraged settlement of these sections. With the exception of the area comprising the great central plain formed by the valleys of the Yellow and Yangtze Rivers, China proper is mountainous or hilly. China is probably one of the best watered countries on the globe. The Yangtze River, about 3,200 miles long, and the Yellow River, about 2,600 miles, rise in Tibet and central Asia and flow eastward across Central and North China, emptying into the Pacific. The West River, about 1,200 miles long, rises in Yunnan Plateau in southeastern China and flows through South China into the Pacific. In addition to these, there are numerous smaller streams and canals, especially in the south. CLIMATE Climatically, China enjoys two distinct seasons, summer and winter, with short autumn and spring seasons. At Tientsin or Peking, which are in the same latitude as Washington, D. C., the thermometer falls to 4° F. and rises in summer to 100° F., with com¬ paratively little humidity. At Shanghai, which lies in a latitude between that of San Diego and New Orleans, the winter temperature reaches 15° F. and the summer temperature 98° F., but with con¬ siderable humidity. At Canton, which lies in the same latitude as Habana, Cuba, the temperature rarely falls in the winter below 32° F. and rises in the summer to a maximum of about 98° F., with much humidity. Generally speaking, considerable rain falls in China during the spring and summer months. The winters in the north are dry and cold, often with no rainfall between the months of October and April. The winters of the central or Yangtze River region are cold and damp, while those of the south are comparatively dry and mild. The autumn season is generally pleasant throughout China. In the north dust storms are common during the spring months. The average annual rainfall in the north is 25 inches, in the Yangtze region 45 inches, and in Kwangtung in the south 80 inches. DISTANCES FROM SHANGHAI Following is a table of distances from Shanghai (by rail to Pe¬ king, to all other points by steamer), the commercial metropolis of China, to nine important cities: Shanghai to— Traveling time Miles Corresponding dis¬ tance in United States: New York to— Days Hours Peking__ . _ __ 36 830 900 600 1,425 410 1,000 750 1,100 9, 920 Indianapolis. Chicago. Cleveland. Omaha. Augusta, Me. Milwaukee. Cincinnati. Tampa, Fla. Hongkong _ _ _ __ _ ._ 2^-3 3 14 Hankow . _ _ . .... Chungking. __ _ - ... Nagasaki . ___ 30 Vladivostok._ _.. .... 4 2 5 20-27 Kobe ...-. Yokohama___ New York. . ..... BRIEF GEOGRAPHICAL DESCRIPTION 3 STATISTICS RELATING TO PROVINCES The following table gives certain essential data concerning the Provinces of China: Province Area in square miles Population according to Chinese Post Office esti¬ mate, 1922 Popula¬ tion per square mile Capital of Province Anhwei ... ______ 54,826 19, 850, 000 362 Anking. Chekiang .. _ . . ... . _ 36,680 22, 000, 000 601 Hangchow. Chihli____ 115,830 46,332 34, 200, 000 295 Paotingfu. Fukien... _ ... ... . 13, 200, 000 284 Foochow. Honan. ... . _ _ .. ... .. 67, 954 30, 850, 000 454 Kaifeng. Hunan_ ... .. . ... ... 83, 398 28, 450, 000 341 Changsha. Hupeh. _ ... ........ . ... . 71, 428 27,150, 000 380 Wuchang. Kansu_______ 125, 483 6, 000, 000 47 Lanchowfu. Kiangsi ....... 69,498 24, 500, 000 352 Nanchang. Kiangsu. ... 38, 610 33, 800, 000 875 Nanking. Kwangsi... .. .. 77, 220 12, 250, 000 159 Kweilin. Kwangtung ...... 100, 000 37,150, 000 11,100, 000 372 Canton. Kweichow_____ 67,182 167 Kweiyang. Shansi.... 81,853 11, 000, 000 134 Taiyuanfu. Shantung.... ...... 55, 984 30, 800, 000 552 Tsinan. Shensi_____... . 75, 290 9, 450, 000 125 Sianfu. Szechwan... . ___ . . . .. 218, 533 49, 800, 000 228 Chengtu. Yunnan.. __ .. ___ . .. Shengking (Manchuria)_ 146, 714 9, 850, 000 67 Yunnanfu. (Mukden. Kirin (Manchuria)_ ___ Heilungkiang (Manchuria)... j 363,700 22,100, 000 61 •{Kirin. (Tsitsihar. Total.... 1, 896, 515 433, 500, 000 238 Sinkiang_ ... .. ___ _ .. . 550, 000 2, 500, 000 2 Mongolia.. .... 1, 370, 000 2, 500, 000 2 Urga. Tibet (Chinese estimate)__ 465, 000 6, 500, 000 14 Lhasa. Grand total___ 4, 282,000 445, 000, 000 104 The figures pertaining to area and population as given in the fore¬ going table are taken from the Chinese Post Office estimates of 1922. Where these figures conflict with estimates given elsewhere in this book, the reader is at liberty to make his own choice—for China has as yet take no official census. The sections below give brief summaries of general features in all the Provinces and dependencies of China. More detailed descrip¬ tions will be found in other parts of this book in the chapters de¬ voted to the American consular districts. PROVINCE OF ANHWEI Area .— 55,000 square miles (about equal to the State of Iowa). Latitude. —Corresponds to that of Mississippi. Population. — 20,000,000 ; 360 per square mile; densest in north. Topography. —South of Yangtze, mountainous; central section, fertile, well- watered plain; north of Hwai River plains are subject to droughts and inunda¬ tions. Agriculture. —Rice, cotton, wheat, and tea are raised. The central section exports large quantities of rice; the north exports wheat, beans, sorghum, tobacco, and millet; the south exports tea and silk exclusively. Minerals. —Coal is widely distributed but is of low quality. Iron deposits are large and of good quality. Industries. —Anhwei supplies a large proportion of China’s native ink. Na¬ tive paper is produced abundantly in the south. Wuhu has several modern rice and flour mills and is destined to become an important industrial city. Communications. —Rivers: Yangtze (ocean-going steamers), Hwai, and trib¬ utaries. Railways: Tientsin-Pukow line through northeastern sections; pro- 4 COMMERCIAL HANDBOOK OF CHINA jected line from Wuhu southwest to Nanchang in Kiangsi. Post offices, 123. Telegraph stations, 36. Cities. —Of more than 100,000 population: Anking (capital), Wuhu, Pochow. Other important cities: Pengpu, Tatung, Hweichow, and Luchowfu. Treaty ports. —Wuhu; Pengpu. Language and characteristics of natives. —Mandarin is spoken. The na¬ tives are simple, hardworking, and peaceable. American interests. —Under jurisdiction of Nanking consulate. PROVINCE OF CHEKIANG Area. —37,000 square miles (about the size of the State of Indiana). Latitude. —Corresponds to that of the southern half of Texas. Population. —22,000,000; 600 per square mile; densest in north and northeast. Topography. —South and west mountainous; large fertile plains in the north; rich agriculturally. Agriculture. —Rice, tea, silk, cotton, wheat, hemp, indigo, sugar, and fruits are produced. Rice is the principal crop. Tea is grown in the hills. Silk, for which the Province is noted, produces two crops. Cotton is increasing in importance, the districts between Shaohing and Ningpo producing an excellent * quality in abundance. Minerals. —There are coal, iron, alum, and soapstone deposits, but they are little developed. Industries. —Silk culture and manufacture comprise the leading industry. Huchowfu produces the best raw silk and Hangchow the best silk cloth. There are in Ningpo three cotton mills with 55,000 spindles for the manufacture of cotton yarn, and 275 looms for weaving cotton cloth. Kasliing is noted for its brass and copper ware. Fans umbrellas, joss paper, and Chinese pens (brushes) are made in large quantities in Hangchow. Shaohing produces China’s best sarnshu (rice wine), of which it shipped 6,000 tons in 1916. The soapstone ware of Wenchow is famous. Communications. —Waterways: The Province is a network of rivers, canals, and creeks, navigable by native craft. There is a steamer service between Shanghai, Ningpo, and Wenchow. Railways: Shanghai-Hangchow-Ningpo; projected, Hangchow-Wuhu and Ningpo-Wenchow. Post offices: 107. Tele¬ graph stations, 42. Cities. —Hangchow (capital) 600,000 population. More than 100,000; Shao¬ hing, Ningpo, Ilucliow. Other important cities: Lanchi, Hashing, Chuchow, Kinliwafu. Treaty ports. —Hangchow, Ningpo, Wenchow. Language and characteristics of natives. —A form of Mandarin is spoken. The natives are enterprising; they are splendid seamen. American interests. —Under the jurisdiction of the Shanghai consulate general. PROVINCE OF CHIHLI Area. —116,000 square miles (about the size of Arizona). Latitude. —Corresponds to that of Illinois. Population. —34,200,000; 300 per square mile; densest in plain toward the southwest. Topography and climate. —Mountainous in north and west; great eastern plain is hot and very productive in summer owing to timely rains, but cold and subject to dust storms in winter, with streams frozen. Agriculture. —Sorghum, millet, wheat, Indian corn, beans, cotton, hemp, pea¬ nuts, walnuts, and fruits constitute the main crops. Wheat is sown in the late fall and harvested in early summer, after which the other crops are planted, corn and beans being planted in the same fields. The cotton is grown on the higher land, is short staple, and finds a ready market in America for the manufacture of blankets. Minerals. —There are deposits of coal (anthracite and bituminous), lime¬ stone, and salt. The Province is particularly rich in high-grade coal, with the largest mines in China worked by modern machinery and methods. Industries. —Tientsin is a very important export and import center. There are wool-cleaning works, besides hydraulic presses for wool, jute, skins, rugs, and hides, in preparation for export; these are under foreign management. Coal mines, flour mills, cotton spinning and weaving mills, cement works, railway shops, and cigarette, match, woolen carpet, and tile factories are among the modern industries of North China. BRIEF GEOGRAPHICAL DESCRIPTION 5 Communications. —Waterways: Pei River and Grand Canal, navigable for small boats. Railways: Peking-Mukden, Tientsin-Pnkow, Peking-Kalgan, Peking-Hankow, and Peking-Mentowkow. Post Offices, 191. Telegraph sta¬ tions, 82. Cities. —Tientsin, 1,300,000; Peking (national capital) 800,000; Paotingfu, 100,000. Treaty ports. —Tientsin, Kalgan, Kweihwacheng, Hulutao, Chihfeng, Dolon nor, and Cliinwangtao. Language and characteristics of natives. —Northern Mandarin is spoken. The natives include Chinese, Mongols, and Manchus with predominance of Tartar blood. American interests. —Under jurisdiction of Tientsin consulate general. The American Legation at Peking has jurisdiction over whole of China. PROVINCE OF FUKIEN Area. —46,000 square miles (about the size of the State of Mississippi). Latitude. —Corresponds to that of southern half of Lower California. Population. —13,000,000; 280 per square mile; densest along coast and in Min River Valley. Topography and climate. —The Province is mountainous, the mountains run¬ ning parallel with the coast. The coast is broken with many bays and three good harbors—Santuao, Foochow, and Amoy. The climate is semitropical. Agriculture. —In order of their importance, the principal products are rice, timber, tea. fruits—of which oranges, olives, lungngans, litchis, and plums are the most important—bamboo shoots, sugar cane, wheat, and sweet potatoes. Minerals. —The principal minerals now being worked are coal, talc, porce¬ lain clay (kaolin), limestone, and iron. There are known deposits of molybdenum, gold, lead, silver, copper, and graphite not being worked. Industries. —Next after agriculture, the principal industries are the milling and exporting of lumber; the manufacture of paper from bamboo pulp; the export of tea; the making of tinfoil, paper umbrellas, matches, and soap; fish¬ ing; and boat building. In the way of modern-type factories there are in Foochow a combined tannery and liquor distillery, a few camphor refineries, two small knitting mills making socks and towels, and a rubber factory which makes rubber soles for shoes. In Amoy there are two fruit canneries. From Amoy there is a large emigration of labor to the South Seas and to Singapore. Communications. —Waterways: Coastwise trade, Amoy, Hinghwa, Foochow, and Santuao connected with Shanghai and Hongkong; foreign, Amoy and Foochow connected with Formosa and the Philippines. Min River is navigable to Foochow by small steamers, beyond Foochow to Shuikow by launches; beyond Shuikow by small boats. Railways: Amoy-Changchow. Approxi¬ mately 40 per cent of transportation is carried on by human carriers, 40 per cent by nonpower boats, and 20 per cent by steamboats and railway. Post offices (first, second, and third class), 40. Telegraph stations, 20. Cities. —Of more than 500,000: Foochow (capital). More than 100,000: Amoy. Other large cities: Changchow and Chuanchowfu. There are 22 other cities, each with population of more than 20,000. Treaty ports. —Amoy, Foochow, and Santuao. Language and local characteristics. —The Amoy, Foochow, and Southern Mandarin are the principal dialects. The natives of the southern part of the Province differ from the rest in being more adventurous. The natives of northern Fukien greatly dislike to leave their own local habitat. American interests. —Under jurisdiction of Foochow consulate for north Fukien (approximately three-fifths of the Province) and of Amoy consulate (approximately two-fifths) for south Fukien. PROVINCE OF HONAN Area. —68,000 square miles (about the size of the State of Washington). Latitude. —Compares with South Carolina. Population. —30,850,000; 450 per square mile; slightly denser in north. . Topography and climate. —Hilly on western boundary, with plains elsewhere; floods of Yellow River a constant menace. Soil fertile. Climate: Summer hot, with considerable rainfall; winters cold and dry. Agriculture. —Wheat, sorghum, beans, millet, sesame, Indian corn, rice, cotton, and peanuts are the principal products. Honan is becoming important for its cotton production. 6 COMMERCIAL HANDBOOK OF CHINA Minerals. —Coal and iron are the principal minerals. The Peking Syndicate operates extensive coal-mining properties in Honan. Industries. —Coal mining, brick making, and cotton manufacture constitute the main industries; otherwise mainly agricultural. Communications. —Waterways : Of the three rivers—Yellow, Hwai, and Wei— only the Yellow is navigable, and that one only in sections. Railways: Peking- Hankow, and the Lung-Hai, extending east and west. Extensive cart traffic is carried on over poor country roads. Post offices, 149. Telegraph stations, 51. Cities. —Of more than 100,000 population: Kaifeng (capital) ; Chengchow is rapidly becoming a city of importance in trade and industry and will soon be opened to foreign trade and residence; there are 12 cities with population exceeding 20,000. Treaty ports. —It is anticipated that Chengchow will soon become a treaty port. Language and characteristics of natives. —Mandarin is spoken. There are few immigrants from other Provinces and few native tribes. American interests. —Under jurisdiction of Tientsin consulate general for region north of Yellow River and Hankow consulate general for territory south of river. PROVINCE OF HUNAN Area. —83,000 square miles (about that of Minnesota). Latitude. —Corresponds to that of Florida. Population. —29,000,000; 350 per square mile; densest in river valleys and around Tungting Lake. Topography. —Mountainous, especially in -west and south; Tungting Lake (75 by 60 miles) in northeast receives waters of four rivers. Plains lie south of Changsha. Agriculture. —Probably no Province surpasses Hunan in agricultural wealth. Rice is the main crop. Tea, beans, ramie, sesame, bamboo, wood oil, vegetable tallow, cotton, tobacco, melons, fruits, and wheat are among its products. It also produces excellent pork. Minerals. —There is abundant mineral wealth. Antimony, lead, zinc, coal, iron, manganese, tin, and quicksilver are the principal minerals. Hunan pro¬ duces a large proportion of the world’s supply of antimony. Industries. —Mining is the main industry. Native paper from bamboo pulp, grass cloth, silk embroideries, and cotton nankeens are extensively manu- . factured. Hunan hams are shipped all over China. Bamboo manufactures are noted. Changsha is developing into an industrial center. Communications. —Waterways: Steamer traffic on lake and between Chang¬ sha and Hankow. Siang, Lei, and Yuen Rivers are navigable, except during low-water season in winter. Railways: Changsha is connected by rail with Hankow and will be connected later with Canton. Hunan is connected by roads with neighboring Provinces. Post offices, 78, Telegraph stations, 51. Cities. —Of more than 100,000 population: Changsha (capital), Changteh, and Sinangtan. Treaty ports. —Changsha and Yochow. Language and characteristics of natives. —The local Mandarin dialect is spoken. The natives are progressive, but distinctly provincial. American interests. —Under jurisdiction of Changsha consulate. PROVINCE OF HUPEH Area. —71,000 square miles (about the size of Oklahoma). Latitude. —Corresponds to that of the State of Louisiana. Population. —27,100,000; 380 per square mile; densest on the plain. Topography—It is said of Hupeh that it is three parts hills, six parts water, and one part habitable land. The Yangtze and Han Rivers intersect the Province, and there are numerous lakes and canals. Agriculture. —Rice, cotton, tea, and beans form the principal crops. Sesame, tobacco, wheat, ramie, and silk are also important products. Eggs and egg products, nutgalls, and vegetable and animal tallows figure in the export trade of Hupeh. Minerals. —Iron and coal are the main minerals. The Tayeh iron mines of Hupeh are the largest in China. Industries. —Iron and steel production is very important. Hankow is called the “ Chicago of China.” It is a great collection and distribution center. BRIEF GEOGRAPHICAL DESCRIPTION 7 Cotton mills, flour mills, cigarette factories, oil mills, iron works, egg-products plants, ore refineries, and cement plants are among its industries. The Prov¬ ince produces large quantities of fish. Hankow is the center of the tea in¬ dustry in China. It is an important export center for cotton, wood oil, sesame, tobacco, hides and skins, tea, pig iron, raw silk, bristles, ramie, egg products, hemp, and nutgalls, listed in order of importance. Communications. —Waterways: Ocean-going steamers to Hankow eight months in the year; river traffic between Hankow and upper Yangtze; Han¬ kow and Changsha; and Hankow and Laohokow (on Han River). Railways: Peking-Hankow; Wuchang-Changsha (to be completed later to Canton) ; line projected from Hankow into Szechwan via Ichang (part of Hukuang system). A modern motor highway extending from Shasi to Siangyang, a distance of 160 miles, was completed in 1924. Provincial roads are numerous, but in poor condition. Post offices, 143. Telegraph stations, 49. Cities. —Hankow, Wuchang, and Hanyang, the “Wuhan cities,” have a combined population of 1,500,000. Hupeh has six other cities with more than 25,000 population. Treaty ports. —Hankow, Ichang, Shasi. Language of natives. —Mandarin is spoken. There are but few immigrants in the Province. American interests. —Under jurisdiction of Hankow consulate general. PROVINCE OF KANSU Area. —125,000 square miles (about that of New Mexico). Latitude. —Corresponds to that of California. Population. —6.000,000; 48 per square mile; most sparsely populated Province. Topography and climate. —Mountains across Kansu northwest to southwest; south very mountainous; east and northeast a large, fertile, loess plateau; north wild and uninhabitable. Climate dry, with cold, dry winters. Agriculture. —Wheat, millet, cotton, tobacco, fruits, and peanuts are the principal products. The Province is pastoral rather than agricultural; sheep and cattle are raised in large numbers. Minerals. —Little is known regarding the mineral wealth. Industries. —Sheep and cattle raising, and production of wool and hides con¬ stitute the main industries. Communications. —Waterways: Tributaries of Yellow River navigable dur¬ ing summer season for short distances for small boats; in winter by ice rafts. No railways. Country roads adapted to cart traffic. Post offices, 48. Tele¬ graph stations, 21. Cities. —Lanchowfu (capital), population 500,000. Other important cities: Tsinchow, Siningfu, Liangchowfu. Treaty ports. —None. Language and characteristics of natives. —Western Mandarin is spoken. A large number of Mohammedans. There are some Mongols in the north. American interests. —Under jurisdiction of Plankow consulate general. PROVINCE OF KIANGSI Area. —68,000 square miles (about the size of the State of Missouri). Latitude. —Corresponds to that of Florida. Population. —24,500,000; 360 per square mile; densest around Poyang Lake and in Kan Valley. Topography and climate. —Mountainous, except Poyang Lake Basin; country around lake, marshy; Kan River drains larger part of Province. Climate humid. Agriculture. —Rice, tea, tobacco, bamboo, peanuts, fruits, indigo, and grains are the main products. Camphor trees are found in many places, but in an isolated way. Ramie is quite extensively grown. Minerals. —There are deposits of coal and kaolin (China clay). The Ping- siang coal mines have an annual output of about a million tons. Industries. —Coal mining and the manufacture of coke and briquets constitute a great industry at Pingsiang, where modern machinery and methods are em¬ ployed. The porcelain industry of Kiangsi is ancient and far famed; with reorganization along modern lines, it could be made one of the very important 8 COMMERCIAL HANDBOOK OF CHINA and profitable industries of China. About one-lialf of China's production of grass cloth is made in Kiangsi. Communications. —Waterways: Steamers through Poyang Lake and Kan River to Nanchang; Kan River and tributaries navigable for native boats. Railways: Kiukiang-Nanchang, Pingsiang-Chuchow; line projected from Nan¬ chang to Santuao or Swatow. The country roads are poor, and, most of the traffic being by water, 70 or 80 walled cities can be reached by boat the greater part of the year. Post offices, 96. Telegraphs stations, 36. Cities. —Of more than 100,000 population; Nanchang (capital), Kanchow, Kianfu, and Kingtehchen. Six other cities have population of more than 25,000. Treaty port. —Kiukiang. Language of natives. —Mandarin, except in the east, where a dialect of Fukienese is spoken. American interests. —Under the jurisdiction of the Hankow consulate gen¬ eral. PROVINCE OF KIANGSU Area. —38,600 square miles (about the same as that of Kentucky). Latitude. —Corresponds to that of Mississippi. Population. —33,800,000; 880 per square mile; densest on Kaimen Promontory and Tsungming Island. Topography. —Great alluvial plain, south comprising portion of Yangtze Delta, 120 by 60 miles. Land low lying, abounding in swamps and lagoons, but noted for fertility. Agriculture. —Silk, cotton, rice, beans, peanuts, wheat, bamboo, vegetables, and fruits are the main products. Wusih enjoys the reputation of producing the finest silk in the world. Cotton is being produced in larger quantities each year. Minerals. —The Province is poor in minerals. Industries. —The greatest development has been in the cotton industry. There are 72 cotton-spinning mills with a total of 2,300,000 spindles and 15,000 looms operating at Shanghai and immediate vicinity. Flour mills, electric light and power plants, oil mills, egg-products plants, match factories, paper mills, elec¬ tric-lamp factories, chemical works, shipbuilding and engineering works, soap and candle factories, cigarette factories, sawmills, printing and publishing houses, cement plants, spinning mills, breweries, brush factories, sugar refin¬ eries, aerated-water factories, tanneries, and canning factories are among the industries that make Shanghai the leading manufacturing center of China. Kiangsu’s leading industry is silk. Wusih, Nanking, and Soochow are the principal centers for the manufacture of silk cloth. Communications. —Waterways: All the rivers are navigable, and the Province is interlaced with canals. Railways : Shanghai-Nanking ; Shanghai-Hangchow- Ningpo; Shanghai-Woosung. Country roads are poor and few in number, as water transportation makes them unnecessary. Post offices, 144. Telegraph stations, 69. Cable companies, 3. Cities. —Shanghai, population of 1,750.000; Soochow, 600,000. More than 100,000: Nanking (capital), Wusih, Chinkiang, Yangchow. Treaty ports. —Shanghai, Chinkiang, Nanking, Soochow, Woosung. Language of natives. —Throughout the Province, Soochow or Shanghai dialect and Mandarin; in Shanghai, besides Shanghai dialect, also Ningpo and Cantonese. American interests. —In eastern section of Province, under Shanghai con¬ sulate general; in western half, under Nanking consulate. PROVINCE OF KWANGSI Area. —77,000 square miles (about the size of Nebraska). Latitude— Corresponds to that of central Mexico. Population. —12,250,000; 160 per square mile; south and southeast most populous. Topography and climate. —Mountainous, ranges running southwest to north¬ east; West River and tributaries have fertile valleys. Climate tropical in south. Agriculture. —Rice, sugar, fruits, grains, bamboo, cassia, and aniseed are the main products. Kwangsi produces the world’s supply of star anise. BRIEF GEOGRAPHICAL DESCRIPTION 9 Minerals. —Antimony, coal, tin, iron, asbestos, and galena are known to exist, but are not developed. Industries. —Lack of railways prevent much development. Firecrackers and leather are made at Nanning. Wuchow has a hosiery factory, a silk filature, and a glass factory. Fishing lines made from the intestines of a species of silk worm which feeds on the camphor tree form a specialty peculiar to this Province. Communications. —Waterways: Steamer traffic on West River; launch serv¬ ice to Lungchow; motor boats ascend Fu tributary to Kweilin. There are no railways. Country roads are poor and in bad condition. Post offices, 279. Telegraph stations, 71. Cities. —Of more than 75,000 population: Nanning, Wuchow, and Kweilin (capital). PROVINCE OF KWANGTUNG Area. —100,000 square miles (roughly, the size of Oregon). Latitude. —Corresponds to that of south-central Mexico. Population. —37,200,000; 370 per square mile; densest in West River Delta and along the coast. Topography and climate. —Mountainous, except in valleys of West River; mountains extend southwest to northeast; valleys and delta regions very fer¬ tile, giving three crops a year; well-indented coast line, with good harbors; climate, tropical. Agriculture. —Silk, rice, sugar cane, tobacco, cassia, fruits, vegetables, bam¬ boo, tea, ginger, reed for matting, and hemp are the main products. Rice is the principal crop, in some places three crops being produced in a year. A very superior hemp is grown. The silk differs from Kiangsu or Chekiang silk in being soft and spongy and producing as many as seven and eight crops a year, compared with two in Chekiang. The oranges, litchis, pomeloes, and ginger of Kwangtung are far-famed. Minerals. —Iron and coal of good quality are known to abound. Tungsten, manganese, molybdenum, and antimony also contribute to the mineral wealth of Kwangtung, but there is very little development of these mineral resources, owing partly to lack of economic transportation and partly to unfavorable con¬ ditions otherwise. Industries. —Silk filatures, silk weaving mills, rice mills, matting factories, knitting mills, the carving of ivory, the making of lacquer, jade ornaments, embroideries, chinaware, firecrackers, hardwood furniture, medicines and drugs, and the preserving of fruits, ginger, etc., are among the manifold indus¬ tries of the Cantonese, noted for their progressiveness and industrious habits. Kwangtung is considered the wealthiest Province in China. Under ordinary circumstances it produces $60,000,000 (silver) in tax revenues. Communications. —Waterways: Steamer service with all coast ports; splen¬ did launch service in the delta region; water connections with adjacent Prov¬ inces ; country roads are few, though stone-paved and narrow and con¬ necting market towns beyond reach of waterways. Railways: Canton- Samshui, Canton-Shiuchow, Canton-Kowloon (Hongkong), Kongmoon-Taishan, Swatow-Chaochowfu; under construction, Canton-Hankow. Post offices, 1,178. Telegraph stations, 71. Cities. —Canton’s estimated population is 1.500,000. Between 100,000 and 500,000: Fatshan, Chaochowfu, Hongkong, Sheklung, Shekki, Samshui, Siulam, and Kongmoon. More than 25,000: Swatow, Macao, Hokshan, and Shaping. Treaty ports. —Canton, Swatow, Kongmoon, Kowloon, Lappa, Pakhoi, Sam¬ shui, Hongkong (ceded to Great Britain), Macao (ceded to Portugal), and Kwangchow (leased to France). Language and characteristics of natives. —Cantonese and tribal dialects are spoken. There are aborigines in the west and Hakkas in the northeast. With the exception of the student class, practically all of the Chinese who emi¬ grated to America were Cantonese. American interests. —In northern section, under jurisdiction of Swatow con¬ sulate; in central and southern section, of Canton consulate general. PROVINCE OF KWEICHOW Area. —67,000 square miles (about the size of the State of Missouri). Latitude. —Corresponds to that of Florida. Population. —11,000,000; 180 per square mile; densest in south and southeast. 10 COMMERCIAL HANDBOOK OF CHINA Topography. —Seven-tenths mountainous; a great table-land with mean alti¬ tude over 4,000 feet; valleys of Yuan and Wu Rivers deep and narrow. Agriculture. —Rice, tobacco, bamboo, wood oil, fruits, opium, and wheat are the principal products, though the Province has the reputation of being the most unproductive in China. Minerals. —Coal, nitrate of potash, iron, zinc, and quicksilver are said to abound, but resources in minerals are unexplored. Industries. —Mining seems to lend the greatest promise for the industrial future of this Province. Communications. —Waterways: Yuan and Wu both navigable for very small vessels. Four chief roads, all very narrow, radiate from Kweiyang, connecting with Yunnan, Szechwan, Hunan, and Kwangsi. There are no railways. Post offices, 48. Telegraph stations, 26. Cities. —Kweiyang (capital), 100,000; Anshunfu, 50,000; Tsunyi, 40,000. Treaty ports. —None. Language and characteristics of natives. —Mandarin is spoken among the Chinese, and there are also many tribal dialects. One-third of the people are Chinese and the remainder aborigines. American interests .—Under the jurisdiction of Changsha consulate. PROVINCE OF SHANSI Area. —82,000 square miles (about that of Kansas). Latitude. —corresponds to that of central California. Population. —11,000,000; 135 per square mile; densest in fertile depressions. Topography and climate. —A great loess plateau from 2,000 to 4,000 feet in elevation, with irregular mountain ranges running east and west; several large depressions, formerly lakes, form the fertile and populous sections of the Province. Winters are cold and summers hot; there are rains in spring and summer. Agriculture. —The loess soil is very fertile. Wheat, millet, sorghum, maize, cotton, tobacco, walnuts, peanuts, rapeseed, and grapes and other fruits, are the principal products. Minerals. —Shansi is reputed to be the richest Province in China in anthra¬ cite coal deposits. The Province is also rich in iron. Industries. —Agriculture and coal mining form the principal industries. Shansi is noted for its numerous native iron furnaces, but there is very little evidence of the development of modern industry. The Province needs rail¬ ways and irrigation works. Communications. —Waterways: The Fen River is navigable for flat-bottomed boats for 40 miles during a short season of the year. Cart roads traverse the fertile plains. These roads have often been worn so far below the surface of the surrounding country that they form veritable canyons. During the past few years 800 miles of graded dirt motor roads have been constructed. Railways: Taiyuanfu, the capital, is connected with the Peking-Hankow Railway by a nar¬ row-gauge line. The Peking-Kalgan line passes through northern Shansi. Cities. —Between 50,000 and 700,000: Taiyuanfu (capital) and Kweihwating. There are a dozen cities with populations of more than 20,000. Treaty ports. —None. Language of natives. —Mandarin. American interests. —Under jurisdiction of Tientsin consulate general. PROVINCE OF SHANTUNG Area. —56,000 square miles (about the size of Illinois). Latitude. —Corresponds with that of southern California. Population. —31,000,000; 550 per square mile; one of the most densely popu¬ lated Provinces; densest in west. Topography. —Mountainous in eastern and southern sections; western Shan¬ tung a great plain. Yellow River, which is not navigable, flows in northeasterly direction through Province, with frequent floods; soil rich. Good harbor at Tsingtao and one at Chefoo. Agriculture. —Shantung is a rich agricultural Province; wheat, cotton, millet, sorghum, peanuts, tobacco, maize, silk, fruits, hemp, walnuts, and vegetables are the principal products, in order listed. About 250,000 tons of peanuts are produced mostly for export. A fine quality of tobacco from American seeds is grown. BRIEF GEOGRAPHICAL DESCRIPTION 11 Minerals. —Coal and iron are the principal minerals. These are worked with modern methods and modern machinery .and have developed into im¬ portant industries. Industries. —Some of the products that contribute, along with coal and iron, to Shantung’s activities are straw braids; vermicelli, from beans, wheat, and sometimes sweet potatoes; pongee silk, from cocoons fed on oak leaves; pig bristles; egg albumen and yolk; cattle; peanut and bean oils; and hair nets. Within recent years, modern flour mills and cotton spinning mills have de¬ veloped into important industries in Shantung. Communications. —Waterways: Grand Canal, principal waterway of commerce; Yellow River navigable through Shantung by small native craft only. Rail¬ ways : Tientsin-Pukow, Kiaochow-Tsinan, with branch to Poshan. Country roads used extensively throughout Province for carts, w T heelbarrows, and pack animals, with about 500 miles of roads used for motor transportation. Post offices, 148. Telegraph stations, 76. Cities. —Tsinan (capital), 300,000. Population of more than 75,000; Chefoo, Tsining, Tsingtao, Weihsien, and Taianfu. Treaty ports. —Chefoo, Tsingtao, Tsinan (voluntarily opened port), Lung- kow, and Weihaiwei. Language and characteristics of natives. —Northern Mandarin is spoken. The natives are hardy and peaceable, and constitute the bulk of the millions of immigrants into Manchuria. American interests. —In Shantung promontory, under jurisdiction of Chefoo consulate; in central and southern Shantung, under Tsinan consulate; in Kiaochow, under Tsingtao consulate. PROVINCE OF SHENSI Area. —75,200 square miles (about equal to that of Nebraska). Latitude. —Corresponds to that of Arizona. Population. —9,450,000; 125 per square mile; densest in Han and Wei River Valleys. Topography. —High mountain ranges extend across northern and southern ends ofxProvince; north of Wei River country is a great, fertile, low table¬ land ; Wei Basin is called “ cradle of China ”; Province was once noted for forests, but now hills are denuded of trees. Agriculture. —The valleys of the Wei and Han Rivers are particularly pro¬ ductive. The Wei Basin produces the finest quality of cotton grown in China. Wheat, corn, tobacco, Irish potatoes, alfalfa, beans, oats, barley, millet, peanuts, silk, persimmons, and rapeseed are also produced, the staple crop being w T heat. Minerals. —Shensi’s mineral wealth remains to be exploited. It is sup¬ posedly rich in coal and petroleum. Lack of railways and good roads have prevented development. Industries. —Native flour mills operated by water wheels are numerous. Mules, cattle, and sheep are raised in large numbers. Communications. —Waterways; The Han River is navigable as far up as Hanchungfu; the Province is poor in navigable waterways. Railways; None; but a projected line crosses Central China through the Wei Basin into Kansu. There is an old road crossing from Shansi over the Wei Basin into central Asia, over which the traffic, by carts and pack animals, is very heavy. A road also passes through this basin from Peking to Chengtu in Szechwan, follow¬ ing also the Han River Valley but crossing over mountain passes 8,000 feet high. Coolies and pack animals by the thousands may be seen on this great highway. Post offices, 57. Telegraph stations, 19. Cities. —Sianfu (capital), population 200,000. Treaty ports. —None. Language of natives. —Mandarin. American interests. —Under jurisdiction of Hankow consulate general. PROVINCE OF SZECHWAN Area. —220,000 square miles (about 80 per cent of the size of Texas.) Latitude. —Corresponds with that of Texas. Population. —50,000,000 ; 230 per square mile; Chengtu plain, 45 by 90 miles, has densest population, estimated at more than 2,000 per square mile. Topography and climate. —Three-fourths of Province is high plateau w T ith mountains extending to an altitude of 18,000 feet; this plateau, of red sand- 12 COMMERCIAL HANDBOOK OF CHINA stone, slopes toward east and southeast; Chengtu plain remarkably pro¬ ductive; southern part of Szechwan semitropical. Agriculture. —Szechwan claims to produce everything raised elsewhere in China. Silk, wheat, sugar, tobacco, fibers, rhubarb, bamboo, tea, herbs, and wood oil figure among the important products. The Chengtu plain is perfectly irrigated by an artificial system 2,000 years old, and is probably the most fertile spot for its size in China. Minerals. —No proper investigation (or at least none whose results have been made public or otherwise accessible) has been made of the supposedly great mineral wealth of Szechwan, including iron, coal, copper, gold, quick¬ silver, and petroleum, all of which are reported as being present in quantity. The salt wells bored to a depth of 3,000 feet have disclosed the presence of petroleum and gas in considerable quantity. Industries. —Szechwan has but one outlet that can be advantageously used— the Yangtze River. As navigation on the dangerous upper Yangtze has up to recent times been confined to junks, the Province has always been self- supporting. During the past few years, however, steam navigation has rap¬ idly developed and it is believed that this will gradually affect the industrial situation. The silk industry is probably the leading industry in Szechwan. Wood oil, salt, brown sugar, vegetable tallow, insect wax, medicines, hides, bristles, tobacco, wool, musk, and paper enter into the industries of the Province. The Szechwan salt wells are famous, some of them being 3,000 feet deep, bored by drills dropped down with bamboo ribbons, and requiring generations to reach this depth. Communications. —Waterways: Steam navigation has developed rapidly dur¬ ing the past few years, and especially during the last three years, until there are now more than 30 steamers plying above Ichang during the summer and one-third of this number in the winter. There is steam traffic on the Yangtze as far as Suifu, and in the summer as far as Iviatingfu on the Min River. The three main branches of the Yangtze in Szechwan carry a heavy junk traffic, but steamers are rapidly displacing junks on the Yangtze below Chungking. Railways: None, though several have been projected and a concession has been granted to an American concern. There are practically no cart roads. Travel is by foot, on horseback, or by chair. There are no automobiles in the Province. Goods are carried on backs of animals or men. Post offices, 183. Telegraph stations, 49. Cities. —Chungking, 800,000; Chengtu (capital), 400,000. More than 100,000: Kiatingfu, Fowchow, Wanhsien, Tzeliutsing. Between 25,000 and 100,000; Chungpa, Batang, Ningyuanfu, Fengtuhsien, Kweichowfu, Suifu, and Yachowfu. Treaty port. —Chungking. Language and characteristics of natives. —Western Mandarin and tribal dia¬ lects. Chinese and aboriginal tribes. American interests. —Under the jurisdiction of the Chungking consulate. PROVINCE OF YUNNAN Area. —146,700 square miles (almost exactly that of Montana). Latitude. —Corresponds to that of Cuba and southern Florida. Population. —10,000,000; 70 per square mile; densest on table-land. Topography and climate. —Mountainous throughout; high and narrow moun¬ tain ranges on west; high table-land on east. Yunnanfu, the capital, lies at elevation of 6,200 feet. Climate in higher altitudes good. Along low- lying river beds, usually damp, foggy, and unhealthful. Greatest rainfall in summer months. Agriculture. —Rice, principal crop. Beans, wheat, and maize extensively cultivated. Minerals. —Wide variety of minerals, but commercially only tin is important. Production of tin is 10.000 short tons. Industries. —Agriculture and mining form basis of industries, which are still crude and primitive, cotton weaving being most important. Communications. —Haifong-Yunnanfu Railway (French) 534 miles. Nar¬ row-gauge railway connects Cochin tin mines with regular line. Regular steamship service between Hongkong and Haifong. Transportation otherwise by pack animals. Post offices, 54. Telegraph stations, 35. Cities. —Yunnanfu (capital) with population of 170,000, (200 foreigners), is chief commercial center; although not a treaty port, foreign firms are located there. BRIEF GEOGRAPHICAL DESCRIPTION 13 Treaty ports. —Mengtsz and Hokow in east; Szemao and Tengyueh in south and west respectively. Language and characteristics of natives. —Western Mandarin is spoken. There are many aboriginal tribes speaking tribal dialects. American interests. —Under jurisdiction of Yunnanfu consulate. MANCHURIA (THREE EASTERN PROVINCES: SHENGKING, KIRIN, HEILUNGKIANG) Area. —365,000 square miles (about the size of California, Oregon, Washing¬ ton, and Ohio combined). Latitude. —Corresponds to that of northern United States and southern Canada. Population. —22,000,000; 60 per square mile; densest in Liao Plain. Topograph and climate. —Three Provinces, Shengking (Fengtien), Kirin, and Heilungkiang; northern region larger and better wooded, sloping toward Amur River; southern, more fertile, more thickly inhabited, sloping toward Gulf of Liaotung; Sungari Plain in north and Liao Plain in south have fertile soil and splendid crops; large areas still uncultivated; on rich plateau lands, grass sometimes grows 6 feet high. Climate is healthful, though winters are long and very severe. Agriculture. —Manchuria contains some of the finest agricultural land in the world. Lack of adequate transportation and presence of brigands have caused this virgin country—so sparsely inhabited, so rich in possibilities, and in such close proximity to densely populated areas—to remain all these centuries without having been effectively colonized. The principal crop of Manchuria now is beans, an article whose value has only recently come to be appreciated by the outside world. Wheat ranks second in importance. Other cereals, such as millet, sorghum, and maize, are raised in large quantities. Silk (from worms fed on oak leaves), indigo, vegetable oils, fruits, and livestock add to Man¬ churia’s agricultural w r ealth. Minerals. —Practically the whole of South Manchuria is one vast coal field. Iron and gold are also found. Japanese capital is developing the coal and iron properties in a large way. Gold, silver, copper, iron, and soda are found in North Manchuria. Of these only gold, coal, and soda are produced, gold chiefly in the northern part of Heilungkiang, on the tributaries of the Amur River, and coal at Manchuria Station, Chalainor, Machiaohe (near Suifenho), and at other places. The Chinese Eastern Railway and Russian and Chinese private capital are interested in developing coal mines. Industries. —Manufacturing of bean products, flour milling, lumbering, and cattle raising constitute great industries in Manchuria. Raw silk, tobacco, furs and skins, and iron and coal are becoming the bases of profitable indus¬ tries, employing in some cases enormous capital. The South Manchuria Rail¬ way, with its ramifications of industry, including coal, iron, and steel indus¬ tries, is the biggest institution in South Manchuria. The Chinese Eastern Railway is the largest enterprise in North Manchuria. These railways have directly and indirectly developed industries, populated the country, and brought prosperity to the settlers. Communications. —Waterways: The Amur River is navigable for the largest river steamers from Nikolaevsk, near its mouth, to Blagoveshchensk; and smaller steamers go on to Stretyinsk, more than 1,500 miles from its mouth. Owing to a series of sand bars across the mouth of the river, large ocean steamers are not able to go up to Nikolaevsk, but the dredging operations that have been undertaken will, when completed, enable ocean vessels to go up the river at least as far as Khabarovsk. The Sungari is navigable to Kirin, the Nonni to Tsitsihar, the Liao to Tungkiantze, and the Yalu for its entire course. Railways: Mukden is con¬ nected on the south with Tientsin and Peking, on the north with Harbin and Tsitsihar, on the southeast with Port Arthur and Dairen, and on the east with Antung; through rail service from Peking to Yokohama, via Manchuria and Korea, is established, and also in peace times from Peking to Petrograd via Manchuria. Through the Chinese Eastern Railway, Harbin is connected on the south with Changchun (which is the northern terminus of the South Manchuria Railway, leading to Mukden and Dairen), on the west with Man- chouli, the terminus of the Chita Railway, which connects with the Trans- Siberian trunk line leading to Europe, and, on the east, with Nikolsk. the ter¬ minus of the Ussuri Railway, which leads to Vladivostok and the Pacific Ocean. The express trains of the Chinese Eastern Railway are ranked among the best 14 COMMERCIAL HANDBOOK OF CHINA in the world. Motor traffic is being rapidly developed in Harbin and other places in North Manchuria; in the winter a motor car can travel anywhere across the country. Post offices, 203. Telegraph stations, 132. Cities. —Harbin, 100,000 foreigners, mostly Russians (larger white population than any other city in Asia), and 200,000 Chinese; Dairen, 186,000; Mukden, 200,000 Chinese; Kirin, 100,000. Changchun, Aigun, and Newchwang are other important cities. Treaty ports. —Aigun, Antung, Dairen (Japanese leased territory), Manchouli, Newchwang, Sansing, Suifenho, Harbin, Mukden, Fakumen, Fenghwangcheng, Hsmmintun, Tieliling, Tungkiangtze, Yingkow, Liaoyang, Changchun, Kirin, Ninguta, Chientao, Tsitsihar, Hailar. Language of natives. —Northern Mandarin is most common. Russian, how¬ ever, is the commercial language of North Manchuria, although both Chinese and Japanese are employed in dealing with the many important firms of those two nationalities. American interests. —In North Manchuria, under jurisdiction of Harbin con¬ sulate ; in southeast, of Antung consulate; in Dairen and leased territory, of Dairen consulate; in South Manchuria, of Mukden consulate general. CHINESE DEPENDENCIES MONGOLIA Area. —1,370,000 square miles (about one and one-lialf times the area of that portion of the United States lying east of the Mississippi). Latitude. —Corresponds with Northern United States and Southern Canada. Population. —2,500,000; 2 per square mile; densest in east and in river valleys. Topography and climate. —A vast basin-like plateau of 3,000 to 4,000 feet elevation, surrounded by mountain ranges and undulating steppes; near center is Gobi Desert, of more than 260,000 square miles; frequent sandstorms; atmos¬ phere dry, winters extremely cold. For purposes of administration country is divided into two sections—northern or Outer Mongolia, and southern or Inner Mongolia. Agriculture. —The country is pastoral and the people nomadic. Cattle raising and sheep raising are carried on, with agriculture in certain favored regions. The average annual rainfall is between 8 and 10 inches a year. The principal crops are grass, wheat, and millet. Minerals. —Gold has been mined for years. The mineral wealth is subject to investigation, but the region is reputed to be rich in coal, iron, copper, gold, silver, lead, and zinc. Industries. —Cattle and sheep raising, hides, wool (sheep and camel), licorice, and drugs seem to constitute the leading items of production. Communications. —Waterways: Canals and rivers are little used, as they are off the trade routes. Railways: None; one projected to connect Urga, the capital, with the Peking-Kalgan line.. Ten or twelve foreign and Chinese com¬ panies are engaged in motor-car transportation service between Kalgan and Urga, making the trip in four days and using, in the main, American cars. Roads are poor and not well marked. Main highway leads from Kalgan to Kiakhta via Urga. Caravan routes lead to Siberia, with camel and bullock wagon trains. Cities. —Urga (capital), 38,000; the only important city. Treaty ports. —Urga and Kiakhta, but present status difficult of determina¬ tion, owing to dominance of Soviet Russia’s political interests. Language and characteristics of natives. —Mongolian is spoken. The people of the west are Turkish, those of the south are Chinese, while the Mongols inhabit Mongolia proper. American interests. —Under jurisdiction of Kalgan consulate. SINKIANG (INCLUDING NEW PROVINCE AND CHINESE TURKESTAN) Area. —550,000 square miles. Population. —2,500,000; 4 per square mile; densest in eastern section. Topography. —For the most part Chinese Turkestan is an immense desert, surrounded by mountains of great height. Fertile spots occur only here and there. Agriculture. —Where irrigation is possible, splendid crops are produced. The famous oasis of Hami is exceptionally fertile, producing barley, oats, BRIEF GEOGRAPHICAL DESCRIPTION 15 millet, and wheat. Its melons are famous throughout China, for in former years many were sent to the Peking court. Minerals. —Chinese Turkestan produces a fine quality of jade. Its mineral resources are as yet unknown. Industries. —Horses, camels, donkeys, sheep, and goats are raised. Carpets, jade, furs, skins, and silk fabrics are among the articles produced. Communications. —S'everal ancient roads, of great historical interest but in bad condition, are used as trade routes. Cities. —Kashgar, 60,000 ; Yarkand, 50,000; Khotan, 30,000 ; Turfan, 20,000; TJrumtsi, 30,000. American interests. —Under the jurisdiction of Hankow consulate general. TIBET Area. —465,000 square miles. Population. —6,000,000; 12 per square mile. Topography. —The greater part of Tibet is desert, but valleys in the south and west are fertile and vegetation is luxuriant. The valley of the Chumbi River is reported to be the most fertile portion. The country as a whole has the greatest average elevation of any similar area in the world. On account of its marginal mountain ranges it is almost inaccessible. Agriculture. —In the fertile valleys are grown fruits and vegetables, as well as corn and barley. Tibet furnishes excellent pasture lands. The domestic animals—the tame yaks, asses, goats, sheep, and horses—are sources of wealth to the natives. Minerals. —Little is known of the mineral wealth, though all writers speak of gold abounding in free form. There is a superstition against mining, there¬ fore it is discouraged. Tibet is, however, regarded as rich in minerals. Industries. —Yak hides, lambskins, musk, gold dust, wool, saddle rugs, car¬ pets, and medicines are some of the products exchanged for Chinese wares and products. The Tibetans generally lack enterprise, though they are highly spoken of in various other respects. Communications. —Roads are few and bad. Rope bridges are used in cross¬ ing rivers and torrents. Sometimes the yak skin is used in making a sort of light ferryboat. Government couriers, traveling day and night, with relays of horses, have been known to reach Peking from Lassa within a month. Cities. —Towns are all small, generally with a maximum of a few hundred inhabitants. Lhasa, the capital, has 40,000, more than half of whom are priests. This number is augmented considerably from time to time by pilgrims. Treaty port. —Yatung, a small town with only a few score inhabitants. Language and characteristics of natives. —The language of the natives is polysyllabic and highly developed. They are credited with being among the more highly endowed peoples of the world. They are fond of music and dancing and are complimented by travelers for their kindly bearing, cheer¬ fulness, and frankness. American interests. —Under the jurisdiction of the Chungking consulate. 16 COMMERCIAL HANDBOOK OF CHINA F ' ' > '4 l;f * i- i I Fig. 1. —Steamship President J'cfferson leaving Shanghai. Among passengers ate upwards of 100 students bound for colleges in United States SKETCH OF CHINESE HISTORY Dr. F. L. Hawks Pott, President, St. John’s University, Shanghai Connected with the story of China there are three remarkable features. Firstly, antiquity, for whereas many ancient nations men¬ tioned by Herodotus as its contemporaries have passed away, China still exists; secondly, the development of a unique civiliza¬ tion, reaching its climax some 3,000 years ago; and thirdly, isola¬ tion, owing to the fact that for a long stretch of time there was little intercommunication or cross-fertilization with other peoples. EARLIEST PERIOD The origin of the Chinese race remains one of the unsolved prob¬ lems of history, and all that we can say with certainty is that it came from somewhere in western Asia. Ethnologically the Chinese differ from other races of western Asia, as is seen by the structure of the hair and the formation of the eyes. In the south there has probably been considerable admixture of Malaysian blood. Originally a nomadic people, the Chinese found their way through the pass between the Tienshan and Altai Mountains, and settled near the banks of the Yellow River in what is now the Province of Shensi. Here they rapidly developed into an agricultural people, and, as in the case of the Euphrates and Nile, we find the growth of a civilization connected with a great river valley. It goes without saying that the Chinese were not the first inhab¬ itants of the country in which they settled. They were brought into conflict with aborginal tribes, much as the European settlers in North America were with the Indians. Remnants of these ancient tribes, called the Lolos, the Shans, and the Miaotse, are found in the islands of Formosa and Hainan and in Kweichow, Sczechwan, Yunnan, Kwangtung, and Kwangsi Provinces, in South and West China. The geographical situation of China helps to account for its long-time isolation from the rest of the world. On the west, the northeast, and the southwest there are great mountain ranges, and on the east the waters of the Pacific. The chief access in ancient times was over a long stretch of desert by the caravan route, which entered from the northwest through the pass we have referred to between the Tienshan and Altai Mountains. In this way there was some commercial relation with central and western Asia and with the .Mediterranean world, but China was not brought into close commercial relationship with the European world until the sea route around the Cape of Good Hope was discovered at the close of the fifteenth century. In a brief sketch like this, there is no space to refer to the myth¬ ical and legendary period. Chinese historians begin their story with the Age of the Five Rulers, B. C. 2852. One historic event stands out, and that was the great flood, B. C. 2297, caused prob¬ ably by the overflow of the Yellow River. We have a graphic account of the disaster and the way the celebrated Yii, styled the “ Engineer 17 100020°— 26-3 18 COMMERCIAL HANDBOOK OF CHINA Emperor,’' coped with the calamity, and it is interesting owing to the fact that there have been periodical disasters of the same char¬ acter, the consequences of which have led foreigners to refer to this river as “ China’s Sorrow.” During this period there was a more or less continuous struggle with the aborigines, known as the outlying barbarians, and they were pushed southward and westward. At first the part of China controlled by the Chinese was small and comprised the modern Provinces of Shensi, Shansi, and Chihli. The government was patriarchal and the rules were great tribal chieftains. Society was organized on the clan system, which accounts for the paucity of recognized surnames in China. The clan spirit endures in China. In various parts of the country, and in the south especially, we still find clan fights. To understand modern China one has to bear in mind the strength of clan spirit. The family is the social unit, but each family is a member of a larger aggregation—the clan. The early religion of the Chinese may be summarized as follows: There was the worship of Shang-ti (the supreme ruler), the powers of nature, and the ancestors. Divination was practiced. There were two classes of spirits, the beneficent and the evil, a distinction indi¬ cated by the Shen and the Kwei. CHOW DYNASTY The first historic dynasty in Chinese history was the Chow. It was established B. C. 1122 and lasted for nine centuries. We are indebted for our account of it to the writings of Confucius. It may be called the feudal period of Chinese history. Owing to the struggle with the aboriginal tribes, military chieftains became pow¬ erful, and just as at a later period in European history, so in the East the successful warriors were rewarded by grants of land or by being given the control over small principalities. In this way a military aristocracy was developed and there was a division into orders, corresponding to dukes, marquises, counts, earls, and barons. China became a loose federation of States ruled by these feudal chieftains, who paid uncertain allegiance to the Emperor as their suzerain. Its political condition was not unlike that of the German confederation in the eighteenth century. During this period lived the trio of famous teachers, Confucius, Mencius, and Laotze. Confucius, the greatest of Chinese sages, was born B. C. 551. Shortly after his death he came to be regarded with a feeling of religious veneration, and for over 2,000 years his teach¬ ings have exerted great moral and intellectual influence on his coun¬ trymen. Inasmuch as his purpose was to preserve the beliefs and customs of antiquity, his teachings have fostered conservatism. This is especially the case in regard to the emphasis placed on ancestor worship. His influence in China may be compared to the influence of Aristotle in Europe during the Middle Ages. Anything contrary to his doctrine was regarded as heretical. TSIN DYNASTY At the close of the Chow dynasty we come to a period of greater centralization. This was brought about by the founder of the Tsin dynasty, the Emperior Shih Huang-ti (B. C. 221-200). SKETCH OF CHINESE HISTORY 19 The evils of the feudal system had become so apparent that the Emperor took steps to increase the power of the central government by abolishing the small principalities or kingdoms and dividing the country into 36 Provinces, the rulers of which were to be directly responsible to himself. Two well-known events took place during his reign. The first was the attempted destruction of the ancient literature, so that the con¬ servative influence which it exercised over the minds of the people might be weakened. The second was the completion of the Great Wall along the northern frontier to prevent the inroads of the north¬ ern barbarians. It extends for 1,500 miles across mountains, hills, valleys, and plains, and is one of the most remarkable structures built by human toil. HAN DYNASTY During the Han dynasty (B. C. 206-A. D. 251), which followed the Tsin, the imperial form of government was further developed, and the boundaries of the Empire were extended. As to social organization the people were divided into the follow¬ ing classes: (1) The literati, whose education consisted in the ac¬ quirement of the six accomplishments—archery, horsemanship, rites, music, history, and mathematics; (2) the cultivators of the land; (3) the artisans; (4) the merchants. No caste system has ever been developed in China, but there has been an intellectual aristocracy, a high prestige being enjoyed by the literati or educated class. Owing to the difficulty in acquiring a knowledge of the written character, education could not be widely extended and was confined to a privileged class. We have already referred to the influence of Confucius as making for conservatism. The other great conservative influence was that of Chinese education. It produced a class limited in numbers, bent on the preservation of classicism,- and the turning away from the study of nature. Hence the backwardness in the development of science. The farmers occupy the second place of honor. This points to the fact that China is essentially an agricultural country. Probably 300,- 000,000 out of the 400,000,000 inhabitants at the present day are engaged in tilling the soil. The land has become divided into small holdings, and peasant ownership has remained one of the marked economic features. This helps us to understand the difficulty in the introduction of farming machinery into this country, and of making any radical change in the methods of cultivation. It may seem strange that the mercantile class is the last on the list. This is probably due to the fact that the merchants were re¬ garded as the distributers and not as the creators of wealth. Com¬ merce for the most part was conducted on a small scale. At an early period it was organized into guilds, regulating prices and terms of apprenticeship. Joint-stock companies were unknown until recent years, and the failure of many such enterprises may be partly accounted for by lack of experience. THE THREE KINGDOMS At the close of the Han dynasty there was one of the constantly recurring periods of civil war (owing to the fact that China has never developed a strongly centralized government), and the coun- 20 COMMERCIAL HANDBOOK OF CHINA try was divided for a time into the Three Kingdoms—Wu (in the east), Shu (in the west )5 and Wei (in the north). The weakness caused by internal dissension gave the northern nomad tribes outside the Great Wall the opportunity for which they were seeking, and henceforth they became a constant menace to China. These nomad tribes came first from Mongolia and later from Manchuria. The first tribe to make an attack on China was that known as the Hiung-nu from Mongolia. From them descended the Huns, who later drove the Germanic tribes toward the west, and under the leadership of Attila (A. D. 445) attacked the Roman Empire. TANG DYNASTY In the Tang dynasty (A. D. 018-907) the Empire was once more united. When peace had been established, the country entered on a period of great prosperity. The civil examination system took on the form which lasted until the overthrow of the Manchus, and officialdom was recruited from the successful candidates. Remains of the ancient examination halls may still be seen by travelers in the city of Nanking. The Hanlin Academy, consisting of the greatest scholars of the land, was estab¬ lished in Peking. The use of gunpowder, the compass, and printing from carved blocks date back to this period. The Empire was still further en¬ larged and the extent of China proper became approximately what it is at the present day. During the reign of the great Emperor Tai-tsung (A. D. 627-650) Christian missionaries of the Nestorian Church came to China. They were permitted to propagate their religion, and at first met with considerable success. The Nestorian Tablet near Sianfu, Shensi, stands as a permanent memorial to this first Christian missionary enterprise. At the close of the Tang dynasty, A. D. 907, came another period of internal disorder, with the inevitable consequence that the nomad tribes from the north made fresh incursions into the country. SUNG DYNASTY Thus we find the Sung dynasty (A. D. 906-1280) dividing the country with the tribe known as the “ Golden Horde ” or the Kins. The Kins occupied the north, and the Sung Emperors ruled over the south. Incessant warfare was carried on, and the famous Chinese general, Yoh-fei, whose tomb may be seen at Hangchow, struggled to drive out the Kins. During the Sung dynasty, there lived a well-known social re¬ former, Wang An-shih (1068). He made radical proposals on the lines of state socialism in regard to the nationalization of commerce, government loans to farmers, income tax, and compulsory enrollment of militia. The unpopularity and failure of his plan are an evidence of the deep-rooted conservatism of China at that time. MONGOL DYNASTY After the Kins, another Tartar tribe, the Mongols, obtained the ascendancy. Under their great leader Genghis Khan (A. D. 1162) SKETCH OF CHINESE HISTORY 21 they invaded the north of China. It is said that the great Khan himself marched in triumph to the Shantung Peninsula, and from the hills near the modern Weihaiwei looked out over the sea. The Mongols invaded western Asia and, penetrating as far as eastern Europe, overran Russia. The conquest of China was made by Kublai Khan, the grandson of Genghis Khan. The Sung dynasty was overthrown, and a new dynasty established known as the Yuan or Mongol dynasty (A. D. 1280-1368). Owing to the invasion of Russia, Hungary, and Poland by the Mongols, the people of Europe had their attention directed to eastern Asia, and travelers and merchants undertook journeys to these unknown regions. The Christian Church realized that there was a vast territory for missionary enterprise. Among the earliest visitors of whom we have authentic records were the Polos, especially Marco Polo (1274). In company with his father and uncle he came to China when he was 16 years of age. The travelers carried letters from Pope Greg¬ ory X, who was desirous of propagating Christianity in the Empire. Marco Polo gained favor at the Mongol court and was permitted to travel freely. Altogether he spent 21 years in the country, and at one time was prefect at Yangchow. In some of the Buddhist temples in the large cities in China, among the images of the 500 Lohans, that of Marco Polo is pointed out to travelers. After his return to Europe, about 1300 A. D., he dictated an ac¬ count of his travels in the East, and gave to Europe a description of what up to that time had been comparatively an unknown land. During this dynasty the reconstruction of the Grand Canal, ex¬ tending for a thousand miles between Hangchow, near Shanghai, and Tungchow, 14 miles east of Peking, was carried out. The Mongols added little to the civilization of China, but yielded to the superior civilization of those whom they had conquered, for, as has been well said, China is like a sea that makes all the water that runs into it salt. MING DYNASTY After less than a century, the Mongol dynasty disappeared in a welter of disorder, and China again came under the rule of a native dynasty. This was the Ming (A. D. 1368-1644). As was natural, an earnest attempt was made to restore every¬ thing that belonged to the old regime. The civil-service examina¬ tions were reorganized and the Government of China assumed the form it held up to the time of the revolution. The Emperor ruled by divine right, and was regarded as the Son of Heaven. He had the appointment of the Six Boards of Administration, and of the viceroys and governors of the Provinces. A Province may be compared to a territory in the United States Government. All officials in the Provinces down to the district magistrate were appointed by the central Government, but no one was allowed to hold an official position in his native Province. The Provinces were like satrapies and were free to administer their local affairs in detail, provided that they paid the necessary tribute and followed the general policy of the central administration. They 22 COMMERCIAL HANDBOOK OR CHINA had local autonomy for the levy of taxes and the administration of the law. In the village communities, however, the village elder or u Tipao ” was appointed “ with and by the advice and consent ” of the vil¬ lagers, represented them in all official and governmental affairs, and was the channel of communication between the officials and the villagers. From this brief account it will be seen that the Government of China has always been loosely federated. If we bear this in mind we can understand the frequent breaking away of Provinces from the central Government and the declaration of their independence. The centrifugal force has always tended to become stronger than the centripetal. As peace prevailed for a long time, the population of the 18 Provinces into which the country was divided increased rapidly. During the Ming dynasty, A. D. 1368-1644, adventurers and mer¬ chants from Europe began to come by the new sea route recently discovered, and not, as formerly, by the overland routes. The first to make their appearance were the Portuguese. In 1577 they obtained a lease of Macao, 88 miles from Canton, and there made a settlement which has continued to the present day. In 1573 the Spaniards came upon the scene and took possession of the Philippine Islands, which they retained until the Spanish- American War. In 1622 the Dutch arrived, settling first on the Pescadores Islands, and then erecting trading forts at the north and south ends of the island of Formosa, where they remained until 1659. MANCHU DYNASTY The Ming dynasty lasted for nearly 300 years, and then, owing to a rebellion in China caused by internal dissension, fell before the inroads of the Manchus, who captured Peking and established the Tsing dynasty. The wearing of the queue imposed- by the con¬ querors as a badge of submission to the Manchus dates from that time. MODERN PERIOD This brings us to the modern period—most difficult to condense in a brief sketch. One of the chief features is the conflict between China and western nations, which resulted in opening up China to foreign commerce and to modern industrial methods. The indus¬ trial revolution in Europe led to the search for new markets for machinemade goods, and thus an economic factor had a good deal to do with forcing China to enter into closer commercial relations. China’s attitude was one of reluctance. China prided itself upon what it considered its superior civilization, and did not welcome foreign trade. In fact it considered that by the purchase of for¬ eign commodities money would flow out of the country, leading to its impoverishment. Russia and Holland in succession sent commercial missions to China, but were unsuccessful in removing the barrier of restriction on foreign trade. In the reign of Kien-lung (1793) while George III was King of England, Lord Macartney was sent on a commercial mission to SKETCH OF CHINESE HISTORY 23 Peking, and consent was obtained for carrying on trade at Canton by British merchants, provided that they submitted to the regula¬ tions imposed by the provincial officials. As a result there was con¬ stant friction, leading finally to war. The first war between China and Great Britain, known as the “ Opium War,” occurred in 1841-42. The war was disastrous for China and was brought to a close by the signing of the treaty of Nanking (1842). According to the terms of this treaty, Canton, Amoy, Foochow, Ningpo, and Shanghai were opened as treaty ports, where foreigners could reside and carry on trade, and Hongkong was ceded to Great Britain. The first treaty between the United States and China was signed by Caleb Cushing on July 3, 1844, although the first American vessel visited China as early as 1783 with a supercargo, Major Shaw, commissioned by the Continental Congress as consul to Canton. A second war occurred in 1856-1860, in which France joined with Great Britain in order to compel China to yield to the demand of the western nations for larger commercial privileges and the open¬ ing up of diplomatic relations. The result was the treaty of Peking (1860), by which Kowloon, opposite Hongkong, was ceded to Great Britain, and Tientsin was opened as a treaty port. The right of the residence of foreign ambassadors was granted. Other nations se¬ cured the same commercial privileges and entered into treaties with China. In the meantime China was ravaged by the Taiping rebellion (1850-1864), in which over 20,000,000 lives were lost and many of the fairest districts of the Empire were devastated. China yielded to the demands of the foreign nations from com¬ pulsion, and her submission incited a strong feeling of hostility among the people. The antiforeign spirit manifested itself in the Tientsin massacre of 1870, when the Eoman Catholic orphanage and cathedral were destroyed, and in the assassination of Mr. A. R. Margary, of the British consular service, on the borders of Yunnan in 1876. As a result of the latter act of violence a convention was held at Chefoo, and China was forced to agree to the opening of four new treaty ports—Ichang, Wuhu, Wenchow, and Pakhoi—and six ports of call on the Yangtze for the landing of foreign goods. In 1884 a war broke out with France over a dispute in regard to Tonkin, in which China was further humiliated. As an evidence of the strong antiforeign feeling among the people, riots broke out along the Yangtze River in 1891. It did not yet occur to China that internal reform and the adoption of a progressive policy were the only means by which the country might be saved from foreign aggression. The war with Japan (1894-95) was a turning point. China learned its own weakness and the strength that Japan had acquired by adopting western education and military science. As a consequence of this war China was obliged to recognize the independence of Korea (since then annexed by Japan), to give up Formosa and the Pescadores Islands, and to open as treaty ports Shasi, Chungking, Soochow, and Hangchow. The effects of this war did not end here. Realizing China’s weakness, a policy of further aggression was pursued by western 24 COMMERCIAL HANDBOOK OF CHINA nations. In 1897 Germany seized Kiaochow. Russia forced the Chinese Government to lease Port Arthur (a very strong naval base), Great Britain obtained the lease of Weihaiwei and France that of Kwangchow. Italy put in a demand (not granted) for Sanmen Bay in Chekiang in 1898. It began to look as if the parti¬ tion of China were inevitable. Alarmed by the dangers to which the country was exposed, a band of ardent reformers persuaded the Emperor Kwangshu to adopt a more enlightened policy. In 1898 the famous reform edicts were issued, and for a brief period it seemed as if China was about to modernize its government. But the Empress Dowager by a coup d’etat seized the government, put the reformers to flight, instituted a reign of terror, and restored the conservative regime. The Boxer outbreak in 1900 was the last desperate attempt on the part of the ultraconservative element to stem the tide of European encroachment. The complete failure of this uprising and the suc¬ cess of Japan a few years later in the Russo-Japanese War were convincing evidence that China’s only hope of salvation was in fol¬ lowing the example of Japan, especially in regard to education and military science. Even the Empress Dowager appeared to be converted, and in 1905 the old civil-service examination system, instituted in A. D. 630, was abolished, and the new education was introduced into the schools. Promises were made in regard to the granting of a constitution, and the country was exhorted to prepare itself for this important change. Owing to growing discontent with the corruption of the Manchu Government and its insincerity in regard to redeeming its promise of a grant of a constitution, a revolution broke out in Wuchang in 1911, resulting in the expulsion of the Manchus and the establish¬ ment of the Republic. Dr. Sun Yat-sen, who for a long time had been raising funds in foreign countries for fomenting a revolution, returned to China and was proclaimed provisional President in Nan¬ king on January 1, 1912. In order to bring over the north to the side of the Republic, Dr. Sun Yat-sen retired in favor of Yuan Shih-kai, who was elected President by the National Assembly. The revolutionists were soon dissatisfied with Yuan, and an at¬ tempt at a second revolution took place in 1913. This was suppressed and President Yuan undertook to govern the country as a military dictator, appointing his generals as military governors or tuchuns over the Provinces. In 1916 he attempted to restore the Empire and to make himself Emperor, but owing to a threatened rebellion he was forced to relinquish his ambitious design. Upon his death, which occurred shortly afterwards, the country drifted into a help¬ less condition politically, owing to the struggle among the military governors for supremacy. During the Great War Japan ranged itself on the side of the allied nations, and participated by sending an expedition for the capture of Tsingtao, the port of Kiaochow, from the Germans. After its fall Japan seized the opportunity of making 21 demands upon China, in an endeavor to obtain a measure of political and economic control over China’s development. China was compelled to jdeld, but declined assent to Group V, which contained the most objectionable demands. SKETCH OF CHINESE HISTORY 25 In 1917 China broke off diplomatic relations with Germany, and the question as to whether it should declare war or not aroused a great controversy. Parliament was opposed and in consequence was dissolved. After the dissolution of Parliament those in favor of war, the military party, dominated the Government and war was declared. One consequence of the dissolution of Parliament was the revolt of Dr. Sun Yat-sen, who came forward as the champion of the Con¬ stitutionalists and set up an independent government in Canton. By declaring war against Germany, China hoped to avail itself of the friendship of the Allies and to obtain redress of its grievances, in the terms of peace at the close of the war. At the Versailles Con¬ ference, however, China met with a disappointment. Unable to obtain the possession of the territory it had been compelled to relin¬ quish—as China believed, unjustly—a strong anti-Japanese feeling broke out in the country, and China’s representatives refused to sign the terms of the Versailles treaty. At the present time, politically, China is in a difficult situation. The finances of the central Government are in a distressed condition. The struggle for power continues between the rival tuchuns in the north. The country is rent with civil dissension, and, in consequence, commerce, industry, and education are making little progress. The three great needs of China are (1) a stable government, (2) improved economic conditions, and (3) the spread of education. But, amidst so much that is dark, there are hopeful features. There is a rapid growth of national consciousness; there is a strong desire for peace; and there is a general discontent with the militaristic regime. The merchants of China are beginning to assert themselves and to demand a government that will put an end to disorder so that commerce and industry may be further developed. There is also in process a great intellectual revolution and a rapid dissemination of new ideas. All these forces must in time produce far-reaching results and bring about a new era in China. BIBLIOGRAPHY Boulger, D. C. History of China. 3 vols. London, 1881, 1884. Cordier, Henri. Histoire Generale de la Chine. 4 vols. By many considered the best history of China published in an occidental language. Encyclopedia Britannica. Foster, J. W. American Diplomacy in the Orient. This gives an excellent account of the early relations with China. Gowen, H. H. Outline History of China. Hirth, F. The Ancient History of China. New York, 1908. Considered a very authoritative work. Latourette, K. S. Development of China. 275 pp. New York, Houghton, Mif¬ flin Co., 1917. Li Ung Bing. Outlines of Chinese History. 664 pp. Shanghai, 1914. Morse, H. B. The International Relations of the Chinese Empire. 3 vols. (1834-1911.) Shanghai, Kelly and Walsh. Parker, E. H. Ancient China Simplified. London, 1908. Pott, F. L. H. A Sketch of Chinese History. Shanghai, 1915. Williams, E. T. China, Yesterday and To-day. 1923. An excellent review for the American desirous of securing a good perspective of China. Williams, S. Wells. The Middle Kingdom. 2 vols. 1882. This is one of the ^ best and most reliable reference books on Chinese institutions. Yule, H. The Book of Ser Marco Polo. New edition by H. Cordier. London, 1915. A most interesting edition of the travels of the famous Venetian. resume: of the trade of china By Commercial Attache Julean Arnold Although the Portuguese as early as 1516 inaugurated direct trade with China, followed by Spanish, Dutch, and British traders, and although American clipper ships were predominant in South China waters during the early decades of the nineteenth century, yet it was not until the middle of the nineteenth century that China was actu¬ ally opened to the trade of the Western world. The self-sufficing nature of Chinese society is demonstrated by the difficulties foreign traders experienced in introducing their products into China. Up to the latter half of the nineteenth century, the profits in trade with China, with the exception of the trade in opium, were derived from the sales of China's products in Western markets rather than from exports to China. Roughly speaking, the year 1890 marks the beginning of modern China, for it w T as not until then that the Chinese people gave sub¬ stantial evidence of a receptive attitude toward the ideas and com¬ modities of the West. VALUE OF TOTAL TRADE Considering the belated nature of China’s industrial awakening, the inertia of an old and long-established civilization, and the politi¬ cal disturbances attendant upon the transition from the old to the new order, the growth of trade and industry along modern lines dur¬ ing the past 30 years in China is most remarkable. The following graph and table showing China’s foreign trade from 1864 to 1924 indicate clearly the vastly greater strides made during the last 30 years as compared with the first half of this period. 1864.. 1865 2 1866.. 1867.. 1868.. 1869 3 1870.. 1871.. 1872.. 1873.. 1874.. 1875.. 1876.. 1877.. 1878.. Net imports 1 Exports Total trade Exchange rates for haikwan tael in U. S. gold and sterling Haikwan taels Haikwan taels Haikwan taels s. d. 51, 293, 578 54,006, 509 105, 300,087 6 8 61,844, 158 60, 054, 634 121, 898 792 6 8 74, 563, 674 56,161, 807 130, 725, 481 6 3 69, 329, 741 57, 895, 713 127, 226, 454 6 3 71,121,213 69,114, 733 140, 235, 946 6 5 74,923, 201 67,143, 988 142, 067, 189 6 754 69, 290, 722 61, 682,121 130, 972, 843 6 6 34 70,103, 077 66, 853, 161 136, 956, 238 6 634 67, 317, 049 75, 288, 125 142, 605,174 6 754 66, 637, 209 69,451, 277 136, 088, 486 6 5 54 64, 360, 864 66, 712, 868 131, 073, 732 6 4*4 67, 803, 247 68,912, 929 136, 716,176 6 234 70, 269, 574 80,850,512 151,120, 086 5 1154 73, 233, 896 67, 445, 022 140, 678, 918 6 054 70, 804, 027 67,172,179 137, 976, 206 5 1154 1 Net imports, i. e., the value of the foreign goods imported direct from foreign countries, less the value of the foreign goods reexported to foreign countries during the year. 2 Taiping Rebellion raged from 1852 to 1865. 3 Suez Canal opened, shortening the route to China, 26 27 RESUME OP THE TRADE OF CHINA Year Net imports Exports Total trade Exchange rates for haikwan tael in U. S. gold and sterling 1879 - _ Haikwan taels 82, 227, 424 79, 293, 452 91,910, 877 77, 715, 228 73, 567, 702 72, 760, 758 88, 200, 018 87, 479, 323 102, 263, 669 Haikwan taels 72, 281, 262 Haikwan taels 154, 508, 686 s. d. 5 7 3 A 1880 - ---- --- - 77, 883, 587 71, 452, 974 157,177, 039 5 9 H 5 6 H 5 m 5 7)4 1881 - _ - _ -- --- 163, 363, 851 1882 __ 67, 336, 846 70, 197, 693 145, 052, 074 1883 _ 143, 765, 395 1884 _ 67, 147, 680 65, 005, 711 77, 206, 568 85, 860, 208 139, 908, 438 153, 205, 729 5 i'A 5 3 y 2 1885 _ 1886 _ 164, 685, 891 188, 123, 877 5 OH 1887_ $1. 20 4 10M 1888 _ 124, 782, 893 110,884, 355 127,093, 481 134, 003, 863 135,101, 198 92, 401, 067 96, 947, 832 87, 144,480 100, 947, 849 102, 583, 525 217,183, 960 207, 832,187 214, 237, 961 234, 951, 712 237, 684, 723 4 m 4 m 5 214 411 1889 - _ 1890 _ __ 1891 ____ 1892_ 1.07 4 4^4 1893 - _ 151,362, 819 162,102,911 171, 696, 715 202, 589, 994 202, 828, 625 116, 632,311 128, 104, 522 143, 293, 211 131,081,421 163, 501, 358 267, 995,130 290, 207,433 314,989,926 333, 671, 415 366, 320,983 3 11 H 3 2V S 3 3A 3 4 1894 4 ___ 1895 5 - _ 1896 - _ 1897_ .72 2 llH 1898 _ 209, 579, 334 264, 748, 456 211,070, 422 268, 302, 918 315, 363, 905 159, 037,149 195, 784, 832 158, 996, 752 169, 656, 757 214,181, 584 214, 352, 467 368, 616,483 460, 533, 288 370, 067,174 437,959, 675 529, 545,489 2 10 H 3 OH 3 VA 2 1114 2 7 y b 1899 6 _ 1900 7 ___ 1901 _ 1902_ .63 1903_ 326, 739, 133 541, 091, 600 .64 2 TH 1904 8 _•__ 344, 060, 608 447,100, 791 410, 270, 082 416, 401,369 239, 486, 683 227, 888,197 236, 456, 739 264, 380, 697 583, 547, 291 674, 988, 988 646, 726, 821 680, 782, 066 2 \0% 3 OiV 1905_ 1906 _ 3 3j4 3 3 1907_ .79 1908 _ 394, 505, 478 418,158, 067 462,964, 894 276, 660, 403 338, 992, 814 380, 833, 328 671, 165,881 757,150, 881 843, 798, 222 2 3 1909_ 2 7^ 2 8^ 1910_ .66 1911 9 _ 471, 503, 943 377, 338,166 370, 520, 403 848, 842,109 .65 2 8M 1912_ 473, 097, 031 843, 617,434 . 74 3 OH 1913 10 _ 570,162, 557 403, 305, 546 973, 468,103 .73 3 0M 1914 ii_ 569, 241, 382 356, 226, 629 925, 468, 011 .67 2 SH 1915_ 454, 475, 719 418, 861,164 873, 336, 883 .62 2 7M 1916 I 2 _ 516, 406, 995 481, 797, 366 998, 204, 361 .79 3 3H 1917_ 549, 518, 774 462, 931, 630 1, 012, 450, 404 1,040, 776,113 1.03 4 3M 1918_ 554, 893, 082 485, 883, 031 1. 26 5 3xV 1919_ 646,997, 681 630, 809,411 1, 277, 807,002 1.39 6 4 1920_ 762, 210, 230 541, 631, 300 1, 303, 881, 530 1. 24 6 9)4 1921_ 906,122, 439 601, 255, 531 1, 507, 377, 976 .76 3 ll^r 1922_ 945, 049, 650 654, 891, 933 1, 599, 941, 583 .83 3 9 1923_ 923, 402, 881 752,917,416 771, 784, 468 1, 676, 320, 303 .80 3 5H 1924_ 1, 018, 210, 677 1, 789, 995,145 .81 3 7M 4 4 Sino-Japanese War, 1894-95. 5 1895-1899 period of foreign aggression—territorial “leases,” “spheres of influence,” “scramble” for railway and mining concessions, and the beginning of China’s foreign indebtedness. 6 Influence of railways felt. 7 Boxer outbreak. 8 Russo-Japanese War, 1904-5. 9 Revolution in October. 10 Rebellion in summer. 11 European War from August. 12 Internal disorders, 1916-17. China’s imports for the year 1880, valued at 79,300,000 haikwan taels (the average value of the tael for 1880 was 5 shillings 9y 2 pence), w^ere as follows: Opium, 32,350,000 taels, or 40 per cent of the total; cotton piece goods, 23,400,000 taels, or 30 per cent of the total; metals, 4,100,000 taels, or 5 per cent of the total; sundries, 19,450,000 taels, or 25 per cent of the total. Sundries comprised coal, raw cotton, agar-agar, timber, kerosene, needles, sugar, betel nuts, rice, paints, window 7 glass, etc., no one item of which amounted to as much as a million taels. Kerosene, which made its first appear¬ ance in the customs in 18G3, had by 1880 increased to 3,500,000 gallons. Paints amounted to about 100,000 taels and window glass had reached 56,000 boxes. Timber imports aggregated 590,000 taels. The customs reports relate the use of matches as confined to that 28 COMMERCIAL HANDBOOK OF CHINA portion of the population living at or near the treaty ports, of which there were but 20 in 1880. Twenty-eight per cent of the space used in the description of China’s import trade for 1880 is devoted to opium. In 1867 opium accounted for 46 per cent of China’s total imports. In the early years of the trade of the United States with China, which had its inception with the birth of our Republic, ginseng constituted the main and for a time the sole article of American export to China. By 1880 the United States figures promi¬ nently in the cotton piece goods trade—American drills, sheetings, and jeans being particularly popular. Of the exports for 1880, aggregating 78,000,000 taels, tea accounts for 40,000,000 taels, or about 50 per cent, and silk for 30,000,000 taels, or about 40 per cent. Sundries consisted of sugar, valued at 3,300,000 taels, straw braid, mats and matting, chinaware, fire¬ crackers, hides, musk, nutgalls, rhubarb, medicines, tobacco, beans e CO e CO o 00 oo lO s o o CO «n C7> co o o O) «n o O) o o> «o o o C\l O) CM cn DRAFTING QIV. (2062) Fig. 2a. —China’s foreign trade, 1864 to 1924 (logarithmic scale) and bean cake, skins, hemp, grass cloth, and camphor, with no one of these items exceeding in value 200,000 taels. DEVELOPMENT OF FOREIGN TRADE In a perusal of the Decennial Returns of Trade for the decade 1882 to 1891, one is impressed wdtli the first appearance in the Chinese market of Japanese cotton yarn, cotton piece goods, cotton socks, singlets, towels, handkerchiefs, matches, soap, copper ware, marine products, coal, and timber. Indian cotton yarn and cotton piece goods also made their appearance during this decade. Rus¬ sian kerosene from Batum then entered the China market in com¬ petition with American kerosene. By 1890 the total imports of kerosene in China had risen to 35,000,000 gallons, just ten times those of 1880. About 1890 the smokestacks of modern factories RESUME OF THE TRADE OF CHINA 29 first appeared on the Chinese horizon. The Chinese Government was recognized as a new element in the market for industrial equipment, arsenals, mints, and other works. The Viceroy, Chang Chih Tung, startled the natives at Hankow with the erection of two large smokestacks, one at Wuchang for a big modern cotton-spin¬ ning mill, the other at Hanyang on the opposite side of the Yangtze River for the Hanyang iron works. Economically there was no reason for the location of an iron works at Hankow, for the ore and coke could be more advantageously handled at Tayeh, some distance down the river, where the iron-ore deposits were; but the Viceroy was anxious to view from his window the smoke rising from these modern industrial plants. Thus it may be said that with the year 1890 modern industrialism had its inception in China. In commenting upon the increasingly responsive attitude of Chinese toward foreign manufactured goods, a report for Canton of the time makes the following statement: For his cloth he (the Chinese) finds the foreigner’s cotton yarn suitable; for his light, kerosene and matches ; and for his workshops, metals and dyes. His taste for American flour may perhaps be attributed to the refining in¬ fluence of Western civilization, further evidenced, we may hope, by his growing desire for condensed milk, of which over 12.000 dozen tins were imported in 1891. Among the officials and wealthier class of Chinese there has perhaps been of late a tendency to appreciate such foreign luxuries as armchairs, sofas, spring beds, etc., but it is doubtful whether there is any real or extended taste for these articles. Purchased as novelties very often, they doubtless in many cases come to be regarded as curios and are kept for show rather than use. The use of kerosene has perhaps of late years somewhat improved the lighting of Canton streets. It is interesting to note that Canton capitalists living in San Fran¬ cisco, where they came to appreciate the advantages of electricity, secured in 1890 a concession from the Canton authorities to supply 30 COMMERCIAL HANDBOOK OE CHINA the cities of Kwangtung Province with electric lights. Shortly after, they commenced operations in Canton and installed a small plant, after considerable difficulty in leading the wires through the narrow streets of that very populous old Chinese city. This was the first Chinese electric-light venture. There is scarcely a report on the trade of a treaty port in China in 1890 which ’did not comment upon the gigantic strides made in the trade in kerosene in its suc¬ cessful competition with the native vegetable oils used for illuminat¬ ing purposes. Thus by 1890, while opium still led in value any single item of foreign imports, with cotton piece goods a close second, the relative positions of these commodities in the import trade generally was greatly reduced by the increased trade in other lines. In exports the outstanding comment throughout the customs trade reports of that time is the competition offered China’s teas by the teas grown in the British colonies. One of the commissioners prophe¬ sied that “ experiments in America in tea growing will undoubtedly place that country in serious competition with China in the tea markets of the world.” By 1890 Japan had already become a promi¬ nent factor in the world’s silk trade, and indications pointed to a serious competitor in China’s silks in the production of Japanese filatures, which were developed along more modern lines and in keeping with demands of the markets abroad, rather than following the course of domestic needs. China’s total foreign trade in 1890 was 36 per cent greater than that of the year 1880. Imports, how¬ ever, had increased 60 per cent while exports had advanced only 12 per cent. Opium represented in 1890 about 25 per cent of the total imports. The Decennial Customs Reports for 1890 comment quite freely upon the very substantial advances in the sales of American cotton drills, sheeting, and jeans in the various ports of China. The Ning- po commissioner of customs states that while at the beginning of the decade there was a preponderance of English drills, as shown by the imports of 15,600 pieces of English drills against 3,015 pieces of American drills for the year 1884, by 1891 the position was reversed, with 17,000 pieces of American drills and 4,800 English. The reason given for the preference for American drills is that they are a stronger and firmer fabric, though 25 per cent dearer, hence considered by the Chinese more economical, especially for the making of tents, awnings, sails, and for other heavy wear. LEADING ARTICLES OF IMPORT By 1910, China’s foreign trade aggregated 844,000,000 taels, or four times the total trade of 1890, and by 1923, the aggregate was 1,676,- 000,000 taels, or nearly double the figures for 1910. Imports for 1910 netted 463,000,000 taels (1 tael=U. S. $0.66). For 1923 the imports netted 923,000,000 taels, or double those for 1910 (in 1923, 1 tael=U. S. $0.80). The following table shows, in order of their value, the leading articles entering into China’s import trade in 1910 and 1923: 31 RESUME OF THE TRADE OF CHINA 1910 IMPORTS 1 . 2 . 3. 4. 5. 6 . 7. 8 . 9. 10. 11 . 12 . 13. 14. 15. 16. 17. 18. 19. 20 . Principal items Cotton yarn- Cotton goods-.- Opium_ Rice.-- Metals_ Kerosene (161, 000, 000 gallons)_ Sugar_ Railway materials_ Marine products_ Machinery- Cigarettes and tobacco.. Coal-.-__ Dyes_ Matches_ Woolen goods.. Leather_ Cotton, raw_ Paper_ Flour_ Tea___ Per cent of total trade Value in haikwan taels 1 Principal items Per cent of total trade Value in haikwan taels 1 13 61, 500, 000 21. Medicines ... _ ( 2 ) 3, 000, 000 13 60, 000, 000 22. Wines, beers, etc . . . ( 2 ) 3, 000, 000 12 55, 500,000 23. Clothing and hats_ ( 2 ) 2, 500, 000 7 31, 000, 000 24. Soap _ . ... . ( 2 ) 2, 000, 000 6 26, 000, 000 25. Cement_ ... ( 2 ) 1, 600, 000 26. Building materials . .. ( 2 ) 1, 300, 000 5 22, 000, 000 27. Hardware_ . . . ( 2 ) 1, 200, 000 4J4 21, 000, 000 28. Needles ... ...... ( 2 ) 1, 000, 000 3 15, 000, 000 29. Glassware __ ( 2 ) 1, 000, 000 2 12, 500, 000 30. Hosiery... ... . ( 2 ) 1, 000, 000 2 9, 000, 000 31. Soda. .. . . ( 2 ) 1, 000, 000 2 9, 000, 000 32. Stationery__ . ( 2 ) 1, 000, 000 2 8, 000, 000 33. Candles_ . ... ( 2 ) 1, 000, 000 1 Vi 7, 600, 000 34. Window glass. ... ... ( 2 ) 900, 000 1 5, 300, 000 35. Haberdashery ... ... ( 2 ) 900, 000 ( 2 ) 5, 300, 000 36. Lamps and lamp ware.. ( 2 ) 800, 000 ( 2 ) 5, 000, 000 37. Ginseng _ ....... ( 2 ) 800, 000 ( 2 ) 4, 500, 000 38. Paint.. . ... ... ( 2 ) 700, 000 ( 2 ) 4, 200, 000 39. Boots and shoes .. ( 2 ) 600,000 ( 2 ) 3, 500, 000 40. Clocks and watches ( 2 ) 700,000 ( 2 ) 3, 300, 000 41. Condensed milk _ _ . ( 2 ) 500, 000 1923 IMPORTS 1 . 2 . 3. 4. 5. 6 . 7. 8 . 9. 10 . 11 . 12 . 13. 14. 15. 16. 17. 18. 19. 20 . 21 . 22 . 23. 24. 25. 26. 27. 28. Cotton goods_ Rice___ Kerosene_ Raw cotton_ Sugar_ Cotton yarn_ Cigarettes and tobacco.. Machinery_ Flour_ Marine products_ Dyes_ Woolen goods_ Paper___ Coal_ Clothing and hats_ Lumber_ Wheat_ Railway materials_ Medicines.... Leather... Copper ingots and slabs. Wines, beers, etc. Bags__ Paraffin wax_ Fertilizers__ Building materials_ Lubricating oil_ Soda... 14 132, 000, 000 29. Cement... _ . _ .. ( 2 ) 3, 300, 000 ioy 2 98, 000, 000 30. Chemicals . . .. . ( 2 ) 3, 200, 000 6 58, 000, 000 31. Sugar candy. ( 2 ) 3, 200, 000 6 54, 000, 000 32. Soap.. ... ( 2 ) 2, 900, 000 5'A 50, 000, 000 33. Perfumes..._ ( 2 ) 2, 800, 000 4 M 42, 000, 000 34. Tin foil. . . _ .. . ( 2 ) 2, 600, 000 4H 41, 000, 000 35. Pain s_ __ ... ( 2 ) 2, 500, 000 4 35, 700, 000 36. Stationery _ . ( 2 ) 2, 300, 000 3 27, 200, 000 37. Motor cars.. _ ... ( 2 ) 2, 200, 000 3 25, 000, 000 38. Window glass_ .. ( 2 ) 2, 000, 000 23^ 22,100, 000 39. Rubber... . ( 2 ) 2, 000, 000 2 19, 000, 000 40. Clocks and watches.. . ( 2 ) 2, 000, 000 2 16, 600, 000 41. Ginseng__ .. _ ( 2 ) 1, 800, 000 m 13, 000, 000 42. Lamps and lamp ware.. ( 2 ) 1, 600, 000 iy 2 12, 800, 000 13. Condensed milk__ ( 2 ) 1, 600, 000 i 9, 600, 000 44. Glass and glassware ( 2 ) 1, 500, 000 i 9, 100, 000 45. Chinaware...__ .. ( 2 ) 1, 500, 000 i 9, 000, 000 46. Hand tools._ (2) 1, 400, 000 ( 2 ) 7, 700, 050 47. Photographic materials. ( 2 ) 1, 300, 000 ( 2 ) 7, 000, 000 48. Hosiery ( 2 ) 1, 100, 000 ( 2 ) 5, 800, 000 49. Printing and lithograph- ( 2 ) 5, 200, 000 ing materials _ ( 2 ) 1,100, 000 ( 2 ) 4, 300, 000 50. Needles. ... ( 2 ) 1, 100, 000 ( 2 ) 4, 000, 000 51. Matches_ _ ( 2 ) 1, 000, 000 ( 2 ) 4, 000, 000 52. Telephone and telegraph ( 2 ) 3, 400, 000 materials._ . . ( 2 ) 1, 000, 000 ( 2 ) 3, 300, 000 53. Scientific instruments.. ( 2 ) 1, 000, 000 ( 2 ) 3, 300, 000 54. Cigars-- ( 2 > 900, 000 1 Value of haikwan tael in United States currency, 1910, $0.66. 2 Less than 1 per cent. EXPLANATORY NOTES Cotton goods .—The zenith of the cotton-goocls and cotton-yarn trade was reached in 1920, when imports of piece goods netted 147.000,000 taels and yarns 79,000,000 taels. It must, however, be borne in mind that the silver ex¬ change for 1920 was particularly favorable for imports, as 1 tael was equiv¬ alent in value to United States gold $1.24; whereas the 1923 average rate for 1 tael was equal to United States gold $0.80. With the increasing manufacture of cotton yarns and cotton piece goods in China, a decline in the importance of these commodities as imports may be considered a possibility. Opium .—Opium disappeared entirely from the customs returns after the year 1917, by virtue of an agreement with Great Britain and the other Powers concerned. Owing, however, to the disordered internal conditions in China during the past few years, the opium poppy is grown extensively in some sec¬ tions, where it is not only encouraged by provincial authority but in some instances the farmers are actually forced to grow it. This accounts in some 32 COMMERCIAL HANDBOOK OF CHINA degree for the greatly increased rice imports for 1923, as many rice lands were given over to opium growing. Rice .—In 1920 rice imports netted 5,300.000 taels; in 1922 they reached 80,000,000 taels; and in 1923, 98,000,000 taels. Poor crop conditions, com Dined with internal disorder and extensive opium planting seem to account for these unprecedented imports of rice, the cost of which doubled during the past decade. China's rice imports depend upon such a number of variable factors that it is difficult to generalize upon the subject. Kerosene .—By 1923 kerosene jumped to third place in China's imports, with 215,000.000 gallons valued at 58,000,000 taels. The extension of kerosene con¬ sumption is due in large measure to the enterprising distributing methods em¬ ployed by the foreign organizations in China and to the fact that vegetable oils have now become important articles of export instead of being used domestically for illuminating purposes. Tobacco .—Items 11 (1910) and 7 (1923) indicate the remarkable develop¬ ment in the cigarette and leaf-tobacco trade. Thirty years ago China was an exporter rather than an importer of tobacco. Owing to enterprising Western methods of salesmanship, China is now one of America’s principal customers for cigarettes and leaf tobacco. Imports of cigarettes for 1923 reached a value of 28.300.000 taels and leaf tobacco 12,700.000 taels, or a total of 41,000,000 taels, thereby placing tobacco products as seventh in importance in China’s imports. The manufacture of cigarettes in China is rapidly growing into a big industry. The country has become an exporter of cigarettes, shipping them to the South Seas. The production of tobacco is improving both in quality and in quantity, and the consumption of tobacco products goes forward at a tre¬ mendous pace. Raw cotton .—Imports of raw cotton for 1923 amounted to 54,000,000 taels and exports to 32.000,000 taels. Japan became an unusually heavy purchaser because of the emergency requirements following the great fire and earth¬ quake of September 1 of that year. This fact in part accounts for China’s unprecedentedly large imports of raw cotton for 1923 (which for 1922 amounted to but 19.000,000 taels). The rapid developments in the manufacture of cotton yarn and cotton cloth in China are increasing China’s demands for raw mate¬ rials. The country now produces about 2,000.000 bales of cotton. Raw cotton has attained a substantial place in China’s list of exports because the short, kinky fiber is well adapted to the manufacture of blankets in the United States, and Japan finds China's cotton economical for mixing with longer staple cottons purchased elsewhere. China must also have a certain amount of longer staple cotton to mix with its native product for modern manufacture. However, as internal conditions improve the country will grow more and better cotton. Substantial progress in this direction has already been made. China should be able to raise the quantity and quality of cotton required for its domestic needs, even conceding that its requirements continue to expand. Sugar .—Before the twentieth century China exported rather than imported sugar. Item 5 in the 1923 imports shows sugar imports valued at 50.000,000 taels. In the 1910 imports sugar held seventh place, aggregating in value but 21,000,000 taels. China has the soil, climate, and labor essential to the devel¬ opment of both cane and beet sugar industries, though little has as yet been done to put the sugar industry on a modern economic basis. The increased imports indicate an improvement in the purchasing power of the people. Wheat .—During 1920 China exported wheat valued at 25.500,000 taels and flour valued at 18,000,000 taels. During 1923 imports of flour netted 27,200,000 taels and of wheat 9,100,000 taels. Poor wheat and rice crops are responsible in part for the heavy imports of 1923. When the price of rice is high in China, wheat consumption is increased. Furthermore, the Chinese are consuming larger quantities of wheat products, apparently because of an increasingly favorable attitude toward them. In spite, however, of the rapid developments in the flour-milling industry of the country, which now has an aggregate daily capacity of 125.000 barrels, it will be some years before China may be expected to become a regular exporter of flour. Lack of internal communi¬ cations, disturbed political conditions, and antiquated farming methods com¬ bine against it. Machinery and industrial supplies .—With the development of a modern industrial society, imports of metals, machinery, railway materials, building materials, hardware, lubricating oil, chemicals, and tools will continue to increase. This is evident from a comparative study of the imports of these 33 RESUME OF THE TRADE OF CHINA commodities as listed in the above tables and those for the years 1900 and 1890. These figures indicate the remarkable strides toward modernization as made by China during the past 20 years. In the next few decades even greater advances, relatively speaking, may be expected. Marine products. —Sea foods figure in about the same relative position in both tables. No people have developed more highly than the Chinese the use of marine products in their dietary, and there are no indications of a lessened use of these foods. In fact, with an increase in the country’s wealth, the imports of sea foods will undoubtedly grow proportionately. Foreign business men should study Chinese tastes in these commodities, as the resources of the West could contribute more to China’s demands in marine products than they do at present. Dyes. —Like many natural products of China which are processed by do¬ mestic handicraft, with a consequent lack of uniformity or standardization, vegetable indigo and other vegetable dyes are being replaced by western manufactured products. China’s imports of artificial indigo for 1923 amounted to 15,000,000 taels and of aniline dyes 6,000,000 taels. The consumption of these products will undoubtedly increase with improved marketing conditions in China. Coal. —For many years China was rated as a coal-importing country, but gradually its exports of coal are exceeding its imports. It is to be expected that with the increased development of China’s coal resources the exports will become increasingly important. During 1923 coal to the value of 13,000,000 taels was imported, as compared with exports valued at 20,500,000 taels. Woolen goods. —Woolen goods were imported in 1923 to the value of 19,000,- 000 taels. Gradually this trade is increasing. Although China produces con¬ siderable wool, which has become an important article of export, woolen manu¬ factures are in their infancy, and domestic manufacture will not, for some¬ time to come, seriously affect imports of woolen goods. Paper .—The newspaper was a matter of little consequence in China before the beginning of the twentieth century. Paper imports for 1923 were four times those for 1910, owing, in the main, to the demand for newsprint. China’s raw materials for paper manufacture are principally bamboo, rice straw, wheat straw, and certain grasses. Chinese manufactured paper appears in the items of exports, mostly for certain uses for the Chinese populations abroad. It is to be expected that the imports of newsprint and writing paper will increase from year to year. Lumber .—Supplies of lumber in China are now a matter of economic trans¬ portation, hence lumber imports will for some time grow in importance rather than otherwise. Exports of timber for 1923 were, however, abnormally high, on account of the emergency demands created by the great fire and earthquake in Japan. Clothing .—In 1923 five times as much clothing and hats was imported as in 1910. This is distinctive evidence of westernizing influences. Similarly, haber¬ dashery increased from 900,000 taels in 1910 to 3,000,000 taels in 1923. Hosiery, garters, boots and shoes, perfumes, and toilet articles likewise show consider¬ able increases. Native manufacture of most of these articles will undoubtedly in the future offer severe competition to the imported articles. Medicines. —Medicines are increasing in importance in China’s import trade, being in 1923 double the value of those for 1910. Many foreign proprietary medicines are now extensively marketed in China through enterprising adver¬ tising campaigns. At the same time, considerable quantities of Chinese medi¬ cines are shipped out, in the main for the use of Chinese abroad. Leather. —Imports of leather in 1923 amounted to 7,000,000 taels, which repre¬ sents a steady advance in the trade. The country is a heavy exporter of hides, and the tannery industry is in process of development. Thus it may be that leather importation will not continue to expand indefinitely. Cement. —Similarly, native manufactures of cement w 7 ill in time make China an exporter rather than an importer of a commodity which now appears among the articles of import. Matches. —In 1910 matches appear as fourteenth in importance in China’s imports, whereas in the 1923 tabulation matches dropped to fifty-first place, with an aggregate valuation of no more than 1,000,000 taels. Match-making materials are now of more importance in China’s imports than are matches, of which the country is rapidly becoming an exporter. 100020°—26-4 34 COMMERCIAL HANDBOOK OF CHINA Soap .—Soap will also become decreasiugly important in China’s import trade. The soaps manufactured in China 10 years ago were very poor imitations of the foreign products. To-day they compare well with imported soaps. Copper .—Copper ingots and slabs will continue an important item of import, as the country has apparently very small available resources in copper. Paraffin and candles .—Imports of paraffin are on the increase, indicating the development of the domestic candle-manufacturing industry. Candles as an article of import are no longer important. Motor cars .—Motor cars do not appear in the 1910 customs returns. There is a very small mileage of surfaced motor roads in China, and probably less than 10,000 miles of graded roads which can be used for motor transportation. The gospel of good roads, however, is being spread among the people of the country, and with improved internal conditions it is to be expected that there will be a very considerable development in roads, hence in the use of motor vehicles. There are now' (1926) but 14,000 motor vehicles in the whole of China. Gasoline .—With the increased use of motor transportation, gasoline imports will naturally continue to increase. Those for the year 1923 amounted to 3,800.000 taels. Window (/lass .—There is under construction in North China a large plant for the manufacture of window glass. Thus imports of window glass may not continue to increase materially. Condensed milk .—Imports of condensed milk for 1923 were valued at 1,600,000 taels, or three times those of 1910. China has developed no dairy interests, and unless the soy bean is utilized for the production of imitation milk, the imports of condensed milk are likely to continue to increase. Scientific instruments, photographic and lithographic materials .—Such items as scientific instruments, photographic materials, printing and lithographing materials, which are given a place in the 1923 returns, but do not appear in those of 1910, indicate a growth in modern industrial enterprise. This is bound to continue, and probably to a much greater extent in the future than in the past. LEADING ARTICLES OF EXPORT China’s exports for the year 1910 netted 381,000,000 taels, which amount was double the value of exports in 1900 and more than four times that of the exports for 1890. Exports for 1923 aggregate 753,000,000 taels, or about double those of 1910. 1910 EXPORTS Principal items Per cent of total trade Value in haikwan taels 1. Silk_ 21 85, 000, 000 2. Tea_ 9 35,000, 000 3. Raw cotton._ 8 28, 000, 000 4. Beans and bean cake_ 8 27, 000, 000 5. Hides and skins_ . 4 16, 000, 000 6. Sesame seed_ __ 4 14, 500, 000 7. Vegetable oils_ 3M 13, 200, 000 8. Provisions and vege¬ tables .. 3 11,300,000 9. Straw braid.... 2 7, 700, 000 10. Tin__ i Vi 6, 000, 000 11. Wool_ \'A 5, 000, 000 12. Bristles... . 0) 4, 500, 000 13. Cattle. (>) 4, 500, 000 14. Mats and matting_ 0) 4, 300, 000 15. Firecrackers_ 0) 4, 000, 000 16. Eggs and egg products.. . 0) 4, 000, 000 17. Paper. . ... . 0) 3, 500, 000 Principal items Per cent of total trade Value in haikwan taels 18. Flour_ 0) 3, 500,000 19. Peanuts _ _ 0) 3,000,000 20. Hair, human_ 0) 3,000,000 21. Tobacco, leaf and pre- pared_ 0) 3, 000, 000 22. Furs___ 0) 2, 000, 000 23. Chinaware. . 0) 2, 000, 000 24, Ramie fiber__ 0) 2, 000, 000 25. Nankeens.. ... . - 0) 2, 000, 000 26. Rapeseed_ _ (*) 2, 000. 000 27. Coal_ 0) 1,700, 000 28. Vegetable tallow_ 0) 1,600, 000 29. Pig iron_ (*) 1, 500,000 30. Lard _ 0) 1, 300, 000 31. Animal tallow_ 0) 1, 000, 000 32. Nutgalls_ (>) 1, 000, 000 33. Antimony_ _ 0) 1, 000, 000 i Less than 1 per cent. 35 RESUME OF THE TRADE OF CHINA 1923 EXPORTS Principal items Per cent of total trade Value in haikwan taels 1. Silk and silk goods_ 23 170,000, 000 2. Beans, bean cake and bean oil. . . .- 15 127,400, 000 3. Raw cotton_ 4 32, 600, 000 4. Eggs and egg products.. 4 29, 600, 000 5. Tea_ 3 23, 000, 000 6. Timber__ 3 20, 700. 000 7. Coal .- 3 20, 300, 000 8. Hides and skins_ 2^ 19, 100, 000 9. Peanuts and peanut oil. 2H 18, 000, 000 10, Wood oil... .. - 2M 17, 500, 000 11. Wool_ . .. m 12, 900, 000 12. Sesame seed . . ... VA 12, 200, 000 13. Millet and kaoliang m 12, 000, 000 14. Pig iron and iron ore- i 8, 800, 000 15. Bristles. ...-- i 7, 800, 000 16. Tin slabs ... - i 8, 000, 000 17. Furs_ (9 5, 600, 000 18. Straw braid .. ... .. (9 5, 400, 000 19. Bran_ .. - (9 5, 000, 000 20. Hair nets... (9 4, 800, 000 21. Carpets ... (9 4, 700, 000 22. Nankeens.. . ... (9 4, 700, 000 23. Paper (Chinese)- (9 4, 500, 000 Principal items Per cent of total trade Value in haikwan taels 24. Mats and matting. (9 4, 500, 000 25. Cotton yarn. (9 4, 400, 000 26. Lace_ . ___ (9 4, 100, 000 27. Medicines . .... (9 4, 000, 000 28. Chinaware . . .. (9 3, 300. 000 29. Intestines. ...... (9 3, 300, 000 30. Frozen meats and game. (9 3, 100, 000 31. Firecrackers.. (9 2, 900, 000 32. Ramie fiber... _ (9 2, 800, 000 33. Grass cloth__ . ... (9 2, 500, 000 34. Wheat.. ... .. (9 2, 100, 000 35. Rapeseed_ ... . (9 2, 000, 000 36. Cattle_ (9 1, 600, 000 37. Hemp_ (9 1,600, 000 38. Antimony_ (9 1, 500, 000 39. Nutgalls... .. .. . (9 1, 400, 000 40. "Watches_ . . . ... (9 1,400, 000 41. Camphor_ . ... . (9 1,400, 000 42. Varnish . . _ . (9 1, 400, 000 43, Feathers_ .. . .. (9 1, 300, 000 44. Vegetable tallow__ (9 1,100, 000 45. Licorice_ .. .. (9 1, 000, 000 46. Lard_...__ (9 1, 000, 000 47. Umbrellas... (9 1, 000, 000 1 Less than 1 per cent. EXPLANATORY NOTES Silk .—Raw silk and silk goods head both of these export lists, with about the same comparative percentages of the whole trade. In keeping with the developments in the export trade generally during the period, exports of silk and silk goods for 1923 are double those for 1910. This is due pri¬ marily to the greater position in the American market because of improved methods in sericulture and silk production during the last few years of the period. Tea .—Tea dropped from second to fifth place in importance during the 13-year period. In fact, in 1920 tea exports from China aggregated only. 9.000.000 taels. During the three years following, the trade recovered to a considerable degree, as the exports of 1923 amounted to 23,000.000 taels. This sum. how¬ ever, is considerably less than that for 1910 and is in keeping with the general decline of the China tea trade over a number of decades following the develop¬ ment of tea growing in other sections of the world. Beans .—Beans and bean products had by 1910 achieved a position of impor¬ tance in China's export trade, although 20 years before these items did not command consideration, and by 1923 these products aggregated 127,000,000 taels, ranking second on the list of China's exports. This phenomenal develop¬ ment is one of the striking features of China’s export trade. Seventy per cent of the beans produced in China are raised in Manchuria, hence it is with the development of this region that the bean industry has come into prominence. Eggs and egg products .—Eggs and egg products advanced from sixteenth place in 1910 to fourth place in 1923, exports aggregating in that year nearly 30,000,000 taels. Had it not been for special tariff enactment by the United States, the egg exports from China to the former country would have been much greater. Apparently China’s egg products have found a permanent place in foreign markets. Minerals .—It is noteworthy that China is gradually coming to the fore as an exporter of coal. In 1910 coal exports amounted to but 1,700.000 taels, while in 1923 they aggregated 20.500,000 taels. On the other hand, the develop¬ ments in pig iron and iron ore exports are less for 1923 than for several years prior thereto, although considerably above those for 1910. Antimony, which had risen during the World War to unprecedented figures in China’s export trade, has dropped back to 1.500,000 taels, which is but 50 per cent greater than the exports for 1910, although China presumably possesses more than half of the world’s resources in antimony. China’s wealth in tin is demonstrated by the continuous exports of this mineral. In 1910 exports of tin amounted to 6,000,000 taels; in 1922 to 11,000,000 taels; but in 1923 they 36 COMMERCIAL HANDBOOK OF CHINA receded to about 8,000,000 taels. As with iron and coal, the question of economic transportation is one which has much to do with the exploitation of China’s tin resources. Vegeta ble oils. —The 1910 returns of vegetable oils were lumped together, with the aggregate of 13,200,000 taels. In the 1923 returns they appear separately, bean oil amounting to 17,700,000 taels, peanut oil to 6,000,000 taels, and wood oil to 17.500,000 taels. The most striking development in this direction is that of the wood-oil trade. Chinese wood oil has found a permanent place in the markets of the West, being now considered indispensable in the manu¬ facture of paints and varnishes. Hides and skins. —While there has not been any considerable advance in exports of hides and skins, yet this trade will continue until China has es¬ tablished a tanning industry sufficient to consume its domestic supplies. Grains. —In grains such as millets, kaoliang, and wheat, in bran and flour and certain other food products, the export trade will undoubtedly be of a sporadic nature, depending upon prices abroad, silver exchange and crop conditions in China, and other variable factors. Asiatic Russia, which has been China’s steadiest customer for the products, may develop sufficient supplies to meet its own needs. Bristles. —Exports of bristles have been greatly stimulated by the inability of the trade in Europe and America to secure supplies from Russia. Sausage casings. —Pig intestines, known to the trade as sausage casings, have also become important articles of export from China, 1923 returns giving the value of exports as 3,300.000 taels. Feathers. —A commodity which commands very little value in China is feath¬ ers. This product is now an article of export, which amounted in 1923 to 1,300,00 taels. Meat and eggs. —Exports of cattle and beef from Tsingtao, principally to Japan, are a noteworthy development in China’s foreign trade during the past decade. Japan is also a heavy purchaser of China’s egg products. Frozen meats and game to the value of 3,100,000 taels were exported during 1923, but during the war years the exports were considerably greater. This trade will continue until the level of prices in China has been raised considerably. Timber. —Timber export, which represents a value of 20,700,000 taels in the 1923 trade, is due to the demand created in Japan following the earthquake and fire of September, 1923. Otherwise China is not a substantial exporter of this product. Nankeens. —The 1923 returns, giving China’s exports of nankeens at 4,700,000 taels and cotton yarn at 4,400,000 taels, are substantial evidence in the customs returns of trade that cotton manufacturing in China is assuming a position of importance that is being felt in other markets. Carpets and rugs. —An item which the World War has brought into promi¬ nence in China’s export trade is carpets or rugs. The North China rug has evidently made a permanent place for itself in the American market. The exports of these rugs amount now to about $5,000,000 gold a year. Lace, hair nets, and furs. —Similarly, Chinese lace, embroideries, hair nets, and furs have become important items in China’s trade with the United States. Wool. —China’s exports of wool increased in value from 5,000,000 taels in 1910 to 12,900,000 taels in 1923. This wool finds a market in the United States for manufacture into carpets, where it is admitted free when used in this in¬ dustry. There are no indications that China will soon consume its surplus of wool stocks in domestic manufacture. Chinaicare. —An industry in China which possesses great potentialities in foreign trade when the industry is modernized and properly organized is the manufacture of porcelain and chinaware. China’s imports and exports of this commodity are about equal, but the demand for Chinese porcelain and china- ware from abroad is very considerable and an expansion of the trade in these products only awaits the modernization of the industry. IMPORT AND EXPORT TRADE IN 1923 AND 1924 • _ The following tables show the import and export trade of China during the calendar years 1923 and 1924, and the distribution of such trade according to countries of origin and destination. RESUME OF THE TRADE OF CHINA 37 Net Imports of Foreign Merchandise into China during Calendar Years 1923 and 1924 Articles TEXTILES AND MATERIALS Cotton, raw.. piculs. Cotton manufactures: Shirting and sheetings— American. pieces. English... do... Japanese.... ...do... Other kinds.. do... Drills and jeans— American. .do... English. do... Japanese.... do... Other kinds.___ do... Canvas and cotton duck- yards. Cotton yarn and thread_ piculs. Velvets and velveteens....... Wool and cotton mixtures------ Woolen goods.. .... Silk piece goods...--- catties. Silk goods, artificial.... yards. Silk mixtures_ catties. Miscellaneous piece goods.-- Bags, all kinds__.'--- Carpets and carpeting... Clothing (including haberdashery, hosiery, hats, etc.)--- All other..... Total textiles and materials. METALS AND MINERALS Aluminum, all kinds. piculs. Brass and yellow metal.... Copper ingots. piculs. Copper manufactures... Iron and steel manufactures: Bamboo steel, hoops, etc...piculs. Bars... do... Cobbles and wire shorts__ .do... Galvanized-iron sheets... do... Other sheets and plates_ do... Pipes and tubes. do... Rails___ do... Wire, including rope. do... Tinned plates. do... Nails and rivets.._ do... Plate cuttings. .do... Angles and tees.... do... Cutlery........ Enameled ware____ Hand tools..... Machine tools..... Needles. thousands. Iron and steel manufactures, miscellaneous.. Safes and steel doors.. Stoves and grates. Lead: Pig or bars.. piculs. Tea and sheet... do... Tin slabs.. do... Tin foil and other foils...... Zinc spelter, sheets, etc_ piculs. All other metals.... Total metals and minerals. SUNDRIES Arms and ammunition. Automobiles, trucks, and motor cycles... BSche de mer. piculs. Birds’ nests..do... Building materials: Bricks and tiles....... pieces. Cement__piculs. 1923 Quantity 1,614,371 16,818 2, 732,198 2, 986, 040 1, 702 178, 627 2,126, 893 1,929 3,108, 872 1, 989, 938 2, 681, 489 64, 417 1, 767, 976 382, 331 3, 007 "230,’464" 108, 489 1,150, 072 415, 830 302,123 451,140 236, 532 389, 497 139, 591 493,162 254, 635 398, 266 137, 011 3, 253, 561 164, 237 8,171 58, 511 110, 281 29,985 43, 555 94, 530 3,417, 653 1,654,868 Value in thousands of haik- wan taels 53,816 121 18,174 18,475 4,464 10 1,062 11,158 11 1,088 43, 554 1, 545 8, 508 19, 042 804 815 1,459 4, 225 5, 889 364 10, 941 76, 284 281, 809 181 1,507 5,814 1,005 707 4, 686 1,266 2, 746 2,021 2,032 1,568 1,399 4, 647 1,745 1.156 535 512 1,251 948 463 1.157 429 231 456 1,455 84 3,362 2, 633 424 4, 953 51,373 912 2,264 2,175 1,051 317 3, 251 1924 Quantity 1,241,881 16,993 3,718,393 3,002,115 20, 584 219, 272 1, 762, 392 500 2, 516,134 1, 793, 684 2, 695,163 69, 925 2, 883, 203 387, 245 3, 859 564, 970 144, 354 1,924,872 478, 454 327,152 746, 866 273, 046 946, 521 234, 972 892, 819 666,155 631, 546 227,908 4,849,316 159, 567 5, 644 106,092 36,026 48, 263 92,480 5, 625,175 1,787, 484 Value in thousands of haik- wan taels 40,076 131 26,830 19, 222 8, 875 121 1,358 9, 579 4 883 36, 261 1,465 11, 241 17, 693 1,000 1,598 1,524 5, 974 7, 763 379 10, 501 86, 345 288, 823 199 1,924 13,178 1,152 967 6, 813 1,509 3, 008 3,189 2,171 3, 005 2,097 8, 459 4,033 1,712 811 651 2,053 1,115 638 1,684 544 250 511 1,552 68 2,348 498 10, 882 77,021 1,973 3,303 2,509 1,099 454 2,074 38 COMMERCIAL HANDBOOK OF CHINA Net Imports of Foreign Merchandise into China during Calendar Years 1923 and 1924—Continued Articles 1923 Quantity sundries— continued Buttons, all kinds__gross.. Casks, empty___ Cereals and cereal products: Bran...____piculs.. Macaroni and vermicelli_do_ Rice and paddy_do_ Wheat___do_ Wheat flour_do_ Chemical products, including match-making materials, medicines, etc_,____ China ware, all kinds___ Clocks and watches_ pieces.. Coal_ tons.. Dyes, colors, paints, and varnish: Aniline_ Indigo, artificial.__piculs.. Other..... Electrical materials_ Fish and fish products_piculs.. Furs (skins)_pieces.. Fruits: Dried_ piculs.. Fresh_____do_ Furniture and materials, including bedsteads, mirrors, etc. G inseng___catties.. Glass and glassware_____ Hides and skins, raw_ .piculs.. Instruments and apparatus... Lamps and lampware.. Leather_ piculs.. Leather manufactures, including belting, boots and shoes, etc.____ Lumber: Hardwood...... Softwood_square feet.. Machinery: Agricultural......... Textile___ Sugar refining, distilling, etc__ Boilers, turbines, etc.. Milk, canned_____ Mineral oil: Paper and paper products, including stationery. Photographic materials_ Printing materials_____ Railway materials and supplies_ Cars_______ Locomotives and tenders...... Rattans, all kinds__ piculs.. Sandalwood__ do_ Spices, all kinds_ ...do_ Sugar, all kinds.._ do_ Sugar canes and candy_do— Tobacco_piculs.. Cigars and cigarettes_thousands.. Toilet preparations, including perfumery_ Umbrellas, all kinds__ ..pieces.. Soap and materials___ All other sundries_'......-. Total sundries. Total imports. 1,858,583 2,891,497 88, 216 22,434, 962 2, 595,190 5, 826, 540 555,300 1, 366,108 256,102 1, 852, 251 1, 356, 193 193, 799 246, 426 202, 618 37,817 137, 271 125, 136, 134 gallons.. 214, 835, 669 ...do_ 179, 139, 245 .. do_ 5, 139, 541 do_ 4, 274, 294 ...do_ 25, 246, 439 ...do _ 7, 499, 880 ...tons.. 57, 267 gallons.. 6, 307, 815 . piculs.. 510, 286 145,919 123, 105 106, 514 5, 823, 399 610, 965 315,312 10, 142, 148 1, 669, 964 Value in thousands of haik- wan taels 425 513 5,422 1,384 98,199 9,096 27, 233 16, 578 1,569 2, 074 12, 861 7, 943 11,817 6, 566 9, 205 19, 461 1,146 2, 396 1, 536 3,415 1,872 3, 465 1,045 1,024 1,655 6, 864 1,283 4, 425 5, 270 302 12, 316 12, 482 1,474 1,818 58, 292 48, 017 1,405 1,411 7,315 3, 279 1,469 3,849 18,950 4, 048 1,344 1, 139 7, 057 1,728 1,170 1,521 1,337 1,735 48, 776 3, 556 12, 691 28, 979 3, 541 1,082 2, 874 19, 544 590, 221 923, 403 1924 Quantity 2,586,903 3, 492, 513 98,146 13,198, 054 5,145,367 6, 657,162 1,232,499 1, 610, 016 421, 214 2, 525, 304 1, 142, 888 186, 284 293,173 184, 093 "33," 748 156, 543 287, 824, 072 223, 207,104 177, 342, 689 7, 013, 540 6, 060, 388 31, 268, 943 9, 129, 302 104. 025 7, 265, 093 576,934 151,839 150, 966 79,198 8,905, 678 506,194 683,152 9, 778, 697 2, 392, 466 Value in thousands of haik- wan taels 510 692 8,370 1,509 63, 249 17, 690 30,098 17, 203 1,751 3,100 15,160 10, 611 21,585 6, 580 9,247 23, 860 1,165 2, 035 1, 726 3, 439 1,606 4,913 863 1,210 2,190 7,601 1, 278 4, 771 11, 349 279 5, 710 12, 783 1,906 1, 858 57, 811 46, 487 1,611 1,650 7, 632 3, 581 2, 306 4, 068 23, 073 5, 902 1,613 1,572 8, 784 2,145 1,065 1,715 1,993 1,487 72, 127 4, 425 24. 640 28, 397 3, 379 1,516 3, 282 30, 797 652, 367 1,018, 211 39 RESUME OF THE TRADE OF CHINA Exports of Chinese Merchandise to Foreign Countries, Calendar Years, 1923 and 1924 Articles TEXTILES AND MATERIALS Carpets___ Cotton, raw_.__ Cotton manufactures: Shirtings and sheetings_ Nankeens_ Yarn___ Fur clothing and rugs_ Hemp__ Ramie fiber and thread___ Grass cloth____._ Laces____ Silk and silk products: Cocoons.. Raw... Waste_____ Piece goods.... Pongee.. Other silk products.. Wool: Camel.. Sheep...... All other textiles and materials. Total textiles and materials_ METALS AND MINERALS Antimony_ Iron ore and pig_ Tin slabs_____ Tungsten___ Zinc ore___ All other__ Total minerals__ SUNDRIES Bamboo and bamboo ware.. Bristles_ Camphor_ Casings.__ Cereals and cereal products: Bean cake__ Beans_ Maize... Rice and paddy_ Rapeseed..... Seasame seed... Seed cake_ Vermicelli and macaroni_ Bran_____ Wheat___ Wheat flour.. Millet and kaoliang___ Coal__ Eggs: Albumen and yolk_ Fresh and preserved_ Frozen_ Feathers, all kinds_ Fish and fishery products_ Furs___ Hair, human___ Hair nets.... Hides and skins: Buffalo and cow.... Goatskins— Tanned... Untanned... Meat and meat products: Frozen meat... Lard.. Tallow.. .piculs.. .pieces. .piculs. ..do... . pieces, .piculs. ..do... ...do... .do... .do... .do... .do... .do... .do... .do.. _do_. . piculs. ..do... ..do... ..do... ..do... ..do... .piculs. ..do... ..do... .piculs. ..do... ..do... ..do... ..do... ..do... ..do... ..do... ..do... ..do... ...do... ..do... ...tons. _piculs. thousands. -do... .do... ..do... _pieces. _piculs . .piculs.. .do... .do... .do... .do... .do... 1923 Quantity 974,574 641, 483 75, 605 89, 001 729, 668 129, 234 167, 488 21,197 19,326 138, 423 128,118 14, 533 13,962 55, 618 352,109 275, 420 13, 585, 020 133, 225 66, 929 1,009, 672 2, 905, 297 74, 422 15,103 24, 785, 869 18, 269, 266 357, 829 63, 089 492,120 1,926, 379 1,318, 240 255, 902 2, 721, 474 639, 919 131, 553 3, 362,135 3,108, 682 377, 535 1,101,049 375, 365 73,024 194, 468 7, 366, 551 30,039 293, 740 1,406,392 7,358, 207 295, 576 51,925 47, 352 Value in thousands of hai- kwan taels 4, 691 32,606 3,733 4, 704 4, 370 1,218 1,607 3,131 2, 540 4,112 1,745 138, 916 11, 560 16, 829 7, 719 3, 868 2, 259 10, 079 4, 482 260,169 1,672 8, 749 7, 875 790 695 2,020 21, 801 1, 403 7, 758 1,421 3, 319 56, 866 52, 416 710 337 2,004 12,161 2, 979 2, 913 4,981 2,173 783 11,779 20, 545 12, 367 11,491 5, 764 1, 256 2, 326 5, 551 983 4,840 9, 266 1,965 5, 501 2, 431 809 646 1924 Quantity 1,080,019 1,370,222 53, 656 147,031 2,033, 524 158,128 285, 366 24, 614 26, 378 315, 830 158,177 13, 303 14,019 37, 950 485, 320 217, 566 18, 503, 330 117, 353 50, 325 338, 241 1,126, 598 65, 540 10, 711 22, 577, 716 24, 589, 687 228, 908 41, 935 502, 616 934,191 1,253,484 276, 986 3, 263, 462 140,185 157, 285 4,130, 649 3,202,352 457,948 944, 253 252, 392 84,072 167, 238 7,169, 751 28, 202 227,694 1,110,420 4, 679, 873 257, 832 61, 733 64,804 Value in thousands of hai- kwan taels 5, 989 40, 420 8,180 3, 409 7, 513 3,067 2, 232 5,172 3, 544 4, 640 2, 251 108,060 10,302 15, 746 6, 555 4, 466 1,991 14, 041 4, 536 252,114 2,034 11, 278 9, 088 555 22 2,191 25,168 1,484 8, 742 994 3, 893 50, 897 76,066 560 227 2,087 6, 501 2, 626 3, 594 6, 272 541 714 16, .549 20, 539 16,659 9,893 4, 972 2,048 2, 215 6,094 1,136 2, 677 6,344 1,744 3, 539 3,039 1,016 829 40 COMMERCIAL HANDBOOK OF CHINA Exports of Chinese Merchandise to Foreign Countries, Calendar Years 1923 and 1924—Continued Articles sundries— continued Nuts: Chestnuts._.. Peanuts— Shelled. Unshelled... Walnuts.. Paper and paper products.. Pottery and earthenware__ Salt...... Straw braid. Sugar, all kinds.. Sugar candy and canes.. Tallow, vegetable. Tea: Black...... Green. Tobacco: Leaf. Prepared. Varnish. Vegetables, dried, fresh, etc. Umbrellas, paper.. Mats and matting. Licorice...... Lumber: Hardwood... Softwood.. Poles. Fruit, dried, preserved, etc. Chinaware..... Matches._•____ Oils, vegetable: Bean oil___ Peanut oil. Wood oil. All other. Total sundries. Total exports. iy23 Quantity 1924 piculs.. ..do_ ..do_ ..do_ ..do_ ..do_ ..do_ ..do_ ..do_ ..do_ ..do_ ..do_ ..do_ 42,240 1,374, 693 871, 832 45, 899 319, 309 213,197 3, 706, 470 83, 911 363,001 507, 420 96, 348 450, 686 284, 630 Value in thousands of haik- wan taels 290 8,047 3,999 665 4,833 951 1,770 5, 444 2,451 632 1,086 13,992 8, 361 Quantity 44, 771 2, 663,414 964, 383 75,177 341, 846 217,177 3, 340, 529 76, 552 149, 898 257, 956 114, 856 402, 776 282, 314 Value in thousands of haik- wan taels 314 16,958 4,450 1,201 5,124 1,203 1,581 5,516 1,091 324 1,330 12,026 8, 363 ..do_ ..do_ ..do_ ..do_ pieces.. piculs.. 222, 724 56,187 19, 374 726, 855 4, 962, 432 75, 987 3, 570 2, 217 1,556 1,725 994 4, 504 1,045 208, 232 56, 957 18, 268 681,047 4,913,834 44, 531 3,424 2,128 1,332 1,824 1,175 4, 878 630 ..cubic feet., square feet.. _pieces.. .piculs.. .do- .gross.. 505, 732 192, 402, 694 2, 402, 385 197, 428 243, 760 3, 699, 157 521 11, 746 9,034 2,414 3,298 1, 375 548, 592 111,403, 821 2,533,119 142, 663 215, 594 1, 793, 347 404 3, 470 9, 502 1,536 2, 799 701 piculs. ..do... ..do... 2,126, 928 467,140 836, 887 17, 689 6, 175 17, 477 83, 342 2 , 470, 947 752, 917 121,470 672, 268 890, 038 20, 484 8, 452 17, 715 90, 076 494, 502 771, 784 Note.— The exports do not include exports to foreign countries by junks. Distribution of Trade by Countries of Origin and Destination, Calendar Years 1923 and 1924 [In thousands of haikwan taels] Countries Gross imports Exports 1923 1924 1923 1924 Hongkong _ ___ 248, 083 211, 024 154,448 120, 397 10, 879 10, 327 13, 600 7, 549 32, 456 55, 241 3,735 11, 955 3,908 10,203 243, 919 234, 762 190, 957 126, 011 18, 278 15, 576 20, 733 10, 560 38, 688 38, 828 175, 796 198, 517 126,804 43, 207 2, 753 2,001 8,085 173,163 201,176 100, 755 50, 251 3,420 1,107 9,317 Japan _ - _ United States _ Great Britain _ Belgium ___ Canada _ Dutch East Indies____ France_____ 39, 578 45, 096 15,949 Germany_____ 11,915 12, 329 India_____- 11,436 Italy....... 6, 273 11, 505 9, 468 8,948 Chosen _______ 30,281 30, 855 Netherlands____ 20, 460 8,511 13,501 Russia and Siberia.... 10, 098 34, 092 46, 359 Straits Settlements_ 9, 214 45, 615 9, 322 17, 928 19, 617 Other______ 43,132 31, 652 40, 834 Total....... 948, 634 1, 039,102 752, 917 771, 784 41 RESUME OF THE TRADE OF CHINA Value of Direct Foreign Trade of Principal Chinese Ports, Calendar Years 1923 and 1924 [In thousands of haikwan taels] Ports Imports Exports 1923 1924 1923 1924 Harbin district 1 ..... 9,236 9,439 33,860 45,302 Antung--- -- -. 26,818 23,827 41,906 32,417 Dairen_____ 68,416 77,160 113,907 125,700 Newchwang -- 11,920 11,911 3,928 2,948 Tientsin _------- 76.178 76,122 49,954 47,825 Kiaochow.------- 32,808 34,620 24,674 39,914 Hankow---- 38,552 18,849 16,278 19,849 Shanghai--- 417,870 483,470 276,838 276,455 Amoy___ 12,090 13,591 3,573 4,067 Swatow__ ___ 29,040 26,828 12,800 12,790 Canton ... ______ 73,846 54,020 90,228 82,776 Kowloon (including railway traffic).... .. 35,106 51,671 18,621 20, 962 Lappa-------- 18,064 21,886 3,785 5,006 Kongmoon.... -. 15,021 13,339 2,697 1,782 Mengtz---- - 13,659 14,845 9,043 9,976 All other...... 70,010 107,524 50,825 44,015 Total---- 948,634 1,039,102 752,917 771,784 1 Harbin district includes Lahasusu, Manchouli, Harbin, and Suifenho. Antung includes Tatungkow. GENERAL TRADE NOTES Invisible imports .—In any statement of China’s trade balance, it is necessary to take cognizance of certain invisible imports. The American consul at Hongkong estimates that $250,000,000 silver is remitted annually to that British colony by Chinese in other countries, for purchases, remittances to relatives, and investments. It is probably safe to estimate a total of $100,000,000 silver in remittances from the Canton communities abroad to Cantonese in China. It is estimated that Swatow receives anually $30,000,000 silver from its na¬ tionals abroad, and that Amoy receives $20,000,000 silver. American con¬ tributions to missionary and other philanthropic work in China aggregate at least $25,000,000 silver a year. The cost of the maintenance of foreign diplo¬ matic missions, foreign men-of-war in Chinese waters, the foreign expedi¬ tionary forces in China, and foreign shipping in China amount to probably $20,000,000 silver a year. Tourists’ expenditures may be reckoned at about $10,000,000 silver. The aggregate of these invisible imports would probably net at least $300,000,000 silver a year. To this sum may be added invest¬ ments of foreign capital in China. China’s unfavorable trade balance amounts to about $300,000,000 silver a year, and the excess of imports of silver over the exports amounts to about $75,000,000 silver annually. China incurs an addi¬ tional obligation of about $150,000,000 silver a year in foreign exchange to meet its debt service. (In these calculations $1 silver may be taken as equiva¬ lent to $0.50 United States gold.) Movement of silver .—For the five years, 1919-1923, China imported silver bars and silver coin to the equivalent of 448,000,000 taels, and exported 163,000,000 taels, or an average excess of imports yearly of 57,000,000 taels or $80,000,000 silver (United States gold at the 1923 rate, $46,000,000). The tendency of the silver dollar to replace the tael unit in China's silver currency is worthy of note. Silver exchange .—Silver exchange is a factor of commanding importance to China’s import and export trade. During 1920, because of the unprecedented heights to which silver advanced, there were numerous failures in business, and foreign business concerns in China suffered severely following the sudden fall in silver exchange. When the silver dollar reached an equivalent of $1.20 gold, China lost an exceptional opportunity to refund its foreign obligations and pay off its rail¬ way loans. Extraterritorial rights .—One of the results of the European war was to deprive German, Austrian, and Russian citizens of their extraterritorial rights in China. This makes for complications in the relations of Chinese with 42 COMMERCIAL HANDBOOK OF CHINA foreigners, as the citizens of those countries without extraterritorial rights are under the jurisdiction of Chinese laws and courts, while those enjoying extraterritorial rights are under the laws and courts of their respective nations. Foreign business moving inland. —In former years the foreign trader con¬ fined the vast bulk of his business transactions in China to a comparatively few Chinese located at coastal or river-treaty ports. Closer contact with the consumers and producers is now essential and foreign business is penetrating the interior. Salesmanship necessary .—There is a very noticeable tendency toward spe¬ cialization in import and export lines in China, particularly with China’s large imports of industrial equipment. Men who are thoroughly familiar with the commodities handled are supplanting general import and export merchants. In other words, service and skilled salesmanship are increasingly important factors to successful business with the Chinese. Increased costs in business. —The expenses of conducting business in China have increased very considerably during the past 10 years. Living costs have advanced about 100 per cent and labor upward of 50 per cent. The copper cash, nominally worth one-tenth of 1 cent silver, has been superseded in all except the more remote sections of the country by the copper cent piece, indi¬ cating a higher living cost among the masses and at the same time an increased purchasing power. Industrial development. —The extensive development of modern industry and manufacturing among the Chinese during the past two decades is sig¬ nificant. The character of the products manufactured has improved very appreciably. The organization of numerous modern banks among Chinese communities has been marked. During the past 10 years over 100 modern-type Chinese banks with an aggregate paid-up capital of more than $300,000,000 silver have been opened in Shanghai. Japanese investments .—The heavy investments of Japanese capital in indus¬ trial projects during the past few years is indicative of Japanese confidence in the future economic development of China. Good-roads movement. —The agitation for good roads during the past 10 years has resulted in the construction of about 8,000 miles of graded dirt roads to serve motor traffic. The greater receptivity of the Chinese to the needs of economic transportation is distinctly encouraging to the establishment of a modern economic society. Miscellaneous. —China, like America, is continental; hence the internal de¬ velopment of the country will offer to the capital, brains, and energies of its people better prospects than can come through direct interest in foreign trade, for which the Chinese have not as yet developed the shipping facilities, insur¬ ance organizations, banking houses, or business establishments with their oversea connections. Thus, as internal conditions in China improve, foreign traders may expect increasingly larger opportunities for business in China through organizations especially developed. In spite of disturbed political conditions in China, trade, modern construc¬ tion work, and modern industrial developments increase year by year; there¬ fore tremendous strides should follow any marked improvement in the direction of political stability. TRADE WITH SPECIFIC COUNTRIES TRADE WITH UNITED STATES The Chinese customs returns from 1867 to 1913 show that the direct trade of China with the United States netted less than 9 per cent of China’s total foreign trade. In fact, trade with the United States ranged from 6.5 per cent to 9 per cent of China’s total. It is very difficult, indeed, impossible, to apportion the actual amount of China’s trade with the United States, for the reason that exports from Hongkong, which are in reality goods transshipped through Hongkong to other countries, are merely credited to the trade of Hongkong. Similarly, imports from abroad coming through Hong¬ kong and transshipped to Chinese ports appear in the customs returns RESUME OF THE TRADE OF CHINA 43 as credited to Hongkong. As a very considerable amount of Ameri¬ can trade with China, particularly with South China, passes through the port of Hongkong, the United States loses credit in the Chinese customs returns for much of its trade. To a lesser extent some of the United States trade with China is transshipped through Japan and has been accredited to Japan. Up to the year 1913 these discrep¬ ancies were not a considerable factor; but since then, with the in¬ crease in America’s trade with China these discrepancies have become a matter of great importance. A table is given below showing the value of China’s direct trade with the United States, as taken from reports of the Chinese Maritime Customs, for the years 1904, 1913, and 1923. Values are converted into United States gold currency. Years Imports from United States Exports to United States Total trade with United States Per cent of China’s total trade 1904 _ $20,368,300 25,826,427 123,558,120 $18,907,407 27,447,069 101,443,019 $39,275,707 53,273,496 225,001,139 9 1913_____ 7 1923.- ___ 17 It is worth while to analyze the 1923 figures to ascertain the ex¬ tent of the discrepancy between China’s actual trade with the United States and the trade as accredited by the Chinese Maritime Customs. As for China’s exports to the United States, shippers of Chinese commodities who invoice these commodities for shipment direct to the United States are obliged to cover the shipments with consular invoices, which are used for the United States customs entry pur¬ poses. The aggregate of the consular invoices of declared exports from the various ports of China to the United States for 1923 was $178,216,127 gold. The declared exports from Hongkong to the United States for 1923 amounted to $13,664,233 gold. Conserva¬ tively speaking, we might consider that $8,000,000 of the Hongkong exports represents Chinese goods. This would make the exports from China roughly $186,000,000. The United States statistics of foreign trade show that for the calendar year 1923 United States imports from China aggregated $186,602,172, and that imports from Hongkong were $19,860,635. For that same year imports from Dairen were also given separately as $4,354,944, which gives a total of about $210,000,000 United States gold for imports from China and Hongkong. Thus, roughly speaking, we may say that the United States figures show imports into the United States from China of about $200,000,000 United States gold for 1923. These figures are practically double those of the trade returns of the Chi¬ nese customs. The principal single item showing a discrepancy between the customs trade returns and the figures as shown by the United States Government agencies is raw silk, particularly at Canton. The Chinese returns accredit the bulk of the silk, which in reality moves from Canton to the United States, as exports to Hongkong, although actually invoiced at Canton for shipment to the United States via Hongkong. It is probably safe to estimate that about $35,000,000 (gold) worth of raw silk exported from China was not credited to China’s trade with the United States. 44 COMMERCIAL HANDBOOK OF CHINA Concerning China’s imports from the United States, it is more difficult to estimate the amount of the discrepancies in the Chinese customs figures, because of the lack of reliable checking agencies. The imports into Hongkong from the United States for the year 1923 netted £5,860,000, or about $27,000,000 United States gold. Over 50 per cent of these imports consisted of flour and kerosene for transshipment to China. Of the remaining items ginseng, cigarettes, tin plate, leaf tobacco, raw cotton, machinery, fertilizers, raisins, and old newspapers constituted the greater part. These were also primarily for China. It is safe to assume that $20,000,000 of these imports entered into the trade of China. This sum would increase China’s imports from the United States to about $150,000,000 gold and give the United States 20 per cent of China’s import trade. China’s exports to the United States for 1923 may be conserva¬ tively estimated at $180,000,000 gold, or about 30 per cent of China’s total export trade. Thus, China's total trade with the United States in 1923 aggregates at least $320,000,000 gold, or 24 per cent of the former country’s total foreign trade. DIRECT TRADE WITH FOREIGN COUNTRIES Statistics showing the value of China’s direct trade with separate countries for 1913 and 1923 appear below. The figures are taken from the Chinese Maritime Customs returns of trade, and haikwan taels are converted to United States gold. (The haikwan tael was equivalent to $0.73 in 1913 and to $0.80 in 1923.) Countries Imports Exports Total 1913 1923 1913 1923 1913 1923 Australia, New Zea¬ land, etc.. $511,770 $2,690,604 $390,994 $1,191,212 $902,764 $3,881,816 Austria-Hungary_ 3,004,875 79,589 1,130,078 96,676 4,134,953 176,265 Belgium. .. 11,540,680 35,205,007 8,703,000 4,772,324 2,202,525 16,313,005 39,717,741 10,905,525 British India. 44,192,785 4,512,734 475,587 9,863,444 54,056,229 Canada.... 1,360,121 8,261,899 1,600,607 1,835,699 9,862,506 Chosen (Korea)_ 2,571,096 9,563,952 4,966,654 24,224,904 7,537, 750 284,562 33,788,856 Denmark. .. 73,520 892,228 211,042 1,206,054 2,098,282 Dutch East Indies. 4,984,020 10,880,260 1,899,089 6,468,265 6,883,110 17,348,525 France_ 3,863,348 6,038,923 29,706,591 31,662,127 33,569,939 37,701,050 French Indo-China_ 3,486,086 14,750,929 1,375,676 3,210,171 9,531,774 4,861,762 17,961,100 Germany_ 20,632,450 25, 964,853 12,411,388 33,043,840 35,496,627 Hongkong 1 _ 125,122,711 198,466, 764 85,386,794 140,636,999 210,509,510 339,103,763 Italy- 483,802 2,988,377 6,063,850 7,574,240 6,547,652 10,562,617 Japan (including For¬ mosa)_ 87,003,716 168,819,437 47,781,710 158,813,875 134,785,417 327,633,312 Macao... 4,808,592 4,988,655 3,610,284 3,174,006 8.418,876 8,162,661 Mexico and Central America_ 5 5,199 43,082 28,640 43,087 33,839 Netherlands. .. 1,037, 997 3,126,577 6,336,807 6,808,834 7,374,804 9,935,411 Norway .. 253,393 1,622,375 1,973 29,547 255,366 1,651,922 Philippine Islands.. 1,015,219 1,088,124 555,967 3,185,256 1,571,186 4,273,380 Portugal__ 855 3,434 13,446 9,121 14,301 12,555 Russia- European ports_ 214,030 132.545 3,636,052 6,959 3,850,083 139, 504 Land frontier _ 8,936,224 4,686,824 2,256,857 1,289,584 11,193,081 5,976,408 Amur ports.. 375,457 86,996 5,809,447 454,829 6,184, 904 541,825 Pacific ports _ 6,623,754 3,255,888 21,045,372 25,522,244 27,669,126 28, 778,132 1 Much of what is entered at Hongkong, both in the import and the export trade, represents goods for transshipment. RESUME OF THE TRADE OF CHINA 45 Countries Imports Exports Total 1913 1923 1913 1923 1913 1923 Siam.. $38,088 $5,007,708 $1,478,337 $2,708,210 $1,516,425 $7,715,918 Singapore, Straits Set- tlements, etc-- 6,513,918 7,370, 977 5,505,926 14,342,249 12,019,844 21,713,226 South Africa (including Mauritius).. 7 20,364 45,734 150,212 45, 741 170,576 South America._ . ___ 126 37,081 48,195 103,098 48,321 140,179 Spain (including Gi- braltar)_ 2,468 23,518 277,691 1,102,493 280,159 1,126,011 Sweden.. _ ... . 1,123,381 1,770,631 166,188 229,413 1,290,069 2,000,044 Switzerland.. _ 42,307 2,843,599 34,773 6,272 77,080 2,849,831 Turkey, Persia, Egypt, Aden, etc. .. 102,196 675,124 2,695,006 8,891,357 2, 797,202 9.566,481 United Kingdom_ 70,648,078 96,317,784 11,916,535 34,565, 704 82,564,613 130,883,488 United States (includ- ing Hawaii)_ 25,826,427 123,558,120 27,447,069 101,443,019 53,273,496 225,001,139 Total 2 __ _ 427,405,724 758, 907,135 294,009,743 602,333,932 721,415,467 1,361,241,068 Less reexports to for- eign countries_ . 11,757,220 20,184,826 11,757,220 20,184,826 Net total.. 415,648,504 738,722,310 294,009.743 602,333,932 709,658,247 1,341,056,242 2 In certain years the individual items do not add to the official total as given, but in all cases such dis¬ crepancies are relatively insignificant. TRADING PORTS There are 69 treaty ports in China in which foreigners are per¬ mitted to reside, purchase property, and erect business establish¬ ments. In addition there are 11 trade marts voluntarily opened by the Chinese Government to foreign trade, but at which foreigners may reside and lease premises for business or residential purposes. In the voluntarily opened ports, leases to property are restricted to definite periods, in some cases 30 years, whereas in the treaty ports foreigners may lease land in perpetuity. In the special foreign con¬ cession areas of some of the treaty ports the leasing of land is in some cases restricted to the nationals of the powers concerned and also for certain prescribed periods. At 47 of the 69 treaty ports the Chinese Maritime Customs maintains offices. These ports are listed in the following tables, which also contain comparative statements of the direct foreign trade of China for each of the ports for the years 1913 and 1923. These tabulations indicate the percentage of each port’s trade in the total foreign trade of China for the years 1913 and 1923, and also the percentages of increase or decrease for the two years. 46 COMMERCIAL HANDBOOK OF CHINA Value of the Direct Imports of China, by Ports, 1913 and 1923 1913 1923 1923 trade 1 Ports Value in haikwan taels Percent¬ age of total for China Value in haikwan taels Percent¬ age of total for China com¬ pared with 1913 trade Aignn ____ 290, 282 47, 765 20,172, 340 399, 969 671, 199 6, 227, 225 28, 740, 282 7, 930, 274 3, 562, 743 51, 354, 297 0. 0495 108, 238 0. 0114 Per cent -62 Sansing_____ .0082 Harbin 2 _____ 3. 4407 9, 236, 497 1, 054, 412 3, 189, 154 26, 818, 200 68, 416, 348 11, 920, 059 1, 966, 761 76, 178, 355 22, 251 5,411,298 32, 807, 680 671, 398 16, 860 391, 322 490, 111 1,131, 124 22, 367 38, 551, 704 3, 857, 431 1, 967, 851 3, 845, 613 3, 646, 278 417, 870, 452 52, 096 2, 520, 488 7, 064, 232 49, 525 66, 753 7, 137, 439 12,089,623 29, 039, 744 73, 846, 423 31, 957, 386 3, 148, 871 18, 064, 389 15, 020, 954 8, 098, 828 6, 858, 678 294, 693 3, 914, 715 3, 475, 259 133, 971 13, 659, 338 184, 054 2, 364, 697 . 9737 -54 +164 +374 +330 +138 +50 -45 +48 Hunchun____ .0682 . 1111 Lungchingtsun___._ __._ . 1145 . 3362 Antung 3 _ 1. 0621 2. 8270 Dairen ______. 4. 9020 7. 2121 Newchwang. _ 1. 3526 1. 2565 Chinwangtao_ . . 6077 . 2073 Tientsin..... 8. 7592 8. 0313 Lungkow____ . 0023 Chefoo ....... 5, 211,897 15, 466, 785 778, 435 . 8889 . 5704 +4 +112 -14 Kiaochow___ . ___ 2. 6381 3. 4584 Chungking_ __ . 1328 . 0708 Wanhsien.... . 0018 Ichang_ 189, 390 200, 063 1, 490, 357 6, 200 34, 164, 083 1, 538, 984 904, 186 . 0323 . 0412 +107 +145 — 24 Shasi . _ .0341 .0517 Changsha _ __ . 2542 . 1192 Y ochow..... .0011 . 0024 +260 +13 + 150 +118 +45 —4 Hankow.._______ 5. 8272 4. 0639 Kiukiang..... .... . 2625 . 4066 Wuhu__ . 1542 . 2074 Nanking_ _ 2, 645, 070 3, 819, 697 244, 452, 421 19, 031 558, 060 2,890, 195 2, 857 28, 607 7, 735, 734 10, 916, 097 20, 111,062 31,791,219 29, 731, 794 711, 138 11,850,834 6, 799, 520 5, 119, 399 10, 776, 994 19, 482 3, 783, 894 1, 850, 365 99, 257 8, 644, 260 184, 890 2, 401,798 . 4511 . 4054 Chinkiang...... . 6515 . 3844 Shanghai___ 41. 6948 44. 0497 +71 +174 +352 +144 +1, 633 +133 —8 Soochow_ _ . 0032 . 0055 Hangchow... .. .. _ . . 0952 . 2657 Ningpo_ _ . . 4930 . 7447 Wenchow...... . 0005 . 0052 Santuao_ . .. . 0049 .0070 Foochow_ .. . . .. 1. 3194 . 7524 Amoy_ . ..... 1. 8619 1. 2744 + 10 +44 + 132 +7 +343 +52 +209 +58 —46 Swatow___ _ 3. 4302 3. 0293 Canton. . ..... 5. 4224 7. 7847 Kowloon.. .. .. 5. 0712 3. 3688 Kowloon (railway traffic)... .. . 1213 .3319 Lappa.... 2. 0213 1. 9042 Kongmoon___ .. ... 1. 1597 1. 5834 Samshui___ _ .8732 . 8537 Wuchow 4 _ . ___ _ 1. 8381 . 7230 Nanning_ _ ... _ ___ .0033 .0310 +1,412 +3 +88 Kiungchow_ .. .. . 6454 .4127 Pakhoi. . ___ . 3156 .3663 Lungchow....... . 0169 .0141 +35 +58 +.3 Mengtsz....... 1. 4744 1. 4399 Szemao... ..... . 0315 .0194 Tengyueh.. .... .4097 .2493 +1.5 Total_ 586, 290, 431 99. 9998 948, 633, 920 99. 9688 +62 1 In quantity increases in imports during the 10 years the leading ports in order of relative importance are Shanghai, Canton, Dairen, Tientsin, Antung, and Kiaochow (Tsingtao). Of these six ports Antung showed the grestest percentage of increase and Dairen stood second. 2 Harbin’s decrease of 10,935,843 taels in imports for the decade is due in part to the falling off in the im¬ portations of Russian cotton piece goods through the border port of Manchouli, under the Harbin customs supervision. During 1913 Manchouli’s imports of goods via the Trans-Siberian route amounted to 13,312,- 459 taels, the greater part of which was Russian piece goods. The imports for 1913 for the frontier port of Suifenho, also under the Harbin customs, were valued at 7,884,939 taels. A very considerable falling off in this trade is noted, owing to the interruption of traffic between Suifenho and Vladivostok. 3 Antung’srapid rise in direct import trade maybe attributed to the specially favored position which this port occupies in customs duties, as rail-borne goods coming through Chosen (Korea) into China receive a special duty consideration of one-third less than the regular 5 per cent tariff imposition. This special treat¬ ment is about the equivalent of the railway freight expenses in transporting cargo from Japan into Man¬ churia, hence accounts for the rapidly increasing prosperity of the port of Antung. 4 Wuchow’s trade for 1910 aggregated 10,776,994 taels, and for 1923, 6,858,678 taels. The average annual trade for the 11 years was valued at 8,880,000 taels. Thelow record in 1923 was due to military disturbances. 47 RESUME OF THE TRADE OF CHINA Value of Direct Exports of China, by Ports, 1913 and 1923 Ports Aigun. Sansing... Harbin... Hunchun.. Lungchingtsun_ Antung 1 _ Dairen C...... Newchwang.. Chinwangtao. Tientsin 2 .. Lungkow.. Chefoo.... Kiaochow.. Chungking. Wanhsien. Ichang. Shasi. Changsha.. Y ochow_ Hankow. Kiukiang. Wuhu.. Nanking. Chinkiang. Shanghai 4 .. Soochow.. Hangchow... Ningpo.. Wenchow.... Santuao.... Foochow.. Amoy. Swatow.... Canton... Kowloon... Kowloon (railway traffic) Lappa... Kongmoon.. Samshui.... Wuchow.... Nanning..... Kiungchow... Pakhoi.... Lungchow. Mengtsz.. Szemao.. Tengyueh. Total. 1913 1923 1923 1 trade com¬ pared with 1913 trade Value in haikwan taels Percent¬ age of total for China Value in haikwan taels Percent¬ age of total for China Per cent 1,216, 966 0. 2828 96,057 0. 0127 -92 2, 445, 967 .6065 18; 565, 529 4. 6033 33, 860, 436 4. 4972 +82 445,193 .1104 478,033 .0635 +7 174,315 .0432 1, 836, 271 .2438 +953 3, 746, 943 .9296 41, 905, 652 5. 5658 +1,018 30,012, 606 7. 4416 113,906, 777 15.1287 +279 11,000, 993 2. 7277 3, 928,152 .5217 -64 1, 605, 528 .3981 5, 997, 602 .7966 +273 8,140, 949 2. 0185 49, 953, 666 6. 6347 +514 1, 462, 557 . 1942 4, 695, 539 1.1642 9,154, 765 1. 2159 +95 12, 960,096 3. 2135 24, 674, 467 3. 2772 +90 77,132 .0191 303, 217 .0403 +293 14, 475 .0019 2, 485 .0003 296 .001 '283 ( 3 ) -4 1,072 .0003 19, 743 .0026 +1, 741 3, 747 .0009 16, 806; 858 4.1673 16, 278,195 2.1620 -3 121, 283 .0301 23, 235 .0031 -81 843 .0002 1, 957,037 .2599 +113,427 123 ( 3 ) 4,036, 887 .5362 +3,281,922 573, 685 . 1422 285,149 .0379 -50 176, 858, 415 43. 8522 276, 838, 233 36. 7687 +56 690 .0002 8, 851 .0012 +1,182 293, 548 .0390 6,158, 639 1. 5270 10, 880,131 1. 4451 +77 2, 533, 307 .6281 3, 573, 050 .4746 +41 8, 282, 047 2. 0535 12, 799, 513 1. 6999 +54 55,937,841 13. 8698 90, 228, 494 11. 9838 +61 12, 812, 500 3.1768 16, 712, 804 2. 2197 +30 268, 521 .0666 1, 908,151 .2534 +610 5, 225, 256 1. 2956 3, 784, 567 .5026 -27 1, 471, 436 .3648 2, 697,069 .3582 +83 812, 701 . 2015 866, 693 .1151 +7 3, 448, 466 .8550 4,198, 981 .5577 +22 2, 036, 416 .5049 1,062, 350 .1411 -47 2, 099, 262 .5205 3, 826, 932 .5083 +82 918,091 .2276 2, 301, 752 .3057 +151 10,024 .0025 139,134 .0185 +1, 288 11,066, 270 2. 7439 9,042, 543 1. 2010 -18 39,360 .0097 42, 868 .0057 +9 730, 277 .1811 1, 536, 611 .2041 +110 403, 305, 546 100. 0000 752, 917, 416 100. 0000 +87 1 Dairen’s increase from 7.4 per cent of China’s export trade in 1913 to 15.1 per cent with a total increase of 84,000,000 taels is distinct evidence of enterprise in Manchuria. In this connection it is also worthy of note that Antung, which in 1913 had about 1 per cent of China’s export trade, in 1923 enjoyed 5.6 per cent of this trade, with an increase of 38,000,000 taels, or over 1,000 per cent. The specially favored position of Antung in duty treatment, whereby one-third of the export duty is remitted, is accountable for considerable of this advance, otherwise Dairen would probably have taken a large percentage of this trade. 2 The fact that Tientsin, which in 1913 enjoyed 2 per cent of China’s direct export trade, in 1923 claimed 6.6 per cent of China’s exports, with an aggregate increase of 42,000,000 taels, indicates a tendency on the part of the North China ports to enter into direct trade with foreign countries rather than transship these goods through Shanghai. Tientsin’s increase in exports for the period under consideration amounted to 514 per cent. 3 Negligible. 4 While Shanghai increased its relative position in the import trade of China, in the export trade it en¬ joyed 7 per cent less of the total trade of China, in spite of the fact that exports from Shanghai increased during the decade by about 100,000,000 taels. 48 COMMERCIAL HANDBOOK OF CHINA CARRYING TRADE American tonnage in the direct foreign import trade of China increased from 26,909 ship tons entered in 1913 to 2,100,926 tons entered in 1923, an increase of over 2,000 per cent. In 1913 but 1.85 per cent of the total entered tonnage was American, whereas in 1923 this percentage was increased to 10.22. The proportion of China’s import trade carried by American ships in 1913 was one-fourth of 1 per cent, whereas in 1923 it advanced to 7.5 per cent. The average tonnage for the American entries in 1923 was about 3,000, whereas the average for Japanese ships was 1,750 tons, for British ships 1,400, and for Chinese 1,000 tons. In other words, America does not get full credit for its carrying trade with China, in that a considerable amount of American tonnage disembarked at Hongkong, from which point it was transshipped to ports in China by British, Japanese, and Chinese ships, which received credit in their entered tonnage for this American trade. The following table shows the net tonnage of steamers entered at Hongkong in 1913 and 1923: Flags 1913 1923 American......... Net tons 290, 987 4, 215,369 1, 907, 307 2, 460, 143 Net tons 1,421,962 5, 572,944 3,129, 156 2, 854, 981 British _______ Japanese _ Other. ........ Total______ 8, 873, 806 12, 979, 043 This table shows that nearly 1,500,000 tons of American cargo arrived in Hongkong in 1923, the vast bulk of which was destined to China, but transshipped in other than American ships. No data are available as to the value of the cargo carried by these ships, but it would alter very materially the table of relative values of the import trade of China as carried by ships of different nationalities; hence it is highly necessary in using these figures that qualifications be made in connection with this discrepancy. Referring to the tonnage entrances for 1923 for the port of Hong¬ kong, it is worthy of note that the average tonnage for the Amer¬ ican ships entered was 5,300, for the British ships 2,000, for the Japanese 2,300, and for those of other nations 1,400 tons, which is a further indication of the fact that a larger relative percentage of the American shipping at Hongkong was in transoceanic steamers. In consulting the table of import shipping it is noted that German shipping decreased in 1923 from the figures for 1913 by 73 per cent for tonnage and 55 per cent in value of cargo carried. It is antic¬ ipated, however, that during the next decade German shipping will have regained its former position. The following table shows the share taken by each nationality in the import trade of China in 1913 and in 1923, also the value of the foreign imports from these nations in the years mentioned and the relation of such trade to China’s total import trade: RESUME OF THE TRADE OF CHINA 1913 1923 Flags 1 Tonnage of entries Per cent of total tonnage Tonnage of entries Per cent of total tonnage Per cent increase or decrease American 2 ____ __ 269, 091 5,127, 578 43, 338 161, 779 1.85 2,100, 926 7, 259, 706 140, 196 507, 118 600, 212 377, 236 83, 944 6, 596, 025 200, 729 177, 266 59, 497 12, 007 55, 617 141, 220 2, 247, 366 10. 22 +680 +41.5 +200. 4 +213. 5 +28 -73 British_ . . .. ___ 35. 32 35. 31 Danish. . .. ... . __ _ .29 .68 Dutch __ _ _ . _ _ 1.04 2.42 French_ _ _ . _ 469, 450 1, 405, 086 3.23 2.91 German__ _ 9.68 1.83 Italian . _ _ .40 Japanese._ __ _ _ _ 3, 882, 664 167, 196 63, 451 422, 274 26. 74 32.08 +70 +20 +179 -86 Norwegian .. __ . . __ 1. 15 .97 Portuguese.. ____ _ .44 .86 Russian__ . . _ 2. 91 .29 Spanish. _ ... _ _ .06 Swedish_ _ _ _ 34, 344 135, 167 2, 336, 806 . 23 .27 +62 +. 4 -3.8 Nontreaty powers.. .93 .69 Chinese. ____ 16.09 10.93 Total____ 14, 518, 224 100. 00 20, 559, 065 100. 00 +41.6 1913 1923 Value of Per cent Value of Per cent Per cent increase import of total import of total trade imports trade imports or decrease Haikwan Haikwan taels 3 tales 3 3, 076, 644 0.25 70, 852, 240 7.47 +2, 202. 9 270, 429, 460 46.12 371, 448, 317 38.11 +33. 25 1, 107, 621 .17 5, 661, 328 .60 +402.1 6, 661, 282 1.14 17, 028, 378 1.79 + 155.6 20, 599,159 3. 51 28, 423, 281 2.99 +38 47, 353, 265 8. 09 21, 300, 543 2.24 -55 2, 600, 905 291, 884, 897 . 27 136, 486, 197 23. 28 30. 77 +113. 85 4, 276, 353 .73 11,545, 455 1. 21 +170 19, 213 .003 2,161, 525 .23 +11,150 21, 064, 826 3. 59 8, 977, 407 .94 -57.4 45, 827 1, 879, 862 .005 983, 075 . 17 . 19 +91 6, 979, 491 1. 19 7, 387, 700 .78 +5.8 67, 253, 845 11.47 107, 436, 255 11. 325 +60 586, 290, 431 100. 00 948, 633, 920 100. 00 +62 Flags American *.. British... Danish_ Dutch__ French_ German_ Italian.__ Japanese. Norwegian_ Portuguese.... Russian.. Spanish__ Swedish.... Nontreaty powers. Chinese.. Total. 1 Austria became a nontreaty power after the World War; Chili did not enter into the foreign import trade of China until a commercial treaty was signed in 1922; Polish and Spanish flags made their first appear¬ ances in China’s carrying trade in 1923; German flags reappeared after the war in 1921. 2 By way of comparison, it is of interest to note that the American tonnage in China’s trade in 1882 was 167,801 and in 1891, 67,090 tons. 3 The exchange value of the haikwan tael of 1913 is quoted by the Customs as $0.73 and for 1923, $0.80 United States gold. Although it has not been considered necessary to reproduce a tabulation for the clearances of steamers from China in the export carrying trade, because the actual amount of tonnage is not very different, yet it is of interest to know that the American position for the period 1913-1923 in the export trade is relatively similar to that in the import trade. American ships are credited with taking from China during 1923 exports valued at 32,000,000 taels. Here, again, is a very considerable discrepancy, due to the fact that silk exports taken from Hongkong by American ships, which represent cargo that originated in Hongkong, probably exceeded in value the 100020°—26-5 50 commercial handbook of china aggregate amount credited to China in the export trade. America’s acknowledged tonnage for Hongkong was almost equal to the clear¬ ances from China, and it is known that the ships carried heavy and valuable cargoes. SHIPPING The fact that Shanghai and Hongkong have been placed in the same category with the ports of New York and London in shipping tonnage, and presumably in relative importance in the world’s ship¬ ping trade, warrants an analysis of China’s shipping situation. The fact that China has poor internal rail communications—the most inadequate in the world for its size and population—causes a much higher development of domestic water transportation than would obtain otherwise. It is the practice of the Chinese Maritime Customs to accredit to each port the actual registered tonnage of the steamers entering and clearing that port, irrespective of the frequency of the calls or the actual amounts of cargo discharged or loaded. Thus, in the table appearing in this section it is seen that the river ports Chinkiang, Nanking, Wuhu, and Kiukiang are each accredited with about 9,000,000 tons of shipping for the year 1923. Although less im¬ portant commercially than Hankow, still they have on the aver¬ age a credit of about 2,000,000 in tonnage per year more than enters and clears the port of Hankow. Hankow’s total trade for 1923 is given as 240,000,000 taels, wiiereas that for each of the three ports, Chinkiang, Nanking, and Wuhu, for the same period is less than 40,000,000 taels. A similar situation obtains with the coasting trade. Chefoo is credited with a tonnage of 3,000,000, which is not much less than that credited to Tientsin, whose actual trade is four times as great. Similarly, the coasting trade of Ningpo, Foochow, Amoy, and Swatow, because of the frequent calls of coasting steamers on regular schedules, receives far more tonnage credit than the trade entitles them to. It is interesting to note also that in tonnage of ocean steamers, the customs tabulations give the coast trade ocean status, apparently reserving to the river trade domestic or nonocean status. Thus Shanghai’s 30,000,000 tons of shipping contains about 18,000,000 tons of entries and clearances representing river and coast trade, the actual cargo tonnage of which would on this account be con¬ siderably less. In a somewhat similar way, Hongkong is credited with 35,000,000 tons entered and cleared in foreign trade for 1923. As Hongkong is located on Victoria Island off the coast of South China, all contact between Hongkong and China is necessarily by water, hence a very considerable amount of transit trade between Canton and other sections of China passes through Hongkong and is credited to the shipping returns of Hongkong’s foreign trade. Canton’s total tonnage for 1923 was given as 6,600,000. As the port of Canton has not been developed for direct ocean shipping except as it concerns coast port trade, the bulk of this tonnage also passes through Hongkong, either on coasting steamers or in transit at Hongkong. Similarly, the regular coast lines running from Swatow, Foochow, and Amoy also make Hongkong a port of call. Thus the table of tonnage of vessels entered and cleared at each port of China and at Hongkong must be taken with the reservations herein mentioned. RESUME OF THE TRADE OF CHINA 51 It is, however, noteworthy that the tonnage of vessels which en¬ tered and cleared Chinese ports increased from a total of 6,600,000 tons in 1864 to 18,800,000 in 1884, 30,000,000 in 1894, 64,000,000 in 1904, and nearly 100,000,000 tons in 1924. The following table shows the tonnage of vessels entered and cleared at each open port of China in 1923. Ports Total shipping Tonnage of ocean steamers Percent¬ age of shipping borne by ocean steamers Ports Total shipping Tonnage of ocean steamers Percent¬ age of shipping borne by ocean steamers Tons Tons Per cent Tons Tons Per cent Aigun _ 229, 588 Shanghai_ 30,018,240 24,726,143 82 Harbin 757' 440 Soochow. __ ' 186', 249 Antung__ 534' 506 521,820 97. 6 Hangchow_ 234^ 282 Dairen 9,042' 027 9,034, 351 99. 9 Ningpo __ 2, 329' 981 2, 313,727 99.3 Newchwang_ 1,107^090 1,107,090 100 Wenchow_ ' 250; 098 202', 947 81 Chinwantgao.. 2, 651, 654 2, 651, 654 100 Santuao_ 77, 644 76,176 98 Tientsin __ 3, 853, 831 3, 853, 831 100 Foochow_ 1, 483,442 1,480, 880 93 Lungkow... ' 104' 736 ' 104' 736 100 Amoy.... 3,136' 384 3,136j 384 100 Chefoo_ 3, 271' 065 3,270' 227 99. 97 Swatow_ 4, 66 O' 662 4,660' 662 100 Kiaochow - _ 3' 393j 521 3,392,069 99. 95 Canton ._ 6, 569, 457 2, 899; 833 44 Chungking 269,330 Kowloon.. 2' 032' 328 Wanshien _ - 443, 665 Lappa _ ' 764, 707 Ichang -_-. 1,006, 861 Kongmoon_ 1,191' 206 Shasi _ 1, 324,054 Samshui. _ i, 395' 930 Changsha _ ' 542' 990 Wuchow_ 611'001 Yochow _ 2, 274' 514 Nanning_ 28' 145 Hankow_ 7, 463, 701 1,052, 652 14 Kiungchow_ 1,156, 586 1,156, 586 100 Kiukiang _ 8,817,094 102, 702 1 Pakhoi_ . 437,058 437,058 100 Wuhu_ _ 9, 669' 297 637j504 6 Lungchow_ 1,952 Nanking_ 9, 347, 886 443^ 572 5 Mengtsz_ 1,124 Chinkiang.. . 9,075', 558 547; 281 6 Note. —The total tonnage of ocean steamers entered and cleared at the open ports of China during 1923 represents 51 per cent of the total shipping of China. The above figures do not include tonnage of vessels entered and cleared under the Inland Steamer Navigation Rules of the Chinese Maritime Customs nor junks entered and cleared at the Chinese Native Customs. Total tonnage of ocean steamers entered and cleared at the ports of China in 1921 was reported at 53,135,726, Of interest to American business are the steamers especially con¬ structed to ply in the upper Yangtze trade over the rapids. There are in this trade at present 40 steamers, of which 10 are American and 9 British. It is anticipated that 15 new steamers will be added to the upper Yangtze trade during 1925, 3 or 4 of which will be under the American flag. The method of assessing tonnage dues in China militates against oversea shipping and encourages transshipments at non-Chinese ports. In other words, it discourages steamers which ply between European or American ports and the Far East from making Chinese trading ports ports of call, as tonnage dues are assessed on a quar¬ terly rather than on a trip basis. Coasting and river steamers are favored in this manner over steamers calling but once or twice during a quarter, as the latter pay as much per ton for one or two entries in three months as is paid by steamers which can make numerous entries during the same period on one assessment. IMPORT TRADE OF CHINA By Trade Commissioner George C. Howard The Chinese Maritime Customs in their annual Report and Ab¬ stract of Statistics divide the import trade into 12 grand groups which are quoted in the following table, with comparative figures for the calendar years of 1913 and 1923 ; Imports 1923 1913 V alue in haikwan taels Per cent of total Order of impor¬ tance Value in haikwan taels Per cent of total Order of impor¬ tance Cotton goods (except yarn). . 131,886,293 14.3 1 111,358,934 19.5 1 Rice.-__ 98,198,591 10.6 2 18,383,719 3.2 6 Kerosene._ . ..- ... 58,291,716 6.3 3 25,408,845 4.5 5 Raw cotton.. 53,816,201 5.8 4 2,984,022 .5 16 Sugar.... 51,997,721 5.6 5 36,463,491 6.4 3 Metals and minerals-. . . _ 44,938,111 4.9 6 29,156,086 5.1 4 Cotton yarn_ .. _ . 41,633,818 4.5 7 71,060,089 12.5 2 Cigarettes___ 28,272,615 3.1 8 12,589,300 2.2 8 Flour.__ 27,232,615 2.9 9 10,300,612 1.8 9 Machinery._ _ 26,677,796 2.9 10 7,137,048 1.3 13 Fish and fishery products_ 25,081,819 2.7 11 12, 974,540 2.3 7 Woolen goods. ... 19,042,413 2.1 12 4,879,281 1.9 14 Paper____ 16,626,519 1.8 13 7,169,255 1.3 12 Coal_... _ ... 12,860,605 1.4 14 9,420, 758 1.7 11 Tobacco.... . 12, 777,016 1.4 15 3,572,560 .6 15 Artifical indigo_ ... 11,816,918 1.3 16 9,633,157 1.7 10 Unclassified and miscellaneous_ 262,251,787 28.4 197,670,860 34.7 Total net imports__ 923,402,554 570,162,557 The above table will indicate both the growth in the value of the total trade and the changed importance of the various groups dur¬ ing the years from 1913 to 1923. RELATIVE POSITION OF COUNTRIES According to the Abstract of Statistics, the relative position of the various countries as suppliers of China’s imports were, in 1913 and 1923, as shown in the following table: 1923 1913 Direct imports Value in h aikwan taels Per cent Value in haikwan taels Per cent Hongkong___ - - 248, 083,456 26. 15 171,636,099 29. 27 Japan___ - . . ... 211,024, 297 22. 25 119, 346, 662 20. 36 United States___-.- __ 154, 447, 651 16. 28 35, 427,198 6. 04 Great Britain.. .. . .. 120,397, 229 12. 69 96, 910, 944 16. 53 British India... 55, 240, 982 5. 82 48, 292,190 8. 24 Germany. ....- French Indo-China .. -- ..- 32, 456, 067 18, 438, 662 13, 600, 326 11,954, 940 JO, 878, 750 10, 327, 374 10, 202,819 3.42 1.94 28, 302,403 4.83 Netherlands Indies... ..-.. Chosen _ _ _ 1.43 1. 26 6, 836, 792 1. 17 Belgium_ _ Canada - - ___ _ _ -- -- - 1.15 1.09 15, 830, 838 2. 70 Russia and Siberia___ ___ 1.08 22,152, 888 3. 78 Straits Settlements.. . - -- -- Macao - . _ - .- -- __ 9,213, 722 .97 8, 935, 416 6, 596,148 26,022, 853 1.52 1. 12 Other._ _ - -- _ 42, 367, 645 4 47 4.4 Value of haikwan tael in 1923, $0.80; in 1913, $0.73. 52 IMPORT TRADE OF CHINA 53 It will be noticed that in both 1913 and 1923 Hongkong is shown as having the greatest single share of the import trade. As Hong¬ kong’s exports to China are practically all transshipped goods from other countries, the difficulty of giving a clear and accurate state¬ ment as to the origin of imports will be readily appreciated. Any attempt to determine the origin of Hongkong’s exports to China is frustrated by the fact that none of the export statistics issued by Hongkong retain the identity of the commodities by country of origin. Therefore the reader should keep in mind the discrepancies aris¬ ing from the Hongkong and also Canadian and Japanese figures, as a very considerable portion of*China’s imports from the United States come through those countries and in Chinese Maritime Cus¬ toms figures are credited to them instead of to the United States. A review T of the place of the United States in the import trade of China in 1923 reveals the fact that 93.3 per cent of the total share of the United States is made up of 20 items. They are listed in the following table, which also gives the percentage supplied by the United States of the total imports of each item from all sources, and the value in per cent of each item in relation to total imports from the United States: Imports from United States Value in haikwan taels Per cent of total imports from United States Per cent of total gross in¬ ports into China from all sources Kerosene,...... .. 48, 776,000 1, 745,000 1, 344, 000 1, 237, 000 2, 530, 000 20, 752, 000 10, 545, 000 16. 369, 000 6, 936, 000 10, 681. 000 4, 449, 000 3, 991, 000 3, 389, 000 2, 822, 000 1, 852, 000 1, 803, 000 1, 384, 000 1, 322, 000 1, 171, 000 1, 047, 000 33.8 71. 5 Paraffin wax___ ___ _ 1.2 42. 4 Gasoline, benzine, naphtha, and petrol..- . ... .9 34.6 Liquid fuel_*_ _* . .9 55. 3 Lubricating oil ... 1.8 74. 7 Cigarettes .. 14 4 72. 8 Tobacco.. . 7.3 80. 2 Flour_ .. _ . 11. 4 60. 1 Wheat_ . .. 4.8 76 3 Metals and minerals.. ____ . ..... 7.4 23. 2 Machinery_ 3.1 16. 0 Dyes, colors, paints.. 2.8 14.9 Raw cotton. 2. 4 6 2 Timber, softwood.. 2.0 53. 7 Tinfoil and other foils 1.3 69.9 Paper- _ 1.2 1.0 .9 10. 7 55. 3 Motorcars ... Electrical materials and fittings. 15.6 Household stores... .8 26. 4 Condensed milk.. . 7 52.2 Total... 144,145, 000 An examination of these figures brings out strongly the fact that commodities comprising the largest individual items of this trade are those handled by specialized organizations rather than by gen¬ eral import and export houses. Some outstanding examples of this in connection with American products are kerosene and other mineral-oil products, 85 per cent of which business is in the hands of two firms; cigarettes and tobacco, largely controlled by one or two concerns; timber, handled to the extent of 78 per cent by five firms; condensed milk, some 90 per cent 54 COMMERCIAL HANDBOOK OF CHINA of which is done by two firms; machinery, a large percentage by four houses. From these and similar examples it is patent that, provided a com¬ modity lends itself to wide use in China, the most effective method for securing thorough marketing is by establishing an organization in China to handle it. This method, however, is one which is followed only in excep¬ tional cases, and then only after the market has been subjected to long and painstaking study from every angle, with particular ref¬ erence to the commodity in question. For fuller statistics regarding China’s imports and exports see section headed “ Resume of the Trade of China.” FINANCING OF IMPORTS There are numerous methods by which China’s imports are financed, and while there is a great amount of detailed information on this important subject, space does not permit of any broad discussion here. We are therefore reproducing here, with his per¬ mission, a short treatise on the subject written recently by Mr. E. Kann, manager of the Chinese-American Bank of Commerce in Shanghai: A small portion of China's imports is financed by collection drafts, which means that the exporter will obtain his money (eventually, plus interest) after advice from China has been received saying that the drafts have been duly paid. A larger portion of imports into China is financed by telegraphic transfer. This means that the goods are shipped free to that country and that the proceeds of sale are transferred by cable to the shipper (or his order) after having been realized. The bulk of China’s imports are financed by means of credits opened by the importer in favor of the exporter. This signifies shifting the burden of financing an oversea transaction from exporter to importer. It is remarkable how little exporters really know of the legal aspects of the various forms of credits. The following is merely an attempt to define briefly the various forms of credits employed by importers in China: I. Authority to purchase (A/P). (a) Revocable and with recourse to drawer. (b) Irrevocable and with recourse to drawer. (c) Revocable, but without recourse to drawer. II. Confirmed credits. (d) Confirmed by issuing bank, but not by notifying bank. (e) Confirmed by issuing bank and also by notifier. (f) Confirmed and without recourse to drawer. (g) Confirmed and irrevocable. III. Acceptance credits. AUTHORITY TO PURCHASE The authority to purchase is employed largely for financing imports into China from foreign countries. The authority is issued by a bank in China upon the written request of an importer of approved standing. It is for a specified amount, for clearly specified goods, to be shipped within a clearly stipulated period. A full set of shipping documents accompanies the draft, drawn either at sight or at usance up to six months after sight; usually 90 or 120 days after sight. The typical characteristics of the A/P referred to under (a) are: (a) The notifying bank abroad acts merely as agent of the bank in China and is at liberty to cancel the authority to draw, if the bank in China does not provide in due time the funds which are needed for negotiating the drafts. This right is clearly visible from the manner in which the authority to draw is advised: IMPORT TRADE OF CHINA 55 “Dear Sirs: We beg to inform you that we are in receipt of instructions from the_Bank in Shanghai, authorizing us on behalf of_to negotiate your documentary drafts, if tendered before the-for $10,000, drawn at 90 days after sight, etc., etc.” (&) The issuing bank reserves for itself the right to cancel the credit, or its unused balance, at any time, without previous notice to the exporter or without the consent of the importer. (c) The drawer (exporter) is responsible to the issuing bank in China for payment of the draft on due date, should the drawee (importer) fail to meet his obligation. This obligation is clearly impressed on the exporter in the original advice to him, which ends up in the words: “ Please note that this is not to be considered as being a bank credit and does not relieve the drawer from the liability attaching to the drawer of a bill of exchange.” Although these conditions seem to be severe, they are accepted for financing the bulk of British and Continental trade with China. America exacts more severe terms, usually confirmed credits. The next variety of the A/P is the one mentioned under (b) irrevocable and with recourse. Such authorities are required for financing goods which have to be manufactured specially (machinery, cotton or woolen cloth with partic¬ ular patterns), or goods which have to be collected in lots. The drawer re¬ mains responsible until the draft has been paid, but the issuing bank has not the right to cancel the A/P before the date of its original expiry. The third kind of A/P, revocable, but without recourse to drawer, men¬ tioned under (c), means that the authority to draw may be canceled during its life, but once the drafts have been negotiated the drawer (shipper) is no more responsible, should acceptance or payment of the draft be refused. The issuing bank has recourse only against the drawee (importer) and is secured by the goods. Some writers speak of a fourth kind of A/P, namely, irrevocable and with¬ out recourse to drawer. In reality this would be a confirmed credit par excel¬ lence, and not an authority to purchase. CONFIRMED CREDITS The confirmed credit, as classified under (d), means a definite engagement on the part of the issuing bank either to negotiate drafts under clearly stipu¬ lated conditions or to honor drafts drawn by the beneficiary. This shows that the issuing bank is liable to the shipper for the fulfillment of its engage¬ ments, but not the notifying bank. The class of confirmed credit specified under (e) differs from the foregoing, because both the issuer and the notifier remain liable to the exporter. This is the real “confirmed” letter of credit, while (d) is often styled (though not correctly) “unconfirmed.” Under (f) we have the “confirmed and without recourse to drawer” credit. A remarkably large percentage of exporters do not know much about the varia¬ tions in the sundry classes of credits just described. It is generally taken for granted that every “ confirmed ” credit is “ without recourse to drawer.” This is not the case. According to law the drawer under a confirmed letter of credit is liable until the draft has been accepted by the draw T ee. Then his responsibility ceases, and the holder of his draft has no more recourse on the drawer, should the acceptor fail to pay on due date. Only if the credit is “ confirmed and without recourse ” is there no more obligation on the part of the drawer, once he has handed in his draft and the documents. The next class, (g), treats “confirmed and irrevocable” credits. Irrevocable means, as already previously stated, that the credit can not be canceled prior to the expiration date without the consent of the beneficiary. In theory a “ con¬ firmed ” credit is liable to be canceled; in practice this is rarely or never done. The term “ irrevocable ” does not absolve the drawer from liability until the draft has been accepted. It happens frequently that exporters to China demand that an “ irrevocable ” credit should be established in their favor. They take it for granted that the term “ irrevocable ” includes the attributes “ confirmed and without recourse.” This is by no means the case. Unless distinctly advised the exporter must take the term “ irrevocable ” to be binding only on the issuing but not on the advising bank. The ideal credit for the exporter is the “ confirmed—irrevocable—without recourse ” credit. 56 COMMERCIAL HANDBOOK OF CHINA The acceptance credit method of financing imports into China has, up to the present, been employed in London only. It differs in many respects from the methods of opening either A/P or confirmed credits; principally because no drafts are sent to China and because there is no interest to be paid there. This class of credit will be used only if discount rates are low, say, not above S 1 / 2 per cent; otherwise it would be unremunerative to use acceptance credits. - The procedure is as follows: At the request of the importer in China, a bank there opens an acceptance credit with a London bank for a certain amount, to be availed of by the exporter within a certain time, and against shipment to China of a certain class of goods. Instead of drawing on the importer in China, the shipper in London will draw on a London bank (as authorized) at 60 to 120 days after sight. The London bank accepts the draft and hands it back to the exporter, from whom it had simultaneously obtained the complete set of shipping documents; these are forwarded to the issuing bank in China. The exporter will discount in the open market the draft accepted by the London bank, if he is in need of funds. Otherwise he will hold the draft until the moment when it will suit him to turn the acceptance into money. The cost of such a transaction is the commission charge, which varies, but which averages % per cent per month. If the market rate for 120-day prime banker’s acceptances is 3 per cent, for instance, and the acceptance commission % per cent per mensem, the total interest cost will be 4 y 2 per cent per annum, compared with 6 per cent payable under A/P or confirmed credits. Financing imports into China under accept¬ ance credits does not involve disbursement of moneys on the part of any one of the parties directly involved in the transaction. The accepting bank merely lends its credit. All it demands is its commission and the remittance of cover from China on due date of the draft. The issuing bank has no outlay of funds, but its risk is somewhat larger, seeing that there is no drawer, and consequently no recourse on drawer. Its profit consists of a share in the acceptance commission and in profits when fixing the rate of exchange. HANDLING SHIPPING DOCUMENTS These are the principal features of credits as used by importers in China. There are many particulars connected with the problem, which can not be discussed here for lack of space. Yet it is deemed expedient to include some remarks on local custom regarding the handling of shipping documents attached to the drafts negotiated under credits opened by China banks. If goods are shipped to China under “ con¬ firmed ” credit or under “A/P without recourse to drawer,” the shipper is in no way concerned as to how the shipping documents are handled in China; this is an arrangement entirely between the drawee and the bank in China. If, however, goods are shipped to China in terms of an “Authority to pur¬ chase,” the exporter, remaining liable as drawer until payment of the draft, is closely concerned with the handling of the documents. Depending on the consent of the issuing bank in China and on the agreement of both exporter and importer, it is to be stipulated whether drafts are to be drawn with documents deliverable on acceptance (D/A) or on payment (D/P). If nothing is said on the face of the draft it is understood that documents are D/P. Sometimes the bank in China will give up the goods to the importer against the latter’s trust receipt. Unless the bank has the distinct consent in writing from the drawer, it loses all recourse against the latter, in case the acceptor (importer) fails to meet his obligations on due date. It is customary in China to deliver shipments in case (bales, barrels, bags, etc.) lots. Say an exporter has made a shipment of 25 cases of woolen cloth to China and drawn at 90 days after sight, under an A/P, $6,000 (United States) on the importer in Shanghai. The importer may take delivery of case lots before due date by paying to the bank the corresponding sums as part payments of the face amount of the draft. This way of procedure may not suit the exporter, especially because the importer has the choice of picking out the current articles, and leaving the goods with a narrow market unsold and the corresponding amount of the draft unpaid. In case of a law suit, the case would probably be decided against plaintiff on the ground of established commercial custom in China. Very few exporters abroad are fully aware of these conditions, the existence of which has proved to be a necessity involving infinitesimal risks for the exporter. Should the IMPORT TRADE OF CHINA 57 latter, however, not agree to the procedure described, he would have to give instructions to that effect, or have the draft marked “ Part deliveries not permitted.” CHEMICALS The absence of detailed statistics renders practically impossible the compilation of comprehensive data on China’s chemical imports. Maritime Customs statistics give but seven headings to cover chem¬ icals, including medicines. These are given in the following table, with comparative figures for 1913 and 1923, all principal countries of supply being shown (values in thousands of haikwan taels) : Chemicals Total Great Britain United States Hongkong Japan Germany France 1913 1923 1913 1923 1913 1923 1913 1923 1913 1923 1913 1923 1913 1923 Soda _ 1,133 3,317 914 2, 010 4 196 43 385 22 597 6 99 91 Soap and soap-making materials 1 2, 896 394 99 603 1, 210 58 310 Saltpeter 415 151 332 132 5 6 78 11 Match-making ma- terials _ _ 496 2, 289 58 3 3 76 487 331 1, 306 10 417 27 Chemical products- 494 3, 386 77 336 40 259 27 492 172 1,428 91 387 9 28 Glycerin .__ 136 170 22 84 43 5 2 19 109 3 7 Medicines.... 4, 117 7,929 469 1,093 66 790 2,395 3,134 748 1, 111 100 563 26 312 Total.. .. 6, 791 20.138 1, 542 3,920 113 1, 387 2, 873 5, 238 1,280 5, 677 394 1, 538 35 775 1 New heading since 1913. Note.— Value of haikwan tael, 1913, $0.73; 1923, $0.80. As Hongkong supplied 26 per cent of China’s total chemical im¬ ports during 1923, details of Hongkong’s imports from various sources during that year are shown in the following table (values in pounds sterling) : Chemicals United Kingdom Japan United States Germany Nether¬ lands East Indies India All others Total Acid: Carbolic.. 26 26 4, 377 6, 267 10, 313 2,943 11,115 11,947 8, 777 14, 327 12, 554 24, 111 1,427 37,198 33, 534 69 17,172 4, 995 117,417 3,697 84,685 614, 265 123, 394 1,977 Hydrochloric_ 4,377 6,088 9, 516 107 7,591 Nitric.. .. Sulphuric. Other.... 2,365 252 Bleaching powder_ Borax_ 6,082 5,310 Calcium carbide_ 3, 202 3,584 Glycerins _ 14,327 Phosphorus. 10,788 22,897 Potash, chloride of... Quinine. 643 745 Saltpeter. 37,198 Soda ash_ . . . 31, 678 Soda: Carbonate _ 62 Caustic_ 12, 799 3, 011 Sulphur_ . 4, 882 29,474 Other chemicals and drugs . . . 37, 385 3,190 15,689 6,713 Soda, silicate of . Alcohol... 82,245 Manures (chemical and mineral). 259, 712 60, 481 118,310 241,169 10,264 Match-making ma¬ terials... Photographic chem¬ icals_ 1,267 438 Total .. 369,474 244, 090 263, 705 51,100 82,990 42,508 92, 721 1,146, 588 58 COMMERCIAL HANDBOOK OF CHINA UTILIZATION IN INDUSTRY There is no organized chemical manufacturing industry in China. There are a few factories scattered throughout the country for the manufacture of sulphuric acid, lactic acid, glycerin, soda ash, caustic soda, nitric acid, saltpeter, and a few miscellaneous chemicals, but owing to the lack of statistics regarding output it is impossible to give any idea of the quantities which China produces. As China’s manufacturing industry progresses, more attention is being given to the manufacture of chemicals needed in the country’s various in¬ dustries. The chief drawbacks to rapid expansion are expenses of obtaining necessary raw materials, the moderate demand, and the absence of a well-defined market for by-products. Therefore, the great proportion of China’s entire requirement of chemicals is imported. China has a well-developed match-making industry, there being nearly 100 factories operating which have an estimated total output valued at about $6,000,000 gold per year. These factories use po¬ tassium chlorate, red phosphorus, potassium permanganate, and nitrate of lead. China’s soap factories, which number in the neighborhood of 100, scattered throughout the country, use glycerin, sodium hydroxide, soda ash, rosin, and soap yellow. There are probably 50 good-sized egg-products factories in China which preserve eggs either by drying or freezing. In these factories there is a demand for ammonia and boric acid. In the cotton and spinning mills where mercerization is done, caustic soda and sulphuric acid are used. Glass factories use a small quantity of sodium carbonate, red lead, sodium nitrate, and arsenic. Ammonia. —Because of the comparatively small number of ice factories in China, imports of ammonia are still small. The an¬ hydrous ammonia is imported principally in steel cylinders and the market is controlled by a large German firm. American manufac¬ turers of this chemical have made repeated efforts to enter the Chi¬ nese market but so far have been unsuccessful in meeting German competition. Arnmonium sulphate. —Although chemical fertilizer is passing out of the experimental stage in China and is being used to an increas¬ ing extent in South China, imports of ammonium sulphate are still very small. Manufacturers of various chemical fertilizers are doing good missionary work, and the use of these fertilizers, while ex¬ pected to be slow of expansion, should become more general. Calcium carbide. —This product is used chiefly in the manufacture of gas for acetylene lamps and has not yet developed a very large trade. Saltpeter. —The Chinese produce a rather inferior quality of salt¬ peter, but it serves their purposes sufficiently well to supply the fire¬ works industry. Some imported saltpeter is being used as fertilizer, and Government arsenals use it in the manufacture of explosives. Bichromate of potash and bichromate of soda. —These chemicals are used in tanning. Hyposulphite of soda. —Confined largely to photographic pur¬ poses. IMPORT TRADE OF CHINA 59 Potassium bichromate .—Used in tanneries in the manufacture of sole leather. Borax .—Used mainly in the manufacture of white brass. Bicarbonate of soda .—Used for manufacturing soda water and medicine. Bleaching powder .—Used in paper manufacturing, in textile bleaching, and as a disinfectant. Ammonia carbonate .—Used mostly in biscuit manufacturing. Industrial chemicals are sold in China principally by import houses on an indent basis, and only the items for which there is a large and steady demand are stocked. These include soda ash, caustic soda, bicarbonate of soda, bleaching powders, boric acid, glycerin, oxalic acid. etc. There are possibly half a dozen houses in China which carry stock of chemicals, these firms in the main being British. One large British firm, which practically controls the trade in soda and various other items enumerated above, has an extremely well-organized business and carries stocks in the principal parts of China. Medicines .—In the preceding table the largest single item sold is that of medicines, which, in 1924, reached a figure of approximately 8,000,000 haikwan taels. There are two distinct markets in China, a very limited one among the foreign population and the wealthier Chinese living in treaty ports, who, unlike the vast majority of the population, use foreign drugs to a considerable extent, and an enormous market among the whole population of China (estimated in the neighbor¬ hood of 400,000,000). It is a simple matter to sell to the foreign market, methods being little different from those pursued at home. For this portion of the population attractive window displays, advertising in the foreign and native language press, well-known foreign trade-marks, reason¬ able price, and good quality will do as much to secure trade as they will in the United States. The enormous market among the rest of the population in China must be approached in an entirely different way. It must be remem¬ bered that in addition to having an extremely limited purchasing power and being (according to recent estimate, including the entire country) 90 per cent illiterate, this market is composed of people who have a pharmacy probably different from any other in the world, which has been evolved through hundreds of years. In addi¬ tion to this, superstition plays no little part in their ideas of medi¬ cine. In connection with the above import figures it is necessary to point out that the customs valuation of drugs imported represent but a fraction of their retail sales value. In the case of a certain item, imports are made in case lots, and the value per unit appearing in the customs returns is in the neighborhood of 10 cents (silver), 'while the retail price is $1 (silver) for the same unit. This ratio does not apply to all drugs, but it is an indication. During the past few years there has been in many places a rapid drawing away from the old-style drug shop to the more modern type of dispensary, where both imported and native medicinal prepara¬ tions, as well as toilet articles and other goods, are carried. In one 60 COMMERCIAL HANDBOOK OF CHINA city, it is stated on good authority, 15 more or less modern Chinese dispensaries now exist where 10 years ago there were two old-type drug shops. It must, however, be understood that owing to prevailing condi¬ tions it is an extremely slow market in which to introduce new prod¬ ucts, but because of the same conservatism which makes the Chinese slow to adopt new things, it is an extremely loyal market when a product has once been properly introduced and the trade-mark or chop becomes well known. From this brief statement it is clear that in order to reach the native market a thorough knowledge of that market is essential. Primarily there must be a demand for the product which is to be sold, or a good reason to believe that such a market can be created. Price must be within reach of a population whose purchasing power is extremely low, and in this price must be included a fair margin of profit for importer, dealer, and retailer. In case of a company establishing their own house here, it must be borne in mind that the initial cost of doing business in China— particularly the introducing of new products on the native market— is high, and that results are extremely slow to obtain. Advertising and distribution facilities are probably the next es¬ sential features to consider, and it is our opinion that the advertis¬ ing should be handled by some one who is thoroughly conversant with proper advertising methods, as there are innumerable factors entering into effective advertising in China which one without ex¬ perience in the market can not properly handle. An advertisement which would carry an excellent appeal in other countries might be useless or possibly harmful in China on account of many factors, among which are such things as improper translation, incorrect color on posters or calendars, and nonconformity with the ideas and customs of a particular section of the, country in which advertising is done. The appointing of able and reliable dealers is a matter which is of prime importance and one which requires a thorough familiarity with the market. Credit as it exists in the United States and methods of determin¬ ing the credit worth of a native firm are practically nonexistent in China, and a familiarity with the native methods of doing business is therefore most essential. INDIGO, DYES, AND COLORS The interest of American manufacturers in China as a market for dyes is of very recent origin. The quantities and values of dye imports from the United States for the years 1913, 1919, 1920, 1921, and 1923 are shown in the following table: Item 1913 1919 1920 Piculs Haikwan taels Piculs Haikwan taels Piculs Haikwan taels Mangrove bark. .. .. . 150 275 2, 050,956 4, 470, 482 960 135, 707 Aniline dyes_ _ 656 1,667,691 . 341,365 Artificial indigo.... 4, 766 44,845 16 2,193 Vermilion____ 15 237 541 2,049 Dyes and colors (unclassed). Total value__ 2,376 87, 326 3,246 2, 096, 382 6, 658, 380 IMPORT TRADE OF CHINA 61 Item 1921 1922 1923 Piculs Haikwan taels Piculs Haikwan taels Piculs Haikwan taels Aniline dyes_ 684,249 2,617,177 1,373 76, 565 181,454 958,434 354, 663 3,185,029 Artificial indigo_ Vermilion. .. . .. 25,108 23 941 16,029 90,158 Dyes and colors (unclassed) _ Total value_ 326 33, 633 2,532 54,515 3,379, 364 1,173, 521 3, 594, 207 Note. —The value of the haikwan tael in 1913 was $0.73 gold; in 1919, $1.39; in 1920, $1.24; in 1921, $0.76; in 1922, $0.83; and in 1923, $0.80. One picul equals 133}^ pounds. The quantities and values of dye imports from all sources for the years 1913, 1919, 1920, 1921, and 1923 are given in the following table: Item X, 1913 1919 ■ 1920 Piculs Haikwan taels Piculs Haikwan taels Piculs Haikwan taels Mangrove bark.. ___ _ Cinnabar. ___ . ... Sapanwood_ Aniline dyes_ __ 107, 725 1,714 23,891 174, 602 130,195 51, 592 5,401, 820 9, 633,157 56, 939 243, 533 956, 500 177,608 1,864 80, 800 351, 721 267,189 224,065 3,042, 917 1, 312, 269 637,116 256, 207 1, 247, 200 117,820 1,825 69,017 238,474 178,128 231, 614 7, 730, 291 15, 306, 474 470, 520 269, 658 1, 427, 868 Artificial indigo_ .. .. Vegetable indigo___ Vermilion... _ .. . . .. . Dyes and colors (unclassed)_ Total value_ 319, 575 12, 620 5,749 135, 649 18, 795 87, 699 2,647 131,143 155, 641 58, 467 4, 008 138,013 16, 648, 338 7,338, 684 25, 853,027 Item 1921 1922 1923 Piculs Haikwan taels Piculs Haikwan taels Piculs Haikwan taels Mangrove bark..... Cinnabar_____ Sapanwood_ ...... Aniline dyes. ... . _ 190, 885 2, 210 30, 686 432,223 201, 231 104, 891 7, 978, 514 15, 260,078 324, 807 263, 508 2,133, 802 244, 415 1,779 28, 790 563,071 148, 419 108,380 6, 848, 907 12, 301,206 182, 231 278,128 2, 281, 964 196,400 1,738 44, 272 526,487 140, 306 186, 238 7, 943, 321 11,816, 918 162,653 343,376 2, 381, 536 Artificial indigo_ ... .. . . Vegetable indigo .. Vermilion.._ _ ... _ Dyes and colors (unclassed) _ .... Total value__ ... __ 157, 748 42, 652 3, 764 194, 296 227, 247 21, 532 5, 020 195,006 256,102 16,029 8, 423 202,146 26, 699,054 22, 712, 306 23, 500, 835 The foregoing figures show that the most important items in the d}^e trade of China are aniline dyes and artificial indigo, these two items constituting 85.8 per cent of the total value of dyes imported during 1913 and 84 per cent in 1923. The year 1913 is considered the last normal pre-war year, and during that year Germany supplied 82.6 per cent of the value of aniline dyes, and approximately 80 per cent of the artificial indigo imported; it is estimated that 20 per cent of the latter came from Switzerland although this is not shown by import statistics. This preeminence of German manufactures was due to the fact that Germany, in addition to being the most important manufactur¬ ing country, had been long in this market, had thoroughly worked 62 COMMERCIAL HANDBOOK OF CHINA the field and established German brands on a sound footing, and had a very efficient system of distribution throughout the territory. During the war, while Germany was unable to export dyes abroad, American manufacturers began to sell their dyes in China, although 1918 marks the first serious entry of the United States into the market. Then American manufacturers, their position strength¬ ened by their great progress during the time when Germany could not supply the American market, began earnestly to seek a share of the China trade, with the result that American brands are now becoming well known on the market, and will undoubtedly strengthen their position from year to year. The year 1923 may be regarded as abnormal in so far as Germany’s participation in the trade is concerned, as the German indigo fac¬ tories are located in the Ruhr, which during part of that year was occupied by France, giving American manufacturers an opportunity to secure wider sales. Imports for the year 1924, while figures are not yet available, indicate a very decided increase in the amount of indigo imported from Germany, estimates placing this at 208,400 piculs out of a total of 343,000 for the first 11 months. The total value (in haikwan taels), of all dyes imported, by countries of origin, during the period from 1919 to 1923, inclusive, shows the rapid recovery of the market by Germany and are given in the following table: Countries 1919 1920 1921 Hongkong_ 2, 271,283 28, 758 22, 596 6, 677 83,628 14 11, 755 2, 832, 252 12, 873 26, 238 17, 524 23, 500 329, 525 47, 633 4. 252, 954 36, 575 33, 546 1,290 70,947 1,763 16, 371 Macao_ __ French Indo-China_ Siam ______ Straits Settlements__ Dutch Indies_ British India_ Turkey, Persia, Egypt, Aden, etc_ Great Britain _ 186,983 1, 284,904 3,000 4,166 13 3, 891, 552 1,966,060 2,014, 338 1,915, 706 3,179, 639 2, 207,126 98, 858 Sweden___ Norway _ Denmark ._.. _ _ 28 5,383, 518 2, 951,197 2,178, 851 3, 611,694 1, 425, 499 106, 275 420 Germany__ Netherlands.. Belgium... . 44, 656 972,904 France__ Switzerland___ Italy .. ___ Austria and Hungary _ 29, 724 160 128 928 22, 308 1, 894, 976 3, 277 67,145 6, 658, 380 Russia and Siberia _ 23 Russia, Amur ports_ 2, 769 24,123 51, 456 1,788, 463 474 2, 302 3, 379, 364 Russia, Pacific ports_ - _ 19,180 55,375 1, 650, 024 11,456 132, 213 2,096,382 Chosen._.. . __ Japan (including Formosa)_ Philippines_ Canada . _ United States__ 1922 3, 704, 408 6, 324 31, 422 409 321, 532 23,122 32,109 8 362, 768 15, 831 11,053 12, 497 8, 698, 994 5,168, 992 937, 862 469, 562 1,973, 549 166, 926 1, 833 8, 799 8, 819 63, 928 44, 408 1,334, 313 20, 889 1,173, 521 1923 3, 569, 090 4, 807 31, 656 1,832 335, 791 6,019 12,112 176 826, 708 34. 347 28,031 33,098 9, 939, 847 1, 689, 777 216,036 742, 883 2, 276, 749 9, 373 810 6, 256 81, 718 870, 846 3, 711 5,735 3, 594, 207 Nonsynthetic dyes comprise but a small part of the total dye imports into China, and a comparison of figures for the years shown indicate a downward tendency in favor of synthetic products. Of these nonsynthetic products, mangrove bark is the most im¬ portant in both volume and value, and is used both in tanning and dyeing. In dyeing it is used in connection with iron sulphate for a cheap coloring in black, gallnuts being used for the same purpose, and sometimes combined with mangrove bark. IMPORT TRADE OF CHINA 63 Sapanwood is next in importance. This wood—one of the red¬ wood family—is usually imported in chips which are ground to sawdust and then soaked with water to form an extract. It can be used for wool dyeing and, therefore, is very likely among the “ natural dyestuffs ” sometimes employed "in the rug industry. It yields varying shades ranging from red to bluish red, depending on the mordant used. This dye can be used also with silk. Cinnabar and vermilion are both red sulphide of mercury. The crude ore is classed as cinnabar to differentiate from a refined grade which is termed “ vermilion.” Its chief use in China is in the prepa¬ ration of the red paste that serves as a stamp pad for “ chops.” It is also used, to some extent, as a pigment. Under the customs heading “ Dyes and colors unclassed,” are in¬ cluded chrome yellow, cobalt oxide, emerald green, Prussian blue, ultramarine, and a wide variety of lakes and pigments, mostly dry colors, largely used in the paint industry. No detailed figures are available. The most important individual item in China’s aniline dye trade is artificial indigo (20 per cent paste) which, in 1923, con¬ stituted approximately 50 per cent of the total value of dye imports. Prior to 1905 there was practically no artificial indigo used in China, but about that time two German firms began to import it, and in a short time succeeded in displacing to a large extent the vegetable product. The situation in the market for aniline dyes other than indigo is practically parallel to that in the indigo market. Germany has long held a dominant position in this trade, and while its share was cut to nothing during the w^ar years, it has made wonderful strides in regaining its share of the market since 1919. The quantity and value (in haikwan taels) of imports of artificial indigo in the years 1913 and 1919 to 1923, inclusive, are given in the following table: Countries ' 1913 1919 1920 Piculs Haikwan taels Piculs Haikwan taels Piculs Haikwan taels Hongkong.._.. 13,875 33 523,015 668 424 34,516 3,930 207, 610 Macao_ French Indo-China..... 18 1,520 Straits Settlements_ . 19 300 102, 261 713 8,433 3, 502, 744 Great Britain.___... .. 2, 256 128,205 11,076 21,575 12, 020 13, 244 21,879 313 925,192 2, 614, 615 1,134, 300 1,173,639 1,849,186 29, 724 Germany. ___ Netherlands... .. _ Belgium_ __ .... 185,108 17, 688 550 5, 009, 083 579,991 16, 271 30 9,348 8,368 643, 905 France. ... . Austria and Hungary_ .. _ Russia, Pacific ports___ 18 1, 979 _io 3,522 153, 421 1, 320 Japan (including Formosa)_ 13 365 1, 487 112, 666 Philippines__ Siam... 342 40 25, 009 4 318 44, 845 13, 200 4,166 2,790, 492 600 17, 836 4,470, 482 Norway_ Switzerland_ Chosen... 2 10 4, 766 153 998 341,365 Canada.. United States (including Hawaii)... Total gross imports.... 319, 847 9, 641, 283 18, 843 1, 315, 773 156,100 15, 345, 228 64 COMMERCIAL HANDBOOK OF CHINA Countries 1921 1922 1923 Piculs Haikwan taels Piculs Haikwan taels Piculs Haikwan taels Hongkong.... French Indo-China__ 12,864 108 19,823 17, 821 17, 968 16,101 38, 745 496 895,751 8,856 1, 934, 448 1, 857,124 1, 906, 229 1, 409, 700 3, 535, 600 64,384 13,431 169 1, 765 100,307 60, 230 8,478 6, 991 3, 599 13 99 854,969 18,993 195,973 5,297, 811 3,334, 945 503, 618 434, 497 161,131 1,159 6,306 11,848 716,495 Great Britain. Germany... .. Netherlands___ Belgium_ ___ France_____ Italy..... ... 13, 718 82, 037 2,918 342 10,959 643,792 4,404, 838 211,759 12, 885 582, 802 Russia, Pacific ports_ 43 112 20 2 46, 797 62 3,193 12,105 1,333 90 2, 221, 365 1, 245 Japan (including Formosa).. Philippines_ 265 14,387 Siam ... _ __ _ Switzerland.... Chosen . . _ 11,409 1, 289, 373 39, 257 2 250 16,029 10 1, 932, 657 130 14, 422 958, 434 800 Canada___ United States (including Hawaii)_ Netherlands Indies_ 25,108 2, 617,177 90,158 3,185, 029 Total gross imports. 160, 708 15, 533, 029 250, 630 13, 715,845 259, 016 11, 996, 841 The value (in haikwan taels) of aniline dyes imported into China for the years 1913 and 1919 to 1923, inclusive, is shown in the fol¬ lowing table: Countries Hongkong. Macao... French Indo-China_ Siam. Straits Settlements. British India.... Netherlands Indies_ Great Britain_ Sweden. Denmark.. Norway. Germany. .... Netherlands.... Belgium.-- France-. Switzerland.. Italy... Austria and Hungary... Russia and Siberia by frontier.. Russia, Pacific ports... Russia, Amur ports. Chosen__ Japan (including Formosa).... Philippine Islands... United States (including Ha¬ waii). Canada. land Total gross imports. 1913 Haikwan tads 545,320 042 22,400 10,802 201,810 3,540 436 2,187,251 240,862 2,058,870 65,150 3,543 9,117 852 278 ’ 15,’744’ 656 5,427,345 1919 Haikwan taels 230,956 21,437 400 520 452 4,407 37,008 30,000 316,268 23 564 1,026 824,206 42 1,667,691 131,171 3,272,231 1920 Haikwan taels 808,744 7,937 109 615 12 7,642 329,525 324,582 1,225,780 824,382 838,110 35,144 389,147 160 30 15 1,193 1,090,962 2,050,956 49,309 7,984,354 1921 Haikwan taels 1,398,186 28,654 1,490 296 170 6,378 250,703 82,458 3,390,278 1,041,198 750,128 9,687 136,126 38,035 420 1,022 634 699,936 370 684,249 1,158 8,521,576 1922 Haikwan taels 1,275,208 7,521 283 166 14,563 12,525 113,077 15,831 12,372 2,280 3,101,939 1,724,951 388,150 6.899 40,781 539 1,940 373 8,025 371,807 181,454 330 7,281,014 1923 Haikwan taels 1,270,672 28,358 454 98 7,881 4,321 113,733 34,282 30,898 28,031 4,805,347 1,394,190 137,513 54,527 52,331 2,829 10,316 207,888 2,378 345,663 3,000 8,534,710 Note.—F or all _ in Belgium and the urposes it is safe to consider all indigo and aniline dyes shown as originating ands as being of German manufacture. Approximately 95 per cent of all aniline dyes sold in this market reach the consumer in small tins. The following packages are usual: 8-ounce tins, 200 to the case; 1-pound tins, 100 to the case; 20-ounce tins, 100 to the case. IMPORT TRADE OF CHINA 65 That portion of the dyes sold in bulk is in barrels of 133y s to 500 pounds, with the Chinese preference strongly in favor of the smaller barrel. Dyes are imported into Shanghai by the manufacturer’s own office, or agent, and sold to Chinese agents or dealers in Shanghai. These agents and dealers have branch offices or agents in outports through¬ out the interior, and effect distribution through them. Dyes which are imported in tins are generally sold under the manufacturer’s chop, this, of course, being a Chinese chop taken out especially for this market. Those dyes which are imported in bulk and repacked by the Chinese dealer or agent are sold under his own chop. Manufacturers of all nationalities appoint Chinese houses to han¬ dle certain chops, of which the Chinese house has control and which are sold only through them. While Chinese firms handling aniline dyes very often also handle indigo, a great many firms selling indigo do not sell aniline dyes. On the other hand, a great many of the firms handling indigo are at the same time consumers, having a dye shop attached. Dyes are generally sold by the importer to the dealer or agent on a 10-day native order, although this is by no means an absolute rule, credits being given from 30 to 90 days, according to the relia¬ bility of the dealer and his relations with the importer. As a general rule, longer credits are given on indigo than on other dyes. The Chinese generally sell on open credits which are settled four times yearly on the appointed settlement days, although of course there are variations from this rule. The Germans can be considered practically masters of the market for aniline d} 7 es. Out of a total gross import into China in 1923 valued at 8,531,710 haikwan taels, Germany (including cargo from Belgium and the Netherlands) supplied 6,337,050 haikwan taels’ worth—not considering imports from Hangkong, practically all of which were of German origin. (In the case of indigo the German predominance is much less marked, although, as previously stated, 1923 can not be considered a normal year, for the reason that the large indigo manufacturing plants of Germany were in the occupied zone and exported 50 per cent less indigo than in the preceding year.) American dye importers state that, test for test, American dyes are equal to the German product, and they attribute the hold which German dyes have on the market largely to the fact that their chops are better known, having been in the market longer. The matter of chops is said to be of far greater importance in the dye trade than in the indigo trade and, therefore, the oldest chops on the market have an enormous advantage over the newer. Markets for various colors are divided according to the colors popular for wear in the various sections of China. For instance, in certain districts the women wear red trousers almost exclusively, and the sales of red dyes in these sections are very much heavier than in sections where the use of other colors is predominant. Direct blues and blacks are the most popular, then come reds and scarlets, then basic violets, greens, and blues. 100020°—26-6 66 COMMERCIAL HANDBOOK OF CHINA Sulphur black has made considerable progress in China during the past few years and the bulk of this business is divided between Japan and Germany, with German cargo gradually replacing Japanese. FOODSTUFFS The imported foreign foodstuffs referred to in this section con¬ sist of fresh, dried, and canned fruits, vegetables, meats, flavoring extracts, pickles, condensed and malted milk, groceries, and all pack¬ age and bulk articles of this nature exclusive of flour, wheat, and rice. The market in China for these foodstuffs is found not only among the Chinese population, but also among over 283,000 resident for¬ eigners, of which number 152,000 are Japanese and 96,000 Russians, with the remainder Europeans and Americans. The Japanese and Russians are concentrated in Manchuria, while the other foreign nationals are found in considerable numbers in the larger treaty ports of Shanghai, Hankow, Tientsin, and the British Colony of Hongkong. The main distributing point for North and Central China, including the densely populated Yangtze Valley, is Shang¬ hai, with Hankow and Tientsin of secondary importance. Hong¬ kong is the distribution center for South China. Imported food¬ stuffs, becoming “ foreign ” in China, and originally imported solely for the consumption of resident foreigners unable or unwilling to limit their dietary to articles of native produce, have so grown in volume and variety within recent years as to represent a sizable factor in China’s imports. Spreading from the scattered retail stores of every foreign na¬ tionality found in every community in China there are a relatively large number of both Chinese and foreign retail and wholesale organizations, with the attendant smaller list of importers, jobbers, and commission houses. American foodstuffs, particularly canned and package goods, are found in all interior towns of any size, and the Chinese people themselves are consuming these articles in increasing amounts. The two largest department stores in Shanghai, both handling a com¬ plete department-store line of both foreign and domestic merchan¬ dise, are devoting approximately one-half of their street-floor selling space to foodstuffs. While at first glance this may seem startling, to one familiar with things Chinese and the extent of the Chinese dietary, probably unequaled in the world for its balance, content, variety, and efficiency, it seems in no way unusual. Particularly is this true if we realize further the part which restaurant life and foods play in the Chinese social structure. Restaurants of all sizes, types, and varieties to suits all castes, tastes, and pocketbooks are met with everywhere in China. They are at once the business man’s club, theater, and eating place. While Americans may believe them¬ selves to be the originators of the community restaurant, distributing hot cooked dishes ready to serve, the Chinese have possessed this service for some hundreds of years, and also have itinerant cooks shouldering their own stoves, ovens, fuel, foodstuffs, and dishes, prepared to serve anything from Dutch soup to freshly baked bread, at an instant’s notice. Large modern Chinese hotels in the larger cities of China to-day serve both European and Chinese food, while IMPORT TRADE OF CHINA 67 the middle and higher classes of Chinese, either to relieve the rou¬ tine of their own culinary art or to adopt a modified Western diet, are buying more and more of foreign foodstuffs. The figures in the following table showing the total gross imports of foodstuffs, except wheat, wheat flour, rice, and paddy, are taken from the published statistics of the Chinese Maritime Customs and illustrate not only the growth of the value of imported foodstuffs but also the growing share taken by American goods, which has increased from 856,000 haikwan taels ($624,880 gold) or 1.1 per cent of the total in 1913, to 3,847,000 haikwan taels ($3,077,600 gold), or 4.4 per cent of the total in 1923. Articles 1913 1923 Total United States Total United States Haikwan taels Haikwan taels Haikwan taels Haikwan taels Beans, peas, etc. Bicho do mar. Birds’ nests... Biscuits___ Butter (including ghee) Cardamoms.. Caviar.. Cereals: 1,022,044 1,173,001 654,991 4,648 592,453 138 198,465 .. 25,666 196 991, 050 2,178, 882 1,052, 392 388, 480 858,923 412,172 27, 424 Barley.—____ Maize____ Oats____ Cheese____ Cinnamon.__ Cloves and spices__ Cocoa, crude.____ Cocoa and chocolate, prepared___ Coffee.......... Confectionery (not including chocolate and cocoa).. Eggs, game, and poultry..._ Fish and fishery products (not including bicho do mar, is¬ inglass, seaweed, and agar-agar).__ Foodstuffs, unclassified__ Fruits: 29,822 17, 250 84, 032 110, 475 65, 201 94, 712 4,140 60, 433 82,629 352, 960 32,930 13,033, 646 5, 745 19, 827 1,719 18 2,985 38, 578 10, 407 227, 273 Dried.. Fresh______ Honey.._ •Macaroni and vermicelli_ Margarine and artificial butter__ Meats, prepared or preserved (including lard and preserved 767, 278 665, 785 38, 856 795, 024 13, 691 33, 616 28,172 1, 705 3, 308 game and poultry..... Milk, condensed: In tins (by dozens)...__ In tins (by piculs).. Molasses...... Mushrooms...... Pepper, black and white... Seaweed and agar-agar___ Stores, household, not otherwise classified. Sugar: 336, 263 23, 476 791, 546 222,925 663, 904 995, 122 1, 715, 584 4, 219, 006 188, 762 64, 532 15, 677 17, 774 120, 403 91, 863 88, 449 14,132 112 , 002 80, 111 482, 082 89, 687 19, 506, 817 671,157 2, 450,984 1, 552, 044 18, 551 1, 383,923 34, 799 440, 801 253, 526 1, 770, 566 212, 390 664,390 887, 054 3,175,943 4, 430, 825 Brown. White.. Refined Candy. Canes.. Tea.... Water, aerated and mineral. Wines, beer, spirits, etc.: Beer and porter_ Wines... Spirits.. Other beverages.. Soy.. 9, 240,197 10, 652, 542 14, 617, 831 1, 844, 718 157, 091 5, 283, 400 200, 490 2 1,113 4,594 1,173 828 4 6, 148, 692 13, 049, 495 30,139, 265 3, 224, 111 335, 063 818, 702 237, 414 736, 078 1, 244, 465 1,165, 664 55, 939 6 14,952 19, 460 210 830, 317 2, 306, 357 2, 421, 622 202, 799 323, 270 3,562 54, 798 114,153 32, 650 612 43, 326 3, 262 1, 405 27, 903 36, 030 60, 353 204, 521 642, 469 283, 668 324 17, 032 298 9,937 9,200 1,047, 375 316 44 1,171, 284 24 484 10,427 9,527 1,503 60, 396 66 Value of haikwan tael in United States gold: 1913, $0.73; 1923, $0.80. Foodstuffs are subject to an import duty of 5 per cent ad valorem or the substantial equivalent in specific rates of duty. By a further 68 COMMERCIAL HANDBOOK OF CHINA payment of one-half of the amount of import duty—that is, approxi¬ mately 2 x /2 per cent surtax—goods destined for interior points not treaty ports are supposedly exempt from likin or local taxes. There are no existing Chinese regulations corresponding to the United States pure-food laws or in any way regulating the quality and content of imported foodstuffs. Imported milk products are marketed by an extensive organiza¬ tion in China, independently of other foodstuffs. The same is true for raisins. All other foodstuffs are in general marketed somewhat after the following manner. A Shanghai commission house, jobber, or broker obtains the agency for a food product. The initial ship¬ ment of goods on arrival is distributed as far as possible on the Shanghai market and the remainder, if any, goes to outport agencies also on a commission basis to be rehandled in like manner. An ex¬ tremely limited number of Shanghai concerns have their own rep¬ resentatives in ports such as Hankow, Tientsin, Dairen, and Hong¬ kong, but in most cases these agencies are directly supervised by Chinese, not American or European sales managers. If a market with the size and potentialities of China does not justify the initial expense of a Shanghai office for distribution and sales promotion work, the detail of a factory or home sales repre¬ sentative to a carefully selected resident commission house or agent is to be recommended. This gives the combined cooperative effort of an agency thoroughly familiar with local conditions and a repre¬ sentative thoroughly familiar with the product. With these working out together an adapted style and size package, label, trade-mark, appropriate advertising matter, combined Chinese and English di¬ rections and explanatory matter, recipes, the distribution of samples, use of demonstrators, selection of agents, training of salesmen, and first-hand estimate of market possibilities, satisfactory results are obtained. The non-English-speaking Chinese, by far the majority of Chinese purchasers, buy imported package and canned goods largely on the relative merits of the brand, trade-mark, or chop. Outside of American raisins and canned-milk products few, if any,- import packages have an identifying mark in the Chinese language, Chinese descriptive matter, or directions for preparing and serving. A further study of Chinese methods of preparing foods of the Chinese, dietary and language, the development of an intelligent Chinese sales force working through the retail and wholesale stores, restaurants, and dealers, the use of demonstrators illustrating the methods of preparing and serving the foodstuffs, all are highly desirable. Illustrative of the ready appreciation and use of canned and pack¬ age foods among the Chinese is the fact that there are more than 11 canning factories in China with a total maximum daily output of 62,000 cans. While these articles can not as yet be said to hold an important place in the everyday dietary of even the wealthier class Chinese, their popularity is increasing. Chinese fruits, vegetables, meats, and biscuits constitute the entire production of these factories. WHEAT AND FLOUR Contrary to the popular idea among those unacquainted with China that all the Chinese are rice-eating people, there are millions IMPORT TRADE OF CHINA 69 of Chinese who do not eat rice, and who probably have never even seen rice. The population of North China, including that of Man¬ churia, is not, for the most part, rice-eating. These people produce and consume wheat, millet, corn, beans, and sweet potatoes, as the main part of their diet. Other parts of China, even to the extreme southern portions, consume wheat flour, and the quantities consumed are constantly increasing. Owing to lack of reliable statistical information, estimates as to the total average wheat crop of China vary from 200,000,000 to (500,000,000 bushels. As the use of wheat flour is becoming more general, exports of wheat and flour from China tend to become less, while imports are rising. The following table shows imports and exports of wheat and wheat flour between China and foreign countries since 1910: Years 1910 1911. 1912 1913. 1914. 1915. 1916. 1917. 1918 1919. 1920 1921. 1922. 1923. Wheat Flour Imports Exports Imports Exports Piculs Piculs Piculs Piculs 1,392 2,199,186 740,841 901,296 3,197 1, 926,121 2,183, 042 669, 889 2,564 1, 376, 689 3, 202, 501 637, 484 2, 032 1, 848, 071 2, 596, 821 139, 206 998 1, 969, 048 2, 166, 318 69, 932 2,585 1, 514, 536 177, 367 196, 596 59, 555 1, 155, 179 233, 464 289, 747 36,169 1, 557, 601 678, 849 798, 031 16 1, 815, 461 4, 551 2,011, 899 20 4, 453, 471 271, 328 2, 694, 271 5, 425 5, 431, 520 511, 021 3, 960, 779 81, 346 5,194, 022 752, 673 2,047, 004 873,142 1, 151, 014 3, 600, 967 593, 255 2, 595,190 639, 919 5, 826, 540 131, 553 One picul equivalent to 133}4 pounds. It will be noted that, while the importation of wheat is a recent development resulting from the growth of China’s milling industry, large importations of flour were being made as far back as 1911, 1912, and 1913. There was a falling off in imports during and immedi¬ ately after the war until, in 1920, there was a decided increase, which has since continued. The principal considerations governing the importation of wheat and flour are price and available domestic supply. When China’s crop in districts available to the milling centers is good, the demand for imported wheat is smaller than at times of failure, unless prices are such that it is to the advantage of the millers to import either wheat or flour. In many instances millers will import flour to sell ~ under their own brands, and dispose of their wheat at a profit in¬ stead of milling it. At other times they will mill imported wheat and sell the product in competition with imported flour. American wheat is in very close competition with Australian and Canadian wheat and most mills blend these with Chinese and Ameri¬ can wheats. Price and quality are the governing factors in determin¬ ing the source of imports, and in price considerations the question of exchange rates is of great importance. Prior to 1921 China’s imports of wheat were small, the heaviest being in 1916 when 59,555 piculs were imported, principally from 70 COMMERCIAL HANDBOOK OF CHINA Russia and Siberia. This is due largely to the fact that the develop¬ ment of the Chinese milling industry has occurred within the past 15 years, and from 1914 to 1921 little of the world’s wheat supply was available to China—in fact, China was exporting large quantities. Beginning with 1922, however, imports have assumed important pro¬ portions, owing to poor wheat crops in 1922 and 1923. The following tabulation shows sources of imports for 1922 and subsequent years as compared with 1921, the most important previous year: Imported from— 1921 1922 1923 First 9 months 1924, Shanghai only Hongkong _ Piculs 37 Haik¬ wan taels 101 Piculs 403 1 Haik¬ wan taels 1,090 8 Piculs 181 5 158 2 61 298, 037 2, 010, 690 286, 056 Haik¬ wan taels 405 100 632 8 257 1,136,758 6, 935, 938 1, 021,967 Piculs Haik¬ wan taels British India__ 5 23 Russia, Amur ports_ Chosen . _ __ 8, 763 65 29,987 322 1,083 9 7,480 800, 827 63,339 2, 551 46 25, 061 2, 807, 701 221,350 Japan (including Taiwan).. Canada_ _ 111 1, 939, 213 1, 927,156 1,181, 306 474 6,138, 026 6, 820, 563 4, 282, 282 United States (including Hawaii).. _ 72,481 271,395 Australia, New Zealand, etc_ Total_ 81, 346 301, 805 873,142 3, 057, 807 2, 595,190 9, 096, 065 5,047, 791 17, 241, 368 United States share __per cent.. 89.9 91.16 76.25 39. 56 Note. —Value of haikwan tael in United States gold: 1921, $0.76; 1922, $0.83; 1923, $0.80; 1924, $0.7983. Shanghai, being the most important milling center in China (aside from Manchuria, which ordinarily grows its own wheat supply), has imported 88.04 per cent of the total wheat imports of China dur¬ ing 1921-1923, inclusive. Based on this percentage, it may be as¬ sumed that China’s total wheat imports for the year 1924 will be around 5,734,000 piculs, as practically none was imported after September. Wheat is imported through American, Japanese, British, and Chinese import houses, which buy either through their own branches in the country of supply or through exporters or brokers in those countries. Japanese houses do a large portion of the business in China because they have their own branches in America, and in some instances have their own steamship lines over which to effect ship¬ ment. Wheat from the United States, Canada, and Australia is bought and sold under Government certificates covering both grade and weight. In general it is a “ cash ” business both for the importer and the Chinese customer, although these terms may vary with the facilities and connections which the importer has in the country of purchase and his relations with his customer in China. Imported wheat arrives both in bulk shipments and sacked. Owing to the lack of modern handling facilities in Shanghai, bulk shipments are sacked in the hold before handling if possible. Ap¬ proximately 40 per cent of the wheat arriving at Shanghai is dis¬ charged on shore and handled through godowns, the remainder being discharged in the stream onto lighters. The average rate of discharge of sacked wheat is from 800 to 1,000 tons per day. While China’s modern milling industry has increased tremen¬ dously, there are still thousands of old-fashioned native stone grind- IMPORT TRADE OF CHINA 71 ers working throughout the interior, turning out a coarse grade of flour for local consumption. It is the gradual education of the people to an appreciation of well-milled flour, as well as the increas¬ ing use of all flours, that is causing the advance in the importation of foreign flour and the increasing demand for the excellent product turned out by the modern mills. China’s flour imports depend on the domestic wheat crop and on prices both for domestic and for foreign flour. Poor wheat crops during 1922 and 1923 caused large imports of flour, but it is prob¬ able that imports during 1924 will show a heavy falling off from these two years. It is thought that China’s milling capacity will gradually increase until it is able to supply the normal demand for high-grade flour, and that imports will depend largely upon the extent to which price fluctuations make such trade profitable. The share of the United States in the flour business of China (direct imports) was 31.83 per cent in 1921, 54.97 per cent in 1922, and 60.07 per cent in 1923. In addition to these direct shipments, the bulk of Hongkong’s shipments into China consisted of American flour, which brings the total share of the United States up to approxi¬ mately 88 per cent in 1921, 89 per cent in 1922, and 82 per cent in 1923. During the buying season, usually from November to April, the larger Pacific coast mills have representatives in China, and through them supply the more important buyers. There are, however, par¬ ticularly in seasons of free buying, a good many smaller orders which go to Pacific coast brokers and exporters. The flour import business is done by Chinese, American, British, and Japanese import houses, who usually import flour under some specified chop or brand. As a rule, letters of credit are opened in favor of exporters or brokers in the United States and importers in China selling for cash on delivery. It is impossible to determine the principal flour importing section of China, as the standing of the ports changes from year to year with changes in crop conditions and prices in the various sections of China. In 1923 Tientsin took 24.9 per cent, Shanghai 18.1 per cent, and Dairen 14.8 per cent of the total, w T hile in 1921 Canton led with 25.8 per cent, and Shanghai followed with 24.7 per cent, Tien¬ tsin taking but little over iy 2 per cent. Both wheat and flour are imported into China duty free. CIGARETTES AND TOBACCO The volume of the cigarette business in China is undoubtedly one of the best examples of results which can be obtained in that country through a systematic building up of the market and the development of a thorough and elaborate system of advertising, merchandising, and distribution. Cigarette smoking, while a habit very recently acquired in China, is to-day cited as an extraordinary example of the luxury purchas¬ ing power of a people whose per capita wealth is extremely low. According to the best available records the importation of ciga¬ rettes was begun about 1890, when a few cases per year were brought in and sold in carton lots to shopkeepers for disposal among for¬ eigners in the ports. 72 COMMERCIAL HANDBOOK OF CHINA Gradually, Chinese in the treaty ports experimented with and adopted the cigarette, and in 1902 cigars and cigarettes were given a. separate heading in the Chinese Maritime Customs returns. In that year imports under this heading were valued at 1,199,119 hai- kwan taels. (During 1902, 1 haikwan tael=$0.64 United States currency.) The rapid growth of this trade since then, and the increase in imports of cigarettes from the United States, in periods from 1910 to 1923 inclusive, are shown in the following table: Imported from— 1910 1914 1919 1923 Thou¬ sands Haikwan taels Thou¬ sands Haikwan taels Thou¬ sands Haikwan taels Thou¬ sands Haikwan taels Hongkong... 217,616 441,463 ' 368,740 932,319 707,005 2, 774,243 400,637 1,306,021 Macao_ 360 1,006 427 1,192 1, 566 4,188 3,227 6,729 French Indo-China_ 8, 872 17, 735 41, 563 55,965 13, 068 17, 289 3,121 5,509 Siam_ 1 7 49 377 120 240 Straits Settlements.. 11,000 19, 910 3,883 5,023 1,400 8,470 Dutch Indies _ 143 481 British India_ 25,096 45, 845 196 548 1,394 3,964 621 2,851 Turkey, Persia, Egypt, Aden, Algeria, etc_ 15,352 79, 667 12,055 128,179 5, 962 51,000 3, 954 62, 365 Great Britain.. 2,112,566 4,049,501 4, 439, 607 9,806, 899 153,433 1,021,148 518, 825 3, 703, 789 Denmark.... 1 6 Germany___ 5,816 20,020 79, 206 160, 626 2, 586 13, 810 Netherlands.... 80 480 1 7 ' 150 ' 700 Belgium .. 67 : 233 90 373 24 109 France... 10,013 25, 556 1,656 3, 674 2,154 10, 502 6,819 7, 611 Italy..... 358 744 1,052 3, 954 577 3, 752 551 4, 878 Austria and Hungary. 25 150 49 237 Russia, European ports.. 52 311 Russia and Siberia by land frontier _ 495, 650 743, 565 544, 501 1, 089, 846 395 739 Russia, Amur Ports_ 133 249 30 40 Russia, Pacific Ports. 745 3, 542 2, 720 4, 249 600 548 2,202 4,852 Chosen _ 20,050 36, 536 127, 798 274, 568 557, 225 905, 617 80, 692 210, 642 Japan (including For- mosa)_ 325, 134 604, 438 207,022 413, 095 380,004 992,100 43, 820 118, 461 Philippine Islands_ 1,017 1,970 6, 051 18,013 11,264 36, 926 7, 258 13, 822 Canada_ 156,875 295, 730 1, 819, 590 4, 605, 727 907,063 2, 277, 866 United States (including Hawaii)... 532,112 968, 216 162,500 322, 550 4, 239, 735 11,006, 437 8,197,159 20, 752, 039 Gross imports from foreign countries. 3, 782,114 7,061,137 6,155, 994 13, 517,060 7, 895,056 21, 442, 328 10,179, 369 28,493,514 Reexported to foreign countries_ 58, 569 158,891 110,586 195,444 123,109 478,879 62, 476 220,899 Net imports from foreign countries. 3, 723, 545 6, 902, 246 6, 045,408 13, 321, 616 7, 771,947 20,963, 449 10,116,893 28, 272, 615 Note.—V alue of haikwan tael in 1910 was $0.73 gold; in 1914, $0.67; in 1919, $1.39; in 1923, $0.80. It is impossible to state what quantity of American cigarettes find their way into China through Hongkong. However, it is of interest to note that in 1923 Hongkong imported cigarettes to the value of 97,289 pounds sterling from the United States, and a large portion of these were reexported to China. While the importation of cigarettes has grown rapidly, this by no means illustrates the growth of consumption in China. A well- known tobacco journal recently estimated the consumption of ciga¬ rettes in China as approximately 40,000,000,000 yearly (as com¬ pared with about 60,000,000,000 in the United States). Statements made by various authorities in China seem to indicate that, if any¬ thing, this estimate is low. In 1910 importation of tobacco was, according to the Chinese Maritime Customs, about 14,000,000 pounds In 1916 this had increased to approximately 20,000,000 pounds. The IMPORT TRADE OF CHINA 73 rapid development of the cigarette manufacturing industry since that time has increased the importation of tobacco until, in 1923, imports totaled 43,000,000 pounds. Imported tobacco is used almost entirely in the manufacture of cigarettes. Only foreigners use imported tobacco for pipe smoking and the quantity is negligible. Chinese use native tobacco for smoking in native pipes. Imports of tobacco into China are shown in the following table: Imported from— 1910 1914 1919 1923 Piculs Haikwan taels Piculs Haikwan taels Piculs Haikwan taels Piculs Haikwan taels Hongkong--- 35, 859 495,949 47, 366 625,684 21,670 494,907 32,155 1,239,904 Macao- - 9,335 45,940 3, 324 18, 423 2, 278 13, 585 2,598 32, 271 French Indo-China.. 211 6, 630 247 9, 674 44 1,514 211 10, 558 Siam_ 19 547 123 3, 222 21 538 62 1,736 Straits Settlements - 139 1, 546 469 5,004 60 6,996 8 363 Netherlands Indies _ 236 2, 031 372 15,940 122 407 British India.. _ . .. 179 1,996 45 i; 338 244 4,836 22 318 Turkey, Persia, Egypt, Aden, Algeria, etc...-- 66 1,365 247 7, 500 5 337 259 18,215 Great Britain - 1, 979 46,109 253 30,957 1,929 48,969 654 113, 749 Germany _ 70 11,052 5,436 162, 724 184 5, 091 Netherlands _ 3 105 9,138 Belgium .. _ 21 597 30 896 88 9, 964 France.... 279 3, 279 58 1, 787 3 189 633 39; 124 Italy . .. _ 24 269 77 6, 240 Austria and Hungary_ 1 80 19 553 Russia, European ports_ Russia and Siberia by land frontier.._ _ 4, 580 114, 500 5,246 196, 532 35 447 Russia Amur ports_ 59 730 Russia Pacific'ports_ 2,015 39, 625 975 23, 570 297 854 87 2, 624 Chosen_ _ 125 3, 842 5, 573 57, 741 16,061 306,437 35, 352 600, 248 Japan (including Formosa)... 7,364 152, 512 3, 637 93, 742 13, 762 368, 264 15,918 359, 231 Philippine Islands_ 208 3, 459 4, 590 164,193 1,998 95, 925 3,101 67,823 Canada_ 82 3, 361 95 3, 920 26,821 927, 390 United States (including Hawaii)___ 40, 846 1,123, 753 41,196 1,314,084 81, 799 3, 283, 243 229, 616 10, 538, 725 Denmark_ 6 South Africa (including Mauritius)__... 10 669 Mexico and Central America (including Formosa)_ 1 113 Gross imports from foreign countries ... 103, 638 2,058, 442 119, 360 2, 738,223 166,992 5, 553, 984 321, 298 13,056, 958 Reexported to foreign countries..— — _ 1,171 33, 531 1,006 44, 975 7,168 202,993 5,986 366, 280 Net imports from for- eign countries.. 102, 467 2,024, 911 118, 354 2, 693, 248 159,824 5,350, 991 315,312 12, 690, 678 Note. —Value of haikwan tael in 1910, $0.73 gold; in 1914, $0.67; in 1919, $1.39; in 1923, $0.80. equivalent to 133M pounds. One picul In 1914 an additional classification was made in the Chinese Mari¬ time Customs returns to cover imported tobacco, by value only. Total gross imports under this heading were: 14,434 haikwan taels in 1914; 30,815 in 1919; and 86,338 in 1923. In addition to the direct imports from the United States, a large quantity of American tobacco reaches China through Hongkong. Statistics showing exact quantities are not available, but in 1923 Hongkong imported raw tobacco from the United States to the value of 84,569 pounds sterling, the greater part of which undoubtedly found its way into China. The manufacturing companies consume a large amount of Chinese tobacco both for making cigarettes of pure Chinese tobacco and for blending with imported leaf. China pro- 74 commercial handbook of china duces all the varieties of tobacco grown in the United States, and many- additional types. From the custom of Chinese trade in classifying Chinese produce under the name of the district in which it originates or according to some simple numerical system, it is impossible to give a type corresponding either to the American commercial or to the botanical classification. The better known types which are ex¬ ported are “Namheung,” “Wongkong,” “Tungchow,” and “Kwong- fung.” In both Shantung and Honan Provinces much tobacco is produced annually from Virginia seed, the tobacco seed being brought over from America each year and cultivation supervised by American tobacco experts. Other prominent types are: “ Willow leaf,” “green veined,” “yellow,” “fragrant amber,” “hollyhock,” “ uneven,” and innumerable others. Tobacco is also commonly clas¬ sified as cigarette, cigar, and pipe tobacco. All three types are grown in China. The largest quantities are consumed in cigarettes, the quantity consumed in native pipes ranks a steadily decreasing second, and cigars constitute an increasing third. Cigarettes tend to displace the old water pipe, and cheap cigars are rapidly assuming an important place in popular demand. If the figure of 3 pounds of tobacco per thousand cigarettes is taken, the 1923 tobacco imports would be sufficient to manufacture approximately 14,300,000,000 cig¬ arettes. On this basis it would appear that 47,000,000 pounds of Chinese tobacco are used each year to manufacture cigarettes, although no statistical substantiation of this figure is obtainable. To-day, not only foreign firms manufacture cigarettes in China, but there is one very large Chinese company and several smaller ones manufacturing for the native trade. In addition to cigarettes and tobacco, the cigarette trade is directly responsible for the importation of large quantities of lumber, tin plate, printing inks and materials, cigarette paper, foil, cardboard, printing paper, wrapping paper, glassine paper, and glue. Some of these items are included in a separate customs classification, “ Cig¬ arette-making materials,” under which heading 1923 gross imports totaled 2,1GG,G19 haikwan taels. Owing to the fact that much of this material is classified in the customs returns under headings such as “ foil,” “ paper,” etc., it is impossible to give exact figures, but the total amounts used in connection with the manufacture of 30,000,- 000,000 cigarettes a year must reach a very high figure. According to Shanghai customs statistics the great bulk of ciga¬ rette imports consists of those valued between 1.50 and 3 haikwan taels per thousand. The imports of cigarettes into Shanghai from Janu¬ ary to September, 1924, inclusive, are shown in the following table: Value per thousand Number in thousands Value in haikwan taels United States Total United States Total 1.50 haikwan taels or less...... 1.50 but not over 3 haikwan taels_ ... _ 3 but not over 4.50 haikwan taels..... 4.50 but not over 6.50 haikwan taels.._ . __ 6.50 but not over 8.50 haikwan taels ___ 8.50 but not over 12.50 haikwan taels. _ Over 12.50 haikwan taels____ Total.... 56,956 5,491, 741 31, 985 1, 925 300 1,753 215 91,185 5, 993, 213 33,500 101, 338 39,428 116, 476 4,746 70,746 13, 771,886 142, 818 8, 681 2, 001 19, 993 4, 622 115,232 15, 016,860 149, 430 615,135 320, 235 1,097,671 79, 623 5, 584, 875 6, 379, 886 14, 020, 747 17, 394,186 IMPORT TRADE OF CHINA 75 The import duty on 1,000 cigarettes in liaikwan taels is as follows: Value over 12.50 haikwan taels per 1,000 and all cigarettes not bearing a distinctive brand or name on each cigarette-0. S3 Value over 8.50 but not over 12.50 haikwan taels per 1,000-. 53 Value over 6.50 but not over 8.50 haikwan taels per 1,000- 38 Value over 4.50 but not over 6.50 haikwan taels per 1,000—:_.28 Value over 3 but not over 4.50 haikwan taels per 1,000- 19 Value over 1.50 but not over 3 haikwan taels per 1,000- 11 Value 1.50 haikwan taels or less per 1,000-- 06 Among the factors contributing to the expansion of business in cigarettes, first place should be given to existing marketing methods as compared with those of 1900. In those days, cigarettes were sold through the compradors of foreign houses established in treaty ports, in the same manner as many other commodities are handled even to-day. The importer had no knowledge of the market’s re¬ quirements, of the demand, or of the conditions under which his goods were sold to the consumer. The transaction was ended, so far as he was concerned, when the goods were delivered to buyers through his comprador. Great strides have been made since then. Trade has been de¬ veloped by intensive working of markets in the interior, through advertising and sales effort, appointing of local agents and distrib¬ uters, and the constant and intelligent study of the very diverse requirements of the markets in various districts. The outstanding feature of the method by which the largest for¬ eign company sells in China is their breaking away from the old, established method of conducting business through import houses and-compradors. They have put in their own elaborate dealer and distributer system throughout the interior, supervised directly by foreigners in branch offices located at strategic points. The most widely used method of distribution is selling through Chinese dealers who are known as division dealers and who cover a certain allotted territory, which is usually a whole provincial district. Under these division dealers, who act as chief distributers for their various territories, are appointed subdealers, who are the actual means of bringing the goods to the consumer. The division dealers put up cash security against which credit is allowed for goods supplied on consignment. Goods consigned may be double the value of the cash security, the balance being secured by written guaranty bond or “ shop guaranty.” Division dealers are held financially responsible for subdealers. Division dealers obtain a rebate ranging from 5 to 10 per cent, which is either deducted from the purchase price or paid 50 per cent on purchase and 50 per cent at the end of the Chinese year. On retail sales the subdealers receive a profit of 10 to 20 per cent and allowances are also made on the return of cases. In certain instances the sale of specific brands has been assigned to Chinese agents who have complete responsibility for the sale and distribution of the brand throughout China. By this method one brand has made a conspicuous success and is now one of the five largest-selling brands in the world. Originally, pioneer work was done in conjunction with adver¬ tising matter in the form of posters, handbills, and similar mediums. 76 COMMERCIAL HANDBOOK OF CHINA This material was not of the quality employed to-day, but was intended to make a strong appeal to the uninformed mind of the public. At present the largest foreign cigarette company operates an ex¬ tensive advertising department where foreign advertising experts work in collaboration with a corps of Chinese advisors. This de¬ partment designs newspaper displays, posters, and hangers, calcu¬ lated to make the strongest appeal to the Chinese. The distribution of cigarette cases and other novelties is cared for. A very com¬ plete motion-picture plant is maintained. Educational and travel pictures are produced and distributed through the various motion- picture houses in China in conjunction with advertising for certain brands of cigarettes. The other foreign and Chinese cigarette companies conduct adver¬ tising campaigns through the press and by means of billboards, posters, and calendars, but necessarity on a smaller scale. The rapid growth- of the cigarette trade is primarily due to the opening up of new territory by the cigarette companies, and it promises steady increase as the use of cigarettes becomes more gen¬ eral in territory already covered and as new districts are worked intensively. In view of the fact that China is to-day consuming not over one-sixth of its capacity as a cigarette user, it is felt that an excellent and increasing business for American-made cigarettes and American tobacco can be expected. COTTON GOODS Cotton manufactures constitute by far the largest single item in the import trade of China. During 1923 imports of cotton yarn and thread amounted to 103,605,159 pounds plus 1,212,705 gross spools of thread valued at 43,553,743 haikwan taels. Imports of piece goods and other cotton manufactures were valued at 129,966,368 haikwan taels, making a total value of 173,520,111 haikwan taels, and representing 18.79 per cent of China’s total imports for that year. The enormous population of China depends largely on cotton goods as a material for clothing. The better class of Chinese is using an increasing amount of wool, and silk is likewise an important material for dress, but the masses are too poor to afford them. The climate in many sections of the country is sufficiently mild to permit the general use of cotton clothing throughout the greater part of the year, and even in the colder section cotton garments stuffed with raw-cotton wadding are worn during the winter months. The following table shows the value, in haikwan taels, of the im¬ ports into China of all articles and imports of cotton manufacture (including thread and yarn), also the percentage that the latter bears to the total import trade during the years 1880-1923: IMPORT TRADE OF CHINA 77 Years 1880. 1885. 1890. 1895. 1900. 1905. 1910. 1913. 1914. 1915. 1916. 1917. 1918. 1919. 1920. 1921. 1922. 1923. Value of total imports in haikwan taels Imports of manufac Value in haikwan taels cotton tures Per cent of total Value of haikwan tael in U nited States currency^ 79,293,452 23,382,957 30.54 $1.41 88,200,018 31,493,823 35. 70 1.29 127,093,481 45,020,302 35.41 1.27 171,696,715 53,074,164 30. 91 .80 211,070,422 75,606,360 35. 82 .75 447,100,791 181,452,953 40. 58 .73 462,964,894 130,679,235 28. 22 .66 570,162,557 182,419,023 31. 99 .73 569,241,382 183,428,473 32. 21 .67 454,475,719 149,300,513 32.85 .612 516,406,995 136,679,386 26. 47 .819 549,518,774 158,950,267 28.93 1.08 554,893,082 151,380,423 27. 28 1.26 646,997,681 209,786,337 32.4 1.39 762,250,230 246,813,429 32.3 1.24 906,122,439 208,662,426 23.0 .76 945,049,650 218,523,170 23.1 .83 923,402,887 173,520,111 18.8 .80 The principal sources of supply for the large volume of cotton piece goods consumed in China are England, Japan, and Hongkong, with smaller quantities from the United States, France, Netherlands, Canada, Germany, Italy, and India. A good indication of the origin of imports may be gained from the following table, which shows the value, in haikwan taels, of the gross imports of cotton piece goods and cotton thread: Year 1913. 1914. 1915. 1916. 1917. 1918. 1919. 1920. 1921. 1922. 1923. United States Great Britain Japan Hongkong All other Total 8, 932, 699 4, 858, 556 3, 075, 642 1, 753, 499 441,160 690, 674 2,116, 235 2,173, 099 2, 961, 586 2,180, 488 284, 817 60,038,160 64, 346,128 42,878, 260 32, 262, 460 31, 421, 794 31, 872, 302 36, 921, 744 74,149, 316 64, 768, 547 63, 961, 428 47, 668, 770 22,894, 732 25, 992, 074 26, 247, 361 29, 777, 359 54, 685, 716 57,142, 096 87,158, 792 77, 757, 705 62,169, 523 71, 382, 417 68,132,934 11,795,093 11,914,125 10,915,444 9, 667, 759 11, 451, 487 10, 441, 767 12, 488, 826 10, 975, 084 15, 584, 915 16,114,192 15, 307, 542 9, 484, 701 6, 982,644 1,104, 326 3, 827, 098 1, 294, 488 2,127, 600 5, 883, 567 8,126, 707 3, 708, 727 3, 556, 098 3, 464, 392 113,145,385 114,093, 527 84, 221, 033 77, 288,175 99, 294, 645 102, 274, 439 144, 569,164 173,181,911 149.193, 298 157.194, 623 134, 858,455 It will be noted that Hongkong is credited with a large portion of the cotton goods imported. Hongkong does not produce cotton goods but is merely a transshipment point. In order to form an ap¬ proximate idea of the countries of origin of the cotton goods imported into China from there the analysis of Hongkong’s imports of this class of merchandise during 1923 is shown in the following table: Items United Kingdom United States Japan North and Middle China 1 All other Total Value in pounds sterling __ __ Percent... 2,365, 241 57.3 12, 348 .3 1,147, 775 27.8 427,944 10.4 172,131 4.1 4,125,439 1 Exported from Hongkong to foreign countries and also to South China. 78 COMMERCIAL HANDBOOK OF CHINA Owing to the low individual purchasing power of the bulk of China’s population, the China market is primarily one for low- priced cotton goods—not necessarily common quality, but fair to good quality textiles which are relatively less expensive to purchase than high-grade finer textiles such as are used in the United States, Agentina, and some other countries. The development of the country along modern lines enhancing the purchasing power of its people will undoubtedly make a market for a greater proportion of finer and higher priced materials, but the backbone of the business will probably always be the demand for the cheaper goods by the masses. The quantities of the principal lines of cotton piece goods im¬ ported during the years 1913 and 1923 from Great Britain, Japan, and the United States, the changing position of Japan and Great Britain in the trade, and the heavy falling off in America’s share during the period are shown in the following table: Items Shirtings, grey, plain... Sheetings, grey, plain... Shirtings, white, plain... Shirtings, white, figured___ White Irishes..... Drills..... Jeans...-. T cloths, 32-inch.. T cloths, 36-inch__ T cloths, bleached, 30-inch by 40 yards.... Cambrics, lawns, muslins.. Lenos and balsarines.... Plain cotton prints-- Printed drills, furnitures and twills. . Printed crfipe.•_. Printed sateen, rep, etc- Turkey red cottons and dyed T cloths---- Dyed cottons, plain, fast black_ Dyed cottons, plain, colored- Dyed cottons, figured.-- Shirtings, dyed, plain___ Shirtings, Hongkong-dyed, plain- Cotton, Spanish stripes, 64-inch_ Flannelettes, plain, dyed or printed.. Flannelettes, yarn dyed. Crimps and crepons-- Cotton blankets...... Total. Great Britain 1913 Pieces 3, 627, 455 127, 510 3, 730,898 57,144 43,098 44, 894 1,498,114 900, 682 48,035 230, 582 28, 058 348, 275 77, 500 119, 445 697,101 1,611,838 764, 814 746, 636 61,833 31, 676 98,035 82,967 14,876, 590 Fancy muslins... Art muslins and cretonnes, un¬ enumerated.. Cottons, yarn dyed.. Crimps and crepons.. Japanese cotton crepe.... Japanese cotton cloth_ Velvets and velveteens.. Cotton goods, unenumerated_ Total. Cotton handkerchiefs. Cotton towels.. Total. Yards 1923 Pieces 1,009,838 10,120 1,430,760 90, 064 10, 700 1,781 117,905 20, 250 49, 694 278,839 30, 546 341, 792 20, 843 8, 252 88, 266 2, 042 1,111,678 407,483 304, 364 4,830 10, 599 2, 253 20, 787 12, 209 5, 385, 895 4, 535, 217 5, 343, 926 9, 879,143 Dozen 971,843 124,706 1, 096, 549 Yards 5, 581 337,088 3, 557,928 4, 500 64,061 2, 231,109 2, 253, 261 8, 453, 528 Dozen 1, 574, 070 126 1, 574,196 Japan 1913 Pieces 95, 227 3,356,011 61, 438 15 1, 666, 757 94, 377 372, 741 1,257 13,105 6,686 1923 Pieces 1,691, 361 1,124, 515 446, 546 3, 298 32 233,188 1, 792 21,817 7, 236 8, 462 57,406 ’200,’274' 6,197,821 Yards 187,457 10, 574, 401 q 400 60,156’ 719 70,928,069 Dozen 59,961 1, 431,132 1, 491, 093 240, 707 1, 703, 387 284, 316 127, 369 13,429 62,052 149 964,159 42, 580 142 15, 011 520,187 389, 262 2, 456, 658 143, 301 146, 760 1,162 445, 664 59, 587 13 71, 262 10,952, 877 Yards 325,908 3,176,215 6, 546 502, 772 41, 777, 332 171,511 2,851, 575 48, 811,859 Dozen 257,102 42,851 299, 953 United States 1913 Pieces 45,725 1, 559,255 2, 262 507,138 37, 580 519 126 99 37 234, 515 609 2, 387,865 Yards 18,812 18,812 Dozen 24 24 1923 Pieces 667 316 364 844 " 19," 118 35 152 ’l03 1,825 1,560 180 25,166 Yards 3,343 25, 971 7, 642 195, 364 232, 320 Dozen 3,635 590 4 , 225 IMPORT TRADE OF CHINA 79 While space does not permit an exhaustive study of the various types of cloth which each country supplies to the China market, a brief statement regarding the position in the market of the two main suppliers, Great Britain and Japan, and also of the United States, may be of interest. [For a detailed study of the piece- goods market of China, reference is made to Special Agents Series No. 107, Cotton Goods in China, by Commercial Agent Ralph M. Odell, published by the Bureau of Foreign and Domestic Commerce, Washington, D. C.] The relative positions of these three countries have undergone marked changes during the past 20 years as shown in the following table of the percentages secured by them in the total cotton-piece goods imports of China: Countries 1902 1913 1923 Great Britain. . . _ __ ___ . 55.3 53.3 35.2 Japan _.. _ _ _ _ _ 2.7 20.2 51.0 United States. __ _ .. .. _ 26. 8 8.0 .02 All other countries. .. ....... 15. 2 18.5 13.8 » • Japanese manufacturers are enjoying an increasing portion of China’s trade by reason of their proximity to the market and their excellent transportation facilities for making quick deliveries, the willingness of Japanese importers and dealers to handle goods at a smaller margin of profit than other foreign firms in China, their liberal attitude regarding credits to Chinese dealers, cheaper cost of packing because of the much shorter distance from mill to consumer, dumping, speculation in raw cotton, readiness to exactly copy good designs originated by other producers, and their cheaper prices. Although Japanese spinners are turning out finer cloths than they were a few years ago, practically all Japanese imports into China are in plain or simple weaves, i. e., goods easily made, and of coarse counts and consequently of lower grade cotton, and in colored goods where simple dyeing and finishing only are required. Importations are chiefly made up of plain grays, low-grade colored lastings, cotton flannels and cotton blankets, and cheap printed cottons. One of the largest items, some 48,000,000 yards in 1923, is in “Japanese cotton cloth,” a plain gray unsized cloth for finishing in China, in which Japan has no competition. This material is handled mostly by Japanese importers who sell direct to dye works. After being dyed the material is sold under the name of “ dyed shirtings.” China is a natural market for Japan in the cloths which the latter is well equipped to manufacture, and the energy and earnestness of Japanese manufacturers and merchants will. undoubtedly bring about further increases in Japan’s already large share in the trade of China. Great Britain’s position in the China market is a strong one. British chops are well and favorably known, and old, established houses are handling this trade with the strong backing of British banks. The items which go to make up the bulk of Great Britain’s trade with China are those in which British manufacturers excel— namely, plain white shirtings; all classes of printed cottons; lawns; 80 COMMERCIAL HANDBOOK OF CHINA dyed plain and fancy cottons; velvets and velveteens. A fai,r pro¬ portion of British cotton piece goods is sold at three auctions held weekly. This method of buying is extremely popular with the Chinese, and auction chops in many cases bring higher prices than equally good cloths sold otherwise. Great Britain is losing both to Japanese and to Chinese cloths much of its trade in coarse yarn cloths, but it is felt that in the materials in which these countries do not compete, British manufacturers will continue to secure the bulk of the business unless far more serious competition develops from the United States than has been felt dur¬ ing the past 10 years. The weaving industry in China has made rapid strides during the past five years. In 1919 there were 8,200 power looms in all of China, while in J une, 1924, there were 16,273 looms working and 6,500 under construction. It is calculated that these looms, working 12 hours a day for 300 days a year, have an annual capacity of approximately 342,000,000 yards of cloth (of 50 picks per inch). The reasons for the growth of the spinning industry in China and its concentration in Shanghai are discussed in this section under the headings of u Cotton and yarn ” and “ Textile machinery.” In addition to the production of plain gray cloths, there are in China several bleaching and dyeing plants well supplied with modern equipment. These plants not only finish native-made cloths, but also imported gray goods which are sometimes handled on contract and sometimes bought outright and resold as white or dyed goods. Recently a plant has been established for dyeing and printing, and has turned out some very creditable prints for the domestic market. There is little need for modern dye works in China at present, as the vast majority of the work is done by native dye shops throughout the country, who dye yarn for weavers and cloth for local piece- goods dealers, and these methods will doubtless be followed for many years to come. RAW COTTON AND COTTON YARN Cotton manufacturing in China, in a modern sense, is of compara¬ tively recent development. Before the war with Japan the Chinese were beginning to erect spinning mills, but only in a half-hearted way. Prior to 1895 foreigners were not permitted to operate mills, but among the concessions from China under the treaty of Shimo- noseki, signed in 1895, was the right of foreigners to import machin¬ ery and to engage in manufacturing industries of all kinds in the treaty ports of the country. Immediately several of the foreign firms that were large importers of English piece goods and Indian yarns took advantage of the provisions of the treaty and began the erection of spinning mills. Previous to that time there had been in operation six native-owned mills containing 183,000 spindles. By the end of 1896 a number of foreign mills, with a total of about 400,000 spindles, were in operation in Shanghai. The rapidity with which the industry has developed is indicated by the fact that in June, 1924, there were 3,032,246 cotton spindles in China, with a further 658,396 spindles in construction. At the same date there were 16,273 looms, and 6,504 in course of erection. IMPORT TRADE OF CHINA 81 The output of these spindles is from 800,000 to 1,000,000 bales (1 bale equals 400 pounds) of yarn per year. Calculating that each loom works 12 hours a day, it should pro¬ duce 72 yards of cloth of 50 picks per inch. Reckoning this at 70 yards for 16,273 looms working 300 days a year the capacity is 341,733,000 yards, or 8,543,325 pieces of 40 yards in length. The published figures of the Chinese Maritime Customs show that exports of cotton yarn through the Maritime Customs (practically 100 per cent being interport trade) have increased from 28,192,933 pounds in 1900 to 290,475,630 pounds in 1923, while in the same period sheetings have increased from 29,360 pieces to 3,441,147 pieces. The total value in haikwan taels of manufactured cotton goods passing through the Maritime Customs in 1923 was as follows: Sheetings, 3,441,147 pieces-20,119, 519 Drills and jeans, 945,643 pieces_-— 4, 883, 342 Native cloth (fancy), 501,323 pieces_ 2,038,773 Nankeens, 29,341,863 pounds_ 13, 409, 242 Cotton towels__ 938, 333 Cotton socks_ 1, 764, 792 Cotton blankets and counterpanes_ 476, 826 43, 630, 827 In addition to the power looms the use of hand looms in China is more extensive than in any country in the world, but these do not enter into the market for imported cotton or imported yarns. During the year 1913 the total net importation of raw cotton into China was 134,735 piculs, but with the rapid growth of cotton manufacturing this grew to 1,614,371 piculs in 1923. Sources and values of these imports are shown in the following table: Sources 1913 1923 Quantity Value Quantity Value Hongkong... . Piculs 9,081 702 2,133 1 496 83,169 Haikwan taels 215, 800 17, 567 36,352 15 11, 432 1, 824, 683 Piculs 7,084 360 10,233 Haikwan taels 135, 227 8,606 226, 590 Macao_ _ French Indo-China.. Siam_ __ Straits Settlements_ 1, 706 1,147, 948 3, 498 1, 185 65, 030 36, 960, 526 199, 615 47, 055 British India .. Turkey, Persia, Egypt, Aden, etc... Great Britain. .. 3 1 187 17 12 2, 321 42 14 1, 237 301 290 46, 420 Germany_ Belgium _ France.. 375 13,125 Russia and Siberia by land frontier.. .. . .. _ Russia, Pacific ports__ _ .. _ Chosen . 596 386, 398 10 72, 851 3,153 13, 341, 732 162 3, 389, 467 Japan (including Formosa)... ... .. _ Philippines 15, 214 363, 417 United States (including Hawaii)... .. Gross imports_____ 26, 310 608, 891 139, 647 4,912 3,126, 461 109,143 1, 632, 244 17, 873 54, 390, 288 574, 087 Reexports- .. ...... ... . Net imports_ _ ___ 134, 735 3, 017, 318 1, 614, 371 53,816, 201 Shanghai, having 63 per cent of the total spindles of China (2,330,270 erected and under construction, as compared with 3,690,- 100020°—26-7 82 . COMMERCIAL HANDBOOK OF CHINA 642 in all China) is naturally the chief importer of raw cotton, taking 84.6 per cent of the total during 1921-1923, inclusive. The next important port was Tientsin, which took 6.7 per cent over the same period. Kiaochow, owing to the large increase in number of spindles during 1923, jumped from about 6 per cent in the two previous years to 10.6 per cent. The principal factors that have contributed to the establishment and growth of the Chinese cotton-goods industry have been the fol¬ lowing: (1) A supply of native-grown cottons of sufficiently good quality for spinning low counts; (2) an enormous domestic demand for the product of the mills, which in the case of yarn by far ex¬ ceeds that in any other country in the world; (3) low cost of power, which is secured through a good supply of coal from native mines and Japan, and in Shanghai by the unusually low rate charged for electric power generated by the municipality; and (4) an abundance of very cheap labor, which makes the cost of production lower than in any other part of the world and which is not subject to any legal restrictions as to hours of work or age of employees. The cotton that is consumed in the mills is not of as good quality as American cotton, but it can be used economically for spinning the coarse counts, which are in greatest demand in China. Its low cost gives the mills a marked advantage in the production of heavy sheetings and drills, in which the value of raw material constitutes a large percentage of the total cost. The finest counts of yarn being spun commercially in China at the present time are 42s. The greatest demand is for 10s to 16s. It is not believed that there will be a tendency for finer counts of yarn in China, such as has been experienced in Japan, for some time to come, owing to the fact that the purchasing power of the people is not sufficient to enable them to purchase higher grades of cloth. Furthermore, to produce finer counts requires better cotton, and there is no real organized movement yet on foot in China toward better cottons. There are several experimental stations which are doing exceptionally fine work in this way, but the scope of their work is limited by lack of funds. The demand is greater for the lower counts, but there is less competition at present in the finer counts, because there are comparatively few mills equipped to spin the finer yarns. Accordingly it would not be surprising if any new equipment the Japanese put in during the next year or two would be arranged for spinning the finer counts. Price is the governing factor in the demand for American cotton in China, so far as the average Chinese mills are concerned. The few mills organized and equipped to spin finer counts than the majority of the Chinese mills are, of course, obliged to use Ameri¬ can cotton for this finer yarn, regardless of price. As a rough esti¬ mate there are approximately 100,000 spindles out of the total num¬ ber in China that are in this group. The importation of Indian cotton is almost entirely dependent upon price, with the exception of a very small quantity which is imported on account of its superior quality. The amount of this better grade of Indian cotton is very limited. There are certain grades of Indian cotton which compete in a way with American IMPORT TRADE OF CHINA 83 staple, but they are very limited and not large enough in quantity to be considered seriously. Egyptian cotton compares favorably with American cotton on the basis of staple, but the price makes it prohibitive in this market. Practically all of the American cotton that is used by the Chinese and English owned mills is imported through branch offices of American cotton dealers. At the present time there are three such offices. A certain amount of cotton used by the Japanese mills passes through these offices, but the greater part is imported through Japanese commission houses having direct connections with the New York Cotton Exchange through their New York offices. There is very little speculation in this market in American cotton either by the Chinese or Japanese. This may be attributed princi¬ pally to the fact that the local exchange offers easier and cheaper facilities and is recognized by all to be on a sound financial basis. All cotton sold by American dealers is on a basis of cash against delivery, whereas it is customary for the Japanese importers to give the Japanese mills 30 days’ credit. The heavy increase in China’s yarn manufacturing capacity has had the natural effect of reducing yarn imports. During 1913-1915 the average importation was 2,695,000 piculs of yarn yearly, of which Japan supplied approximately 50 per cent. As compared with this figure, the average importation during 1921-1923 was approximately 1,065,000 piculs, of which Japan supplied approximately 50 per cent. Following Japan are Hongkong and India, in the order named. Hongkong’s contribution consists, to a very large extent, of Indian and Japanese yarns, transshipped there principally for South China ports. The counts being imported at the present time are mostly 20s to 42s, the cheaper grades coming from India and Japan, while the better grades are supplied by England and the United States. Amer¬ ican yarn can not, as a rule, compete in price with the English prod¬ uct, and for this reason the share of the United States in the yarn trade is negligible. From 1913 to 1915 the demand for higher counts was practically nil, and the United States supplied none, while Great Britain sup¬ plied less than 5,000 piculs in any year. During the years 1921 to 1923 Great Britain is credited with an average of 17,337 piculs per year. The share of the United States, however, averaged but 97 piculs per year over that period. Imports of cotton yarn are distributed fairly evenly among the various ports of China, although during the past three years Tientsin, being the distributing point for North China, has imported 16 per¬ cent—the greatest individual share—followed by Mengtsz, on the Nansi River in Yunnan Province, which has taken 13 per cent, dis¬ tributing it through the southwest. Shanghai, being the center of China’s cotton-spinning industry, does not figure as a leading port in this trade, ranking seventh in 1923, with total imports of 24,870 piculs valued at 1,826,000 haikwan taels. Yarn is imported through Japanese, English, Indian, and Amer¬ ican importers, mostly for the account of Chinese yarn dealers who have their own distributing organizations throughout China. 84 COMMERCIAL HANDBOOK OF CHINA The following table shows imports of cotton and cotton yarn from 1912 to 1923, inclusive: Items 1912 1913 1914 1918 1919 1920 1921 1922 1923 RAW COTTON Hongkong_ French Indo-China. British India. . Japan (including Formosa). _ Canada. ... _ Piculs 31, 417 2, 785 97, 124 14, 063 Piculs 9,081 2, 133 83,169 15, 214 Piculs 6, 379 3,924 50, 766 20, 882 Piculs 25, 847 4,121 18, 364 128, 222 1,957 11, 665 1,712 Piculs 6, 217 4, 766 98, 430 75, 029 11, 453 37,199 8, 709 Piculs 22, 526 11,049 418, 964 161,978 Piculs 30, 458 10, 303 981, 136 141, 754 Piculs 18,961 5, 476 1, 370, 069 302, 895 Piculs 7,084 10, 233 1, 147,948 386, 398 United States (in¬ cluding Hawaii).. All others .... ... Gross imports.. COTTON YARN Hongkong.... British India Japan (including Formosa)_ All others_ Gross imports.. 141, 200 6, 356 26, 310 3, 740 44, 865 1, 086 34, 049 39, 930 516, 676 9,811 155, 319 5, 150 72,851 7, 730 292,945 139, 647 127,902 191, 888 241, 803 688, 496 1, 690,138 1, 857, 870 1, 632, 244 708, 841 627, 832 920, 589 65, 769 688, 644 656, 649 1, 272, 983 81, 798 683, 261 520, 145 1, 242, 828 108, 040 373, 673 127, 679 666, 800 25, 771 472, 040 435, 458 479, 228 30, 457 373,979 329, 637 568, 204 95, 355 324,969 183, 658 575,945 200,842 304,928 68, 001 680, 017 165, 621 286, 573 39, 025 405, 615 31,918 2, 323, 031 2, 700,074 2, 554, 274 1, 193,923 1, 417,183 1, 367,175 1, 285, 414 1, 218, 567 763,131 Note. —One picul equivalent to 133^ pounds avoirdupois. WOOLEN GOODS An extremely interesting trend in China’s piece-goods market is the increasing use of woolens by Chinese, who have begun to show appreciation of the advantages of woolens over padded and fur- lined cotton clothing. A comparison of the imports of 1913 with those of 1923 is shown in the following table: Item 1913 1923 Lastings, long ells, camlets, and buntings... ..pieces.. Blankets and rugs_____ _ _ ... .pounds.. Yarn and cord... . .. .. .. .. . .... ..piculs.. All other_________..yards.. 100, 281 1, 696, 202 14, 710 1, 901,888 23, 416 500,166 32, 380 5,985, 451 While the United States has but an extremely small share of this trade, the details of imports of woolen goods for the years 1913 and 1923, which may be of interest to American manufacturers as indicating the growth and present extent of the China market, are shown in the following table: Item United States Great Britain Hong¬ kong Ger¬ many Japan Total 1913 Blankets and rugs.pounds.. Bunting ....pieces.. Camlets__do . . Quan¬ tity Quantity 253, 657 1,282 6, 571 20, 462 10, 032 27, 016 22,110 122, 298 423, 304 1,940 Quantity 341, 961 236 9,317 44, 563 13, 788 6,091 17, 076 92, 372 181,039 1,558 Quantity 157,624 4 Quantity 34, 770 341 Quantity 1,696, 202 2,003 16, 286 387, 884 79, 487 33,179 48, 813 241, 329 1,193,188 14, 710 Haikwan taels 634,872 11,009 230,137 556, 263 35, 843 407, 098 292, 405 149, 930 1,119,599 1, 600, 783 Cloth, broad, medium, habit and russia... . _yards . Woolen flannel_ ... do_ Woolen lastings... _pieces.. Long ells__do 105 262,156 13, 728 2 9,512 13, 762 100 2, 250 249, 923 303 Woolen Spain stripes_yards.. Woolen goods, unclassed ...do_ Woolen and worsted yarn and cord.piculs.. 53,199 5, 490 IMPORT TRADE OF CHINA 85 Item United States Great Britain Hong¬ kong Ger¬ many Japan Total 1923 Quart- Haikwan Woolen blankets and rugs tity Quantity Quantity Quantity Quantity Quantity taels . .pounds . 1, 447 121, 706 272,852 37,393 18, 704 500,166 476, 508 Broad and medium habit and rus- si fin ninth _ .yards.. 3,159 49, 341 75, 616 1,136 140,184 388,626 Hamlets and hnntine nieces 3i 218 3; 740 ' 122 7, 107 150j 157 Woolen coatings and suitings _yards 227 2,168, 563 514, 506 81,872 101,518 3, 207, 898 7, 009, 781 Woolen flanneL.. ..do . . 1, 321 15, 445 309, 642 514 9,122 340, 936 340, 844 Woolen lastings _ _pieces. 2,518 3, 277 5,810 122, 336 Long ells .do .. 5, 320 4, 871 10, 499 Hoi 947 Wnnlen Snain strines vards _ 4, 928 2, 896 7; 920 8; 461 Woolen * goods. * unenumerated .yards.. 1,573 1,673,443 96, 098 95,104 259, 710 2, 288, 513 5, 442, 721 Woolen and worsted yarn and cord.. _piculs.. 8 21,892 1, 383 6,798 1,576 32, 380 5,317,141 Note.—V alue of hiakwan tael in gold: 1913, $0.73; 1923, $0.80. One picul equivalent to 133j^ pounds. Although there is a small market among foreigners and the more wealthy Chinese for high-grade w r oolen and worsteds for clothing, the principal demand is for the cheaper cloths which are suited for wide distribution in native garments. Some 15 or 20 Chinese mills of various sizes are in operation, manufacturing both from native and from imported yarn a variety of articles including cloth, blankets, shirts, trousers, scarfs, hosiery, gloves, hats, and sweaters. Great Britain supplied 70 per cent of direct imports in 1923 but as Great Britain supplied 79 per cent of Hongkong’s 1923 imports of these goods it is probable that approximately 79 per cent of the imports from Hongkong are British woolens. Germany supplied approximately 9.6 per cent of the direct imports, and some 13.5 per cent of Hongkong’s imports during 1923. The most of the woolen-goods business is in the hands of British import houses which indent for Chinese dealers, giving 90 to 120 days’ credit. High-grade goods for foreign consumption are purchased by the retail shops through importers and dealers, and also direct from mill on samples furnished by traveling representatives or by mail. Terms in the latter case vary, but well-established Chinese foreign shops buy on 90-day sight draft. PETROLEUM PRODUCTS KEROSENE The importance of America’s oil fields in relation to trade with China is fully illustrated by an analysis of China’s imports from the United States for the year 1923. During that year, the gross total of direct imports from the United States to China was valued, according to returns of the Chinese Maritime Customs, at 154,488,000 haikwan taels which, at $0.80 gold is equivalent to $123,558,400. Of this, 55,632,000 haikwan taels or $44,505,600 gold was made up of kerosene oil, gasoline, lubricating oil, and paraffin wax. This, it will be noted, constitutes 36 per cent of the total imports into China from the United States, and is by far the greatest single group in this trade. 86 COMMERCIAL HANDBOOK OF CHINA In fact, this total is larger than appears by a study of the customs returns, but owing to the impossibility of determining definitely the value of imports from Hongkong and Canada which originated in the United States, it is necessary to adhere to published figures for the purpose of comparison. As an instance of this, it is known that the total imports of American kerosene in 1923 were 182,250,811 gallons, valued at 48,775,567 haikwan taels. The customs, in their analysis of foreign trade, show 159,544,760 gallons valued at 42,231,901 haikwan taels as originating in the United States, the difference being made up by imports from Hongkong, transshipment through Singapore, etc. While in the case of kerosene it is possible to secure actual figures from the customs’ “Abstract of Statistics ” showing the nature of the oil imported—that is, “American,” “Borneo,” “Sumatra,” etc.—it is not possible in other cases. The figures regarding kerosene are, therefore, accurate, but figures showing imports of other oils Fig. 3.—Transporting petroleum products to interior Provinces merely show imports direct from the United States and do not take into consideration the quantities imported through Hongkong. In view of the fact that mineral oil is not produced in commercial quantities in China, the country’s entire requirements of kerosene are imported. Oil is said to exist in good quantities in various portions of the country, but the extreme difficulty of transportation and the unsettled conditions which exist in the interior have militated against the development of these resources by either foreign or Chinese interests. Aside from test drillings in Shensi Province dur¬ ing 1915 and 1916 by a large American oil company, and later efforts by a Japanese firm, little has been done in the way of attempts to establish a domestic source of supply for this important item of China’s requirements. The quantity of kerosene consumed in China each year and the steady growth in the importation of American oil is well illustrated IMPORT TRADE OF CHINA 87 by the following figures taken from the records of the Chinese Maritime Customs showing imports of kerosene (quantity in 1,000 gallons; value in 1,000 haikwan taels) in periods from 1910 to 1923, inclusive: From— 1910 1914 1919 1923 Quantity Value Quantity Value Quantity Value Quantity Value America. - Borneo.. . - Burma .. .. _ 96,100 19,044 508 19 2,229 42, 780 710 11,496 2,822 65 4 637 6, 613 106 160, 428 22, 616 \ 23, 871 3, 477 157, 294 6,401 36, 333 1, 475 179, 739 5,140 48,017 1, 405 Japan... ... .- Russia. -- Sumatra......-- Persia _ 514 5, 234 36, 671 98 1,118 5, 868 651 33, 612 1, 440 212 8,264 430 12 424 25, 246 4 140 7, 315 Other sources . ... 4, 274 1,411 Note.— Value of haikwan tael in United States gold: 1910, $0.66; 1914, $0.67; 1919, $1.39; 1923, $0.80. It will be noted that the United States supplied 82.5 per cent of the total value of kerosene imports during 1923 and 83.3 per cent of the quantity, as compared with 52.8 per cent of value and 59.5 per cent of quantity in 1910. Aside from the naturally expanding demand resulting from the increasing purchasing power in the country, the growth of this business is due almost entirely to the increased distribution which large American and British oil companies are effecting throughout the interior. The use of kerosene in the treaty ports where electric light is available is not a great factor in demand, but it is the in¬ terior, where lighting is accomplished by means of kerosene lamps and lanterns, which furnishes the great market, and there consump¬ tion is steadily increasing. Aside from increased distribution, prob¬ ably the greatest factor in the spread of the use of kerosene is the increase in facilities for transportation, enabling oil to reach sec¬ tions of the country hitherto inaccessible, and it is certain that as transportation facilities improve, the use of kerosene will increase. The substitution of kerosene for candles, tallow dips, and other native means of lighting is proceeding rapidly in territory opened up by the oil companies, and the popularity of kerosene is likewise heightened by the introduction of lamps, lanterns, and other oil¬ burning devices, by the oil companies and by importers of these various devices. It is interesting to note the value which is attached to empty oil tins in China, and the various uses to which they are put. Cut into quarters and made into dustpans a tin will bring 60 cents to $1 silver; made into a small suitcase, $1.50 to $2.50 silver; painted vari¬ ous colors they may be seen suspended from signal poles and used as signals for river craft. New tins are cut carefully and the tin sheets sold to shops making various tin articles. Dealers also de¬ rive a profit from the sale of the wooden cases. Many factors affect the sale of kerosene, among the most important of which are crops and crop prices; silver exchange and local ex¬ changes against Shanghai and other import centers; local military disturbances; water levels in the creeks and canals through which 88 COMMERCIAL HANDBOOK OF CHINA shipments must pass; and the supply, export demand, and price of vegetable oils which may be used for dip lights. The increasing use of electric light throughout China, while not keenly felt at present, constitutes a growing factor in the lighting field which will naturally affect oil sales. Approximately 85 per cent of the kerosene trade of China is con¬ trolled by two organizations—one large American company, selling American oil exclusively, and one large British company which, while acting as sales agents for Dutch and other producers, sells American oil to the extent of approximately 60 per cent of its total China sales. These companies bring their oil in bulk in their own tank steam¬ ers and store it in tanks at seaports. From these points it is dis¬ tributed by tank barges to other distributing points on navigable rivers, where other storage tanks are maintained. Tank cars, tank lighters and steamers, storage tanks, and other equipment are owned by the companies. At various points from which distribution can be effected at mini¬ mum cost, plants for the manufacture of tins and cases are operated. Using Chinese labor, importing tin plate, and buying lumber in quantities, these companies are able to case their own oil for fur¬ ther distribution as case goods at prices which are extremely difficult to meet with oil imported in cases from America or elsewhere. One American company, handling probably 10 per cent of the kerosene trade, import all their goods in cases, and distribute from godowns located at advantageous distributing centers. Independent oil companies, when prices in China are such as to permit the importation of case goods at a profit, indent kerosene from the United States against orders from Chinese dealers. In the majority of cases these dealers are located in treaty ports, and either sell locally or resell to agents in other localities. These dealers buy at a stipulated price, which must be such as to allow them the same commission as they would make in buying from the large fac¬ tors in the trade. The success of the companies controlling the kerosene trade is due primarily to their very excellent and far-reaching system of distri- l3ution throughout China, which has been built up at the expense of painstaking study of conditions in each separate locality; heavy outlay in time and money; the gathering together and continual augmenting of a personnel of trained men; intensive, thorough, and continuous effort to reduce transportation costs to an absolute min¬ imum ; and constant advertising and introductory work, both through the usual advertising channels and by the introduction of oil-burn¬ ing devices of various descriptions. These companies maintain a network of Chinese agents through¬ out the country. To these agents, wdio are bonded for appropriate amounts, oil is consigned. The proceeds of sales are remitted by the agents, less commissions and fixed allowances for godown expenses, etc. The goods remain the property of the foreign company until payment is received by them. This system has many advantages, one of the greatest in recent years being the comparative safety of the goods, owing to the hesitancy of bandits and military authorities to interfere with foreign property. ' IMPORT TRADE OF CHINA 89 FUEL OIL The heavy increase in the demand for fuel oils in China which has taken place in the past 10 years, is due in a large measure to the increased use of fuel oil by ships. The greatest growth has been in the use of bunker oil but there has also been a heavy and continuous growth in the use of ships operated by Diesel oil-burning engines, and this demand promises to continue its already heavy increase. The quantity thus used is indicated by the figures of reexports shown in the table of imports given below. In addition to its use on ships, a fair quantity of fuel oil is being used in China for operat¬ ing various types of work engines. The continuous growth of this trade is expected with the progress of industrialization. As indicated by the following table of imports (1913, 1918, 1921, and 1923), prior to 1918 the greater part of the liquid fuel was im¬ ported from the Dutch East Indies and Straits Settlements. This was due in part to the fact that American companies had no storage facilities for fuel oil which would enable them to bring in their oil in such quantities as to compete with the product of near-by producing countries. Since 1918, through the changing over from coal-burning to oil¬ burning vessels, a demand has grown for heavy oil, such as California produces. The consumption of these heavy oils has increased greatly and both American and British companies are obtaining supplies from the United States. The imports of fuel oil, and countries from which imported, are shown in the following table: Countries 1913 1918 1921 1923 Quantity Value Quantity Value Quantity Value Quantity Value Hongkong . Tom 1, 378 6,989 12, 813 Haikwan taels 25, 822 57, 735 104, 179 Tom 10, 220 19, 269 2, 597 30 43 2,825 Haikwan taels 212,119 305,900 42, 751 487 5, 342 39,099 Tom 17,066 714 21, 279 3 32, 755 Haikwan taels 629, 460 16, 680 456,135 51 668, 425 Tons 9,940 19, 584 14,088 Haikwan taels 213, 629 468, 496 316,946 Straits Settlements... Dutch East Indies.... Japan (including Formosa) ... ... United States (in¬ cluding Hawaii).... Australia and New Zealand. .. 83 12, 608 45, 666 1, 237, 377 Macao _ 46 973 Gross imports.. Reexports_ _ 21, 263 9,198 200, 344 75, 240 34,984 16, 780 605, 698 267, 473 71, 817 31, 256 1, 770, 751 649,992 89, 324 32, 057 2, 237, 421 768, 385 Net imports_ 12, 065 125, 104 18, 204 338, 225 40, 561 1,120, 759 57, 267 1, 469, 036 Fuel oil is imported in bulk, stored in tanks at important points, and distributed in drums to the inland trade. That for sale to ocean-going vessels is imported with a duty drawback, against which duty is refunded. Shanghai is the principal port of importation, followed by Hankow, Hongkong, and Kiukiang, in the order named. Hankow is increasing in importance as a port of importation, owing to the increasing use of fuel oil in the boats plying the Yangtze River 90 COMMERCIAL HANDBOOK OF CHINA and also on account of the increased use in various industries which can be supplied from Hankow. GASOLINE The increasing use in China of motor cars and trucks, during the past 10 years, has resulted in the steady and rapid growth of the gasoline trade. Total imports in 1914 were 823,000 gallons, valued at 215,000 haikwan taels; in 1923 imports had risen to 6,325,000 gallons valued at 3,890,000 haikwan taels. The position of the United States in this trade has varied, but its average share of the total imports has been 28 per cent over the 10-year period from 1914 to 1923 inclusive. The gross imports of gasoline, benzine, naphtha, petrol, etc., into all of China, and countries from which imported (value in thousands of haikwan taels, quantity in thousands of gallons) are shown in the folloAving table: Imported from— 1914 1917 1920 1923 Quan¬ tity Value Quan¬ tity Value Quan¬ tity Value Quan¬ tity Value Hongkong_ __ 55 16 37 18 147 72 282 164 Singapore, Straits Settlements_ . 431 94 579 197 462 277 1,026 565 Netherlands Indies... _ . . 99 34 705 420 2, 826 1, 590 Russia and Siberia by land frontier_ 5 2 3 1 77 116 3 1 Russia, Amur ports. _ _ 1 1 1 1 1 Russia Pacific ports. 5 4 2 1 53 38 13 12 Chosen. ... . ... 1 3 2 1 1 2 2 Japan (including Taiwan)_ 25 8 241 161 640 416 249 204 United States (including Hawaii)_ 298 89 199 133 568 385 1, 953 1, 344 Philippines.. ..... 31 11 French Indo-China... 2 1 6 5 Macao. . ..... 1 Great Britain.. 3 3 Total___ 821 213 1,194 558 2, 656 1, 727 6, 365 3,891 It is estimated that 50 per cent of the imports from Hongkong are American gasoline, increasing the share of the United States in that proportion. Gasoline imported from the Netherlands East Indies, Singapore, and Straits Settlements, is handled by a large British company acting as selling agents for The Royal Dutch Shell Co. Owing to proximity to the market, they are in a position to do the largest share of the trade as the foregoing figures illustrate. Gasoline is imported from the United States in drums and tins ranging in capacity from 5 to 50 gallons. From Sumatra and Java it is brought in by tank steamers, stored in bulk, and tinned locally. Case goods and cargo in drums are usually stored in “ dangerous cargo ” warehouses at treaty ports, or in the godowns of the im¬ porting companies, and distribution is effeceted from the principal ports of importation, either by the vessels of the importer or by coastwise and river boats operated by various steamship companies. The bulk of the gasoline trade is done direct between the import¬ ing oil companies and large users and retailers such as garages and hire-car operators. IMPORT TRADE OF CHINA 91 A great majority of the automobiles being located in treaty ports, where conditions closely resemble those obtaining in the United States, distribution and advertising are carried out along almost identical lines. Advertising in the daily press, distribution of calendars and other novelties are among the many advertising meth¬ ods used. Filling stations are maintained at garages, and also by individual oil companies, prices being the same at either. Visible pumps are in general use at filling stations. Automobiles are the greatest, and practically the only users of gasoline in China. The quantity used in motor boats and stationary engines is small, and generally confined to use for starting only, as kerosene and fuel oil are far cheaper. Such engines are prac¬ tically all equipped with kerosene carburetors. The growth of the gasoline trade depends at present on the prog¬ ress of good roads in China and on further development or the use of automobiles. LUBRICATING OIL The industrial development of China has brought with it an increasing demand for lubricating oils, and the United States has steadily improved its position in this trade. The imports of lubricat¬ ing oils into all of China (quantity in thousands of gallons, value in thousands of haikwan taels) are shown in the following table: Imported from— 1911 . 1914 1919 1923 Quan¬ tity Value Quan¬ tity Value Quan¬ tity Value Quan¬ tity Value Hongkong ____ _ 145 47 324 99 674 220 646 343 French Indo-China .. . _ 2 1 8 4 16 7 25 16 Singapore, Straits Settlements, etc _ 178 49 64 22 354 99 55 20 Netherlands Indies ... . .. . 11 3 5 1 188 54 260 115 Great Britain __ _ .. _ __ 46 21 32 16 18 9 23 25 Germany .. . ___ .. 169 57 15 7 5 8 Netherlands....... 13 4 Belgium _ . _ _ _ .. 187 60 169 50 France _ __ _ . 53 15 1 Austria and Hungary_ _ 102 30 17 5 Russia and Siberia by land frontier.. 22 6 95 55 10 2 2 2 Russia, Amur ports. _ . .. 2 Russia, P acifkf ports ._.. . 215 69 212 104 166 57 7 5 Chosen.. .. .. ... 43 12 5 1 10 5 23 11 Japan (including Taiwan) _ ... . . 382 111 410 123 935 383 635 299 Philippines _ . ... ... 1 1 10 8 United States (including Hawaii) _ 716 175 1 , 861 514 5, 398 1,936 6, 042 2, 530 Canada ____ 103 60 Siam _ _ 1 Macao _ _ .. . 1 Australia, New Zealand, etc _ . .. 1 1 \ Note.—V alue of haikwan tael in gold: 1911, $0.65; in 1914, $0.67; in 1919, $1.39; in 1923, $0.80. The increasing demand is due primarily to the growth of indus¬ tries using modern machinery (spinning mills, flour mills, electric light and power plants, oil mills, cement plants), and the increasing use of automotive, railway, and street-car transportation, and motor 9 boats. It is estimated that motor oils constituted approximately 8 per cent of the imports of lubricating oil in 1923, while the remainder, 92 per cent, was for industrial purposes. 92 COMMERCIAL HANDBOOK OF CHINA Approximately 80 per cent of the business in lubricating oil is in the hands of three large American firms, about 10 per cent is done by an old-established British company, and the rest is handled by a few firms of Chinese dealers who import direct and also buy from the various independent oil companies. The large foreign com¬ panies sell direct to consumers in the majority of cases, having well- established distributing facilities. They hold stocks at all impor- deliver to customers either ex godown or at the The Chinese importing firms are few in number and handle but 10 per cent (approximately) of the business, but it is to these dealers that the independent oil companies operating in China endeavor to sell, as they have well-established agent organizations in important consuming centers. The independent companies must rely on these dealers to effect their distribution, as the building up of an inde¬ pendent distribution organization is difficult and requires heavy ex¬ penditures in both time and money to perfect. Motor oil is delivered to garages maintaining filling stations and is sold by these garages, as in other countries. Filling stations are also maintained bv the oil companies independently of the garages, prices being the same at either. The advertising of lubricating oil is carried on through the usual channels such as foreign and Chinese newspapers and periodicals, billboards, and mail campaigns. As most of the motor oil is used in the foreign concessions where practically the same conditions apply as in the United States, ad¬ vertising methods are practically the same. Illuminated signs on garages, and the distribution of literature being among the many used to create a consumer demand. PARAFFIN WAX The manufacture of matches and candles in China has made good progress during the past few years, and paraffin wax is being im¬ ported in increasing quantities. In 1913 imports totaled 137,845 piculs, valued at 1,176,895 haikwan taels. By 1921 these amounts had increased to 266,728 piculs and 2,901,357 haikwan taels, and 1923 im¬ ports were 519,087 piculs valued at 4,118,351 haikwan taels. The United States has supplied 42.5 per cent of China’s total im¬ ports over the past 10 years, not including that reaching China through Hongkong. The share of the United States in 1923 in direct imports was 44.8 per cent or 232,815 piculs valued at 1,744,903 haikwan taels. Other suppliers are the Malay States, Netherlands East Indies, and British India, and a small amount also arrives from Japan and Great Britain. Hongkong is second to the United States as a source of imports, but her supplies are derived from the above countries and reach China as transshipped cargo. Paraffin wax is imported and used by large American and British oil companies in their candle-manufacturing plants, and is sold by them to other candle makers and match factories. According to* recently published statistics there are approximately 40 soap and candle factories in China, but owing to the lack of details regarding tant points, i buyers plant. IMPORT TRADE OF CHINA 93 them, it is impossible to say whether they are equipped with modern machinery for making wax candles or are making native tallow candles. It is likewise impossible to procure statistics as to the quantity of candles manufactured in China. It is known that China consumes a great number each year, but what proportion of these are wax and what portion are native-made tallow candles, is not known. In addition to domestic makes, candles are imported from abroad in varying quantities, the majority coming from the Netherlands Indies. In the years 1918 to 1923, inclusive, the average importa¬ tion of candles of all kinds was 67,800 piculs a year. An indication of increased candle manufacturing in China may be had from the import statistics on candlewick, which has increased from 153 piculs in 1918 to 551 piculs and 656 piculs in 1922 and 1923, respectively. The manufacture of matches also consumes an increasing quantity of wax. There are at present about 125 match factories in China, and while statistics are not available, the increasing domestic output can be judged from the decrease in imports, which have fallen steadily from over 28,000,000 gross in 1913, to 2,241,000 gross in 1923. HARDWARE MARKET FEATURES In approaching the China market American manufacturers should appreciate the following three outstanding facts which apply with particular force to small items such as hardware: 1. China is a market of great aggregate purchasing power, but the individual purchasing power of the great mass of the popula¬ tion is extremely low. 2. The Chinese are an extremely conservative people, and the introduction of goods bearing a new or hitherto unknown chop or trade-mark is a slow process. However, once known and found to stand for excellence and value, a trade-mark is of the utmost value, as the very conservatism which makes the Chinese slow to adopt the new tends to make them extremely loyal customers. 3. It is necessary to adapt business methods to the established customs of the country, and to study the market and its requirements thoroughly from all angles before attempting to supply its wants. In general the market for imported hardware is very limited. The Chinese use tools, cooking utensils, stoves, brushes, and cutlery of their own design and make, and imported articles can be sold only to foreigners in China and to a few Chinese living and work¬ ing in foreign or semiforeign style. The market is gradually broad¬ ening, but no great quantities are sold. Enameled ware and articles of tin and aluminum, made especially to suit Chinese uses—or adaptable to these uses—are finding an in¬ creasing market, but in general are subject to the limitations of the low individual purchasing power of the bulk of the population. Lamps and lanterns burning kerosene, having been well introduced by the large oil companies, find a good market, and both the im¬ ported and domestic articles are used practically throughout the country. J b 94 COMMERCIAL HANDBOOK OF CHINA The use of building hardware and locks of all descriptions is in¬ creasing under the stimulus of the steady increase in foreign-style building, the increasing use of foreign-style furniture among the Chinese, and the growing manufacture of foreign-st}de trunks, bags, safes, cabinets, and office furniture. GENERAL IMPORT METHODS Probably 90 per cent of China’s imports of hardware is sold through import houses acting as commission agents. These houses indent to fill orders as received from Chinese dealers, but at times order for stock some articles which are well established on the market and which enjoy a regular turnover. When the dealer’s order is received, the importer places his order with the manufacturer. When shipment is made the dealer is no¬ tified in order that he may settle his exchange, and is again notified some 10 days prior to the arrival of the cargo in Shanghai. The importer settles his own exchange and usually takes up docu¬ ments from the bank on trust receipts, paying the bank when the dealer takes delivery. Delivery is usually made against cash. Hardware is usually sold f. o. b. port of shipment, plus 2% per cent commission, plus ocean freight, marine insurance, duty, han¬ dling charges, and all other costs except storage, which is for im¬ porter’s account. Shanghai hardware dealers, as a class, are in good standing with the import houses. It is said that they order conservatively, make three or four turnovers a year under ordinary circumstances, and are not prone to speculation in meehandise, although a certain amount of speculation in the matter of fixing exchange is to be expected. As a rule they take delivery of cargo promptly and are quite satisfac¬ tory to deal with. t / COMPETITION British .—American and British methods of importation, sale, and distribution are practically identical, and the principal advantage which British manufacturers have over American is the fact that many of their chops or trade-marks are better known in China owing to having been longer in the market. In some lines British prices are higher than American, yet the American goods are equal in excellence but have a trade-mark less widely known in China. German .—German prices, which are quoted in sterling and in gold, are nearly equal to American or British prices, although the quality of German cargo is not up to the standard of either. In order to keep in the market German houses are giving 30 to 60 days’ credit; taking postdated native bank orders in payment as against the “ cash on delivery ” terms of the British and American importers. This practice, together with the fact that they are put¬ ting on the market goods designed for Chinese use, is said to be the main factor at present assisting their sales. Japanese .—The Japanese are close to the market, give quicker delivery than any of their competitors, and have a good hold on interior markets in certain lines, such as aluminum ware and enam- IMPORT TRADE OF CHINA 95 eled ware, as their prices are cheapest and the individual purchas¬ ing power of the customers in the interior is extremely low. Terms of 30 to 60 days are also given by the Japanese. They likewise endeavor to manufacture goods to suit the market. Local Chinese dealers state that although their cheapness appeals, Japanese goods are inferior in quality to German. CLASSES IMPORTED In dealing with hardware it is unfortunate that more * detailed import statistics are not available for all China. The yearly analysis of China’s import trade published by the Chinese Maritime Customs shows in detail only the following classes of hardware: Cutlery and electroplated ware, enameled ware, lamps and lamp ware, stoves and grates. Total value of imports into all China under these headings was as follows during the year shown (value in haikwan taels) : Articles and countries 1913 1918 1921 1923 Cutlery and electroplated ware: Hongkong.- . ..-__ 27,058 88 4, 813 7 272 17,991 9 509 24, 063 49 832 31,079 13 10, 574 Macao .. . ___ French Indo-China _____ Siam . - -- .... Singapore, Straits Settlements, etc___ 42 117 1, 933 667 5,388 95, 068 215 289 ., 611 125, 234 7,075 586 992 400 732 750 326 1,239 1, 023 125, 644 71 291 112,302 Netherlands Indies... British India_ _____ 7,258 73, 863 623 51,173 1,189 138, 296 Great Britain.. . _ ... . ....._ Norway. ....... Sweden ___ ... ... 60 2,530 489 53, 211 39, 746 1,634 9,343 Denmark........ Germany _ ___ . . .. 72,112 63 21,105 1,884 Netherlands___ ......._ Belgium _.. .. .... . ... France._ .... ..._ .. . __ 27 Switzerland. ....... .... . .... Italy______ __ 74 20 7, 420 4, 212 796 37, 233 7 1,502 11,684 631 Austria and Hungary... . . . .. . Russia and Siberia___ ^ _ Russia Pacific ports. . . . ... 120 520 92,929 236 3, 712 48,162 29, 563 1,904 106, 678 336 3,730 67, 575 Chosen_ 1 . ..._ .... . _ Japan (including Taiwafi) .... . __ Philippine Islands. ... . . . __ Canada_ __ __ .. . . _ United States (including Hawaii)_ ... ... Gross imports...... . . . .. 272, 531 5,963 216, 684 243, 238 481, 285 16, 608 523, 502 11, 789 Reexports ... _ ..... . . . .. Net imports.... ..... 266, 568 464, 677 511, 713 Enameled ware: Switzerland... . 3,100 154,541 90 1, 201 Hongkong___ . . _ . . 168, 024 458 10, 516 22 6,318 3,880 29, 257 332 2,128 127, 476 9,000 12, 327 1,283 7 691, 138 17, 053 77 10, 256 806 60,087 196, 208 51 3,808 218, 700 57 829 Macao.... ... ..... French Indo-China.. Siam. . _ .. ... Singapore, Straits Settlements, etc_ 816 1,956 56, 245 3, 330 7 43, 945 13, 931 670 21, 418 British India.... 1,525 6, 835 Great Britain.. .... Sweden...... Denmark. _ ... . ... 176 88, 209 1,004 52 1,866 15,074 76 40 Germany ..... Netherlands____ . . Belgium. ... 554 29 4, 564 France. .. Italy ... . . .... Austria and Hungary__ Russia and Siberia.... 29 87 398 3, 933 884,178 10 Russia, Amur ports___ Russia, Pacific ports. .... 3, 760 6, 750 813, 861 3, 406 17, 617 836,998 Chosen_ ' . .... Japan (including Taiwan).. 96 COMMERCIAL HANDBOOK OF CHINA Articles and countries 1913 1918 1921 1923 Enameled ware—Continued. Philippine Islands .... 117 3,373 4, 306 59,249 169 105 37, 076 217 United States (including Hawaii)... 23, 675 2,221 Canada____ Gross imports.__ 1,153, 935 5,540 1, 122, 948 16, 416 1,158, 483 29, 440 1, 257, 521 6, 865 Reexports__ ._____ Net imports___ 1,148, 395 1,106, 532 1,129, 043 1, 250, 656 Lamps and lamp ware: Hongkong........ 251, 255 1, 279 30, 891 150 3, 644 2,607 50 76,195 24, 915 247 370, 679 713 23, 415 2,165 84 31, 739 22, 036 217 4,744 1,833 436, 056 141 143, 096 473 9,931 239, 951 1,420 37, 958 349, 798 668 39, 251 Macao . ... __ French Indo-China___ . Siam...__ _ __ Singapore, Straits Settlements, etc.... 2,665 240 5,106 94 38, 382 74 1,501 610, 548 24, 258 12, 185 905 2,775 392 British India_ _ .. _ 1,841 Turkey, Persia, Egypt, Aden, Algeria, etc. Great Britain.. .. . _ 9,719 68, 607 13, 620 5, 588 324, 994 2,871 10, 536 2, 488 Sweden.. . . _ _ _ ... Denmark. ...... Germany________ Netherlands... . ___ Belgium... .. _ _ .. . France_ _ _ _ ... Italy. . _ .. ... .. •Austria and Hungary_ . . _ __ Russia and Siberia.____ ... _ 39 3 1,013 3, 641 371,917 63 32, 494 112, 219 Russia, Amin - ports__ __ __ 220 6, 469 7, 267 384, 527 267 10, 421 338, 725 Russia, Pacific ports__ .. .. _____ 1,518 8,988 343, 996 356 3, 887 230,475 Chosen_ .... . .... .. _ .. .. . Japan (including Taiwan)_ . ... .. Philippines____ . ... . Canada___ _ _ United States (including Hawaii)... 83, 770 Australia, New Zealand, etc.... Netherlands Indies__ 132 74 Gross imports__ 1, 368, 825 12, 402 686, 449 6,122 1, 458, 726 85, 049 1, 675, 471 20, 045 Reexports_ Net imports_ 1, 356, 423 680, 327 1, 373, 677 1, 655, 426 Stoves and grates: Hongkong___ 5, 518 3, 881 25 102 12, 256 183 467 13 15, 970 91 1,118 188 Macao___ French Indo-China.__ Singapore, Straits Settlements, etc.. 96 67 ” 38,589 14, 238 British India_ _ Great Britain... ...... 10, 890 165, 288 4, 596 491 88, 591 10 19,127 8, 794 170 85,962 9,420 1,036 145, 200 Sweden.. _ . ....... Denmark__ . . . . . . _ .. - Germany__ . _ _ 165, 862 4, 158 21, 308 535 208 2,407 2,748 10, 120 289 19, 617 12 237 26, 490 28 N etherlands____ Belgium__ ____ _ 1, 766 9,876 4,649 5,587 17 200 9,751 11, 450 France... ....... . Italy_______ Austria and Hungary. .. _ . Russia and Siberia. ___ 12 34 2, 390 20, 779 25, 020 16, 530 228, 762 Russia, Pacific ports_ ___ 8 761 22,349 Chosen__ _____ ___ Japan (including Taiwan).... Philippine Islands.. Canada...... __ 3, 006 46, 399 852 166, 490 United States (including Hawaii)__ Australia, New Zealand___ _ __ Netherlands Indies_____ 600 Gross imports____ 312, 527 1,415 87, 421 3, 320 593, 513 10, 603 470, 223 13, 834 Reexports ._ _ Net imports____ 311,112 84,101 582, 910 456, 389 Items not included under these headings are lumped under the two headings: Sundries, unenumerated; stores, household. There is reason to believe that a small amount of cutlery, flash¬ lights, electroplated ware, and miscellaneous small items come in by parcel post, and are listed under the general heading “ Postal parcels, not otherwise classified.” IMPORT TRADE OF CHINA 97 While it is impossible to segregate items from these general classi¬ fications, it is of interest to note the increases in value, during the past 10 years, of goods coming under these headings, as illustrated by the following tables taken from the Chinese Maritime Customs returns of trade for the years shown (value in haikwan taels) : Imported from— Sundries, unenumerated Household stores Postal parcels, not otherwise classified 1918 1923 1913 1918 1923 1913 1918 1923 United States.. Great Britain.. Japan__ Germany_ 314, 603 266, 716 2, 223,189 1, 050, 319 875, 789 4, 933, 080 557, 450 3,631,028 1, 731, 255 181,443 287,127 391, 925 188,113 359, 217 2,512, 733 369, 427 129, 793 833,833 1,171, 284 518, 790 1,119, 749 66, 631 660, 649 893, 722 41, 486 290, 859 297,164 273, 508 112,121 1,398, 823 466, 677 331, 536 1, 991, 375 2,157, 235 794, 330 2, 289, 448 325, 554 392, 070 1,059, 374 Hongkong _ Others_ 1, 095, 897 435, 822 379,957 256, 012 284, 323 283, 301 Total.. 4, 356, 227 12, 777, 921 3,920, 558 1,969, 022 4, 430, 825 2, 413, 961 3, 357, 212 7, 018, 011 Note—V alue of haikwan tael in gold, 1913, $0.73; 1918, $1.26; 1923, $0.80. The customs records at the port of Shanghai give more detailed figures, and as Shanghai imports an average of 50 per cent of the hardware brought into China, the following figures showing 1923 imports (value in haikwan taels) into Shanghai will be of interest: Stoves and grates_ 392, 968 Locks and padlocks_ 323, 239 Lamps and lamp ware_ 122, 553 Enameled ware: Basins over 11 centimeters but not over 22 centimeters in diameter- 837 Basins over 22 centimeters but not over 36 centimeters in diameter. 335,191 Basins, other sizes_ 18,339 Bathtubs_ 38, 736 Bowls, cups, and mugs not over 11 centimeters in diameter_ 4, 607 Bowls, cups, and mugs, other sizes_ 324 Enameled ware unclassed_ 96, 087 Filters and parts of_ 50, 290 Ice freezers and refrigerators_ 36, 043 Brushes: Clothing __ 3, 400 Tooth and nail_ 44,147 Unclassed_ 28, 545 Cutlery_ 182,574 Electroplated ware_ 58,448 Hair clippers_ 5, 416 Razors, including blades and strops_ 34, 847 Scissors_ 6, 518 MACHINERY AND MACHINE TOOLS The advances which China has made in the establishing of modern industries during the past 20 years, in spite of the numerous handi¬ caps to which this process of industrialization is subjected, speaks for the potentialities existing in the country’s great natural resources, and indicates a wide and developing market for manufactured prod¬ ucts among China’s enormous population of industrious, thrifty, and intelligent people, whose purchasing power, while low individually, is large in the aggregate. 100020°—26-8 98 COMMERCIAL HANDBOOK OF CHINA Illustrating the amount of machinery being absorbed by China, the following table of the value (in haikwan taels) of imports of all classes of machinery into China from 1913 to 1923 will be interesting: Year Machine tools Agricultural machinery Propelling machinery Textile machinery Total From United States and Canada Total From United States and Canada Total From United States and Canada Total From United States and Canada 1913_ 51,288 3, 773 113, 077 12, 553 658, 349 43,964 839, 724 2, 615 1914. 97, 616 11,001 334, 279 937 1, 047, 003 64, 637 2, 050, 646 2, 530 1915... 72,811 15, 494 161, 563 13, 210 710, 887 126,157 1, 419, 511 15, 700 1916_ 97, 778 23,403 207, 957 164, 268 606, 148 134, 477 1, 934, 131 115, 431 1917_ 208, 394 40,983 110, 969 46, 819 508,258 140, 540 1, 235, 800 218, 928 1918. 349, 108 145, 571 167, 506 106, 173 757, 469 421,987 1, 714,994 379, 867 1919_ 499, 853 197, 859 524, 739 468, 405 1, 640, 303 907, 715 3, 767, 406 1, 944, 350 1920_ 761, 073 305, 780 1, 023, 570 832, 300 2, 376,122 795, 605 6,927, 728 3, 897, 204 1921. 940, 337 277, 827 2, 199, 142 1,671, 730 5, 163, 781 1, 051, 333 26, 792, 072 11, 768, 212 1922- 657, 832 85, 323 768, 857 544, 336 2, 492, 730 330,947 30, 529, 286 7,910, 042 1923- 491,987 88, 935 349, 055 105, 954 1, 541, 618 348, 277 12, 334, 417 933, 533 Year Brewing, distil¬ ling, etc., ma¬ chinery Embroidering, knitting, and sew¬ ing machinery Other kinds Total, all classes Per cent supplied by United States and Canada Total From United States and Canada Total From United States and Canada Total From United States and Canada All coun¬ tries From United States and Canada 1913 _- 1914 _- 1915 49,108 25,301 24, 774 11,517 87, 332 19, 352 3,271 27,688 634,973 268,809 103, 188 3, 400 1,007 915, 898 600, 243 306, 253 316, 243 446, 424 311,228 628, 840 1, 048, 596 707, 170 907, 643 881, 774 139, 513 42,389 6,940 25,486 238, 789 150, 206 383, 736 558, 035 283,848 177, 660 118, 386 5, 538, 579 5,106,952 2, 257, 884 3, 481, 674 3, 942, 941 5, 019, 367 8, 417, 416 12, 443, 643 21, 367, 427 15,915, 486 12, 909, 299 363,195 601,995 573, 801 804, 829 1, 009, 378 1, 442,907 3, 357, 728 1,172, 733 8, 043,992 3, 250, 961 2, 895, 585 8,166,023 9, 262,040 4,953, 683 6, 655, 448 6, 540, 118 8, 339, 024 15, 481, 828 24, 608, 420 57, 804,902 51, 540, 643 28, 611, 338 569,013 724, 496 751, 302 1, 268, 284 1, 696, 749 2, 646, 711 7, 259, 868 7, 571, 717 23,154,978 12, 357, 285 4, 577, 250 7.0 7.0 15.8 19.2 25.1 31.9 46.7 30.9 40.8 24.1 16.0 1916 _- 1917 _ 1918 390 1,312 1919 _ 1920 _ 1921 _ 1922 . 1923 _- 75 10,060 58, 036 58, 016 86, 580 Note—V alue of haikwan tael in gold: 1913, $0.75; 1914, $0.67; 1915, $0.62; 1916, $0.79; 1917, $1.03; 1918, $1.26; 1919, $1.39; 1920, $0.76; 1921, $0.76; 1922, $0.83; 1923, $0.80. The development and expansion of industrial enterprises in China has been particularly difficult during the past three years, owing to conditions which have caused the exercise of extreme care in the matter of capital investments outside of the treaty ports. Compared with import figures during the period of rising machinery importation occurring between 1916 and 1921, those for 1922 to 1924 show marked declines, but a comparison of 1923 figures with those for the year 1913 will serve to indicate the real growth of the trade during the 10 years intervening. This is particularly true when it is considered that the year 1923 saw very few new enterprises started, but was a year of settling up and completing deliveries on old contracts, and that the business done during that year will be materially improved upon with the natural growth of demand for the manufactured products of China’s factories, even though conditions continue in their present unsettled state. IMPORT TRADE OF CHINA 99 The most noticeable feature of the general engineering and ma¬ chinery business in China during 1923 and 1924 was the fact that a very large number of foreign firms which, during the boom period, added machinery departments to their establishments are dropping out of this trade and closing out the departments. Of the general trading firms which, during the boom, added en¬ gineering departments to their general business and sold machinery on the same basis as they were selling indent goods, many have learned through practical experience that this way of conducting an extensive machinery business in China is neither feasible nor profit¬ able. In only very few instances do Chinese industrial concerns or machinery buyers know exactly what they wish to buy. It is there¬ fore left in the hands of the selling firms to supply the technical information necessary to close the business. The Chinese are still averse to paying consulting engineers for drawing up specifications, and this part of the work must be performed free of charge by the selling firms. This necessitates the employment of well-qualified men in the lines dealt with, and consequently entails a heavy ex¬ pense. It also means that a sale is not finished when the contract is signed. The firms which are handling this trade are really re¬ sponsible, for every practical reason, for the proper operation of the plants and machinery which they sell to their Chinese customers. Although most of the big machinery sales are made on a c. i. f. basis, the firm which sells the machinery usually undertakes to in¬ stall it, and in the majority of cases the Chinese customer does not consider that he has had good delivery until the machinery deliv¬ ered to him is operating satisfactorily. Owing to the comparatively limited business in any special line of machinery and the heavy expense in conducting such business, it is not yet possible for any one firm to specialize in any one kind of machinery and at the same time make a successful trading estab¬ lishment in China. For example, an electric manufacturer dealing in electrical mate¬ rial only would find that a very large number of orders in connec¬ tion with combined plants would not come within his reach at all, as the Chinese are not, as a rule, prepared to split their orders for a combined plant between several firms, but prefer to buy the whole plant from one firm which they can hold responsible for the com¬ pleteness and operation of the plant. While a certain amount of business in small machinery can natu¬ rally be done by nonspecializing import houses, it is felt that the bulk of the big business, consisting at it does of combined selling and engineering, will be effected through houses properly equipped to handle both ends of the work to the satisfaction of both the Chinese customers and the manufacturer who is looking to his agent for thorough representation. MACHINE TOOLS While the total volume of machine tools imported into China is not large when compared with the imports of an industrialized na¬ tion, it must be remembered that China is still in the stage of hand¬ craft, and the growth of the market for machine tools must depend to 100 COMMERCIAL HANDBOOK OF CHINA a large extent upon the progress made in the installation of modern mills, factories, etc., and the growth of the necessity for mass pro¬ duction which at present is practically absent in China. Machine tools are sold in China for use in railroad and shipbuild¬ ing establishments, repair shops of mills and factories, and machine shops making a variety of articles. The last named is confined mainly to small tools. The railways of China, normally the largest individual purchasers of machine tools, have not been in a position for the past few years to purchase the amount of equipment which they would have pur¬ chased had their financial condition been more satisfactory. Ship¬ building activities have fallen off considerably, and shipyards, which were good customers for machine tools during normal operation, have done little local buying during the past two years. A majority of the purchases of the foreign owned and operated shipyards in Shanghai and Hongkong are made through home purchasing agents. Small installations for light manufacturing purposes are becom¬ ing more frequent, and sales of small tools of various sorts are pro¬ gressing fairly well in spite of the absence of buying by the usual large purchasers. The growth of the machine-tool trade from 51,000 haikwan taels in 1913 to 500,000 haikwan taels in 1923 represents a steadier expan¬ sion in the use of machine tools than the rather erratic import figures show. In 1920, 7G1,000, in 1921 some 940,000, and in 1922 approxi¬ mately 660,000 haikwan taels’ worth of machine tools were imported, while in 1923 imports had dropped to 492,000 haikwan taels. Con¬ sidering these figures, it must be borne in mind that heavy over-buy¬ ing took place both in 1920 and in 1921. While imports are shown to have fallen off during 1922 and 1923, there was a good deal of ma¬ terial going into consumption from stocks which had accumulated during the three previous years, which is naturally not shown as imports. It is believed that the various arsenals in China have absorbed a considerable quantity of machine tools during the past few years, but of this business American and British firms are deprived, as a result of agreements preventing the sale of materials to Chinese gov¬ ernmental or provincial authorities for use in the manufacture of arms or ammunition. During the war Japan obtained a large share of the machine-tool trade, but with the reentry of Great Britain and Germany into the market, Japan’s share has fallen off, until in 1923 it was reduced to but 11.8 per cent, from a 1917 record of 77 per cent. The United Kingdom, practically out of the market from 1914 to 1920, reached 31 per cent of the total during 1921, while the United States declined from 40 per cent in 1920 to 29.5 per cent in 1921. All countries, with the exception of Germany, show declines from 1921 to 1923, while Germany, which was absolutely out of the market from 1915 to 1920, increased its share of the machine-tool trade from 3.6 per cent in 1921 to 44.5 per cent in 1923. This increase was due almost entirely to the fact that prices of German tools in this market were from 20 to 40 per cent below all competition, and that im¬ porters of German tools were making terms which it was impossible for competitors to meet. IMPORT TRADE OF CHINA 101 AGRICULTURAL MACHINERY Conditions obtaining in Chinese agriculture do not permit the sale of any great quantity of American agricultural machinery. While possibly 80 per cent of China’s population is engaged in farming, individual holdings are extremely small, purchasing power is low, native tools are cheap and efficient, and labor is cheap and plentiful. While a considerable quantity of agricultural machinery of various sorts, from tractors to light plows, has been imported, the bulk of the large equipment has been for experimental purposes. There are constant imports of items under the customs heading “ Machinery, agricultural,” but their small volume may be judged from the import figures previously quoted. A considerable portion of these imports is made up of rice-hulling machines. Japan turns out a low-priced rice machine which sells well in this market. The comparatively high figures for 1920 and 1921 are accounted for mainly by fairly large experimental purchases and large imports for stock, some of which are still unsold. Good work is being done by educational institutions which are making efforts to introduce American agricultural machinery to the Chinese. In the opinion of importers, the best opportunities lie in such items as small rice-hulling machines to operate by kerosene engine, irri¬ gating hand pumps, walking harrows, walking cultivators, walking plows, and various other items which may be used in connection with hand labor or animal power, and which are designed to meet the peculiar requirements of the Chinese farmer. FLOUR-MILLING MACHINERY The present modern flour-milling industry of China, represented by approximately 160 mills with a daily capacity estimated at nearly 270,000 50-pound bags, has been but 25 years in the making. Prior to 1900 the flour produced in China was ground by old- fashioned native stone mills, turning out a coarse product of dark color known as “ whole wheat ” flour. Many thousands of these mills are in operation in China, but as the white product of the modern mills becomes increasingly popular, as shown by the in¬ creased sale both of domestic and of imported flour, there is every reason to anticipate a continued growth in the use of imported flour¬ milling machinery. At present Manchuria has 45 mills; Shanghai, 23; Wusih, 8; and Tientsin, 6, with the rest scattered throughout the country in loca¬ tions where wheat supplies are available. Statistics as to the country of origin of flour-mill machinery are lacking, but practically all the modern mills in China are using American machinery, some of the best-known American makers being represented by American and British houses. The newer Chinese mills are modern in every sense and compare favorably with those in the United States, both as to plant and product. The lack of competent mill superintendents has been commented upon by manufacturers who have visited China and studied the situation, as has the apparent superabundance of labor employed by 102 COMMERCIAL HANDBOOK OF CHINA the mills. Good men are being developed as the industry progresses, however, and in some cases foreign superintendents are hired by the most progressive managements. Competition is doing much to help put the flour mills on a basis where strict cost accounting is becoming a necessity, and it may be that we shall witness a change in their custom of sympathy toward relatives and friends in the matter of jobs. TEXTILE MACHINERY The outstanding feature in China’s industrial development is the growth of its cotton-spinning and weaving industry, which has grown from about 500,000 spindles in 1900 to 1,500,000 in late 1920, and 3,690,642 (operating and under construction) in June, 1924, the last available census. Shanghai, on account of its many advantages in location, trans¬ portation, cheap coal, and low electric-power rates, has become the center of this industry, and there is located 63 per cent of China’s total spindles and over 50 per cent of its mills. Next to Shanghai in importance is Tientsin, with 7 Chinese mills having 277,652 spin¬ dles (231,580 built and 46,072 under construction) ; Tsingtao, with 6 Japanese mills and 228,000 spindles (155,000 built and 73,000 under construction) ; and Wusih, with 6 Chinese mills and a total of 145,480 spindles (136,680 built and 8,800 under construction). In addition to the rapid increase in spindles, the installation of power looms has made great strides during the past five years. In 1919 there were but 8,200 power looms in China. At the beginning of 1922 the total number installed and on order was approximately 13,000, while in June, 1924, this had increased to 22,777 installed and under construction. As with spinning, weaving is centered in Shang¬ hai, which has 67.4 per cent of all power looms in China. Owing to lack of statistics it is impossible to give the exact number of American-made spindles or looms in China, but a recent trade estimate places the number at 953,740 spindles and 3,400 looms. The participation of the United States in this trade may be seen from the Chinese Maritime Customs figures for 1911 to 1923, inclu¬ sive, showing total gross imports of machinery for spinning mills for all China, in the following table: Year United States and Canada United Kingdom Japan All other countries Total Haikwan Haikwan Haikwan Haikwan Haikwan taels taels taels taels taels 1911_____ 7,161 241, 234 60,159 23,028 331,582 1912___ 9,885 307, 283 50, 229 91,219 458,616 1913___ 2, 615 572,150 112,500 52, 459 839, 724 1914_ 2, 530 1,540,100 187, 661 308,169 2,038, 460 1915__- 15,446 1,076, 229 253, 490 74, 346 1,419,511 1916_ 115,431 1, 257, 961 531,437 29, 312 1,934,141 1917_ 218, 928 669, 649 300, 607 24, 616 1, 235, 800 1918_ 379, 867 669, 402 642, 948 22, 777 1,714,994 1919_ 1, 944, 350 813, 254 897, 760 112, 042 3, 767,406 1920_ 3, 897, 204 1,925, 696 1,071,201 33, 627 6, 927, 728 1921_ 11,768,212 11,160,313 3, 622, 553 240, 994 26, 792,072 1922__ 7, 910, 042 15,171, 830 6, 725, 264 722,150 30, 529, 286 1923__ 933, 533 6,152,364 4, 557, 784 690, 736 12, 334, 417 Note.— Shipments credited to Canada may reasonably be supposed to have come from the United States. IMPORT TRADE OF CHINA 103 Prior to 1915 the share of the United States was negligible, but from 1915 its participation grew to over 56 per cent in 1920, only to decline to less than 8 per cent in 1923. The reason for this rapid increase and subsequent decline may be discovered through an anal¬ ysis of conditions during the period covered. During the war the established mills began to enjoy large profits, and these attracted capitalists, promoters, and industrialists to the industry. A large number of companies were organized and ma¬ chinery was ordered. American manufacturers, taking advantage of the opportunity and aided by the proved excellence of their product and the extremely long deliveries being made by British makers, suc¬ ceeded in securing a good share of the business. The Chinese organizers of these new projects, being in the majority of cases inexperienced in large industrial enterprises and anxious to take profits, not only failed to capitalize their companies adequately, but overlooked the necessity of providing sinking funds. In addition, much of the machinery was contracted for at a time when silver was high and a tael was worth over $1 gold. Failure to cover exchange properly resulted in many heavy exchange losses when payments became due, as the tael had slumped abruptly in its gold value. In addition to this, much of the equipment was bought at the peak of prices for Spinning machinery. This placed an added burden on the companies purchasing at that time in comparison with those securing their equipment either previously or subsequently to the price peak. Inexperienced management, and the nepotism which characterized much of the selection of personnel, was likewise a heavy handicap, bringing manufacturing costs out of line with those of efficiently managed mills operated by Japanese and other foreign nationals. In spite of the handicaps many of the mills made excellent profits for a time, but as competition in the domestic yarn market became keener, these Chinese mills began to feel the effects of their numerous handicaps, and no new spinning machinery of any importance has been purchased by Chinese since 1922. On the other hand, Japan had thousands of spindles on order in England when the postwar slump hit Japan in 1921. A very large number of these were delivered to China, thus increasing the share of Great Britain in the imports of 1921 and 1922. While few new spinning enterprises have been started recently, a healthy development has taken place in weaving, as previously, pointed out. Here American manufacturers are badly handicapped, British and Continental makers being considerablv under them in price and taking the great majority of this business. Supplies constitute a large item in imports in this industry, and here, again, America has been unable to compete in price in the Chinese market during the past two years, throwing the business else¬ where. The rapid growth of Japanese interest in the industry in China has taken place largely since 1919, at which time, according to figures published in that year, China’s spindles were operated as shown in the table which follows: 104 COMMERCIAL HANDBOOK OF CHINA Location Mills Spindles Shanghai: Foreign....... . 5 3 42- 1 314, 258 206, 965 1, 073, 220 25,000 Japanese..... . Chinese.____ Tientsin, Japanese... . Total_ ______ ___ 51 1,619, 443 Since that time Japanese interests have not only taken over one foreign mill of 65,842 spindles, but have added 926,385 new spindles and 37 mills to their holdings. In addition they are understood to have considerable interest in Chinese mills. Foreign interests have released one mill to Japanese and have added but 42,000 spindles to their remaining four, all of which are in Shanghai. No new foreign mills have started. Chinese holdings have increased 556,723 spindles and 33 mills in the same period. During the latter part of 1923 the condition of the cotton spinning and weaving industries in China was critical, but during 1924 condi¬ tions became so much worse that many of the mills, both Chinese and foreign owned, were closed for varying periods, and for about six months of the year few were operating full time. Cotton prices during 1924 were high, and the offtake of yarn was disappointing and at prices which were too low to enable profitable manufacturing even by the Japanese mills, which in many cases, re¬ ceive higher prices for their products than the Chinese receive. In consequence of this situation there was practically no business in textile machinery during that year, while the supply business in connection with the industry was very largely diminished. Prices quoted by British and American manufacturers for spinning ma¬ chinery were very similar, and manufacturers of these two countries are still the principal competitors in textile machinery in China, but during 1924 French and German manufacturers entered the market. Textile machinery is sold in this market direct by the manufac¬ turers, either maintaining their own offices or working through im¬ port houses. One of the largest American manufacturers of textile machinery maintains its own organization in China, which works with and through one of the old-established American import engi¬ neering firms. Machinery sold is erected under the personal super- w vision of the manufacturer’s organization, and this firm is also in a position to render both advisory and mechanical service when neces¬ sary. • KNITTING AND SEWING MACHINES Power-operated knitting machines are receiving increasing atten¬ tion from Chinese hosiery manufacturers. The manufacture of hosiery by machinery is a very recent development in China, and even at present the great majority of the hosiery knitting is carried on as a household industry, one or two hand-power knitting ma¬ chines being installed. The upward trend in sales of power machines is the result of a gradual and healthy development in the combining of small groups of hand-power machines into small factories, which, after proving IMPORT TRADE OF CHINA 105 their earning capacity, are purchasing power machines, possibly one or two at a time, and gradually enlarging their output. The majority of these plants are knitting hosiery from imported yarn of from 42 to 60 counts. Part of the product of these machines is being con¬ sumed locally and part exported to the Malay States, Netherlands, East Indies, and the Philippine Islands. About 98 per cent of the power knitting machines at present in¬ stalled in China are said to be of American manufacture. Sales are made by factory representatives working in some cases through their own organizations and in others through the organizations of import houses. Another item in which the United States is well represented is sewing machines, which are being introduced throughout China by a large American company which has established its own widespread system of agencies. These agencies are in charge of Chinese who have been trained by the company. Unfortunately, detailed statistics covering these two items are not available, but the extent of the business may be judged from the fact that net imports under the heading “Machines, embroidering, knitting, sewing,” under which they appear, have averaged in value 590,000 haikwan taels over the past 11 years, of which the United States is shown as having supplied imports having an average value of 184,000 haikwan taels per year ELECTRICAL MACHINERY AND APPLIANCES The use of electric light and power plants in China started in the foreign concessions where light and power were sold by central sta¬ tions. Beginning with the concessions, development is traceable to cities located near the concessions and from these has gradually spread outward. Probably 90 per cent of the electric plants in China are used for lighting purposes, the only plants carrying power loads of any importance being located in treaty ports such as Shanghai, Tientsin, Harbin, Hankow, Canton, and cities like Hongkong and Mukden, where industrial development has made rapid strides and where the majority of China’s large manufacturing plants are located. It is extremely difficult to secure an accurate idea of the exact number and capacity of electric plants in China, as the Government statistics are kept only by number of permits issued, and information gathered from individual plants is usually of the most fragmentary nature and often extremely unreliable. Based on the best obtainable esti¬ mates, however, there are nearly 400 electric light and/or power plants in China with a total generating capacity of something over 400,000 kilowatts. The growth of electrical generating plants in China was slow up to 1916. The industry during 1914 gave promise of rapid growth, but this was delayed by the uncertainties arising at the end of 1914 on account of the war, but from 1916 to 1921 there occurred a very marked and rapid expansion. An instance is that of the Mukden Electric Light Works which started 14 years ago with a 350-kilowatt unit, had increased to only 850 kilowatts in 1920, but now has a capacity of 4,000 kilowatts. 106 COMMERCIAL HANDBOOK OF CHINA Prior to 1910 the electric light and power industry in China was in an embryonic stage. Practically all of the plants were of Eu¬ ropean manufacture and few, if any, turbo-generators had been con¬ sidered for China. In 1910 an American company sold a 350-kilo¬ watt turbo-generator to the Mukden Electric Light Co., this being the first turbo-generator supplied to China. Later in the same year an order was secured for a similar machine of 500-kilowatt capacity for the Changshun Electric Light Co. At the time of the placing of these two orders they were considered revolutionary, as practically all plants installed previously had been driven by reciprocating engines. The greatest factor in the growth of electrical power plants has been the growing industrial enterprises, particularly of modern cot¬ ton spinning and weaving mills, flour mills, and oil mills. A very large part of the output of the Shanghai Municipal Council electri¬ cal undertaking is used by local manufacturing concerns. In loca¬ tions away from Shanghai, industrial enterprises have been responsi¬ ble for the installation of power plants of their own, varying in ca¬ pacity from 500 to 3,000 or 4,000 kilowatts. The rapid growth in the supply of American machinery has been due to an intensive campaign by American manufacturers and their representatives or agents during a period when exchange between gold dollars and silver was particularly attractive to the purchaser, enabling them to purchase complete plants at a low first cost. American manufacturers for a number of years, both during the war and immediately following, were able to secure orders, as most of the large European manufacturers were unable to make deliveries, and as a result of this, machinery manufactured in the United States received a very distinct stimulus. Simultaneous with this demand for industrial machinery, un¬ doubtedly influenced by the electrical equipment installed in the spinning mills, there w r as a growth in the demand for electric light¬ ing for cities, large and small, and while the manufacturing in¬ dustries are confined to districts surrounding the large open ports, lighting installations quickly spread themselves over all parts of China from north to south. Electric lighting plants are now to be found in cities many days’ journey from the nearest railways and waterways. In many cases these small plants are backed by local citizens, who, after having visited the outports, appreciate the con¬ venience of electric light, compared with the methods to which they were previously accustomed. To-day there are very few cities or towns of any considerable population which are without a supply of electricity. A fair num¬ ber of small units of 2 y 2 to 10 kilowatts in capacity are distributed in locations where power from central stations is not available. In most places in China are available cheap supplies of coal con¬ veniently located. Much of this coal is of poor quality, but in spite of this, with anything approaching good mangement, these small lighting plants pay handsomely, as it is always possible to secure high rates for electric current and thus obtain good profits on in¬ vestments. Even in locations where cost of coal is high, many of these small plants are operated, selling current to consumers on a flat-rate basis from $1 to $1.50 per 16 candlepower lamp a month. IMPORT TRADE OF CHINA 107 During the past eight years there has been healthy expansion in turbo-generator plants in such places as Shanghai, Kwangtung, Hankow, Foochow, Harbin (native city), Kirin, Changchun, Tien¬ tsin, Peking, Wuchang, and Amoy. Owing, however, to the dis¬ turbed political situation and the seizure of certain plants by mili¬ tary officials, also the demand for free current, certain power plants in China are unsatisfactory from a credit point of view. In many cases these power plants are carrying heavy overloads without an opportunity of shutting down for periodic inspection and overhaul, with the result that the plants are in very poor shape. In addition to turbo-generator units, there are a large number of generators driven by steam and oil engines. These range from the smallest sizes of a few kilowatts up to 300 kilowatts in capacity. There are also a few water turbines of small size but there has been practically no development of any consequence in this special harnessing of power in China. Beginning with 1921, European—particularly German and Swiss—competition began to show itself to a very appreciable degree, offering equipment which, although considered in many cases not equal to American material, was acceptable to Chinese purchasers, particularly at the prices offered. European manufacturers seem to be willing to spare no expense to get back this class of busi¬ ness in China. This is evidenced by the large number of represen¬ tatives now competing for power-plant business here. This, coupled with the general falling off in demand, on account of political condi¬ tions during the last two years and also on account of the fall in exchange, has made business for American machinery show a very considerable falling off. Unfortunately, Chinese Maritime Customs statistics fail to make a separate classification for electric-power plants and their equipment. Imports of this class of material are listed under “ Electrical materials and fittings,” “ Machinery, other kinds and parts of,” “ Machinery, propelling (boilers, turbines, etc.).” It is also the practice to list complete cotton-spinning plants, flour mills, etc., under their respective headings, including in the entry any electrical equipment which may form a part of the ship¬ ment. Thus, no definite import figures are procurable for the whole of China. Estimates made from available individual port statistics, and by importers, place 1923 imports of electric-power stations, of all classes, at a total capacity of 50,000 kilowatts. In 1923 under the customs heading “ Electrical materials and fittings ” the total value of gross imports was 8,480,510 haikwan taels, of which the United States supplied 1,322,000, Great Britain 1,244,- 500, Germany 2,064,100, and Japan 2,495,100 haikwan taels. With the continued widespread domestic uncertainty and disorder and the intense low-priced European competition, the prospects for any heavy increase in the sale of American electrical machinery in China can not be considered as bright at the present time or in the immediate future. Orders will be placed, of course, for additions to present installa¬ tions, largely made up of American machinery, as in certain in¬ stances it is difficult for European manufacturers to match this 108 COMMERCIAL HANDBOOK OP CHINA equipment. Also with any renewal of activity in the cotton spinning and weaving industry, we can expect an increased sale of power- plant machinery, provided the order for textile machinery is placed with American manufacturers; and in this class of machinery Amer¬ ican manufacturers seem to be in line as they encounter competition only from British manufacturers, Continental manufacturers hav¬ ing supplied very little textile machinery to China. It is usually the case that when contract is taken for a complete textile mill, the power plant goes to the same supplier as the spinning and weav¬ ing machinery. The upkeep of electric plants is most unsatisfactory from the point of view of efficiency, and the manufacturers or their represen¬ tatives in China encounter considerable difficulty in impressing upon their customers the necessity of making repairs as and when they become necessary, the tendency among the Chinese operating plants being to get along as best they can until repairs are absolutely necessary in order to keep the plant running, and then the seller is called on to perform a rush job, often at far greater expense to the customers than would have been necessary had the repairs been made in time. The majority of plants make no effort to secure an evenly distrib¬ uted load, most of those in interior cities starting at dusk and running until daylight and closing down during daylight hours, as no day load is available. Manufacturers are endeavoring to edu¬ cate the operators up to the point of securing a 24-hour load; and while they have met with success in isolated cases, the idea is very slow in spreading. Approximately 80 per cent of the imports of power-plant equip¬ ment from the United States is controlled by two American com¬ panies. These companies have offices in Shanghai and branch offices in various treaty ports, where they are operating in conjunction with established engineering firms. A considerable amount of ad¬ vertising is done by these companies both in foreign weekly and monthly journals and in Chinese newspapers. Both methods are proving of considerable value. With the increased use of electric power the market for electrical goods of all sorts is expanding. Sales of motors, meters, trans¬ formers, switchboard material, wire, insulators, lamps, fans, plugs, and numerous electrically operated household appliances are in¬ creasing. Exact figures are unobtainable, as customs classifications give no detailed data. Prior to 1915 Germany was the largest supplier, being credited with 35 per cent in 1913, but its share dropped to zero from 1916 to 1919, inclusive. In 1920 Germany supplied but 1 y 2 per cent of total imports while by 1923 this share had increased to 24!/2 per cent. German prices since the war have been extremely low and the com¬ petition has been hard to meet on such items as small motors, meters, lamps, and household appliances. The Japanese have bettered their position in this market, aided by the development of their home manufacturing industry and the excellent opportunity afforded by the dislocation of trade during the World War. In 1913 Japan is shown as supplying 16.3 per cent of total imports, its share being valued at 392,749 haikwan IMPORT TRADE OF CHINA 109 taels. In 1923 its share was valued at 2,495,131 haikwan taels or 29.4 per cent of total imports. The United States has secured an increasingly important share of this trade. Prior to the World War the share of the United States was small, being in 1913 but 7.4 per cent, but by 1923 this had in¬ creased to 15.5 per cent in spite of the increasingly keen competi¬ tion from Japan and Germany. The greatest participation was in 1921 when the United States secured 34.7 per cent of the total, but that year may be regarded as abnormal. Great Britain supplies a good portion of this class of material, its share over the 10 years, 1914 to 1923, inclusive, being 18.5 per cent. Although domestic manufacture is not highly developed, there are an increasing number of Chinese firms making various types of electrical equipment. Among the domestic manufactures are lamps, insulators, dry cells, meters, and a fairly. t complete line of wiring devices, fuses, and heating devices. The largest individual manu¬ facturer is an American company which makes all these items except dry cells and heating devices, marketing their products through the China agents of their parent company. AUTOMOTIVE EQUIPMENT China, a country one-third larger than the United States and having a. population usually stated as 400,000,000, had less than 11,000 motor vehicles of all descriptions operating at the end of the year 1923, including 1,200 in Hongkong. These were divided as follows: Passenger cars_ 8, 508 Trucks and motor busses_ 1,140 Tractors_ _ 2 Motor cycles- 1,124 Fire-fighting apparatus_ 95 Airplanes and seaplanes_ 99 Total_10,968 These figures were compiled by the Shanghai office of the United States Department of Commerce with the assistance of American consuls throughout China, and are the most accurate figures obtain¬ able at this time, owing to the lack of governmental or other statis¬ tical bureaus in China. The principal reason for China’s unimportant position as an au¬ tomobile user is that it is practically without roads on which auto¬ mobiles can be safely and successfully operated. Statistics as to the extent of roads which can care for automobile traffic are, to say the least, incomplete. Aside from the hard- surfaced roads existing in the foreign concessions of the various treaty ports of China, there are extremely few roads which will permit the use of automobiles. The latest available information as regards roads throughout China is that recently compiled by the Chinese Government Bureau of Economic Information. In pub¬ lishing this data the bureau states that the utmost difficulty was met in securing complete information, but that the figures have been checked from every possible source and represent the most accurate statements available at this time. These figures indicate that there are 3,535 miles of roads actually constructed, 3,090 miles partly con¬ structed or under construction, and about 17,000 miles projected on 110 COMMERCIAL HANDBOOK OF CHINA which no work has yet been done and for which no provision has been made as to funds. These roads do not represent hard-surfaced highways, many of them being mud roads which have been put in a state of repair which will make it possible for automobiles to use them. It is for this reason that approximately 80 per cent of the auto¬ mobiles in China are concentrated in the cities of Shanghai, Peking, and Tientsin, as the following table showing the approximate dis¬ tribution of motor vehicles in China and Hongkong will indicate: City Passen¬ ger cars Trucks and busses Motor cycles Airplanes and sea¬ planes Fire fight¬ ing appa¬ ratus Tractors Amoy 1 _ 26 9 • Antung_ _ 8 2 Canton. .. _ _ 288 125 135 4 Changchun __ ..... . ... 29 9 2 Changsha_ 6 4 Chefoo _ __ _ '2 Chinkiang 1 ..... 2 Dairen 1 .... .. . . 152 27 24 7 Foochow 1 __ _ 9 8 > Hangchow 1 ___ 12 10 Hankow-- - 214 11 39 2 3 1 Harbin ___ ... . 342 91 12 6 Hongkong. . . . ____ 715 158 320 H Kalgan and Urga.. ___ 105 10 3 Mukden_ . _ __ 102 15 6 9 Manking. ___ _ 52 2 6 3 1 Nantungchow 1 _ 100 13 Newchwang_ _ 9 • Peking 1 _ . 1,248 35 39 42 Paotingfu 1 __ 9 Shanghai___ 4, 094 581 330 25 49 Tientsin 1 __ 750 14 144 15 Tsinan____ 63 9 10 Tsingtao..... 188 9 43 Yunnanfu.... 1 9 Total . .... 8, 508 1,140 1,124 99 95 2 Total 35 10 552 40 10 2 2 210 17 22 270 451 1,204 118 132 64 113 9 1,364 9 5,079 923 82 240 10 10,968 1 Figures not revised. In addition to the lack of roads, it must be borne in mind that the per capita purchasing power of the vast population of China is extremely low, in most cases being barely sufficient for the necessities of life. PASSENGER CARS From the above it is clear that China’s potentialities as a market for automobiles can not be gauged on the usual factors, such as pop¬ ulation. That it is a growing market, however, is clear from a pe¬ rusal of net import figures covering the value of automobiles im¬ ported over the period 1908 to 1923, inclusive. These are given be¬ low and include only the value (in haikwan taels) of motor cars and parts: 1908 _ 109,814 1909 _ 168,021 1910 _181,304 1911 _ 286,860 1912 _ 250,610 1913 _ 485,182 1914 _ 521,955 1915 _ 433,043 1916 _ 536, 725 1917 _ 914, 347 1918 _ 1,272,981 1919 _ 2,158,998 1920 _ 3,477.219 1921 _ 3,569,354 1922 _ 2,297,156 1923 _ 2,165,967 IMPORT TRADE OF CHINA 111 American cars have occupied an important position in the market since China became an automobile user. The principal commercial center and the most important city in China is Shanghai. The greatest individual share of the motor-car imports come through that port. Figured by value, the average over the past 10 years was 54.19 per cent, the next largest share being taken by Tientsin, which shows an average percentage of 27.85 over the same period. In addition to its position as chief port of importation, Shanghai has the largest registration of motor vehicles of all the cities in China, and it is therefore natural that the principal dealers have their head offices there. Sales of motor vehicles are effected through agents appointed by manufacturers or their export distributers. These agents hold ex¬ clusive sales rights in certain specified territories. Where agents have branches outside Shanghai they control all territory their branches can advantageously cover. Few agents, however, are in a position to handle the entire country, and they either appoint subagents or the manufacturer appoints an agent in each of the important distribut¬ ing centers such as Shanghai, Tientsin, Peking, Hankow, Harbin, and Hongkong. In appointing agents to handle all China the most rigid and pains¬ taking study should be made of their ability to adequately cover the territory, either through their own organization, or through sub¬ agents who are properly qualified to handle automobiles to ad¬ vantage. Care should be taken that no important consuming section of the country be neglected, as with the gradual spread of the use of automobiles the problem of wide distribution gains rapidly in importance over that of centralized selling effort in the large con¬ suming cities. To effect proper distribution, China should be treated as three separate units—North, Central, and South. North China, with Tientsin as its chief port, may be regarded as that portion lying north of 34° N. latitude; Central China, to which Shanghai is the principal port, from latitude 25 to 34° N., and South China, covered from Hongkong, includes territory from the border of Indo-China to latitude 25° N. At present, approximately 25 makes of American cars are repre¬ sented in China on an agency basis. Nearly all these are repre¬ sented in Peking, Tientsin, and Hongkong by agents or subagents. The automobile business in China is in the hands of foreigners, and for this reason is conducted along practically the same lines as in the United States or European countries. Advertising is carried in daily papers in both Chinese and foreign languages. Repair and service stations are maintained by agents, the majority of those in Shanghai operating garages in connection with which a hire-car service is frequently operated. Sales are made, if necessary, under time payment plans. There are no automobiles manufactured in China, but body build¬ ing is done in Shanghai, where very excellent bodies both of open and of closed models are turned out. 112 COMMERCIAL HANDBOOK OF CHINA No definite figures are obtainable as to the proportion of Chinese-owned automobiles, but the following figures may be taken as an indication. In the French concession of Shanghai at the end of 1923, out of 1,234 passenger automobiles registered, 324 were Chinese owned, and it is presumed that the rest of Shanghai may be calculated on practically the same basis. Peking shows 1,071 Chi¬ nese owners out of a total of 1,353 cars. Canton, with some 300 cars, busses, and trucks, has approximately 250 owned by Chinese. The foreign population in treaty ports constituted the best market formerly, but since Chinese have learned to use motor transporta¬ tion, the important and growing market can be looked for among Chinese buyers, with the foreign population as a steady, but hardly an increasing outlet. American cars are well known and well liked in this market. The past year has seen increasing imports of small, low-priced European cars, and while increasing sales effort is required from year to year, as competition becomes keener, there is every reason to believe that the American car will retain its prominent position in this market. MOTOR TRUCKS The use of motor trucks is unknown except for hauling within the cities where modern roads exist, and for use as busses both in cities and in certain parts of China where roads are built or where the terrain lends itself to automobile travel. The concentration of trucks in a few cities is well illustrated by the following table showing the approximate registration figures at the end of 1923 : Amoy (Cliangchow 4; Anhai 5)_ 9 Canton_ 125 Changsha district (busses)- 4 Changchun_ 9 Dairen_ 27 Foochow- 8 Hangchow (trucks, passenger bus bodies)- 10 Hangkow_ 11 Harbin_ 91 Hongkong (76 trucks and 82 motor busses)- 158 Kalgan and Urga- 10 Mukden district (including 7 busses)- 15 Nanking_ 2 Nantungchow (10 busses)- 13 Peking_ 35 Shanghai_ 581 Tientsin (3 motor busses)- H Tsingtao_ 9 Tsinan district (2 not in use)- 0 Total_1> 1-40 In addition to the lack of roads this condition is aggravated by the antagonistic attitude of guilds to members of which the introduc¬ tion of automobile transportation would mean loss of employment. This, in certain sections, assumes a very serious aspect, although in the majority of the foreign concessions the automobile is recognized as an inevitable adjunct to modern development. As Chinese become conversant with the advantages of the truck over old methods of haul- IMPORT TRADE OF CHINA 113 age, it is believed that such opposition will gradually lessen, and in addition, more interest will be taken by the Chinese in the develop¬ ment of roads. Shanghai has developed into the largest individual truck market in China by reason of its size, its greater industrial development, and the fact of its spreading manufacturing and shipping districts, necessitating longer hauls which can not be quickly and conveniently made by water. The district is well supplied with canals, but low Tvater causes bad congestion along the waterways, and truck haulage is being resorted to in an increasing measure. As other centers of China become industrialized, the necessity for longer hauls by land will become apparent. The expansion of the railroads will bring with it a call for feeder systems. Fig. 4.—Truck with chassis built in Tientsin These developments will be extremely slow, however, and it is felt that the greatest possibilities within the next few years lie in the field of bus transportation. At present motor busses or cars for public passenger transportation are operating on regular routes in cities and between cities and towns in various parts of China. Lines are operated in Shanghai, Canton, Hongkong, Tsingtao, Har¬ bin, Mukden, Dairen, Tientsin, Hangchow, Changsha, Chefoo, and Kowloon. Some intercity lines are: Kalgan to I rga, Tungchang to Wuting, Lintsing to Tehchow, Tehchow to Nanking and Tsining to Isaochow. These lines are proving extremely popular among the Chinese, and additional routes are planned in all sections of the country where roads make it possible. These routes do not develop as rap¬ idly as planned, owing in part to unsettled conditions existing in many sections of the country. Dealers are carefully watching this phase of the automotive market as being the most likely of develop¬ ment in the near future. 100020°—2C-9 114 COMMERCIAL HANDBOOK OF CHINA It is impossible to ascertain from any published figures the actual import of motor trucks into China. The customs list them under a heading which includes “ Vehicles: Railway carriages and wagons (including tramcars).” However, it is safe to assume that exclud¬ ing Hongkong, 80 per cent come through the port of Shanghai, and in view of this assumption, the following figures showing approxi¬ mate imports through that port for one year, October, 1923, to September, 1924, inclusive, will be of interest: From the United States, 152; Great Britain, 2; France, 2; Germany, 4; total, 160. The above record includes light commercial trucks of a well-known American make, many of which are used in conjunction with locally built bodies in hire-car service. It is, therefore, impossible to assume that these figures indicate growth in the use of truck haulage in pro¬ portion to the number of trucks imported. Import figures on trucks over the past three years, could they be obtained in detail, would be very misleading, owing to the fact that in Shanghai there were in stock at the beginning of 1925 probably between 70 and 90 trucks of 1 to 5 tons in capacity, which can not be disposed of. These were brought in as initial orders on agency arrangements, some on speculation, while others represent stock imported on orders later canceled. They are being gradually worked off' at prices below present replacement costs, and represent a serious deterrent to new imports for some time to come. There are in China no separate organizations interested in truck sales, trucks being handled more or less as a side line by the motor¬ car dealers. More attention is being paid to light commercial trucks for bus service, town delivery, and similar uses, as this field promises earlier returns than that of haulage. METALS AND MINERALS Metals and minerals constitute one of the important items of China’s imports from the United States. In 1923 this classification covered 6 per cent of the direct imports from that country. Although China is known to have excellent resources both in iron and in coal, the lack of modern and efficient transportation prevents development on a commercial basis, and instead of a producing country China is an importer of practically all requirements in iron and steel. This condition is paralleled in the majority of the other metals and minerals which China uses. Those which China pro¬ duces are dealt with under “ Exports.” VALUE OF IMPORTS With the industrialization of China, carrying with it increased manufacturing facilities and the rapid progress in the construction of modern factories, warehouses, business buildings, wharves, go- downs, residences, and apartment houses, the use of this class of material is expanding, as illustrated by the following table showing total value of imports of metals and minerals, from all sources and that portion supplied by the United States, for the years 1913 and 1923: IMPORT TRADE OP CHINA 115 Item Aluminum.... Aluminum, manufactures of. Brass and yellow metal: Bars, rods, sheets, plates, and nails_ Wire__- Unclassed- Copper: Bars, rods, sheets, plates, and nails_ Ingots and slabs--- Wire__- Other manufactures- Unclassed-- Iron and mild steel, new: Anchors, anvils, chains, and forgings- Angles and tees-- Bars--- Castings, rough- Cobbles and wire shorts_ Hoops___ Joists__ Nail rod___ Nails and rivets- Pig and kentledge_ Pipes and tubes_ Plate cuttings--- Rails... Screws_ Sheets and plates_ Wire_ Galvanized sheets_ Galvanized wire_ Ore--- Manufactures (not including tinned plates, enameled ware, needles, scales, safes, and stoves_ Unclassified, including old_ Lead, in pigs and bars.. Tea and sheet_ Other manufactures_ Manganese_ Nickel_ Manufactures of__ Quicksilver_ Steel, (bamboo, bars, hoops, sheets, and plates)__ Cast, wire, and wire rope_ Tin, in slabs_ Manufactures of (not includ¬ ing tinfoil) _ Tinned places_ White metal or German silver_ Zinc (spelter)_ Sheets and plates... Other manufactures... Metals and minerals unclassed_ Ores, unclassed...... 1913 United States Haikwan taels 20 73,091 33, 634 633,573 23^905 372,302 63,524 1,882 323,293 15,696 97,702 30,511 841 150 638 Total. 248 76,086 18,218 1,765,314 Total Haikwan taels 5,211 65,222 493,972 87, 246 263,780 258,083 6.130,774 203,247 28,397 91,406 140,711 1,858,696 1,989 846,415 366, 204 326,653 1,443,562 230,164 376,948 762,269 922.335 1,254,831 283,187 1,417,244 330,891 207 1,749,953 2,010,134 770,104 30,923 53,236 1,341 104.114 16,221 74,893 773,171 163,506 2,324,267 112,888 2,439,709 206,633 107,254 333,876 93,240 260,550 104 29,815,761 Per cent 1.0 8.6 9.2 43.9 " 6.3 40.4 5.1 .7 22.8 4.7 5.6 4.5 2.7 .2 3.1 7.0 1923 United States Haikwan tads 3,494 1,215 2,822 6^116 3,995 4,697,632 12,241 10,056 11,692 600,199 332.198 59, 382 10, 146 397,061 764,260 52,028 924,366 131,709 101.606 5,108 321,330 64,042 89,825 283,597 26,853 536 4430 254,100 14,924 1,220,826 1,200 28, 566 5,309 244,509 10,687,073 Total Haikwan taels 39,574 142,288 1,354,606 '’’lei’327 861, 769 5,817,291 154,689 296,012 541,077 4,745,706 1, 281, 827 641,864 262, 569 41,806 1,990,259 227,163 2,062,737 1,156,358 1,575,954 271,930 2,147,916 191,751 2,871,365 741,168 34,757 429,925 3,091,582 1,469,489 83, 714 109,761 1,812 363,190 140,340 709,103 519,967 3,375,730 1,679 4,883,560 30,270 88,177 238,309 98,176 729,297 12,578 45,990,422 Per cent 8.8 .9 .2 3." 8 .5 80.8 7.9 3.4 2.2 12.6 25.9 9.3 3.9 20.0 37.1 4.5 58.7 48.4 4.7 2.7 11.2 8.6 20.9 18.8 1.8 .5 Ti 35.8 2.9 25.0 1.4 12.0 5.4 33.5 It will be noted that total business has increased from about 30,000,000 hailcwan taels in 1913 to approximately 46,000,000 in 1923, and America’s share has increased from less than 2,000,000 taels and 6 per cent of the total to over 10,500,000 and more than 23 per cent of the total in 1923. In addition to this there has been an increase from 19 to 37 in the number of items which America is supplying. 116 COMMERCIAL HANDBOOK OF CHINA The iron and steel market in China is extremely competitive; and, with price as the prime factor except in rare instances, the trade is very susceptible to changes in exchange rates which make pur¬ chasing in one country advantageous, while the following year an¬ other country may be in a position to conduct business on a basis more profitable to buyers in China. American manufactured steel products in general are recognized by the Chinese as being superior in quality and finish. The average Chinese dealer, however, is often unable to pay the price of the more expensive American product, as Continental steel mills are selling direct, thus making the competition for importers handling American steel products extremely difficult. Such commodities as bars and steel plates, in wdiich quality is not easily determined, the dealer will purchase from Great Britain or the Continent if their price is lower. A good portion of the American sales of steel are effected through a large combination of steel mills in the United States, which maintains its own offices in Shanghai, and handles business for all China from there, selling both direct and through agents. Aside from this company there are no American mills rep¬ resented bv their own organization, and sales of metal products are handled in the majority of cases through established agents repre¬ senting mills direct, or by import houses. Chinese firms are now direct importers in a number of cases, but the greater proportion of business is still placed through foreign firms in China. The usual terms on which importers and agents work are draft at 90 to 120 days’ sight, interest at current'rate, and exchange for buyer’s account, APPLICATION IN INDUSTRY The principal uses to which the metals listed in the above table are put in China are as follows: Aluminum .—Small castings and some stampings. Aluminum , manufactured, sheets .—In the manufacture of electri¬ cal appliances; building of motor car bodies; telephone and electric bells; switch boxes; water bottles; and lately, in Xorth China, for airplane appliances. Rods, vnre .—The use is practically limited to manufacture of elec¬ trical appliances. This is a comparatively new departure in China, and no extensive output has been attained. Copper in ingots .—In the manufacture of coins. Also used in Chinese Government arsenals, railway, and shipbuilding establish¬ ments. Copper and brass. (Bars, rod-s, sheets, nails, wire tachs). —In the manufacture of ornamental structures; kitchen utensils; domestic hardware; trunks; doors; panels; window accessories; signboards; sheathing for river steamers; water taps and valves; curio imitations; printing, electrical, and telephone appliances; rail, car, and loco¬ motive repairs; building, etc.; wire nets; lanterns; radiators; wire¬ less materials; and tanks. Mild soft steel. (Angles , bars, joists, channels, ties, tees, half rounds ).—Usually of a tensile strength of 24 to 28 tons per square inch, and 20 per cent elongation in 8 inches is used in all general IMPORT TRADE OF CHINA 117 construction work connected with buildings, ships, cars, bridges, tanks, sheds, warehouses, wharves, etc. Mild steel plates , sheets. —Black, open and blue annealed used in enamelware, drums, warehouse shutters, fire and insulating doors, piling, furniture, motor-car bodies, stoves, and boilers. Nail rods. —Also called wire rods. Manufacture of nails for native purposes; defective rods for use in reenforcing. Pig iron. —Imported iron used only by railways or shipyards. Very small quantities, usually mixed with native-made iron, con¬ stitute the present casting product of China for stoves, grates, bars, pillars, wheels, crossings, sewer covers, and piping for waterworks. Hoops. —For press packing, bundling, trunk hardware, baling, and truck wheels. Pipes and tubes. —Seventy-five per cent for gas and 25 per cent for water pipes; in heating and sanitary installations, plumbing, railways, lighting towers, general canalization and draining. Wire , galvanized. —General kitchen utensils, telegraph and tele¬ phone installations, domestic hardware, fences, bundling, etc. Galvanized sheets. —Signboards, roofing, stoves, tanks, cylinders, cisterns, dust bins, buckets, washing tubs, watering pots, petrol storage. Tinned plates. —American product favored for canning ;* British product for other domestic purposes; various uses are in the manu¬ facturing of tins for all preserves, dried vegetables, tobacco; interior decorations; moldings, panels, etc. Lead , in pigs ancl bars. —Rolled into tea lead and foil; manu¬ facture of cartridges; insulating, etc. Lead , tea and sheet. —For packing purposes, insulating, etc. Nickel. —Manufacture of silver coins and in plating. Zinc , sheets. —Manufacture of ornaments, matches, and linings. Plate cuttings , bars and rods. —Manufacture of native implements for agricultural, industrial, and domestic household purposes, through forging with an inferior quality of tool steel or heat-treated steel by native blacksmith methods. Iron and mild steel , old. —Put to practically the same uses as plate cuttings. Quicksilver. —For medical purposes and also used by arsenals. LEADING PORTS IN MINERAL TRADE Approximately 64 per cent of China’s total imports of metals and minerals in 1923 came through the four ports of Shanghai (22 per cent), Hankow (16 per cent) ; Dairen (15 per cent) ; and Tientsin (11 per cent). The chief items taken by each of these ports are shown in order of value: Shanghai. —Bars and rods, galvanized sheets, tinned plates, pipes and tubes; copper ingots, sheets, plates, and wire; pig lead; cobbles; angles; brass sheets and plates. , Dairen. —Rails, bars, pipes and tubes, plain sheets, galvanized sheets, copper ingots and slabs, scrap, wire nails, miscellaneous manu¬ factured articles, bolts and nuts. Hankow. —Copper ingots and slabs (this item valued at 3.997,000 haikwan taels, constituting over 50 per cent of the total, being 118 COMMERCIAL HANDBOOK OF CHINA destined for the Hankow mint), tinned plates, bars, wire nails, hoops, pig lead, galvanized sheets, bamboo steel. Tientsin .—Bars and rods, tinned plates, sheets and plates, copper ingots and slabs, galvanized sheets, hoops, cobbles, shorts, nails. LUMBER The quality of timber desired for the market in China depends in the first place upon low price rather than upon quality or dura¬ bility. This applies to probably 90 per cent of the construction work in the country. Very few Chinese undertakings in construc¬ tion work are based on quality and durability in preference to cheapness. This report, therefore, covers primarily the cheap woods required for the trade and does not take into consideration the higher-grade woods imported for the furniture trades or for special finishes and interior decoration of high-grade buildings, such as are built mostly in treaty ports in China, as these woods are not supplied to ihis market by America. VARIETIES IMPORTED From America are obtained Pacific coast softwoods, including Douglas fir, hemlock, silver fir, and all the varieties that come mixed in what is generally described as “China grade cargoes” of so-called Oregon pine. From Japan softwoods are obtained in comparatively small lots from Kyushu, Hokkaido, and southern Sakhalin. These softwoods consist of various species of pine and spruce. From Siberia a number of varieties of coniferous woods are im¬ ported into China in round logs, squared logs, and also sawn into boards and planks. Quality ranges from very inferior types of coniferous woods to high-grade pine such as kedra. Matchwood is also imported from Sibera in increasing quantities. From the Philippines and Indo-Malayan territories, lauan, which is also known under other names through the Indo-Malayan States, is imported and classified as hardwood. In actual fact, however, the majority of this class of wood brought into the market is about as soft as Oregon pine. It is finding growing favor in China and the demand is keeping up excellently as compared with supplies available. The above woods are used in general construction work. In Chinese house building they are combined with native woods. Most of the Chinese houses are built with Foochow pine poles used as uprights. For joists and floors either imported woods or native pines are used. Since most native pines come in lengths of 7 to 12 feet—very little of the wood being over 9 feet—they are used where these short lengths can be employed, and imported woods of greater lengths are used in joists, flooring, stringers, etc. Native pole uprights of good quality are durable and are cut in the forests to the length wanted for construction of native houses. Attempts have been made in the past to use Oregon pine in place of the native round poles, but such attempts have not proved successful except for IMPORT TRADE OF CHINA 119 front posts, where the nicely squared Oregon pine gives a better appearance than the round native pole. Some of the imported woods of inferior grade are used for box- shook manufacture, but the greater part of box shooks in China are made from native pine. The principal American wood in which the China market is inter¬ ested is Douglas fir. Normal consumption of this wood in China is approximately 120,000,000 to 130,000,000 feet annually. It is imported in random sizes ranging from 1 by 6 inches up to 24 by 24 inches, the term “ usual China specifications ” in the lumber trade meaning a random specification from 1 by 6 inches to 12 by 12 inches, in lengths up to and including 40 feet. The demand for sizes varies with the locality in which it is to be used. The heaviest demand in Shanghai is for 2 by 12 inches, which is the size used for forms in reinforced-concrete construction, which is making rapid headway throughout China. The size second in demand in the Shanghai market is 1 by 6 inches, which is manu¬ factured locally into cheap grades of flooring for use in Chinese houses and buildings of all kinds. In Tientsin the heaviest stock size is 12 by 12 inches, this being consumed largely by the railways and for heavy construction. Apart from the uses for native house construction above de¬ scribed, Oregon pine is the principal wood used in general foreign- house construction in treaty port areas, and in foreign-type houses built in Chinese cities. It is also used for wharves, piling, bridge work, and railway sleepers. Aside from the importation of hemlock, silver fir, and bastard woods of similar nature mixed in with Douglas fir and combined in cargoes under the name of “ China grade Oregon pine ” there are very few other softwoods imported from America into China that can be considered as possible of commercial development. The lumber trade in China is being gradually educated to im¬ port in dimensions to suit consumption, and there is not the same volume of resawing done as in previous years when the heaviest imports were large timbers which were resawn by hand. Mills in China operate under a handicap. It is only possible to make them successful because of speed of operation and quantity of output. In actual practice, where time is not a great object, sawing by hand is cheaper than machine sawing. At present in the treaty ports such as Shanghai and Tientsin, where large lumber yards are maintained, heavy imported timbers are worked up by sawmills operated by the lumber importers, but even considering the mills in the treaty ports, the majority of the re¬ sawing in China is done by hand. Wages are extremely low and the workmen possess remarkable skill. Competition met by Douglas fir varies according to the values of the different woods. When Oregon pine sells at a low price im¬ ports are heavier; when it is higher in price imports slow down. This is the natural result of supply and demand when the Chinese look more to the price of the wood for purchase than to the quality of species or durability thereof. The varieties of hardAvoods imported into China are very great, comprising northern, tropical, and subtropical woods of every de¬ scription. Of the northern woods, oak and ash take the lead. Of 120 COMMERCIAL HANDBOOK OF CHINA tropical and subtropical woods, lauan and teak are the most prominent. American hardwoods (exports of which to China are decreasing) do not figure in the China market because they are either too ex¬ pensive or are no better than the hardwoods obtainable from other sources at lower prices. The mills in China are able to turn out high-grade hardwoods in interior trim, flooring, and other grades, and are becoming a centralizing point for hardwoods from various neighboring territories to be manufactured, with cheap Chinese labor, into finished kiln-dried products for reexport to foreign countries, including the United States, where the markets will pay a higher price for high-grade materials than is obtainable for ordi¬ nary construction work in China. Oregon pine is imported direct by American, British, and Japa¬ nese mill agents and importers operating lumber yards in Shanghai and other treaty ports. The majority of the importers have their head offices at Shanghai, with branch offices in Hongkong, Nanking, Tientsin, Hankow, and Tsingtao. These importers sell most of their lumber to Chinese lumber dealers, but in many instances they sell it direct to contractors on individual jobs. TERMS TO DEALERS The usual terms of sale to dealers are 20 per cent bargain money with order, balance, cash 80 days; although a variety of terms ranging from 60 to 120 days are given to responsible dealers who have an established credit. In a majority of instances these Chinese dealers are located in the large treaty ports and they in turn sell to dealers in the interior. The ultimate buyer of most Oregon pine is the contractor, who usually pays the dealer as and when he receives payments from the owner for whom he is building. The lumber dealers in the treaty ports belong to guilds, but so far as maintaining prices or similar functions usually attributed to guild activities, the lumber guilds in treaty ports are ineffective. STATISTICS OF TRADE The following table shows the imports of softwood into China for the years 1921, 1922, and 1923: Imported from— 1921 1922 1923 Hongkong ____ - -- _ Square feet 152,882 39, 215 16, 510 316, 974 Square feet 785, 202 17,104 4, 100 160, 739 Square feet 566,386 58, 975 2, 065 31,610 41, 653 6,123, 683 Macao_ -.-1 _ _ _ French Indo-China ._ - ___ __- Singapore, Straits Settlements, etc.. ..- - Netherlands Indies . . ... _ Russia and Siberia, by land frontier_ __ Russia, Amur ports _ _ _ __ _ . ._ 782, 306 161, 587 1, 718, 165 17, 476, 371 7, 290, 850 400 10, 076, 892 88, 348,116 3, 503, 699 1, 127, 697 16, 347, 847 25, 606, 919 16,939, 482 Russia, Pacific ports _ _ . . 7, 598, 125 11, 256, 116 14, 576, 746 10, 493 26, 254,691 60, 695,933 Chosen.... . ... Japan (including Taiwan)... . . . .... _ Philippine Islands.._ . Canada_ _____ 27, 178, 052 142, 012,899 1, 156 United States (including Hawaii)... ... ... Australia, New Zealand, etc. ___ Direct gross import... ____ 126, 380, 268 13, 527, 069 233, 684, 896 1, 344, 079 127,216,476 2, 080, 342 Reexported abroad. . Total net import___ 112, 853, 199 232, 340, 817 125,136,134 IMPORT TRADE OF CHINA 121 PAPER China—the discoverer of paper—remains to-day, owing to back¬ ward industrial development, an importer of this commodity rather than an exporter. Within the last 14 years imports have more than trebled in value, increasing from 5,545,197 haikwan taels in 1910 to 16,626,519 haikwan taels during 1923. Japan leads in the import trade (with 5,021,809 haikwan taels to her credit in 1923), with Hongkong, Norway, United States, Great Britain, and Sweden in the respective order named, each taking over 1,000,000 haikwan taels’ worth of the total volume of imports. MANUFACTURE IN CHINA While China’s paper-manufacturing capacity is known to be increasing rapidly, no data are available from which to judge the total capacity. An indication of the increasing quantities handled may be had from the following comparative statement of total exports of Chinese paper to China ports and foreign countries through customs ports for the years 1914 and 1923: Item 1914 1923 Quantity Value Quantity Value First quality _ - _- _ _ _ _ Piculs 114, 045 366, 269 Haikwan tads 2,145, 062 2, 782, 474 Piculs 207, 876 350, 462 212, 000 212, 556 48, 744 13, 933 40, 387 Haikwan taels 4, 648, 877 3, 906,959 1, 101, 454 3, 338, 242 587,170 56, 633 481,178 Second quality_ _ _ _________ _____ Third quality 1 _ __ ___ _ __ _ Joss___ __ _____ _ _ _ __ 120, 625 41, 123 2,128, 433 368, 353 Mill_ Strawboard 2 _ _ _ _ _ _ _ _ _ _ Other_ _ 18,011 95,140 Total _ __ _ _ 660, 073 7, 519, 462 1, 085, 958 14,120,513 1 New division. 2 New heading. This trade position will doubtless be maintained for a number of years, primarily because China’s mineral and water-power re¬ sources have not been sufficiently developed to }deld the ready sup¬ ply of water and component chemicals necessary for manufacturing purposes. The few modern mills which have been erected are wholly dependent upon outside sources of supply for certain raw materials. It is claimed that several of these mills have suspended operations for this very fundamental reason. TYPES IMPORTED The Chinese Maritime Customs returns of trade for the whole of China do not separately classify specific styles of paper. The only index from which to determine the trade in each particular class is to be found in the individual port returns for the port of Shanghai, through which 40 per cent of the total volume of imports enter China. The following table gives the value in haikwan taels of the prin¬ cipal paper items imported through Shanghai, and sources of origin for the year 1923. 122 COMMERCIAL HANDBOOK OF CHINA Articles Total gross imports into Shanghai Art_ Bank note- Cardboard_ Enameled_ Machine glazed cap_ Packing and wrapping... Simili_ Strawboard_ Tissue_ Wax, paraffin, and grease proof_ 1 _ Writing___ Unclassed_ Printing, common_ Printing, common (Jap¬ anese)_ Printing, free of mechan¬ ical wood pulp. 143,084 281, 045 559, 496 666,102 2,050, 491 437, 448 248, 712 160, 540 25,308 i 246,056 394, 223 845, 254 2, 040, 820 589, 967 1,060, 242 Japan Sweden United States Great Britain Ger¬ many Italy Norway 26,761 26,980 95,185 28, 722 234, 742 378,191 179, 301 53,003 14, 441 34, 292 124, 451 43, 921 37, 574 16, 219 26, 380 95,166 179, 349 96,122 104, 250 190, 812 116,716 73,969 109,288 389,314 100,080 23, 214 1,079, 738 54, 543 48,189 2,334 4,552 7, 336 22,039 129,682 198, 378 84,129 3,020 40,654 23, 435 65,393 298, 564 4,881 22,917 23,138 21, 505 43, 124 154, 762 276, 792 69, 380 51, 846 647, 576 400,854 479, 231 589,967 39, 414 631,549 64, 295 129, 570 58, 694 1 Of this amount the Netherlands furnished 29,338 taels’ worth and Belgium 79,415 taels’ worth. 3 Of this amount Belgium furnished 99,081 taels' worth. Note. —In 1923 the haikwan tael equaled $0.80. Newsprint. —With over 1,100 native and foreign newspapers and 70-odd lithographing and printing establishments operating through¬ out China, the business in newsprint very obviously dominates the paper trade of China. Annual imports into Shanghai aggregate $2,500,000. The cheapest quality of newsprint comes in from Japan—a grade with which even the Scandinavian countries can not compete. The better grades of newsprint are supplied princi¬ pally by Sweden and Norway. Machine glazed cap. —Commonly known in China as “ M. G. Cap ” ranks next in importance to newsprint. It is a very thin tissue paper glazed upon one side and used principally in the printing of Chinese books and pamphlets. A sheet is doubled and printed upon the two glazed sides, thus leaving the two interposing rough sides of the sheet blank. The Chinese are beginning to realize that by using newsprint they can print upon both sides of the paper at less cost than by using machine-glazed cap, and the two larger Chinese textbook establish¬ ments are introducing newsprint in this work wherever possible. This new policy of theirs will doubtless decrease the demand for machine-glazed cap, but it is still a very important item in the paper trade. This paper is supplied by Norway, Sweden, Germany, and Japan. Booh paper .—A wood-free printing paper is very much in de¬ mand. This grade comes mainlv from the Scandinavian countries and England. Art, enamel , and coated papers. —A very large business is done in these classes of paper, used principally in half-tone and calendar work. Deliveries must be made in China before June, in order that the Chinese lithographers may have ample time to turn out the great volume of calendars for the Chinese New Year period. The calendar business is one of the largest single items in the trade. Principal supplies are from America, England, Italy, Scandinavia, Japan, and Germany. Bank-note paper .—America has a practical monopoly in this character of paper, imports from this source during 1923 having IMPORT TRADE OF CHINA 123 a value of 234,732 haikwan taels out of a total volume of the trade valued at 281,045 haikwan taels. Small amounts came in from Japan, Great Britain, and Germany. Blotting paper .—America and Great Britain are the principal suppliers. Cardboard , pasteboard , and strawboard. —This class embraces one of the most important items in the import paper trade. America holds the cardboard trade. Strawboard is consumed in greatest quantities and is supplied principally by native mills and by im¬ ports from Japan. Chip-board, when obtainable from America at competitive prices, is gradually replacing strawboard. In cardboard the principal item is a white patent-coated news back (WPCNB). This paper is used chiefly by the British-American Tobacco Co. and other large manufacturers. America supplies the bulk of the trade, although Japan and Great Britain are sending in a little. There is also a fairly large market for sulphite bristols, white, in 22% by 28, 95-pound, 100-pound, and 120-pound. At the present time most of this is coming from Belgium. A rather small market exists for colored index bristols, most of which is consumed by the foreign population. Egg shell or antique booh. —This character of paper is called “ cartridge paper ” in the customs, but no figures are available. There is said to be a very small market, which is supplied principally by America and Great Britain. Colored printing. —A large market obtains for supercalendered ground-wood-content book, practically all of which is being supplied by Scandinavian countries. Copying. —Japan holds the market on this paper with its simili tissue, although a small quantity of American tissue is being used. Embossed. —Small market, mostly supplied by Europe. Marble. —Very small market, Germany being the chief supplier. Machine glazed buff. —A very common machine glazed, ground- wood-content paper used for wrapping and for making cheap en¬ velopes. Scandinavian countries hold the trade. Packing , wrapping , and kraft. —Volume of trade approximates 300,000 haikwan taels per annum, principally supplied by Japan, Sweden, Great Britain, and Germany. Parchment , glassine , wax paraffin , and grease proof. —Fairly large market, principal, consumers being cigarette, candy, and food¬ stuff manufacturers. America led in the trade during 1921, but in 1923 the Scandinavian countries largely supplied the demand for this character of goods. Germany is also a factor in the trade. Simili. —Japan practically controls the market, with Italy and Sweden following. Tissue. —Greater part imported from Great Britain and Scandi¬ navian countries. Wall paper. —Very limited demand; practically confined to use by foreigners. Imports mainly from Great Britain. Toilet paper. —Limited demand, with United States ranking first and Japan second. Writing .—A fairly large market exists for water-marked sulphite bond paper. The trade is about equally divided between United States and England. 124 COMMERCIAL HANDBOOK OF CHINA Laid writings .—Market is for sulphite and esparto content, cheap water-marked, laid writing, England being the largest supplier, fol¬ lowed by Scandinavian countries and Japan. The United States has practically none of the trade in laid writing paper. Cover .—The United States has been losing ground in this class of paper, England remaining the chief supplier, followed by Germany and Scandinavian countries. Market is for a cheaper character of. paper generally than that offered by American mills. Machine glazed poster .—Limited market for this paper, which is really a machine glazed sulphite book. A machine glazed bleached sulphite, which is also on the market, is practically the same as the machine glazed poster. Japan and Scandinavian countries are the main sources of supply. Drawing .—Very small market; Japan first, England second, Italy third, and United States fourth. Paper is imported in most instances by local import houses which act either as direct mill agents or as representatives of paper ex¬ porters in America and Europe. Japanese mills are generally rep¬ resented direct by large Japanese houses in China. DISTRIBUTION METHODS Distribution is effected through Chinese paper dealers, who buy from the importer and take delivery at warehouse, paying (except in rare instances) cash against delivery. Importers have been in the habit of indenting against dealers’ (usually unsecured) orders, paying import duty, clearance, and handling charges, and allowing dealers 60 days in which to take delivery. This has led to wide gambling by the less responsible dealers, who order in the expectation of price advances and are very difficult to hold to their clearance dates if the market goes against them. This has led to the proposal of the leading foreign paper im¬ porters to form an association for the formation and enforcement of standard practices in the paper import trade with a view to eliminat¬ ing many of the lax methods now followed and to put the trade in foreign papers on a safer basis. Large paper users, such as the cigarette companies and the larger printing and publishing houses, order direct for a large portion of their requirements. MISCELLANEOUS IMPORTS Space does not permit a detailed discussion of the various lines of foreign goods which are yearly being imported by China in in¬ creasing quantities. Some of these items, however, are of such rela¬ tive importance that they are given below in paragraph form in or¬ der that some idea of the quantities may be formed. Import fig¬ ures (values in haikwan taels) in each case are given for the year 1923. SPORTING ARMS AND AMMUNITION Imports of sporting arms and ammunition were valued at ap¬ proximately 122,000 taels. There is a fairly good field for these goods, as hunting is popular in all parts of China and there is a great variety of game to be found. Import regulations are strict. IMPORT TRADE OF CHINA 125 Sporting-goods houses carry complete lines of rifles, shotguns, and ammunition. MACHINE BELTING Machine belting to the value of 1,140,000 taels was imported. Of this 430,000 taels’ worth came from the United States, 385,000 taels’ worth from Great Britain, and 245,000 taels’ worth from Japan, llelative demand for belting is in the following order: Leather, cot¬ ton, rubber, balata, canvas and other textiles, and hair. It is esti¬ mated that 80 per cent of the belting is leather and is used in power transmission in cotton mills, electric light and power plants, filatures, paper plants, and cement works. The remaining 20 per cent is found in the rice and flour mills, machine shops, sawmills, and other industries. BOOKS AND MUSIC Imports of books and music in 1923 totaled in value over 900,000 taels, of which the United States supplied over one-third. Libraries are maintained by the various clubs, and there are a number of public libraries in the treaty ports. A considerable portion of the books imported are of a religious character, imported and used by the missions. In the treaty ports there are excellent bookshops where up-to-date fiction may be obtained, in addition to the latest works on travel, biography, and science. Printed music is imported in a fair quantity—not only produc¬ tions of a religious character, but also up-to-date, popular music and also music for the orchestras and bands which are to be found in various parts of China. BUILDING MATERIALS This item is of rapidly increasing importance in China, now that foreign type of construction is becoming increasingly popular. To¬ tal imports under this heading in 1913 were valued at 723,000 taels, of which the United States supplied imports valued at 145,000 taels, while in 1923 the total had risen to 3,495,000 taels, of which the United States supplied a share valued at 839,000 taels. CHINA AND EARTHENWARE Total value of the imports of china and earthenware for 1923 was 1,576,000 taels, the majority of which consisted of cheap ware from Japan. A small amount of finer goods is also imported, but this is mainly for the use of the foreign population and of this ware Great Britain supplies the largest part. WEARING APPAREL Under this heading, exclusive of hosiery, leather shoes, and haber¬ dashery, imports were valued at more than 6,500,000 taels in 1923, of which the greatest quantity consisted of cotton clothing manufac¬ tured in Japan (which accounted for nearly 3,000,000 taels). Hong¬ kong is next in importance, supplying imports valued at more than 1,330,000 taels, and Great Britain next with a share valued at 778.000 taels. 126 COMMERCIAL HANDBOOK OF CHINA Not only is the foreign population to be supplied with foreign- type clothing but an increasing number of Chinese men are adopt¬ ing foreign dress, wholly or in part. Many of the Chinese wear native clothing with the exception of hats and shoes, which are often imported. Imports of haberdashery in 1928 were valued at approximately 3,000,000 taels, of which Great Britain supplied the largest share (1,222,000 taels); Germany, 507,000 taels; United States, 275,000 taels; and Japan, 552,000 taels. Excellent goods can be purchased at an extremely reasonable price owing to the fact that duty approxi¬ mates 5 per cent ad valorem. Hosiery to the value of 1,431,000 taels was imported. The largest share (valued at 1,263,000 taels) was supplied by Hongkong. Hong¬ kong import statistics show that the largest individual portion origi¬ nated in Great Britain with £10,672, followed by the United States with £3,512. China is developing the hosiery manufacturing indus¬ try and is not only manufacturing for local consumption but is also exporting to near-by countries. CLOCKS AND WATCHES Total imports of clocks and watches to the value of 2,074,000 taels were brought in during 1923. Switzerland occupied first posi¬ tion with 649,000 taels, followed by Japan, with 527,000 taels, and Germany, 342,000 taels. The majority of the German and Japanese goods are of a variety which sell at very low prices. The Swiss goods range in price from $25 to $300, silver, and represent goods which appeal to the more well-to-do Chinese and the foreign trade. The United States is not yet securing an important share of this business, imports in 1923 amounting to 101,000 taels. A number of the best-known makes of American goods are represented here, and it is believed that they are making an increasingly important market for themselves. MUSICAL INSTRUMENTS Under this heading are imported pianos, organs, string and wind instruments, gramophones and parts. The majority of the pianos used in China are manufactured in the country by foreign firms which have made a particular study of the requirements to meet the trying climatic conditions here. Pianos are imported from America, Germany, and Canada, but to be successful they must be manufactured especially for the very damp climate, with its exces¬ sive heat in summer, and cold, wet winters. Organs are mainly small instruments with the foot-operated bellows, although the larger churches have excellent pipe organs. Small organs are also manu¬ factured in China. String instruments for foreign music are prac¬ tically all imported, but the field is practically confined to the foreign population and a few symphony and dance orchestras. The same applies to wind instruments. Gramophones are imported from the United, States, Great Britain, Germany, France, and Italy. Gramo¬ phone cases are manufactured by Chinese firms in Shanghai and elsewhere in China, and imported mechanisms are installed. These mechanisms are imported principally from Germany, France, Swit¬ zerland, and America. IMPORT TRADE OF CHINA 127 INDIA RUBBER AND GUTTA-PERCHA MANUFACTURES Gross imports were valued at 2,122,000 taels, of which imports worth 1,018,000 taels came from Japan. Under this heading are listed automobile tires and tubes; jinrikisha tires and tubes; rubber boots and shoes; hot-water bottles, which are very popular in China, where they are used as hand warmers, etc.; and a variety of other rubber goods such as hose, tape, rubber soles and heels. LEATHER Under this heading are lumped all the classes of leather which China imports. The total value in 1923 was 6,976,500 taels, of " which it is estimated that 75 per cent was sole leather. The greatest share came through Hongkong and consisted of Australian and Singapore leathers. Singapore leather is a cheap grade of soft sole leather very widely used on account of its low cost. American sole leathers are being imported in increasing quantities as the trade-marks under which they are sold are becoming better known, but at present Aus¬ tralian sole leather (bellies and sides) are the most important of the higher grade leathers. Some good sole leather is manufactured in China by modern tanneries, but the majority is similar to the cheap Singapore variety. ARTIFICIAL LEATHER AND OILCLOTH Separate figures are not published for artificial leather and oil¬ cloth. Total gross imports (not including linoleum) during 1923 were valued at 175,000 taels. The share of the United States was approximately 50 per cent. American oilcloth and artificial leather are well liked in the market. Artificial leather is used for auto¬ mobile tops and for upholstery, jinrikisha tops, furniture covering, bookbinding, and novelty manufacture. Oilcloth is used principally for counter and chair covers, sweat bands for hats, jinrikisha seats and backs, and uppers for cheap Chinese shoes. PHOTOGRAPHIC MATERIALS The United States supplied 398,000 taels’ worth of photographic materials to China out of a total importation having a value of 1,741,000 taels in 1923. A well-known American manufacturer of cameras and photographic supplies is making good progress in this market, and China is considered to have great possibilities in the future for the sale of this class of material. The main competition at present comes from Germany. Moving-picture cameras, films, and projectors are in increasing demand as the motion picture becomes more popular. At present there are about 100 motion-picture theaters showing American, British, German, Italian, and French film plays, while there are half a dozen fairly well organized companies in China producing cinema plays and educational films. The principal competition in motion-picture cameras and projectors comes from France, on account of far lower prices of the French product. STATIONERY The United States sold over 500,000 taels’ worth of stationery out of a total importation valued at 2,445,000 taels. The use of imported 128 COMMERCIAL HANDBOOK OE CHINA stationery is confined to schools, colleges, foreign firms and indi¬ viduals, and the comparatively few Chinese firms who use foreign office equipment. Japan supplied the largest individual share, amounting to 878,000 taels, while Great Britain follows the United States with 508,000 taels, and Germany next with 24,000 taels. POSTAL PARCELS AND OTHER ITEMS Under this heading China imported articles valued at 2,157,000 taels from the United States, with a total importation of such articles valued at 7,018,000 taels. Numerous items are included, ranging from personal effects to light goods, such as cutlery in small quan¬ tities, jewelry, wearing apparel, and numerous item's of various classifications. A wide range of material falls under the heading of “ Sundries, unenumerated,*' but there are no statistics available from which any definite idea of the quantities of each can be obtained. Among other things included are advertising matter, newspapers, bronze ware, brass, capsules, cloisonne, fan handles, fish nets, Japanese matches, paper-making materials, cottonseed cake, skin and fur sundries, and certain kinds of tobacco. MARKET DEVELOPMENT Commercial Attache Julean Arnold Indicative of the growth of the American population and Ameri¬ can business in China, we find that while there were 24 American firms and 410 resident Americans in China in 1882 (compared with 32 firms and 1,200 individuals in 1890), by 1925 the numbers had increased to 600 American firms and 12,000 Americans. American trade with China has increased fourfold during the past 20 years, constituting in 1923 30 per cent of China’s total exports and nearly 20 per cent of its imports, and representing about 8 per cent of the foreign trade of the United States. China’s total foreign trade (imports and exports) now aggregates about $1,300,000,000 gold, 55 per cent of which represents imports. During the past 20 years China’s foreign trade has increased threefold and during the past 30 years eightfold. Thus it is apparent that America is now pro¬ portionately a greater factor in China's foreign trade than it was 20 or 30 years ago. Upward of 90 per cent of American exports to China are em¬ braced in the following items: Kerosene and petroleum products, including lubricating oils; cigarettes and tobacco; wheat; flour; metals and minerals, including silver bullion and copper; machinery; dyes; colors and paints; raw cotton; timber; tin foil; paper; motor cars; electrical materials and fittings; canned fruits and vegetables; condensed milk. It is well also to take cognizance of the fact that certain American houses in China supplement their trade in Ameri¬ can commodities with certain noncompetitive lines from other coun¬ tries, and some utilize Chinese products and increase the value of their own business through the addition of Chinese labor. For in¬ stance, some of the motor-car bodies are built in China, as this type better meets the needs of the Chinese market than would the bodies imported from the United States. In the sales of machinery and equipment requiring installation, Chinese materials and labor contribute to the transactions of the American houses. In some cases manufacturing plants under American capital, equipped with American machinery and operated under American supervision, contribute to the sum total of American trade with China. Items which do not enter into the totals of imports into China but which contribute to the success of American effort in China are American shipping companies, insurance companies, banks, and pro¬ fessional firms. Other classes which sell American ideas and con¬ tribute in a substantial way to the general success of American en¬ terprise in China are the vast Christian missionary agencies and the Rockefeller Medical Schools, manned by three or four thousand American workers and financed to the extent of about $10,000,000 gold a year from friends in the United States. Much has been said and written within recent years about the Chinese importers dealing directly with the manufacturer abroad, 129 100020°— 26-10 130 COMMERCIAL HANDBOOK OF CHINA thereby eliminating intermediary agencies, whether they be com¬ mission houses, foreign establishments in China, or foreign sales¬ men. The American manufacturer’s attention is called to the developments in Japan, and he is then reminded that China is about prepared to follow suit. Cognizance must be taken of the fact that Japan and China are as different as are England and America, in a foreign-trade sense. Until China has made very much further advancement in its internal developments, we need not expect Chinese capital and Chinese business organizations to engage in direct foreign trade. In other words, the country will during the next few decades offer greater inducements for its capital and energy in internal developments than will be offered in foreign trade. Hence China’s foreign trade will for some time be handled through foreign organizations rather than by native concerns. OPENING A HOUSE IN CHINA For those lines in which sales or market possibilities warrant, it is advisable to open a house in China. With the recent amendments to the China trade act, it is now possible to incorporate for busi¬ ness in China under the China trade act, with exemptions from corporate taxes for business done in China. As Americans in China enjoy extraterritorial treaty rights they are not subject to Chinese laws or courts as regards either their persons or property. During the European war certain American interests opened estab¬ lishments in China on a very pretentious scale only to close down with a slump following the war. While the conditions in China did not have all to do with their failure to succeed—in fact, in several cases the larger contributing factors were external to this field—yet the methods pursued by some of these concerns were such as to invite disaster. Probably the greatest weakness among these mushroom concerns was the development of an overhead out of all proportion to the business turnover. Instead, they should have begun in a modest way and branched out as a trained personnel and increased business warranted. IMPORTANCE OF PERSONNEL Personnel constitutes 70 per cent of success in China. In Amer¬ ica the individual is far more a part of a vast machinery of organization than in China. The bulk of China’s foreign trade is handled through foreign or non-Chinese concerns in the field. The 1,500 men who comprise the aggregate of America’s male mercantile population in China hold relatively more responsible positions and are individually greater factors to success or failure than would be a similar number holding positions of corresponding importance in the United States for the following reasons: 1. The superimposition of extraterritoriality upon Chinese society by certain treaty powers places the nationals of these powers and the properties which they control beyond the scope of Chinese law and courts, thereby creating a situation pregnant with responsi¬ bilities and opportunities. 2. China is now in process of transition, passing from an indi¬ vidualistic or family unit to a modern corporate society. Until MARKET DEVELOPMENT 131 a modern economic society becomes an accomplished fact, the inge¬ nuity of foreigners having relations with the Chinese will con¬ tinue to be taxed in meeting the adjustments necessary to the situation. 3. The success of the individual American is affected by the general success of American interests in China; hence the bigger and more effective the individual, the greater his contribution to the American community in China. On the contrary, if his con¬ cern is headed by a man of small caliber or is under the direction of a foreigner out of sympathy with America and American ideals, not only does the concern employing such a man suffer, but it reflects unfavorably upon all American interests in China. 4. With the great distance between the head office of a company in America and its representative in China, it becomes even more neces¬ sary that this representative be a high quality of individual, as the home office must depend upon his judgment in matters which can not advantageously be decided by men not on the ground or not thoroughly familiar with conditions in a field so different from the United States as is China. 5. American trade in China must meet international rather than national competition, hence the representative in China must familiarize himself with the methods of his international competi¬ tors, and must be prepared to attack problems arising out of this international competition. 6. Many American concerns destroy the usefulness of their repre¬ sentatives in China by unduly restricting their powers of attorney. Mr. Brown, of the International Bank of Shanghai, has the follow¬ ing comment to offer on this important subject: In sending representatives to the Far East, the firm or individual in America should see that its representative is supplied with a power of attorney cover¬ ing, as fully as possible, any eventuality which may arise in conducting the firm’s business. It has been the experience of bankers in the Far East to find that even large firms at home send out representatives who carry with them powers of attorney which have only the most limited scope and which in some instances hamper their activities to a considerable extent. Not only does this reflect upon the representative, who when carrying a very limited power of attorney can not be looked upon as representing his firm as fully as he should, but also causes doubts in the mind of anyone w T ho actually sees the power of attorney, and reflects on the firm itself for sending out a representative whom they apparently trust only to a very limited extent. It would appear wise for any firm in America which is sending out a representative and which is supposed to do actual business to supply him with a power covering the following items: Opening of bank accounts; the ability to borrow; the ability to take and defend legal actions; the power of substitution and revocation; the power to buy and sell merchandise, rent offices, employ and- dismiss assistants; and in all ways to give to the repre¬ sentative a document which will enable him to carry on the firm’s business without embarrassment to him or his employees. SALESMANSHIP During the past 10 years important changes have been in progress in breaking down the old system of the comprador and substituting therefor closer working contacts between the foreign trader and Chinese dealers. At one time the Chinese comprador guaranteed all of the firm’s transactions with Chinese dealers. To-day many of these compradors guarantee no more than 25 per cent. It is 132 COMMERCIAL HANDBOOK OF CHTNA contended that the old-time Chinese merchant whose word was as good as his bond is no longer the general rule, and that greater vigilance is required of the foreign trader in his relations with Chinese dealers. The foreigner must become acquainted with the firms’ customers and must arrange for inspection trips over terri¬ tory coA r ered by his Chinese salesmen. Conditions now require closer working contacts between the foreign trader in China and the Chinese customer. Unfortunately there is a tendency among some of the American and British merchants in Shanghai to cling too strongly to the old traditions and old ideas of dealing with the Chinese, shutting themselves off from contact with the Chinese, through the perpetuation of institutions and ideas which are rapidly becoming antiquated. Those who persist in these old-time ideas and methods are bound to suffer from the competition of those who cultivate a closer working contact with the Chinese business public. SELLING SERVICE WITH GOODS One of the promising opportunities for the American trader in China is the opening which is presented in the selling of service with goods. During the war years American plate glass captured the market in China. Had the American who controlled the bulk of this plate-glass trade during the war years accepted the situation he might have returned to the United States thoroughly convinced that China was no longer any place for him. In the transition from the old to the new order among the Chinese in the great commercial metropolis, he saw his opportunity in selling service with goods. Thus, instead of continuing in hopeless competition with European plate glass he offered to the Chinese shopkeepers of Shanghai the complete store front. He furnished plans and contracted to put in the finished product. The time has not yet come when service in itself will command a market, but salesmanship which combines the idea of service stands a better chance to succeed than salesmanship without service. The Chinese, reared in a nonscientific environment and unaccustomed to modern industrial machinery and organization, while still unappre¬ ciative of the money value of engineering and organization counsel, finds that if foreign manufactured products are to give him satisfac¬ tion he must understand their use, hence the goods without the method of setting them up or of using them or keeping them in good running shape may be of little value to him. Furthermore, there are not as yet in China the facilities such as are developed in a western industrial society for repairs and for the furnishing of parts, or for the securing of independent expert advice, so that the Chinese buyer is obliged to depend upon the foreign salesman for advisory assistance. REPRESENTATIVES The American manufacturer would do well to proceed with care in intrusting the handling of his business in China to young Chinese who have not already succeeded in establishing themselves in busi¬ ness in their own country. Although China is in transition, yet it will for some time continue to be recognized as the land of fathers MARKET DEVELOPMENT 133 and grandfathers rather than as the country of young men. Cer¬ tainly it will be some years before the family system in China will be so adjusted as to accord the young men a position of independent responsibility, free from the entangling alliances of obligations to relatives. Furthermore, a man from one Province in China experi¬ ences difficulties in doing business with natives of other Provinces, a difficulty which does not confront the foreigner. Under the direc¬ tion of a competent, experienced American, concerns in China are able to utilize the services of trained Chinese salesmen to an increas¬ ing extent. Much good time and money have been wasted by American manu¬ facturers in sending to China men whose main object in making the trip was their own personal satisfaction and enjoyment in visit¬ ing the field. The opportunity of seeing something of the Orient is often sufficiently enticing to prompt individuals to undertake the work of representing the American manufacturer on a tour through the Far East at what appears to be very reasonable terms to the concern represented. Through false promises, through superficial knowledge of conditions under which business is done, or through carelessness in attending to the details of individual transactions, such representatives often do more damage than good. In some cases the good name of a particular manufacturer has been ruined in a certain foreign field through the irresponsible acts of men ill qualified to represent an American concern. It is equally necessary to avoid the unscrupulous individual who solicits a number of con¬ nections with different manufacturers, especially the small manu¬ facturers, to pile up sufficient retaining fees to give him an easy livelihood at the expense of others. The properly qualified man in China or the man who makes the tour over the Far East in a successful way several times deserves far more consideration than some of the good men receive. To the man who is bent upon serving his house faithfully, what novelty he may have experienced upon the first tour rapidly falls into the background with repeated visits, and, in fact, some of the trips are taken under distinct discomfort. A representative of a manufacturer of pharma¬ ceutical supplies recently made his fifth tour over China, visiting a number of mission hospitals and native drug dealers in places in the interior reached only by primitive methods of transportation and under much discomfort, involving days to cover distances which rail¬ ways in America make in a corresponding number of hours. The results of this energetic and faithful representative’s labors in China built up for the concern he represented a splendid name, and a busi¬ ness netting many thousands of dollars annually. The house could well afford to pay this man a bonus in addition to his salary and regular commission, for he has built for the future in his employer’s opportunities in China. The American manufacturer or jobber is often too hasty in placing his agency for China. Ordinarily speaking, China is for foreign- trade purposes divided into three general sections—North China, with headquarters at Tientsin; Central China, with headquarters at Shanghai; and South China, with headquarters at Hongkong. While some of the Tientsin firms cover Manchuria, yet if there is reason to work that territory more intensively, it would be well to 134 COMMERCIAL HANDBOOK OF CHINA operate through houses in Dairen or Mukden for South Manchuria, and in Harbin for North Manchuria. In Central China, the great upper Yangtze region can best be covered from Hankow rather than from Shanghai,-although under ordinary circumstances Shanghai houses generally cover the Yangtze region and sometimes also North China. South China is quite' a distinct territory and is generally supplied from Hongkong, although for more intensive purposes houses at Canton can reach the trade in that populous and wealthy section more effectively. As for the coast ports, for special com¬ modities more direct connections can be made by dealing with con¬ cerns located at Swatow, Amoy, and Foochow. Care should be taken to refrain from granting a house an agency for a greater extent of territory than its facilities will permit it to cover effectively. Through inquiries directed to the Bureau of For¬ eign and Domestic Commerce at Washington helpful information may be secured as to the general reputation of firms. It is also well to ascertain the standing of the concern in the estimation of the Chinese trade, for in most cases the commodities handled must eventually find their way to Chinese dealers and consumers. For some unaccountable reason, some American manufacturers seem to labor under the delusion that in foreign trade the best method of procedure is to secure a foreign rather than an American house to handle an agency. Unless there are good reasons for doing other¬ wise, American manufacturers and jobbers would do well to make their connections in China through American houses alreadv estab- lished there, or houses in the United States possessed of good market¬ ing facilities in China. The third question of importance in selecting an agent is the man¬ ner in which the commodity to be marketed fits in with those which this concern is already handling. Cases are known in which houses of presumably good reputation have accepted, in fact sought, sole agency rights for certain products with the sinister idea in view of keeping those products out of the market. There are, however, com¬ mission houses which handle quite effectively a number of different manufacturers’ commodities of similar lines; for different Chinese dealers of the same lines of commodities often prefer to stock prod¬ ucts carrying different trade-marks from those of their competitors. Some houses in China have taken on more agency connections than they can effectively operate. It is surprising how well some estab¬ lishments apparently succeed in concealing the names of the Ameri¬ can companies which they are presumed to represent. If the market possibilities warrant and the commodity in question is of such a character as to justify the arangement, it may be best to have the agent take into his employ a salesman trained under the American manufacturer or with the jobber, as such a person will devote his energies to the sales of this particular product or set of commodities concerning which he is thoroughly familiar. There are a number of houses in China which prefer to work on the basis of big profits on a small turnover rather than small profits on a large turnover, particularly so if it appears that a certain amount of pioneering work will be required to develop the larger market. American automobile accessories are in some cases held for much higher prices than should obtain, because the houses handling MARKET DEVELOPMENT 135 them see chances of making big profits on small sales, thereby re¬ stricting not only the sales of these accessories but injuring the mar¬ ket prospects for the cars which require them. KEEPING THE AGENT INFORMED If the American manufacturer or jobber would get the most from his representative in China, he should keep him fully informed as to alterations in prices or commodities and as to other details important to a successful prosecution of the business in China. The manager of the export department of an American manufacturer of motor cars came to North China and found that the company’s representa¬ tive in that territory had not been on the company’s mailing list for its latest catalogues and literature descriptive of its improved prod¬ ucts. Some of these products were well adapted to the Chinese market. Furthermore, through helpful suggestions as to sales methods the export manager was able to increase his representative’s sales very considerably. A common cause for complaint is that manufacturers change the specifications of commodities ordered or substitute others without first securing the consent of their representatives in China. The Chinese buyer becomes accustomed to an article put up in a certain way, and unless educated to understand that a certain substitute is equally good or better or that the same product appears in a different sort of package he is suspicious that some one is trying to u put some¬ thing over on him.” Some years ago an American firm in Shanghai built up a nice business in a fancy toilet soap made in cakes of a certain specified size. Without any warning to the Shanghai firm, the American manufacturer, in response to an order for several hundred cases of this soap, took the liberty of shipping a lot slightly larger in size, justifying himself in that the price was the same; hence the firm in Shanghai would stand to gain rather than lose. In this case the extra size did not appeal to the Chinese dealer, for his customers for this particular brand of soap were high-class Chinese women, who were more concerned in securing a cake of soap which fitted their small hands and which was otherwise attractive than in securing more for their money at the expense of convenience in use. An American manufacturer of trunk fittings shipped to a China firm trunk center locks instead of rights and lefts, as were ordered. The dealer refused to take the center locks and the manu¬ facturer refused to rectify his mistake, which he admitted. . SHIPPING IN ACCORD WITH INSTRUCTIONS One of the very common causes of complaint in regard to Ameri can import trade with China is that the American exporters do not conserve the interests of the importer in China in complying with shipping instructions. Many a transaction which should have netted a neat profit to the Chinese importer terminated in an actual loss instead, solely because of the failure of the exporter to have met the shipping requirements. There are, unfortunately, a number of for¬ warding and express companies which exact charges out of all pro¬ portion to the burden the goods can stand. Cases have been cited in which forwarders falsified weights, measurements, and shipping 136 COMMERCIAL HANDBOOK OF CHINA charges or added one-eighth to one-half of i per cent on insurance, both ordinary and marine. Steamship companies should be required to show on the bill of lading the exact weight and amount of freight charged, or bankers should refuse to accept documents in which the freight measurements and charges are not clearly stated. Some for¬ warding companies exact exorbitant charges where transshipments are involved. It is exasperating to the importer in China to order a bill of goods shipped by parcel post and to receive this shipment through some forwarding or express company, with charges assessed more than sufficient to eat up any possible profits on the transaction. Arrangements should be perfected whereby C. O. D. parcel-post transactions could be carried between the United States and China, the shippers paying return postage, which may be deducted or added to the C. O. D. charge. Other countries have such an arrangement. An importer in China will often place an order with a jobbing house on the Pacific coast because of the advantage of fast ship¬ ping connections, only to be disappointed in having the order sent forward on a sailing subsequent to the one which might well have carried the goods. The old, hackneyed subject of packing comes up constantly in criticism of exporters who refuse to comply with special instruc¬ tions designed to bring the goods to the Chinese dealer in as good condition as they leave America. Of course, the well-established concerns give careful attention to the essentials of shipping and packing; otherwise they would never have achieved the distinction of being well established in their trade abroad. A large American mail-order house built up a business of several hundred thousand dollars a year in China. The biggest asset of this concern was the scrupulous care which it gave to the filling of its orders. Each satisfied customer became a volunteer advertising agent for the company, and it must be said to the credit of the com¬ pany that it had very few dissatisfied customers. Invariably goods were sent in accord with the specifications of the buyers, were intelli¬ gently packed, and were shipped at the lowest possible cost to the buyer. Breakages and losses in transit were credited to the cus¬ tomers. ADVERTISING There are certain lines of goods and certain commodities which depend for their successful introduction and sales in foreign Inar- kets upon an intelligent campaign of advertising. The successful marketing of these products in competitive fields requires some ex¬ penditure both for advertising and for selling. While it would be folly to make lump-sum donations for advertising in China unless one were fully assured as to the expenditure of this sum for the purposes in view, yet ways and means can be so devised as to get an effective check on both the character of the advertising and its effectiveness in the market where it is done. The agent in China should be able to furnish the American manufacturer with a detailed bill of particulars justifying expenditures made for the introduction and sales of the products of the company he represents. It is advis¬ able that manufacturers and jobbers make reasonable allowances to their agents in China for properly advertising their goods. MAH RET DEV ELOPM EN T 137 SILVER EXCHANGE AND PRICES China is on a silver-copper rather than a gold-standard basis. Furthertnore, silver and copper in China are handled as commodities while also serving as mediums of exchange. The situation is further complicated in that units of currency vary in different places. Theoretically, the silver ounce by weight serves as the unit in silver transactions, but different communities have different scales—that is, there is a lack of uniformity in the ounces. Silver exchange enters very prominently into every import transaction. For instance, sup¬ pose an importer offers a Chinese dealer an American motor car at $1,000 gold c. i. f. (cost, insurance, and freight) Shanghai. At the time the sale is made suppose that the Shanghai silver tael is quoted at 75 cents United States gold. This means that the Chinese buyer must produce the equivalent in silver of 1,333.33 taels to cover the $1,000 gold. Suppose that three months later, when the car ar¬ rives in Shanghai, silver exchange had advanced to 85 taels, it would then be necessary to put up only 1,176.47 taels to cover. On the other hand, suppose silver had dropped to 65, then it would require 1,538.46 taels to meet the bill. It is thus plainly evident that silver exchange has much to do with fixing the prices to the Chinese consumers. Where possible to do so, the importer would do well to arrange to sell his article at a fixed price in silver under a sliding scale of discounts to the trade on a basis of the fluctuations in exchange. In the main these discounts go to the jobber, but the retailer gets in on a certain share. The em¬ ployees in a Chinese shop are numerous and receive little by way of actual wage considerations. At the end of the Chinese year they, however, receive a bonus based upon the profits made during the year, the funds from the sales of containers and samples, and dis¬ counts. The latter are distinctly helpful as an incentive to the sales¬ man to boost the sales of the commodities carrying special discounts. Some importers have hit upon the happy device of limiting the number of jobbers through whom they deal to a definite number— say, 8 or 10. They contract with these jobbers to handle the article in question, fixing the price in local silver ctirrency, and stipulating as to the proportion of discounts to go to each jobber. The agree¬ ment carries with it the stipulation that the retailers agree to sell at certain fixed prices and also receive a certain share of the dis¬ counts. In some cases the jobbers employ the salesmen, some of which are specially trained under the direction and at the expense of the importer or manufacturer. However, the nearer one can come to putting his article into the market at a price which will permit its being retailed over a given territory at a stated price in local silver currency, the better are his chances for success. TRADE-MARKS One brand of American condensed milk sells for 20 per cent more than any other condensed milk in the market, yet holds nearly 90 per cent of the trade. This is due to the fact that it established its trade-mark and that through this trade-mark it has come to be rec¬ ognized as a superior product, in spite of the fact that other equally good brands are offered at 20 to 25 per cent below the market price 138 COMMERCIAL HANDBOOK OF CHINA of the favorite make. The manufacturers of this brand have over a period of many years zealously safeguarded their trade-mark against frequent efforts upon the part of others to imitate. Many years ago a certain brand of American underwear was sold to the extent of 500 cases a week. It became known throughout the length and breadth of the land. Because of the failure of the manu¬ facturers to protect their trade-mark, an imitation gradually dis¬ placed the original American, product. The Chinese Government recently enacted a trade-mark law. Although not formally recog¬ nized by certain of the treaty powers, yet the foreign traders in China are gradually registering their marks under this law. Regis¬ tration under this law can be arranged through American attorneys at law resident in China. SERIOUS EFFORT NECESSARY A prominent merchant associated with a very large concern in China maintaining a big organization throughout the interior of the country made the statement that China is no place for the “piker.” On the other hand, he stated that, provided a man has an article or idea which can commend itself to the Chinese people or which is suitable to conditions in China, there are big opportunities, with proper financial backing, for profitable business. As he stated, there is enough new about the field, and it possesses so much in the way of development potentialities, that with the proper backing, coupled with a carefully selected personnel, it is possible to build up a business with greater prospects of expansion than in almost any other field. One strikingly interesting phase of China is the increas¬ ing consumption of the Chinese masses. However, it is higlv necessary that previous to embarking upon any enterprise in China one make a careful and intelligent survey of the field, utilizing all possible agencies which may be helpful in this connection. It is well here to take cognizance of the fact that the United States Department of Commerce maintains an organiza¬ tion in China, under the direction of its commercial attache, with offices in Shanghai, Peking, and Canton, and that this service is at the command of American business men, who would do well to utilize and investigate the character of the services which this organi¬ zation is prepared to render. Also the department’s Bureau of For¬ eign and Domestic Commerce in Washington, D. C., has published much materia] concerning China and is prepared to answer inquiries from those interested in marketing in this field. INCORPORATION OF AMERICAN FIRMS IN CHINA Assistant Trade Commissioner A. Viola Smith, Shanghai American commerce with China was originally carried on by supercargoes traveling aboard clipper ships of the day. Canton was their port, and with the development of the trade there followed as a natural sequence the establishment in Canton of resident agents, commission houses, and direct representatives of firms having their headquarters in America. By 1815 these changes in the development of mercantile channels had practically eliminated the supercargo. AMERICAN ENTERPRISES IN CHINA The first American concern established in Canton to engage in the commission business w r as inaugurated by Shaw and Randall, both formerly supercargoes. The death of Shaw soon dissolved the firm, but other American enterprises quickly followed. The outstanding American house of its time was that of Samuel Russell & Co., a part¬ nership established in 1818 by Russell, Ammidon, Edward Carring¬ ton, Cyrus Butler, and B. and T. C. Hoppin, of Providence. Later reorganized under the name of Russell & Co., this firm came to occupy a financial position in China comparable with that of famous British firms of the day. Tyler Dennett describes this period of American enterprise in China in his Americans in Eastern Asia thus: Olyphant & Co. at Canton was organized in 1828 out of the ruins of the firm of Thomas H. Smith by D. W. C. Olyphant, who had served an apprenticeship in New York, Baltimore, and then in Canton as the supercargo and agent of Smith. This firm came to occupy a position second only to that of Russell & Co., until Augustine Heard, leaving the Russell firm, established the house which long bore his name. The only other important firm was that of W. S. Wetmore. It is significant that out of the much larger number of American merchants who came to and departed from Canton only these firms—Russell, Olyphant, Heard, and Wetmore—survived the competition of decades. Some, like John C. Cushing, retired with wealth; others failed grandly and left only pitiful derelicts. The effect of this consolidation of American interests was to stabilize business and to increase the influence of the surviving merchants in their dealings with both the Chinese and with the other foreigners. What has become of the firms of Russell, Olyphant, Heard, and Wetmore, which played such an essential part in the foundation of American trade in China? Russell & Co., the strongest, survives to-day in the form of a British partnership operating under the name of Shewan, Tomes & Co. This British company was organized in 1891 out of the ruins of Russell & Co. when the American firm went on the rocks overnight in a huge sugar-exchange transaction. An¬ other split off from Russell & Co. is the Yangtze Insurance Associa¬ tion (Ltd.), a British company with its head office in Shanghai. Originally founded in 1862 by the American firm, it changed to British registry in 1883. 139 140 COMMERCIAL HANDBOOK OF CHINA The old Canton firm of Wetmore & Co., established in that city during 1832, had branches in Valparaiso, New York, and Shanghai, trading under the name of Wetmore, Cryder & Co., and owned its own line of clippers. It claimed to have brought the first ship¬ ment of American petroleum into China during the early sixties. Its present-day descendant, Frazar & Co. (Ltd.) assumed British nationality during 1924, and now operates as a British-China com¬ pany organized under the Hongkong companies ordinances, which are extended by orders in council over British persons resident in China through the long arm of extraterritorial privileges. Olyphant & Co. has long since dropped out of existence. The only trace of it to-day is found in the British firm of Wisner & Co., orig¬ inally established by two American employees of Olyphant & Co.— Wisner and Seamon—after the parent company had suffered reverses and had gone out of business. Heard's enterprise, so highly spoken of by Tyler Dennett, seems to have been lost in the vicissitudes of those ever-changing conditions through which mercantile interests in China have passed from the opening of trade with Canton. The strength of America’s position in the trade of these earlier days is cogently brought out by Dennett in these words: American trade with Asia was begun without the direct assistance of any others than Americans and made its way, needless to say, in the face of no inconsiderable opposition from British competitors, notably the East India Co. British interests in the Far East have enjoyed a continuity of commercial policy which American interests have not possessed. During the World War years of 1911—1919 American interests were, owing to the favorable position of the United States as a producing nation, able to operate without feeling too severely the burden of home taxation. The postwar years of readjustment and the reentry into the China field of products from Great Britain, France, Ger¬ many, and other European countries, coupled with Japan’s increas¬ ing activities, brought about such strong competition that American interests were forced to analyze from every angle the advantages held by their competitors. They found that their British competi¬ tors, for instance, organized and operated under the provisions of the Hongkong companies ordinances, were free from the burden of home taxation other than the payment of a nominal annual license fee. In the “ language of the dollar ” this meant that a British company in China holding an American agency could sell American products for 1 y 2 per cent less than the identical products could be quoted upon by an established American trading company in China. The difference proved entirety attributable to the disparity between the home taxations exacted by the respective Governments of these nationals. No other nationals operating in China have been so taxed by their home Governments as Americans. Japanese business interests, for example, are free from home taxation so long as they reinvest their profits in enterprises outside of Japan. This accounts, in a large measure, for the enormous industrial investments which the Japa¬ nese have made in recent years in various parts of China, notably at Shanghai, in the cotton and weaving industries. The Germans, French, and other European nationals operating in China are like- INCORPORATION OF AMERICAN FIRMS IN CHINA 141 wise lightly taxed and are particularly free from home-taxation burdens. China’s income tax law, promulgated by presidential mandate, on January 11, 1914, effective January 1, 1921, applies to companies organized under Chinese law, and as such is not a taxation liability with which foreign interests are concerned so long as they are organ¬ ized under their own laws and enjoy the privileges of extraterri¬ toriality. The first measure of relief accorded American interests from Federal-taxation burdens was in the passage of the China trade act of 1922. Unfortunately the act fell short of its contemplated aims, and it was not until the passage of certain amendments during Feb¬ ruary, 1925, that it provided American interests in China with a favorable incorporating medium which would somewhat equalize their position in competition with other nationals. AMERICAN CORPORATIONS American corporate entities have, for the most part, conducted their business in China under the laws of the respective States in which the parent organization in America was incorporated or by forming in China a corporation under the laws of a particular State. This procedure was made- possible by the acts of Congress of 1848 and 1860, which extended the laws of the United States of America over all American persons resident in China, in pursuance of the treaties granting to American citizens extraterritorial rights in China. Before going into the methods of incorporation which have been and are now open to American companies desiring to operate in China clear distinction should be drawn between “ China ” and “ Hongkong.” The term “ China ” includes the 18 principal Provinces and Manchuria, Mongolia, Chinese Turkestan, and Tibet. It does not include the territory of Hongkong, the latter having been ceded by China to Great Britain in 1841. Hongkong, therefore, is a British Crown colony, quite apart from China. As a British Crown colony Hongkong has its own set of incorporation laws (known as the Hongkong companies ordinances), its own trade¬ mark and copyright laws, and is in every way governed distinctly apart from China. Congress, in enacting the China trade act of 1922, defined China as meaning “ (1) China, including Manchuria, Thibet, Mongolia, and any territory leased by China to any foreign Government; (2) the Crown colony of Hongkong; and (3) the Province of Macao.” A recent case in the United States Court for China may or may not be significant, if at some future time this court should be called upon to determine judicially the application of the China trade act of 1922 in the territory of the “ Crown colony of Hongkong, the Province of Macao, or any other territory leased by China to any foreign Government.” In the case, United States v. Arthur W, Smith, the United States commissioner ruled, during the latter part of 1923, that the United States Court, for China had jurisdiction over American persons in the Japanese leased territory of Dairen, on the principle that China, once having granted within the limits of her sovereignty extraterritorial privileges to the United States, could not 142 COMMERCIAL HANDBOOK OF CHINA at some subsequent date enter into a contract with a third party as a result of which the contractual obligations to the United States could be modified without the consent of the latter. On March 2, 1925, the ruling of the commissioner was reversed by Judge Milton D. Purdy, of the United States Court for China, who granted a motion to quash the case, the court taking occasion to state that “ the basic reason for American extraterritoriality in China was to overcome the necessity of American citizens appearing before Chinese tribunals. Hence, with the withdrawal of China from the Dairen area, the need for extraterritorial rights for American citizens in the Kwan- tung leased territory automatically ceased.” This reversal of the commissioner’s decision by Judge Purdy, while perhaps disposing of the issue in the case considered, can not be said to settle definitely the general principle involved. In view of the complexity of the entire extraterritorial situation in China, it is probable that the principle involved in the above case may have eventually to be carried to the United States Supreme Court for de¬ termination. COURSES OPEN TO AMERICAN INTERESTS The following courses have been or are now open to American interests for the formation of companies to operate in China: State law ,'?.—Organizing under the incorporation laws of what¬ ever State of the American Union the company might elect. This method of organization is still available. Alaskan Code .—The incorporation provisions of the Alaskan Code, known as the act of Congress of March 2, 1903, were recognized as being applicable to this jurisdiction by the United States Court for China during March, 1917. This method of incorporation was availed of by 163 American firms. A court order of July 5, 1924, temporarily discontinued this method, and an amendment to the China trade act passed during February, 1925, prohibits further incorporation under the act of Congress of March 2, 1903, which has been used as the Alaskan Code incorporating law. Hongkong companies ordinances .—During 1911-1919 a certain amount of American capital found it advantageous to operate under these ordinances. Subsequent amendments during 1919 and 1921, making it mandatory that such companies should be British con¬ trolled and managed, tended to discourage this form of organiza¬ tion for American interests. However, considerable American capital to-day is using this method of incorporation. China, trade act .—Incorporation under the provisions of the China trade act of 1922, enacted by Congress during September of that year, and amended during February, 1925, for the special purpose of giving to American enterprises a Federal incorporation law for the incorporation of American companies to operate “ within China.” There exists in China a corporation law known as “ China’s cor¬ poration regulations,” which were promulgated by presidential man¬ date on January 1, 1914. A prominent Chinese attorney of Shang¬ hai with western education, in commenting upon this piece of Chi¬ nese legislation, stated: “ It is very unsatisfactory as a piece of legis¬ lation, as it contains so many contradictions and cites so much detail, while the broad principles of corporation or partnership law INCORPORATION OF AMERICAN FIRMS IN CHINA 143 as we know it in the West are not properly stressed and are indis¬ tinctly defined. While the English translation calls it ‘corporation regulations,’ it is, strictly speaking, of much broader application, as it purports to govern partnerships and joint-stock companies, as well as limited companies, and the title is better rendered 4 Chinese com¬ panies ordinances.’ " The law itself makes no reference to investment by foreigners in Chinese companies, but the rules of enforcement state: “Accord¬ ing to law only Chinese subjects are allowed to form limited companies with shares.” It might, therefore, be inferred that if papers relating to a proposed company formed wdiolly or in part by foreigners were presented to the Chinese authorities they would refuse to register the company. On the other hand, there appears to be nothing to prevent foreigners from taking shares in a Chinese company when it is once established. The Chinese mining law prohibits foreign participation to a greater extent than 50 per cent. Japanese mining interests, as well as several other nationals, have organized companies with part Chinese ownership, which permits them to operate outside of the treaty ports under special charters or concesssions. Theoretically, foreigners can not hold land in China outside of the treaty port limits. In actual practice this problem is solved in several ways. Willoughby’s “Foreign Rights and Interests in China ” presents an excellent outline of landholding both by Chinese and by foreigners for anyone who desires specific details on this point. Generally speaking, however, foreign capital has not organized under the provisions of China’s corporation law owing to the advan¬ tages which the respective foreign nationals enjoy by organizing under their own national laws so long as extraterritoriality pre¬ vails. Chinese interests also have, in some instances, organized under the provisions of various foreign laws in order to be relieved of the exactions of their own laws. INCORPORATION UNDER STATE LAWS This method is still in vogue and the majority of American corporations in China to-day are either operating as branch offices of their respective parent organizations or have organized in China under the laws of some specific State of the Union. The States in which such companies are usually incorporated are, of course, Delaware and New Jersey; yet we find American interests trading under charters from practically every State in the Union, as well as the laws of the Philippine Islands. American interests in China desiring to incorporate under a par¬ ticular State law proceed through appropriate legal counsel in a similar manner to which they would go about the formation of such a company in xCmerica. INCORPORATION UNDER ALASKAN CODE The United States Court for China, which was established by act of Congress in 1906, ruled in March, 1917, that the Alaskan Code incorporation provisions, known as the corporation act of Congress of March 2, 1903, were applicable in this jurisdiction. 144 COMMERCIAL HANDBOOK OF CHINA The first charter under the provisions of the Alaskan Code was granted to the American Sales Co. on March 28, 191T. The legality of the application of this act of Congress of 1903 was tested in the case of the United States ex rel. Haven et al. v. Paul McRae, brought during June, 1917. The court not only held that the law was applicable through the extension of the United States laws by the acts of Congress of 1848 and 1860, but further stated that this corporation act of Congress of March 2, 1903, appeared to be suitable to conditions in China and necessary to execute the treaties. Subsequently, 163 companies were granted charters under this act of 1903 by the United States Court for China. On July 5, 1924, the Hon. Milton D. Purdy, judge of the United States Court for China, issued the following order: On and after this date all applications, and a draft of the articles for the incorporation of American companies under the provisions of the Dis¬ trict of Alaska Code, will be submitted to the court for its inspection and determination prior to any tiling thereof. Although no official announcement has been made as to the reason for this order, it is generally understood that this step was taken owing to the fact that during September, 1922, Congress had enacted a special law for the incorporation of American companies to operate in China, known as the China trade act. The order was therefore tantamount to forcing a test case on mandamus proceedings, which would once and for all determine whether the act of March 2, 1903, was correctly construed as applicable to this jurisdiction to meet the exigencies of American commerce; and if so, whether it was repealed by the enactment of Congress of the China trade act of 1922, when the latter act failed to contain a specific repealing clause. Suffice it to say that since this order of July 5, 1924, was made no further applications have been filed for incorporation. Three in¬ stances are known in which American interests desirous of incor¬ porating under these provisions approached the court with the idea of incorporating, but in view of the above order they did not care to make a test case and made other plans. Two of these cases went no further with their plans for incorporation, and the third per¬ fected its organization under the form of a common-law trust. Amendments to the China trade act passed during February, 1925, provided that: Sec. 29. Hereafter no corporation shall be created under any law of the United States extended over citizens of the United States in China, for the purpose of engaging in business within China. This amendment, in effect, limits and discontinues further incor¬ poration of concerns in China under the act of Congress of March 2, 1903, commonly termed the Alaska Code. In effect it amounts to the same as a repealing clause, which was olnitted from the original China trade act of 1922. INCORPORATION UNDER HONGKONG COMPANIES ORDINANCES From 1911 to 1919 a considerable amount of American capital took advantage of the incorporation provisions of the Hongkong companies ordinances. Subsequent amendments to these ordinances, first in 1919, requiring that a majority of the directors must be British subjects, and a later amendment in 1921, providing that the INCORPORATION OP AMERICAN FIRMS IN CHINA 145 managing director must also be a British subject, tended somewhat to discourage American interests from extensively using this ‘means of incorporation for business in the Orient. By the exercise of extraterritorial treaty rights these Hongkong companies ordinances have been extended through British orders of council over British persons resident in China, thereby permitting the formation of what are known as British-China companies. There is still a certain amount of American capital finding its way into these British companies, owing to the more favorable and flexible facilities which these ordinances provide for the conduct of mer¬ cantile business in China, but primarily because of their tax-exemp¬ tion features. THE CHINA TRADE ACT Agitation for a Federal incorporation law was begun early in 1918 by American commercial organizations in China, using as their medium of expression the American Chamber of Commerce of China and the Seattle Chamber of Commerce. A committee of the former chamber, in cooperation with the Hon. Charles Denby, then a mem¬ ber of the United States War Trade Board, who was touring China on a special investigation of conditions affecting the development of American trade, prepared the first draft of a bill which later be¬ came the foundation for the present China trade act. Through the energetic interest of Congressman L. C. Dyer, the first bill (H. R. 7204) was introduced in Congress during July, 1919. Legislative procedure consumed the greater part of two years before the final enactment by Congress of the Cliina trade act of 1922, approved September 19, 1922, gave to American interests a uniform Federal incorporation law for the purpose of engaging in business within China. The primary purposes contemplated by the original draft of this legislation, in addition to securing a uniform Federal incorporation law, were: (a) To place American interests, from the standpoint of home corporation and individual income taxation, on an equality of oppor¬ tunity with other nationals doing business in China. (b) A means of inducing Chinese capital to participate with American capital in undertakings in China under American management. The original draft was designed to give corporate as well as in¬ dividual income-tax relief to American interests operating in China. The various legislative stages through which the original passed before enactment by Congress succeeded in modifying its primary intent to such a degree that the final law of September 19, 1922, fell short of according the relief originally designed to put American interests in China upon an equal footing with their competitors. This deficiency was succinctly brought out in an editorial appearing in the November, 1922, issue of the British Chamber of Commerce Journal, which is the authoritative organ for British interests in China. * * * and while the effect is not to bring about the same complete free¬ dom from income tax which British firms carrying on business in China enjoy, 100020°—20-11 146 COMMERCIAL HANDBOOK OF CHINA American concerns carrying on business in China which are in a position to avail themselves of the provisions of the act will be relieved, partially at least, from a handicap to which they have hitherto been subject in competing with British firms. In addition to making the act more workable and useful from the standpoint of administration, the amendments as enacted by Con¬ gress in February, 1925, correct to a considerable extent the taxation deficiencies of the original law of 1922. Although a number of suggestions were made for widening the scope of business in which China trade act corporations might engage, no amendments were recommended to Congress along these lines. It was felt that a sounder policy would be to recommend only such amendments as would correct the deficiencies of the original act. Such procedure would afford an opportunity to demonstrate the merits of the primary purposes of this legislation. If the future shows it desirable and permissible to widen the scope of business, this can be done, based on practical experience by the actual working of the law. SYNOPSIS OF REQUIREMENTS The brief outline given below of the requirements of the China trade act of 1922 as amended February 26, 1925, is intended for the layman as a matter of quick reference. Persons desiring to organize under the provisions of this law are advised to make a detailed study of the full text of the law, which will be found in the appendix. Character of business .—A District of Columbia corporation may be organized under the provisions of the China trade act for the purpose of engaging in business within (1) China, including Man¬ churia, Tibet, Mongolia, and any territory leased by China to any foreign Government; (2) the Crown colony of Hongkong; and (3) the Province of Macao, except that such corporations are not per¬ mitted to engage in any form of («;) banking business; (b) insurance business; ( c) shipping business, unless controlling interest is owned by citizens of the United States, within the meaning of section 2 of the shipping act, 1916, as amended. Purpose .—The corporation must “ aid in developing markets in China for goods produced in the United States.” Incorporators .—Three or more individuals, a majority of whom must be American citizens, may incorporate. Directors .—Directors are of two classes: (a) Temporary. Incorporators must name at least three individuals, a majority of whom af the time of designation and during their term of office are citizens of the United States, to serve as temporary directors. (&) Permanent. Not less than three, a majority of whom and the president and treasurer must be American citizens resident in China. Offices .—Offices must be located as follows: (a) The principal office must be located in Washington, D. C., which may be accomplished by maintaining an accredited agent in that city to accept service. (&) Head or branch offices may be located in such places in China as cor¬ porations deem advisable. Name and seal .—The name of the corporation must end with the legend “ Federal Inc., U. S. A.” No individual, partnership, association, or corpora¬ tion not incorporated under the China trade act or under a law of the United States shall engage in business within China under a name in connection with which the legend “ Federal Inc., U. S. A.” is used. Any person violating this provision shall upon conviction be fined not more than $1,000 gold for each violation thereof. INCORPORATION OF AMERICAN FIRMS IN CHINA 147 A corporate seal is mandatory, and may be altered only upon the approval of the Secretary of Commerce. Shares. —Shares shall be issued at not less than par value; 25 per cent of the authorized capital must be paid in cash or real or personal property placed in the custody of the directors before certificate of incorporation will be granted. Taxes. —China trade act corporations are now completely exempt from the Federal income tax of 12 Yj per cent on their taxable income. This exemption takes the form of a special dividend, which must be declared and distributed prior to March 15 after the close of the calendar-year business on December 31. Alien shareholders (other than Chinese) who do not reside in China, the United States, or possessions of the United States are not entitled to this special exemption dividend. China trade act corporations pay in full the capital-stock tax of $1 gold on $1,000 gold of the capital-stock value. Stockholders of China trade act corporations are exempt from income taxes on dividends from China trade act corporations when such stockholders are resident in China. Fees. —The following fees are required: (a) Certificate of registration (sec. 5), $100 gold; (&) certificate of property value (sec. 8), $300 gold, maximum; $25 gold, minimum; (c) certificate of amendment of articles of incorporation, $100 gold; (d) certificate of authority for dissolution, $100 gold. Registration fees shall accompany each application, except that for property value, which is payable before issuance of certificate. Fees are collectible by the registrar or the Secretary of Commerce. All fees are payable in United States gold currency, either at Shanghai, China, or Washington, D. C. Drafts are to be made payable to Treasurer of the United States. Documents to be filed on registration. —There must be filed copies of the application, in triplicate, supported by: (a) Minutes of meeting adopting articles of incorporation. (b) Certificate by secretary of meeting regarding adoption of articles of incorporation. (c) Certificate of naturalization from all incorporators who are naturalized American citizens. (d) Certified copy of articles of incorporation signed by and acknowledged by incorporators. (e) Certificate of property value, when shares are paid for in real or per¬ sonal property in accordance with section 8. Applications originating in China shall be filed with the Registrar of the China Trade Act at Shanghai, China. Applications originating in the United States may be filed direct with the Secretary of Commerce. Permanent organization. —A majority of the directors shall call, within six months after the issuance of the certificate of incorporation, a stockholders’ meeting, for which 90 days’ notice has been given, for the purpose of adopting a code of by-laws and effecting a permanent organization. Stockholders ’ .meetings. —The following questions shall be determined only by the stockholders at a stockholders’ meeting: 1. Adoption of by-laws. 2. Amendments to the articles of incorporation or by-laws. 3. Authorization of the sale of the entire business of the corporation or of an independent branch of such business. 4. Authorization of the voluntary dissolution of the corporation. 5. Authorization of application for the extension of the period of duration of the corporation. The adoption of any such amendments or authorization shall require the approval of at least two-thirds of the voting shares. No amendment to the articles of incorporation or authorization for dissolution or extension shall take effect until (1) the corporation files a certificate with the secretary stating the action taken * * * ; (2) such amendment or authorization is found and certified by the Secretary of Commerce to conform to the requirements of the act. Subsequent documents to be filed with registrar. —Other documents to be filed are: (a) Certified copies of all by-laws and amendments thereof. (b) Certified copies of minutes of all stockholders’ meetings of the cor¬ poration. 148 COMMERCIAL HANDBOOK OF CHINA (c) Annual report subscribed under oath by secretary of corporation, sup¬ ported by: (1) Minutes of stockholders’ meeting approving balance sheet; (2) certified copy of balance sheet; (3) detailed statement of profit and loss; (4) statement of the distribution of profits; (5) changes in list of stockholders during the year. Powers of the registrar. —The Secretary of Commerce is authorized to desig¬ nate as Registrar of the China Trade Act an officer of the Department of Commerce, whose official station shall be located in China. The registrar has the power to: ( a) Investigate the affairs of any corporation organized under the act. (&) Institute proceedings in the United States Court for China for the revocation of the certificate of incorporation issued to a China trade act cor¬ poration. (c) Subpoena witnesses to appear before him and produce any books, papers, or documents relating to the business of the corporation. (d) Require the taking of depositions relating to a corporation organized under the act before any designated person having power to administer oaths. (e) Administer oaths. (f) Examine and copy, or cause to be examined and copied, any book, ac¬ count, record, or paper or correspondence relating to the business or affairs of a China trade act corporation. Any person who upon demand refuses the registrar or any duly authorized officer, employee, or agent such access or opportunity to copy, or who hinders, obstructs, or resists him in the exercise of such right, shall be liable to a penalty of not more than $5,000 gold for each such offense. Trustees. —In the case of voluntary dissolution of a China trade-act corpora¬ tion or revocation of its certificate of incorporation, the directors of the cor¬ poration shall be trustees for the creditors and stockholders of the corporation, except that upon application to the United States Court for China by any interested party, * * * the court may in its discretion appoint as trustees such persons, other than the directors, as it may determine. Trustees may sue and be sued in the name of the corporation and are jointly and severally liable to the stockholders and creditors of the corporation to the extent of the prop¬ erty coming into their hands. Penaltg for false statements. —No stockholder, director, officer, employee, or agent of a China trade act corporation shall (1) make any false statement as to the financial condition of the corporation, or (2) publish any written state¬ ment or advertisement in any form stating the amount of the authorized stock without also stating as the amount actually paid in a sum not greater than the amount paid in. Any person guilty of violating these provisions is subject to a fine of not more than $5,000 gold or to imprisonment for not more than 10 years, or both. Suits. —Suits may be brought against a China trade act corporation in the United States Court for China, or in the Supreme Court of the District of Columbia, or in the Federal district court for any district in which the corpora¬ tion has an agent and is engaged in doing business. [For further requirements of the China trade act, 1922, as amended February 26, 1925, refer to the appendix.] UNINCORPORATED COMPANIES American business is also carried on in the nature of sole proprie¬ torships and partnerships. The operation of such businesses are gov¬ erned by the laws of the United States. That is to say, if an individual or a partnership were sued on a breach of contract and brought before the United States Court for China, the procedure and decision of the court would be controlled by the laws of the United States on contracts, as extended over American citizens in China by treaty. CONSULAR REGISTRATION Although not compulsory, the Department of State urges all American citizens, institutions, and corporations to register annually INCORPORATION OF AMERICAN FIRMS IN CHINA 149 with the American consular officer in whose district they live or operate. The object of this registration is to facilitate the protection of American interests on the part of the agents of the United States Government. Forms for registration may be had upon application to the nearest America consulate. Registration of American citizens. —American citizens should appear personally at the nearest consulate to register, submitting proof of citizenship. If residence is outside of the city in which the consulate is located, application for registration may be made by mail, and the necessary forms will be sent for execution. Registration of American 'partnerships and corporations (other than China trade act corporations) .—Prescribed regulations of the Department of State require the following: 1. Partnerships. An authenticated copy of the partnership agree¬ ment and a sworn statement showing the names, nationality, and residence of the members of the partnership and the extent of their respective financial interests must be filed with the American con¬ sular officer. 2. Corporations. Applicants for registration of an American cor¬ poration are required to furnish an authenticated copy of the article of incorporation and a statement, under oath, showing the names, nationality, and residence of the officers, directors, and stockholders, and the extent of their respective financial interests. Applicants for registration must show to the satisfaction of the consulate that a substantial American financial interest exists; that a corporation maintains an American officer or agent in China; and that a partnership is represented in China by an American partner or agent for purposes of service of judicial process. The mere fact of registration has no significance as to the na¬ tionality of the enterprise but is merely a recording of alleged facts as to the nationality of the persons concerned in the registered enterprise, and does not necessarily imply that the enterprise is entitled to diplomatic protection or the intervention of the United States Government. The measure of protection to be accorded in such cases is to be determined in each case as it arises. Registration of China trade act corporations. —The regulations of the China trade act, 1922, provide that copies of the certificate of incorporation when issued by the Secretary of Commerce are to be filed with the American Legation at Peking, and with the consular officers for the districts in which its main and branch offices or agencies in China are situated. These copies are filed through the office of the registrar, located at Shanghai, China. Such certificates of incorporation are accepted by consular officers in lieu of, and as the equivalent of, the particulars mentioned above, which are required for the registration of other American business enterprises. BIBLIOGRAPHY Alaskan Code. American Chamber of Commerce of China. Various pamphlets, as well as its archives. British Chamber of Commerce Journals. Issued by British Chamber of Commerce at Shanghai. China Year Book. Issued yearly by the Tientsin Press. Dennett, Tyler. Americans in Eastern Asia. New York, 1922. 150 COMMERCIAL HANDBOOK OF CHINA Department of Commerce: Conduct of Business with China. Miscellaneous Series No. 70. 1919. By Julean Arnold and others. Commercial Handbook of China. Miscellaneous Series No. 84. 2 vols. 1920. China Trade Act, 1922. Trade Information Bulletin No. 74. (Reprint, May, 1925, with amendments as of February, 1925.) Extraterritorial Corporation Manual. Far Eastern Bar Association. Bulletin IV. Hearings before the Committee on the Judiciary of the House of Representa¬ tives, Sixty-eighth Congress, first session, on H. J. Res. 149, January 30, 1924, serial 8. Hubbell's Legal Dictionary, 1924. New York. Lobinger, Charles S. Extraterritorial Cases, United States Court for China. 1920. Vol. I. MacMurray, J. V. A. Treaties and Agreements with and Concerning China. 1919. Vols. I and II. North China Daily News and Herald. Annual files. Report No. 321 of the House of Representatives, Sixty-eighth Congress, first session, to accompany H. R. 7190. Toller, W. Stark. Handbook of Company Law, Being the Hongkong Com¬ panies Ordnances. Shanghai, 1923. Willoughby, W. W. Foreign Rights and Interests in China. Baltimore, 1920. CURRENCY, EXCHANGE, AND BANKING 1 By Commercial Attache Julean Arnold CURRENCY Except for comparatively brief periods in its long history, China has adhered to a specie basis; even during the World War the coun¬ try did not resort to fiat money. The metallic currency of China serves as both a commodity and a medium of exchange. Efforts toward making subsidiary coinage token have not yet met with suc¬ cess. China’s currency is probably the most complicated in the world. Some of the factors contributory to this condition are: (1) Lack of a strong centralized system of government, and a lais- sez faire policy permitting separate communities to develop actual standards of weights and measures different from those of other communities; (2) a family or clan system of social organization, with the people rooted to the soil, thereby making for immobility among the masses and encouraging local provincialisms; (3) bad internal communications in a country of vast areas and distances, discouraging internal intercommunication; (4) a system of trade and provincial guilds which developed distinctive customs and practices among certain trades and peoples of certain sections; (5) the persistence up to the beginning of the twentieth century of a medieval economic condition in agriculture, industry, and trade; (6) a lack of appreciation by the Chinese Government, until after the establishment of the Republic, of the underlying principles of a national system of legal-tender currency; (7) following the revolu¬ tion of 1911 the breakdown of the central government authority over the Provinces, resulting in the use by military governors of provincial mints for issuing debased coins for the production of revenue. VARIETIES IN USE Brass or bronze cash .—This money (Chinese designation “ch’ien,” meaning 1,000) was first coined in 1032 B. C. In 660 B. C. the cash took the form of a round coin about 1 inch in diameter with a round hole in the center; in 220 B. C. this round hole was replaced by a square. Each succeeding Emperor minted cash, inscribed upon which were the names of his reign and dynasty. Theoretically a string of 1,000 cash equals a Chinese ounce of pure silver, but ex¬ change has fluctuated between 600 to upward of 2,000. These coins have been in use in China continuously down to the present day, but are now almost entirely replaced by copper 10-cash and 20-casli pieces. In view of the importance of this subject the Bureau of Foreign and Domestic Com¬ merce has published a handbook on Currency, Banking, and Finance in China, prepared by Dr. Frederic E. Lee, formerly American economist consul in China and now a special agent with the Bureau of Foreign and Domestic Commerce, 151 152 COMMERCIAL HANDBOOK OF CHINA Copper coins .—These were first coined in 1900 A. D. and are made in denominations of 10 and 20 cash, also in some places 200, 100, 50, and 5 cash. They were first intended as token money, with one hun¬ dred 10-cash pieces equivalent to a silver dollar, but they soon dropped to intrinsic values. In some places exchange has dropped as low as 300 to the dollar. It is estimated that there is the equiva¬ lent of more than 60,000,000,000 of these coins in circulation. Silver tael .—A bimetallic silver-copper currency system was offi¬ cially decreed about TOO A. D. The tael is a fictitious unit of silver currency, theoretically a Chinese ounce of commercially pure silver. (Tael is a word of Malay origin, the Chinese word “liang,” meaning ounce.) Its weight ranges from 510 to 590 grains, depending on the scales used, also with varying standards of fineness. Over 200 dif¬ ferent scales are known to be in use in silver-currency transactions. The tael is gradually being replaced by silver coins on a decimal basis. Silver coins .—Dollars and subsidiary coins comprise this type of currency. Silver dollars were first introduced into China from Spain toward the end of the eighteenth century. During the latter half of the nineteenth century Mexican dollars were more extensively used than any other of the twelve or fifteen varieties in circulation during that period. In 1892 the minting of Chinese dollars was begun. In 1911 Chinese currency regulations were issued, fixing the Yuan or dollar as the unit of national currency, with token subsidiary silver and copper coins. Since 1914 the Yuan Shih Kai “ Yuan ” or dollar, minted at Tientsin and Nanking, has quite largely replaced the Mexican and other silver dollars. Subsidiary silver coins are depreciated and are accepted at eleven to thirteen 10-cent pieces to the dollar. Paper currency .—Chinese money changers’ notes preceded Gov¬ ernment issues, which had their inception about 810 A. D. The circulation of notes of foreign banks is limited for the most part to ports in which these banks operate, except Japanese bank notes circulating in Manchuria. Bank notes are issued by numerous Chinese banks and provincial governments as dollar, small-silver coin, and copper-coin notes, but these issues are not always backed by adequate reserves for redemption; hence fluctuations in discounts of some issues have been very marked. Gold (mostly bullion ).—China produces but little gold, and gold coins have featured in a very limited way in China’s currency system. Gold occupies an important position for hoarding purposes, par¬ ticularly in the form of bullion, and often in the form of jewelry and gold leaf. Latterly, through a gold-bar exchange at Shanghai, heavy transactions in gold bars have become an important feature of China’s financial market. These transactions are mostly specu¬ lative. COPPER COINS Copper has been the standard of currency of the masses in China for upward of 25 centuries. As early as 700 A. D., one tiao or complete string of 1,000 brass cash was nominally the equivalent of one Chinese ounce of commercially pure silver. Silver appre¬ ciated later, and one tael became the equivalent of 2,000 brass cash, CURRENCY, EXCHANGE, AND BANKING 153 but the first Emperor of the Manchu Dynasty in 1G44 inscribed upon the brass cash, minted under his direction, “ Equivalent to T Urr liang,” or Chinese ounce. Since then theoretically 1 Chinese ounce of commercially pure silver has been considered the equiva¬ lent of 1,000 brass cash. In (560 15. C. the-brass cash appeared with a round hole in the center, and a few centuries later with a square hole. This was for the purpose of convenience in handling, so that they might be strung. Different practices developed in various communities; instead of 100 to a section of a string, 99, 98, 97, or 96 would be accepted as 100, the difference being allowed as a commission to the exchange shops. Furthermore, in some places small, worn cash of less intrinsic value would be allowed, within certain limitations, in the center of each string, these depreciated coins being acceptable for the purchase of certain designated com¬ modities only. In spite of the fact that the Government decreed tampering with the nation’s currency a capital offense, its authority over the entire country was not so administered as to prevent a considerable amount of counterfeiting. However, the low profit from manufacturing coins of such small denominations in itself probably assisted to prevent operations in this connection. Toward the close of the nineteenth century the expense of coining brass cash had advanced to such an extent that when Canton Province in 1900 coined copper 10 and 20 cash pieces, the central Government encouraged other Provinces to do likewise. Shortly after the outbreak of the European war the unprecedented demand for copper led to the melting down of the brass or bronze cash of China and to its being shipped out in huge quantities. This paved the way for very considerable operations in the minting of 10-cash and 20-cash copper coins. The weakening of the central Government’s authority over the Provinces after the revolution in 1911 gave the semiindependent military governors ample opporunity to take full advantage of the profits which might accrue to them through the extensive coinage of copper. Depreciated and light¬ weight coins added to the easily acquired wealth of military over- lords; furthermore, they were able to take advantage of the market prices of copper. The country has been so flooded with copper coins that it is estimated that there are now in circulation in China in copper coins the equivalent of upward of 60,000,000,000 copper 10-cash pieces. They have superseded the brass or bronze cash, except in the more remote sections of the country, and even there their influence is very considerable. This has resulted in reducing their purchasing value to such an extent as to produce a serious situation with the masses who receive their wages in this currency, and prices in China have advanced, varying in different parts of the country from 50 to 300 per cent, because of this reduction in the purchasing power of the currency of the masses. China’s imports of copper slabs and ingots for the five years, 1918 to 1923, aggregated 275,- 000,000 pounds, valued at 48,000,000 haikwan taels, or about $38,- 000,000 United States gold. SILVER To a considerable degree the complexities of Chinese currency are due to the position occupied by silver. For 1,300 years the Chinese unit of silver currency has been the “liang,” or Chinese 154 COMMERCIAL HANDBOOK OF CHINA ounce, 16of which equal a “ chin,” or “catty,” of 1 y 3 pounds avoir¬ dupois. To the foreigner, the liang is designated a tael. It is not a coin; it is merely a unit of weight. For practical purposes the silver bullion is cast in ingots in the shape of a Chinese shoe, the standard size being approximately 50 taels, or ounces, Chinese weight. For convenience in use smaller sizes are cast, ranging from 1 to 10 taels in weight. However, in order to make the distinction between a tael of silver as a com¬ modity and a tael of silver as currency, the latter incorporates the stipulation as to fineness. The situation would be comparatively simple if, in the currency of China, a tael of silver were a uniform measure of weight and a standard of fineness. Theoretically, the weight does not change. It is always understood to be an ounce of commercially pure silver. The scales change. Not only does every commercial community have its own scales, but many of the different, trades have different scales. Those who are obliged to have transac¬ tions involving the use of different taels carry their own scales for comparative purposes. The scale determines the ounce rather than the ounce the scale. In some communities as many as 20 different scales are found in use. Thus, in reality, a Chinese ounce of com¬ mercially pure silver may range from 510 to 590 grains of actual weight. A further complication comes with different standards of fineness, for, after the weight is settled, or rather scales are designated, it is then necessary to fix the fineness. Custom here also decrees certain qualifications for certain transactions or communities, but the vari¬ ations in this direction are over a comparatively small range. In fixing exchange, the exchange shop marks the weight and fineness on the silver put out and stands responsible for its calculations. In some cities in South China silver dollars are accepted only on their individual intrinsic silver value, and shops through whose hands they pass chop or stamp them as a guaranty of their acceptance. Banks accept deposits also on this basis. These are known as “ chop dollars.” To illustrate the method in actual practice in regard to the han¬ dling of silver currency, if 1 Tientsin tael is specified, it means 1 Hanping tael in weight of silver of “ Hwapao ” standard, 0.992 fine. The Hanping ounce simply refers to certain scales, but the “ Hwa¬ pao ” standard of fineness adds the qualification necessary to its serv¬ ice as a medium of exchange or a currency. Thus the generally rec¬ ognized standard of Tientsin for commercial purposes is the Han- ping-Hwapao tael, which contains 557.4 grains of silver of 0.992 fineness. Chinese exchange shops seem to be trained to recognize by the touch and sight the fineness of silver which for ordinary purposes is acceptable. They seldom apply the stone or crucible test. In order to make for uniformity in the payment of customs dues at the different ports in China, the foreign powers stipulated by treaty a fixed currency for customs payments. The unit is the haikwan or customs tael. In practice, its weight varies from 581 to 589 grains, and theoretically it is 1,000 fine. In other words, the customs banks are responsible to the Government for a silver 1,000 fine; hence they are careful that the rate of conversion shall fully cover their liabilities. Singularly, the conversion rate for paying out customs money varies from one-eighth to one-half of 1 per cent from CURRENCY, EXCHANGE, AND BANKING 155 that for receiving dues. This difference is considered the commis¬ sion as compensation for the banks’ expert knowledge, its risk, and its labor in handling silver of different degrees of fineness. One hundred haikwan or customs taels are equal to 111.4 Shanghai taels. The customs publish periodic rates of exchange for various cur¬ rencies into the standard haikwan tael. Accounts which require for settlement amounts smaller than 50 taels are handled with smaller ingots of silver ranging in weight from 1 to 10 taels. For fractional amounts of a tael, subsidiary silver and copper coins are used. Generally speaking, so far as the for¬ eigner is concerned, tael settlements are usually bank transactions; thus he is not concerned with the details of payment in specie. In those sections where taels are in standard use some firms carry ac¬ counts with their banks both in taels and in dollars. Gradually the fictitious tael unit of Chinese currency is being replaced by silver coins. In Canton the subsidiary or small-silver coin and the Hongkong dollar are current. In Peking the tael is no longer in use. During the first year of the Republic the Chinese Government abolished the tael unit from all Government books and transactions, adopting the neAv silver dollar throughout the country for taxes, for salaries, in railways and post offices, and for Govern¬ ment bond issues. The Chinese banks in Peking now carry their accounts in dollars. At a recent revision of the valuation schedules for duty-paying purposes in the Chinese customs, a resolution was passed calling for the payment of customs dues in silver dollars, as soon as China develops a standard silver dollar coin. Thus it is evident that the cumbersome and uneconomic fictitious tael unit of currency will doubtless be replaced by a silver dollar coinage on a decimal basis. With no legal ratio between copper and silver, the exchange rate being controlled by the factors of demand and supply and by the customs of different communities and different trades, it was only natural that foreign traders in their relations with Chinese mer¬ chants should find it necessary to resort to something less cumbersome and less complicated than silver bullion and brass cash. Toward the end of the eighteenth century the Spanish Carolus dollars came into China from the Philippine Islands and soon became current in Sino- foreign trade transactions in Canton and later in other South China ports. As soon as the foreign powers could do so they fixed by treaty on a “ constant ” in silver currency for customs transactions in desig¬ nating a customs tael. During the nineteenth century 10 or 15 dif¬ ferent foreign silver dollars became current in trade circles in the treaty ports of China. Of all these coins the American trade dollar naturally became the most popular, owing to its superior silver con¬ tent. For the same reason it was soon melted down or hoarded and thus disappeared. The Mexican dollar became the most generally used of all foreign coins introduced into China. In fact, in popular use it held the premier position during the latter half of the nine¬ teenth century. It is singular that as early as 1792 the Emperor Ch’ien Lung ordered the minting of silver dollars in Tibet. Apparently this arose from Tibet’s contact with India. At all events, these coins were short lived and did not become current in other sections of China. It was not until a hundred years later that Chinese provincial mints 156 COMMERCIAL HANDBOOK OF CHINA took to the minting of silver dollars and silver subsidiary coins. Several of these provincial silver dollars became quite common. However, the controlling factor in the use of all silver continued to be demand and supply. In other words, silver, whether in the shape of shoes or coins, was handled as a commodity as well as a medium of exchange. Each piece was accepted on the basis of its intrinsic worth but incidentally influenced by the inexorable workings of the law of supply and demand. Small or subsidiary silver coins, although nominally on a decimal basis of ten 10-cent pieces to the dollar, also followed the same rules, and the market quotations ranged from 10 to 13 to the dollar. In 1914 were witnessed the first serious attempts on the part of the Chinese Government to establish a legal-tender standard system of currency. The Yuan or silver dollar w T as made the unit, with silver and copper sub^diar}^ coins as token on a decimal basis. The dollars which became known as Yuan Shih Ivai dollars were coined at Nan¬ king and Tientsin. Following the death of Yuan Shih Kai, the weakening of the authority of the central Government over the Prov¬ inces interfered seriously with the carrying out of this scheme for currency reform, although the Chinese dollars have gradually forced the others from the market ; for upwards of 80 per cent of the silver dollars in circulation in China to-day are undoubtedly Yuan Shih Kai dollars. These dollars are 89 per cent silver and 11 per cent cop¬ per alloy, with a gross weight of 0.72 Chinese ounce. This would mean a dollar of 370 grains of commercially pure silver, or 415.73 grains including alloy. The American silver dollar contains 371.25 grains of silver plus 41.25 grains of alloy, making the total 412.5 grains. During the World War the shortage and high price of silver led to the melting down of huge quantities of the foreign dollars in circulation in China, thereby paving the way for their easy replace¬ ment by coins of the Chinese mints. Thus while the new dollars are supreme, yet there are not sufficient guaranties of stability in the maintenance of a standard of weight and fineness to warrant the elimination of the tael in commercial transactions. Military governors have taken advantage of the opportunities for adding to their revenues easy money through coining and putting on the market huge quantities of depreciated subsidiary silver coins. These efforts have been found far more profitable than attempts at putting upon the market depreciated silver dollars. Thus while the standard of the Yuan Shih Kai dollar has been fairly well preserved, the subsidiary currency has not become token, nor has its parity been maintained. In this connection, the Canton Mint has been the worst offender. With the establishment of a central mint at Shanghai, under proper expert management, it was planned to prohibit the coinage of silver coins in other mints in China. A plant patterned after mints in the United States has been erected at Shanghai for this purpose, which would assure China the largest and most modern mint in the w T orld. The Chinese bankers’ associations, at a conference in 1924, undertook to underwrite a loan of $3,000,000 silver, with the salt surplus and the mint as security, to provide necessary funds for the equipment of this mint, upon which $2,500,000 had already been spent, also covered by a loan from the Chinese bankers. The Minis- CURRENCY, EXCHANGE, AND BANKING 157 try of Finance virtually made a definite promise that if the Chinese banking group would take up this $3,000,000 loan, it would be given full powers to manage the mint, including the appointment of a director. Unfortunately, the civil war of the autumn of 1924 inter¬ fered with the consummation of these plans. China is not a silver-producing country, and yet it is one of the principal silver-using nations. During the past 12 years, imports of silver have exceeded exports by the equivalent of about $400,- 000,000 silver. It is impossible to secure reliable estimates upon the amount of silver in circulation in China. Some bankers, pre¬ sumably well informed, estimate the amount in dollars and sycee (bullion) at a minimum of $500,000,000 silver, and a maximum of $1,000,000,000 silver. The amount hoarded and used in the arts is estimated as equivalent to the quantity in circulation. Following the disturbances of the autumn of 1924, hoarding increased very considerably; in fact, Chinese banks have felt very seriously the strain of the withdrawal of deposits. The Shanghai banks’ normal silver stocks aggregate about the equivalent of $70,000,000 silver. They gravitate between a maximum equivalent in bullion and coins to $110,000,000 and a minimum equivalent to $35,000,000. [The sec¬ tion devoted to Foreign Exchange describes transactions in silver.] PAPER CURRENCY During the past decade the world has witnessed wonderful feats in juggling with the ciphers of paper currency. It has often been said that no matter what transpires elsewhere in the world, its counter¬ part can be unearthed from the pages of the history of this oldest civilization now extant. Marco Polo, in describing his wonderful discovery of the secret of the great wealth of Kublai Khan, the romantic Mongol ruler of China during the thirteenth century, remarked: With these pieces of paper, made as I have described, he causes all pay¬ ments on his own account to be made; and he makes them to pass current universally over all his kingdoms and provinces and territories, and whither¬ soever his power and sovereignty extends. And nobody, however important he may think himself, dares to refuse them on pain of death. And, indeed, everybody takes them readily, for wheresoever a person may go throughout the Great Kaan's dominions he shall find these pieces of paper current, and shall be able to transact all sales and purchases of goods by means of them just as "well as if they were coins of pure gold. And all the wdiile they are so light that ten bezants’ worth does not weigh one golden bezant. * * * Now, you have heard the ways and means whereby the Great Kaan may have, and in fact has, more treasure than all the kings in the world; and you know all about it and the reason why. Among the causes which are cited as responsible for the downfall of the century of Mongol rule in China were the evils of an unredeem¬ able and depreciated paper currency which drove the people into rebellion. To the first of the Emperors of the Ming dynasty, fol¬ lowing the defeat of the Mongols, is attributed the remarkable feat of having placed the country’s finances upon a sound foundation, through the resumption of specie payments. From that time down to 1853, a period of four and a half centuries, there were no Gov¬ ernment issues of paper money. About the middle of the nine¬ teenth century, copper cash and silver tael notes were issued without adequate reserves, with the result that by 1861 they fell in value 158 COMMERCIAL HANDBOOK OF CHINA Fig. 5.—Hongkong and Shanghai Banking Corporation’s building at Shanghai CURRENCY, EXCHANGE, AND BANKING 159 to 3 per cent and soon thereafter passed out of circulation. Since then, and up to quite recently, paper instruments of credit were left to private banks and business concerns. During the past 20 years, and more especially since the revolution of 1911, provincial note issues, with inadequate reserves, have not been uncommon. Military governors have used this expediency to tide over the embarrassments of depleted treasuries. Invariably the issues soon dropped to redemption values. Some communities, how¬ ever, suffered severely upon this account. Hunan Province in Cen¬ tral China, has probably fared worse from unredeemed paper cur¬ rency than has any of the other Provinces. The issues of notes of certain Chinese banks have increased very considerably during the past 10 years, mainly because of the estab¬ lishment or the branches of modern Chinese banks in the interior cities, where foreign branks have no branches. This condition ac¬ counts also for the decreased popularity of the notes of foreign banks, the circulation of which is confined for the most part to the cities in which they are located. In fact, these notes are designated for the cities in which they are issued, and when presented in other towns, even where the banks have their branches, are usually subject to a discount. On the other hand the military disturbances during the autumn of 1924 shook the confidence of a large part of the Chinese public in paper currency or bank credits, and silver came into demand for the purpose of hoarding. This seriously affected the available resources of the modern Chinese banks. Of foreign bank notes in circulation in Manchuria, the Bank of Chosen (Korea) gold yen notes are in circulation to the extent of probably 100,000,000 yen. As the Japanese authorities operating the Manchurian Railway consider yen the only legal tender for rail¬ way purposes, this has done much to popularize Japanese currency, especially in South Manchuria. In 1912 the Japanese Government authorized the Bank of Chosen to issue its notes in gold yen cur¬ rency throughout Manchuria. These notes were to be repayable either in bank notes issued by the Bank of Japan or in gold coin. The latter stipulation, however, applied only so long as Japan per¬ mitted the export of gold. Efforts have been made by the Japanese authorities in the Ivwantung leased territory to establish a single gold yen standard, and the transactions of the Dairen Produce and Stock Exchange were ordered to be in gold yen. The Chinese pro¬ tested, and finally both Chinese silver dollars and Japanese yen were admitted as acceptable for transactions on the exchange. Since September, 1924, the Japanese yen has depreciated about 20 per cent. This has caused the Japanese Government to abandon for the time being efforts to establish a single yen standard. The greatest havoc in connection with the paper currency situation in China during the past 10 years has come with the provincial issues under the military governors, who have utilized them as a means of extorting revenues from the people. In reality, then, they may be considered a kind of enforced taxes. They are put out gen¬ erally as copper-coin notes, so as to get the widest possible circulation. In fact, the people pass them along, retaining no more than necessary, so that when a crash comes no one is caught with large proportionate holdings, but in the aggregate the holdings have been such as to net considerable profits to the authorities responsible for 160 COMMERCIAL HANDBOOK OF CHINA their issue. Until an effective central government administration is established there appears to be but little hope of correcting this seri¬ ous situation as developed under some of the irresponsible military governors. An interesting and useful instrument in trade transactions in China is the native bank order. This subject is treated in the section headed “ Banking.” GOLD There are evidences that efforts were made from time to time to embrace gold in China’s currency system, but with no tangible results. Probably the nearest approach "to the circulation of gold coins came with the effort upon the part of the military governor of Yunnan in October, 1919, to establish a gold coin in his Province. At first a 10-dollar and later a 5-dollar gold coin was placed in circulation, and $9,000,000 worth of these coins was put out. The gold was pur¬ chased when silver was at its high peak. When silver dropped, through a 50 per cent range, these coins became so valuable that they disappeared from circulation. When the price of silver was exceptionally high in 1919 and 1920, and gold, therefore, cheap from the Chinese point of view, gold was imported in large quantities. On the other hand, when the silver price and exchange dropped—that is, when gold became dear in this silver-using country—then the movement was reversed. In the latter case gold investments realized handsome profits and gold exports increased. Thus, since 1920 gold exports have exceeded imports. During the years 1916 to 1919 inclusive, China imported gold to the value of 8*6,000,000 taels, and exported 26,000,000 taels, but during the years 1920 to 1923, inclusive, the imports of gold aggregated 100,000,000 taels, and exports 136,000,000 taels. Thus, in a total aggregate trade in gold of 328,000,000 taels, the imports ex¬ ceeded the exports by only 24,000,000 taels, or, roughly, $20,000,000 United States gold. CURRENCY REFORM The question of currency reform in China is apparently not so difficult as it has often been pictured. With the establishment of a strong central government, it should be possible to operate a central mint for silver coinage and certain designated mints for token coins. With coins in China on a commodity basis, as they are at present, it should not be difficult to retire those now in circulation. Great difficulties will attend the handling of the paper-money issues. In some cases these have fallen to redemption values. Undoubtedly the masses in many sections have come to consider their holdings of provincial notes as valueless, so are not expecting anything by way of redemption plans. BIBLIOGRAPHY Bouleau. M. Practical Guide to Far Eastern Exchange. 150 pp. 1923. This volume is probably the best practical guide for ready use for those who have occasion to handle transactions in Chinese silver exchange or other Far Eastern exchanges. It contains splendid conversion tables for Chinese currencies. Chinese Maritime Customs. Annual publications on foreign trade of China. The report and abstract of statistics and the ports reports contain much CURRENCY, EXCHANGE, AND BANKING 161 valuable current information regarding China’s currency, exchange, and banking. Jernigan, T. R. China in Law and Commerce. 400 pp. The Macmillan Co., 1905. Lee, Frederic E. Currency, Banking, and Finance in China. Trade Promo¬ tion Series No. 27. United States Department of Commerce, 1926. Morse, H. B. The Trade and Administration of China. 1912. This work contains a splendid chapter descriptive of China's currency. Spalding, William F. Eastern Exchange, Currency, and Finance. 375 pp. Bath Melbourne, and New York, Sir Isaac Pitman & Sons (Ltd.). Spalding, William F. Foreign Exchange and Foreign Bills in Theory and Practice. 234 pp. Yissering, G. On Chinese Currency. Amsterdam, J. H. de Bussy, 1912 and 1915. Wagel, S. R. Finance in China. 1914. Published by the North China Daily News and Herald, Shanghai, in connection with other literature on this subject. FOREIGN EXCHANGE An American typewriter selling for $100 gold in the United States might have cost the buyer in Shanghai (exclusive of freight, duty, and other charges) during the past 10 years anything from $85 to $250 silver, according to the fluctuations in silver exchange during this period. The Chinese dealer makes his purchases in the currency of his country, which is silver. The higher the price of silver in terms of gold, the cheaper will be the American product to the Chinese buyer; thus, high silver favors American exports to China. The American manufacturer who buys Chinese wood oil must pay what the Chinese market dictates in Chinese currency. If it is quoted in 20 taels a picul and exchange is at 65 cents gold to 1 tael, then he pays $13 in gold for 133 y 3 pounds; but if exchange is at 80 he must pay for the same amount $16 gold, without the price in China chang¬ ing 1 cent. Thus the lower the price of silver, the better is the export market of China for the American manufacturer. It is patent, then, that silver exchange is a factor of commanding importance in Ameri¬ can trade with China. In settling exchange transactions it is not necessary that both sides draw; one may draw, the other remit. Shanghai may draw on New York for its exports and remit to New York for the cost of its imports. The importer or exporter effects payments for his goods in telegraphic transfers from China in gold or in bills drawn on China in gold. The merchant in China who sells goods to America on a four months’ gold bill would, if he acted entirely upon his own responsibility, chance the exchange value of that gold at the end of the four months. Similarly, if he purchased goods from America on a four months’ gold bill he would have to guess the amount of silver it would take at the end of four months to meet that gold pay¬ ment. If his transaction were on a basis of cash against documents it would be equally perplexing. In other words, he would find his legitimate business transactions involved in speculations in exchange. The services of the exchange bank come to his assistance in quoting daily exchange rates both for telegraphic transfers and for forward rates, thereby transferring the speculative features of the transaction from the merchant to the banker, who is in a better position to cover his transactions in exchange. In fact, the exchange banker is not only able to save the import and export merchant from the necessity 100020°—26-12 162 COMMERCIAL HANDBOOK OF CHINA of speculating in exchange in his legitimate import and export trans¬ actions, but also to handle his own business in such a way as to make it distinctly profitable to the bank. Thus, it becomes very important that the American having trade with China should understand the principles controlling foreign exchange as they affect the transactions in trade between these two countries. EXCHANGE QUOTATIONS Mr. E. E. Kann, manager of the Chinese American Bank of Com¬ merce, Shanghai, has prepared an excellent article on China’s foreign trade and transactions in silver and gold bars. For lack of space it is possible to reproduce here only a resume of Mr. Kann’s article: For international trade and exchange in China, silver is employed. As silver (in quantity) is not mined in China it has to be imported from the world's silver markets, New York and London. Until recently London was the principal market for silver, but since the World War New York has be¬ come the chief center of distribution, for China in particular. Practically all the tael bars, the dollars, and the small coin circulating in China have had their origin, directly or indirectly, in imported bar silver. China is therefore obliged to derive its parity 2 quotations from the price of silver in an important bar silver market. Such markets have up to the present existed in London and in New York only. It is therefore immaterial whether the parity of the Shanghai tael is based on the price of 1 standard ounce of silver (0.925 fine) in London, or on the price in New York of 1 troy ounce of silver 0.999 fine. The theoretical conversion of bar silver into Shanghai sycee will result in constants for England of 1.1752 and 108.228 for America. Multiply these con¬ stants by the price quoted for bar silver at either London or New York and add charges and interest, in order to obtain the parity quotations for 1 Shang¬ hai tael in shillings and pence, respectively, for the United States dollar. Having any one of these two rates, all other currencies are brought to the tael parity by introducing into the problem the cross rate. This means that, in order to issue parity rates at Shanghai, one has to receive telegraphically the price of bar silver, the cross rates between the principal trade centers, and the discount rates; the latter only whenever a change occurs. It needs no emphasizing that the official rates of exchange, as issued every morning at 9.30 by the Hongkong A Shanghai Banking Corporation, are not necessarily corresponding to the parity. In fact, they are usually above or below parity, according to conditions ruling on the home and/or the local money markets. It must also be clearly understood that exchange business in Shanghai is done at widely and frequently fluctuating rates. The official quotations are likely to guide or influence the trend of the market, but usually they fail to check activities created by either a genuine demand or by specu¬ lators. The official exchange bulletin, as issued every morning at Shanghai, which is an important factor to the American or other foreign importer or exporter whose transactions must pass from a gold into a silver currency or vice versa, appears in the following form: EXCHANGE RATES Shanghai, Friday, October 17, 1924 1. Bar silver, spot-35ie— S/Q-vs 2. Bar silver, forward_ 35B 3. Chinese dollars, market rate_ 72. 975 4. Chinese dollars, buying rate- 72. 75 5. Chinese dollars, selling rate_ 73. 25 6. Native interest_ 0. 05 2 There is no real par for silver in terms of gold. What actually exists is what is termed “ relative par.” Cf. Spalding, W. F., “ Eastern Exchange,” p. 311, CURRENCY, EXCHANGE, AND BANKING H. & S. B. C. opening quotations 9.30 a. in. banks’ selling rates 163 7. London: T/T_ 3/5% 8. London : Demand_ 3/5 t 9 g 9. London: 4 m/s- 3/5% 10. India: T/T_ 229% 11. France : T/T_ 1, 480 12. America: T/T_'_ 77% 13. Hongkong: T/T- 70% 14. Japan : T/T_ 49% 15. Batavia: T/T_ 204 16. Straits: T/T_ 68 banks’ buying rates 17. London: 4 m/s credits_ 3/7% 18. London: 4 m/s documents_ 3/7% 19. London: 6 m/s credits_1- 3/7% 20. London: 6 m/s documents-- 21. France: 4 m/s- 1,555 22. America: 4 m/s L/C- 80% 23. America : Documents_ 81% EXPLANATION OF QUOTATIONS For the sake of convenience in locating the individual items, progressive numbers have been placed at the left side of the above schedule, but these do not appear in the original quotations, and are used here merely to facilitate reference: 1. Bar silver, spot, 35rk, parity 3/6 ts. —This is the bar silver quotation of the previous date, as cabled from London, for 1 standard ounce of bar silver. The parity of 3s. 6ied. is the theoretical parity, based on the con¬ stant of 1.182 (H. O. White) ; it includes charges, but not interest, and is based on 111.20 Shanghai taels currency being equal to 100 Canton taels weight. In fact, the correct ratio is now 110.90, unless the bars are sold to provincial mints at a premium. 2. Bar silver forward, 35\l. —This is the London official quotation for two months’ delivery of bar silver. It coincides here with the rate for spot delivery, but may at times be higher, at other times lower. 3. Chinese dollars (market rate), 72.975. —The quotation is fixed and issued twice daily—in the morning and in the afternoon—by the Chinese Native Banks Guild. It is the proportion of Shanghai taels to 100 silver dollars (local currency). Foreign banks have very little influence over this quotation. 4. Chinese dollars (buying rate), 72.75. —This means that the Hongkong & Shanghai Bank is prepared to buy resonable amounts of dollars and to pay for every $100 72.75 Shanghai taels. 5. Chinese dollars (selling rate), 73.25. —The Hongkong & Shanghai Bank is prepared to sell reasonable amounts at the price of $100, equal to 73.25 taels. If large sums are involved, the deviation from the official rate is usually 0.10 points only. 6. Native interest, 0.05. —This is the official interest rate, issued every day anew by the Native Bankers Guild, uninfluenced by the foreign and modern Chinese commercial banks. It is a good barometer to the state and tendency of the local money market. The quotation refers to so many candareens per 1,000 taels per day. The maximum rate permitted by the guild is 70 candareens. In order to compare with percentage multiply the rate by 365. Thus 20 candareens equals 7.3 per cent per annum. 7. London T. T., 3/5%.—This quotation means that the bank is prepared to sell telegraphic transfer on London, payable there on the same day, and give 3s. 5%d. for every Shanghai tael. The rate in this instance is much below silver parity, which fact does not favor import of bar silver. However, it must not be overlooked that the official rate is not necessarily the market rate. In fact, on October 17 business has been done at quotations considerably above the official rate. 164 COMMERCIAL HANDBOOK OF CHINA 8. London demand, 3/5 us. —The banks sell checks at a slightly higher rate than telegraphic transfer, the difference representing about 30 days’ interest at around the official London discount rate. 9. London 5 months, 3/5%. —The same remarks apply here. Five months’ interest have to be added to the telegraphic transfer rate. In this case the rate of interest works out at 1% per cent per annum, which does not make it favorable to remit money to London by a bank draft, payable there four months after sight. As a matter of fact, this mode of remitting is very rarely used unless the difference between the telegraphic transfer rate and for four months’ sight is much wider. 10. India T. T., 229y 2 . —The quotation for India (22914 rupees=100 Shang¬ hai taels), as well as all other rates following here (except the Hongkong T. T.) are based on the telegraphic transfer rate on London, taken in conjunc¬ tion with the cross rates, according to the following formula: ? rupees =1 Shanghai tael. 1 Shanghai tael =41.50 pence. 18.09375 pence =1 rupee. X=2.2930 The London-Bombay cross rate was cabled as Is. 6^jd. for 1 rupee. 11. France T. T., 1,580. —The quotation is for 100 taels=l,480 francs. In order to ascertain the cross rate on which the Hongkong & Shanghai Bank has based its calculation, use the chain rule. ? francs =1 pound sterling. 1 pound sterling=240 pence. 41.5 pence =1 tael. 1 tael =14.80 francs. 240X14.80 41.5 =85.592 The London-Paris cross rate in this instance was 85.6 francs to the pound sterling. 12. America T. T. 77%.—The formula in this instance is as follows: ? gold dollars =100 taels. 1 tael =41.5 pence. 240 pence =4.49% gold dollars. X=77.73 The Shanghai telegraphic transfer rate of 77% United States dollars for 100 taels is based on a New York-London cross rate of 4.49%. 13. Hongkong T. T., 70y 2 . —This quotation is (contrary to most others on the bulletin) in taels, and not in foreign money. It means that the bank will sell 100 Hongkong dollars telegraphic transfer for 70 y 2 Shanghai taels. The quotation is subject to demand and inquiry and may fluctuate up to the shipping point, always provided that there is no embargo on the export of silver dollars from Hongkong. As the Hongkong & Shanghai Bank is the principal note¬ issuing bank in Hongkong, it is in a position to control the quotation between Hongkong and Shanghai. 14. Japan T. T., 59%. —As in the previous instance, the Japan rate is quoted in China in taels per 100 yen. It is obtained by applying the cross rate be¬ tween London and Japan. In normal times the mint parity is 24.576 pence=l yen. In 1919 the cross rate had surpassed 2s. 10d., and in 1924 it had dropped to Is. 8%d. per yen. ? taels =100 yen. 1 yen =20.4375 pence. 41.5 pence=l tael. 100 yen=49% taels 15. Batavia T. T., 205. —There is very little direct trade between the Nether¬ lands and China, but a good deal of direct business is done between the Dutch CURRENCY, EXCHANGE, AND BANKING 165 East Indies and China, notably in sugar. Usually the rate for florins payable in the Netherlands is somewhat lower than the quotation for florins (guilders) on the Dutch East Indies. Through the chain rule in the usual manner we can ascertain on what cross rate the above quotation of 204 florins for 100 taels is based. ? florins =1 pound sterling. 1 pound sterling =240 pence. * 41.5 pence =1 tael. 1 tael =204 florins. 1 pound sterling=11.80 florins 16. Straits T. T. 68. —This quotation is in taels for 100 Singapore dollars. It is obtained by applying the cross rate, which was then 2s. 4% d. for 1 Straits dollar. ? taels =100 Straits dollars. 1 Straits dollar =28.25 pence. 41.5 pence =ltael. 100 Straits dollars=68.07 taels The foregoing quotations have been banks’ selling rates, and the following are buying quotations. These are obtained by adding to the selling rates in¬ terest for the period during which the drafts are en route, plus interest for the time the draft has still to run. The official buying rates are far too high to allow business to be transacted. Therefore they may be considered as nominal. In making calculations for buying rates the bank has to add to the quotation at which it can actually sell: (1) Brokerage, (2) interest for the time the draft is en route, (3) interest for the period the draft has to run (this means the rate at which it can be discounted after acceptance), and (4) a margin of profit. In some countries there are also revenue stamps and collection charges to be considered. Let us consider the remaining quotations in this light. 17. London, 4 m/s credits, 3/ 7%.—The quotation refers to drafts negotiated under confirmed banker’s credit and therefore easily discountable. Say, on October 17, 1914, a Shanghai bank had to sell T. T. on London at 3s. 6d. per tael: Pence Selling rate- 42. 0000 Brokerage, % per cent_ . 0525 30 days’ interest at 6 per cent (en route)_ .2100 120 days’ discount at 4 per cent_ . 5600 Profit_ . 2500 Bill stamps, postage, and petties_ . 0575 Total_ 43.1300 The Shanghai bank will therefore be in a position to buy at 3s. T%d. per tael. 18. London, 4 m/s documents, 3/7%- —The rate is % d. above the 4-month credit quotation, partly because the draft is either not discountable or only at a higher rate of discount; therefore the interest charge is above the cost discussed in the previous example. Besides, there is an added risk in nego¬ tiating documentary drafts drawn on firms or individuals. 19. London, 6 m/s credits, 3/7%. —The extended usance and the higher rate of discount for 6-month drafts are the principal factors for an increased quotation. 20. London, 6 m/s documents. —No quotation is given here, as it is not customary to draw six months, D/P. However, such paper is sometimes in the market, and as banks are not keen to compete for this class of bills the drawer will have to accept a rather high rate. 21. France 4 m/s, 1,555. —It is not customary to negotiate drafts on France under L/C. Practically all export drafts from China are drawn on firms (chiefly against shipment of raw silk), either D/P or D/A. Discounts are usually 1 per cent below the official Banque de France rate, but no standing rule can be established in this connection. 166 COMMERCIAL HANDBOOK OF CHINA Say, on October 17, 1924, a bank could sell telegraphic transfer on Paris at 1,500 francs: Francs Selling rate_ 1, 500. 000 Brokerage, one-eighth of 1 per cent_ 1. 875 Profit, one-fourth of 1 per cent_ 3. 750 Bill stamps, commissions_ 3. 775 150 days’ interest, at 6 per cent- 37. 500 Total_i_i_ 1,546.900 The hank will probably he pleased to buy 4-montli documentary drafts at the rate of 1,550 francs for 100 taels. 22. America, 4 m/s L/C, 80 %.—When this rate was issued call money at New York was 2 per cent and discounts averaged 3 per cent. Therefore, if the bank could have sold telegraphic transfer on America at, say, 78%, it would have bought 4-month credit bills at 80. T. T. selling rate_$78,500 Brokerage, one-eighth of 1 per cent_ . 098 Profit, one-fourth of 1 per cent_ . 196 1 month’s interest, at 6 per cent_ . 390 4 months’ discount, at 3 per cent_ . 780 Postage and petties_ .036 Total_ 80. 000 23. America, J/ m/s documents, 81 %.—The calculation is similar to the pre¬ ceding example, except for a higher rate of interest, as the draft is scarcely discountable. Besides, the risk is greater. BAR SILVER IMPORT OF BAR SILVER FROM AMERICA The United States is producing from 60,000,000 to 70,000,000 ounces of silver each year, which is about one-third of the world's output. The consumption within the country for industrial purposes is estimated at 20,000,000 to 30,000,000 ounces annually, and the remainder is exported abroad. In addition to the surplus production of the United States, New York and San Francisco have become trading centers for the silver produced in Mexico and Canada. New York is fast gaining on London in importance as the world’s market for bar silver, all the factors being in favor of the former place. China and, recently, India have bought the bulk of their requirements in the United States instead of in London, as formerly. The arrival of bar silver in China during 1923 amounted to 71,318 bars of about 1,000 ounces each, out of which 50,204 bars were imported from America. During the first eight months of 1924 the total number of silver bars landed at Shanghai amounted to 29,187, and of these 22,251 bars came from the United States. Conditions prevailing on the American silver market are somewhat peculiar; they differ from those in vogue at London in many respects, but notably in the following two points: 1. The New York official silver quotation (per ounce fine) is hardly ever the price at which business is done in America, while the London official quo¬ tations (per standard ounce) represent the actual market price. 2. The express and the steamer freight rates in and from America are not uniform, but are subject to reduction in the same proportion as the quantity increases in value. London quotes uniform freight rates for any quantity instead of graduated rates. CONVERSION OF AMERICAN BAR SILVER INTO SHANGHAI TAELS If the bar silver imported from America is to be melted down in Shanghai, in order to be converted into sycee taels the local smelting shops (called loofangs) will return to the bank 111 Shanghai taels (currency) for every 100 Canton taels weight of American bar silver 0.999 fine. This proportion was CURRENCY, EXCHANGE, AND BANKING 167 fixed in 1020. Before that year the outturn would have been 111.30 Shanghai taels. As a reason for the difference the smelters indicated the higher cost of labor and coal. It has happened in the years 1922 to 1924 that American bar silver was sold locally at premiums varying from one-fourth of 1 per cent to 1 per cent. In such cases the bar silver was not wanted for conversion into sycee, but for coinage. Some of the provincial mints thought that they could afford to pay a premium, as even under these circumstances they made sufficiently large profits. American bar silver was frequently sold at Shanghai during the period indicated at 111.50 and even as high as 112 Shanghai taels for each 100 Canton taels weight. Formula for the constant .—The weight of 1 Canton tael is 579.84 grains, or 1.208 ounces troy; the weight of 100 Shanghai taels is 108.6212 ounces troy. “Parity” between American bar silver and the Shanghai rate for telegraphic transfer on America is illustrated by the formula below: ? U. S. dollars. =100 Shanghai taels currency. Ill Shanghai taels currency =100 Canton taels weight. 1 Canton tael weight =579.84 grains. 480 grains =1 ounce. 1 ounce =New York silver price. 100X100X579.84 111X1X480 “108.828. The figure 108.828 is a constant. It does not include charges and interest, which have to be added according to conditions prevailing at the time of mak¬ ing calculations. These charges vary not only in course of time, but their total is influenced by the rate of interest prevailing on the money market. The total is furthermore subject to a graduated scale for freight, according to the quantity shipped. In the autumn of 1924 the expenses for shipping $100,000 (U. S.) worth of bar silver from San Francisco to Shanghai would have been as follows: Freight, five-eighths of 1 per cent_ $625. 00 Insurance, one-eighth of 1 per cent_ 125. 00 Bank’s commission, one-sixteenth of 1 per cent_ 62. 50 Interest for 25 days at 5 per cent_ 340. 00 Landing expenses, coolie hire at Shanghai, cables, and inci¬ dentals_ 60.00 Cartage at San Francisco, 25 cents per bar_ 37. 50 Total charges (equivalent to 1% per cent)_ 1,250.00 To the constant 108.828 add 1% per cent charges, or 1.360, making the total 110.188. In order to obtain the “ parity ” of telegraphic transfer at Shanghai, multiply the constant (plus charges) by the price at which silver is actually obtainable at San Francisco. If, for example, the actual price per ounce 0.999 fine is 70 cents, the “parity” for telegraphic transfer on America will be 110.188X70= 77.1316. Provided that telegraphic transfer at Shanghai can be bought at, say, 77y 2 United States dollars for 100 taels, it will be remunerative to buy bar silver at San Francisco at a price of 70 cents an ounce and have it shipped to Shanghai. The brokerage on bar silver amounts to one-sixteenth of 1 cent per ounce and is payable by the seller. ? U. S. dollars =1 Shanghai tael currency. Ill Shanghai taels =100 Canton taels weight. 82.7815 Canton taels =100 ounces fine. 1 ounce fine =U. S. dollar price. 100X100 111 X 82.7815 ~i- 08828 ' 7 To the constant 1.08828 add the amount of charges and interest. If turned into Shanghai sycee, 100,000 ounces of American silver (0.999 fine) will produce 91,887.27 Shanghai taels. 168 COMMERCIAL HANDBOOK OP CHINA LONDON AND AMERICAN BAR SILVER COMPARED Until the outbreak of the World War London was the only market of im¬ portance for bar silver. During a certain period of the war exports of silver from England had to be discontinued. As New York was well able to take care of the silver market, it was natural that matters developed rapidly, and since that time New York has not only held its own hut, conjointly with San Francisco, has taken the lead. This is natural if one considers that every factor is in favor of the United States. Practically all of America’s silver production is now being sold in the United States. India and China since the beginning of 1924 are taking the bulk of their requirements from America direct instead of from England, as was done formerly. About seven-twelfths of America’s silver production comes to New York and five-twelfths to San Francisco. In spite of these facts the London silver market undoubtedly retains a good deal of its old glory and importance. It lias served as a basis for quotations in silver-using countries for many decades, and it continues to exercise this func¬ tion, notwithstanding the limitation of supplies and the depreciation of the pound sterling. ENGLISH BAR SILVER MARKET Silver bars have the shape of bricks and weigh usually from SO 1 /} to 37 kilos, i. e., 980 to 1,190 ounces troy. This description is applicable to English as well as American bar silver. English bars destined for export abroad are 0.998 fine, but bars of a fineness of 0.996 and 0.997 are admissible and do occur, though in small proportions only. The British standard for silver is 0.925, which means that in 240 parts of alloy 222 parts of pure silver are contained: 222 37 24 — 40 or 0.925 As bar silver exported from London to China and India is usually 0.998 fine, it is 17)4 better than the English standard: 222 + 17^ 2301 210 240 ays Bar silver is a commodity in London, and its price is subject to the relation of demand to supply. All official transactions must pass through one of the four old established firms of bullion brokers, who meet daily at 2 p. m. in order to fix silver quotations in harmony with orders on hand. There are two official silver quotations issued daily in London, one for spot delivery (which means within seven days) and one for two months from date of making the contract; but unofficially it can be arranged that delivery be made at any particular day within two months, at a price to be specially arranged. As there is a difference of eight hours in time between Shanghai and London (Shanghai being earlier), China can operate only on London’s quotations of the previous day. Every bar of silver is clearly marked, so as to be easily identified. It shows the weight (within *4 ounce), the fineness, and initials with numbers. It is accompanied by a chip (about % ounce in weight) and a testimony of assay. ENGLISH BAR SILVER AND THE CHINA MARKET English bar silver is bought by China either for export to China or for forward delivery as cover for a purchase of sterling drafts or telegraphic transfer with the idea to reverse the transaction as soon as the parity will permit. The import of bar silver into China serves purely currency purposes, which means that the silver is melted after arrival and then converted into sycee taels or dollars or subsidiary coins. Contrary to established usage in America, the brokerage in England on bar silver, amounting to one-eighth of 1 per cent, is payable by the buyer. Other charges fluctuate. So. for example, the freight from London to China was reduced in September, 1924, from three-fourths of 1 per cent to five-eighths of 1 per cent, in order to be better able to compete with New York. CURRENCY, EXCHANGE, AND BANKING 169 Interest varies greatly and depends not only on the state of the money market, but also on the ability of the importer to finance the shipment (until arrival at Shanghai) by means of sterling or by means of taels. In the for¬ mer case the rate of interest will be much lower, as money at Shanghai com¬ mands much higher rates of interest. Bar silver is bought and sold in London in gross ounces, but quotations are in standard ounces (0.925 fine). One can have orders executed in standard ounces just as easily, but this would have to be distinctly stated when placing the order. “ Buy 100.000 ounces spot delivery, at best ” means 100,000 ounces troy. Orders may also be placed for a specified amount in sterling: “ Buy at a limit of_pence, £25,000 bar silver, forward delivery.” CONVERSION OF ENGLISH BAR SILVER INTO SHANGHAI TAELS There are two questions immediately connected with the conversion of bar silver into sycee taels, the first of which is how many Shanghai taels currency are 100.000 troy ounces of bar silver 0.998 fine. This may be demonstrated by the following formula: ? Shanghai taels =100.000 ounces English silver. 1.208 ounces =1 Canton tael weight.. 100 Canton taels’ weight of bar silver=110.90 Shanghai taels currency. 100.000X110.90 1.208X100 =91,804.64 Shanghai taels The second problem, which is of more importance, resolves itself into establishing a basis for the parity of the pound sterling and the Shanghai tael. The constant derived from the following formulas, multiplied by the London price per ounce standard of bar silver, will give the theoretical par between London and Shanghai. The addition of charges and interest will produce the actual parity between the Shanghai tael and the pound. Charges fluctu¬ ate and may be considered (until further notice) to consist of the following items: Per cent Freight London to Shanghai_0.625 Insurance_ . 100 Dock charges, marking, and landing_ . 250 London brokerage_ . 125 1.10 Interest for 45 days is to he added, according to the rate at which one is willing to invest funds or at which one can borrow money. The origin of all the links in the chain constituting the following formulas are plain, except perhaps the presence of the Canton taels weight. The reason the Canton tael is introduced into our calculations is that when foreign banks first entered the field at Shanghai they brought along with them Cantonese compradors, who were accustomed to the Canton taels weight. To this day the original standard has been maintained. The following formula may be used in making the desired conversions: ? pence = 1 Shanghai tael currency. 110.90 Shanghai taels = 100 Canton taels weight. 1 Canton tael weight = 579.84 grains. 480 grains = 1 ounce 0.998 fine. 222 ounces fine = 240 ounces standard. 1 ounce standard = London price in pence. 579.84 X 99.8 X 240 -—1.175234 110.90 X 480 X 222 The constant is 1.175. Say the price of bar silver in London per ounce standard is 35%d. for spot delivery: Multiply price per ounce by the constant, 1.175. (35.625 X Pence 1.175)_ 41.859375 Add charges, 1 per cent (variable)_ — __ .460453 Add interest for 45 days at 4 per cent (variable)_ . 231472 Parity for 1 Shanghai tael (or 3s, 6xVd.)___ 42.5513 170 COMMERCIAL, HANDBOOK OF CHINA If, for example, telegraphic transfer on London is obtainable at Shanghai at 3s. 7d. for ready delivery, it will be remunerative to buy telegraphic transfer in Shanghai, remit to London, and purchase bar silver there for ready shipment. If, on the other hand, telegraphic transfer on London can be sold at Shanghai below the parity just demonstrated (3s. 6 tV 1.), say, at 3s. 6d. for forward delivery, it will prove remunerative to sell sterling at Shanghai and cover by selling simultaneously silver in London for forward delivery. This means that if the rate for telegraphic transfer is above parity of bar silver, it induces purchase of silver in London (import into China) ; if below parity, it favors sale of silver in London (export of silver from Shanghai). GOLD BARS DESCRIPTION Gold in the shape of bars plays a most important role in financial trans- ations in China. Gold bars are derived from gold articles, and to a larger extent from coins, melted down and refined to the degree required. In shape gold bars are small oblong bricks with rounded-off corners. They weigh as nearly as possible 10 Shanghai taels (10 Shanghai taels weight equal 11.3593 ounces). In North China still may be found gold bars weighing from 5 to 10 taels, having the shape of sycee and being as nearly as possible 1.000 fine. How¬ ever, bars of this shape, which are used to hoard savings, are seldom en¬ countered. Gold bars handled at Shanghai are similar in shape and w r eight to those produced at Tientsin and Peking, but not in fineness, wdiich is as follows for these three types: Shanghai bars_0. 978 Tientsin bars_ . 980 Peking bars___ . 985 Each bar is embossed wfith the firm name of the smelter, also the year in which it was manufactured and the Chinese characters meaning “ surface gold.” that is, gold containing alloy. Gold bars are for the most part gold coins melted down after being imported from countries where there is a free circulation of gold, w T hich means that bank notes can be cashed against gold coin at par and that there is no export prohibition in force iri China relative to the yellow metal. Banks in China very rarely import gold coins for their own account. Invariably the imports are made for Chinese clients, w T ho agree to a certain price in silver taels or in telegraphic transfer of the same gold currency, plus charges and commission. The Chinese buyer, upon receipt, wfill invariably melt the coin into gold bars for sale in the local market. The weight of gold bars is as follows: The Shanghai bar equals 10 Chau- ping taels (366.71 grams) ; Tientsin bars are 1.35 per cent lighter in weight, which means that 1 Shanghai gold bar equals 1.0135 Tientsin gold bars in weight; I Shanghai gold bar weighs 1.0183 Peking bars. TRADING IN GOLD BARS Gold bars have become of enormous importance to the financial markets in China, notably for Shanghai. They are sold for actual delivery by Chinese holders to banks, who wall buy, whenever the parity permits it, for export abroad. The bulk of transactions in gold bars is made for delivery on settle¬ ment day (which at Shanghai is now r the 15th of each month). Contracts for delivery exceeding two months are not permissible. There is a gold-bar exchange, to w T hich members send their representatives. Already in the beginning of the present century there existed an association of gold dealers in Shanghai. The members dealt in gold with persons having direct use for gold for adornment or for export abroad. But there was no gold exchange. Such an institution had begun already to take root before the advent of the European war and developed fully during that memorable period. To-day it commands the attention of the world by means of its huge transactions and through its powerful influence on the price of silver. 171 CURRENCY, EXCHANGE, AND BANKING GOLD BARS FROM PEKING AND TIENTSIN As indicated above, Peking gold bars are of a fineness of 0.985, but they are below the weight of Shanghai bars. One Shanghai bar equals 1.0183 Peking bars. In order to buy large amounts of gold, Peking will probably have either to draw on Shanghai or demand shipment of sycee. In the former case, the actual drawing rate (telegraphic transfer selling for Shanghai taels) will have to be considered; in the latter instance, the outturn of sycee actually shipped. This would mean that 107 Shanghai taels equals 100 Peking taels. The formula is as follows: Shan ghai price for gold bars X 0.985 1.0183 X 978 X drawing rate on Shanghai Gold bars in Tientsin are 0.980 fine and weigh 1.0132 for every Shanghai tael weight. If Tientsin buys large quantities of gold bars for account of Shanghai such purchases will be paid for by drawing telegraphic transfer on Shanghai (market rate) or by ordering shipment of sycee from Shanghai; the latter will turn out at a cross rate of 1,064 Shanghai taels to 1,000 Tientsin taels. The following formula demonstrates : Shanghai gold-bar price X 0.980 1.0132 X 0.978 X drawing rate It has to be borne in mind that charges and interest for shipments from Peking and Tientsin to foreign countries will be higher on almost every item as compared with Shanghai. The gold has to be transshipped at Shanghai and is therefore subject to extra freight and additional insurance and interest. EXPORT OF GOLD Bx\RS When exported, gold bars are wrapped in soft paper and wadding and are either packed into bamboo tubes, usually 10 bars into each tube, or placed in small but strong wooden boxes. The parcels are then wrapped with Hessian cloth, which is sewn up and secured by thin steel wire. Finally, they are pro¬ vided with a number of seals. The packing is inexpensive, and the cost is from 20 to 50 cents per parcel weighing between 4 and 5 kilos. The export of gold bars is made possible if the parity permits it. The parity is based on yen. Multiply the constant 4.7682 by the market rate for telegraphic transfer on Japan and add charges and interest to the result. If gold bars for spot delivery (actual bars) are obtainable below the parity, it will be pos¬ sible to export gold and obtain a profit. The theoretical as well as the practical aspect of the question will be demonstrated presently. In principle, gold bars may be exported to any country willing to buy them at the seller’s price. There are no restrictions placed in the way by the Chinese Government, and there is no duty imposed on gold shipments inward or outward by the customs. Export to America .—Since 1920 very large quantities of gold bars have been shipped from Shanghai to the United States of America. There was a total interruption of export in 1922, when the parity did not allow the shipment of gold bars from China to the United States, but shipments were continued again in 1923 and 1924. Here a warning may be inserted as to the handling of gold bars from Shang¬ hai. The fineness of gold shipped from China is guaranteed by the seller. If it exceeds 0.978, a refund is made by the buyer at Shanghai, but if it is below this standard a refdnd is claimed from the seller. A bank at Shanghai often makes a large shipment of gold bars to the United States; such shipments con¬ sist frequently of bars contracted for with sundry sellers. It is true that the bars are numbered; but if they are melted together and then found at the assay to be deviating from the fineness of 0.978, it will be impossible to ascertain whose bars had been deficient. In such an event it will be impossible to allocate the claim to the party concerned. Therefore it is advisable to have a clearly stipulated lot of gold bars melted separately. Claims at Shanghai are settled according to the actual fineness, on the strength of the mint’s assay certificate. For instance, a bank at Shanghai buys 70 gold bars with a guaranteed fineness of 0.978. This would mean 68,460 units of fine contents. After assay at the United States mint it was ascer- 172 COMMERCIAL HANDBOOK OF CHINA tained that some bars were only 0.960, others 0.945 fine. The total difference was certified to amount to 1,220 units of fine contents. The bars were origi¬ nally purchased at Shanghai at 282.50 taels per bar, so that the seller will have to refund to the bank here 344.65 taels. After these preliminary remarks it may he appropriate to turn to the consid¬ eration of actual shipments of gold bars to America. These are, owing to proximity of that port,, consigned to San Francisco, but may just as well be directed to any other of the four remaining mints (Carson, Denver, Philadelphia, or New Orleans), or they may be addressed to one of the Government assay offices at New York, Boise, Charlotte, Deadwood, Helena, Seattle, or St. Louis. Charges and interest fluctuate. The following is illustrative, based on rates prevailing at time of computation: Per cent Packing and postage_0. 030 Brokerage at Shanghai_ . 050 Insurance_ . 015 Mint charges_ . 040 Correspondent’s commission and other incidentals in America_ . 250 Total charges_ . 385 Interest. 30 days at 5 per cent_ . 415 Total_ . 800 The equivalent of $100,000 is 4,196.9339 Shanghai taels (weight) of gold bars (0.978 fine). Consequently the value of 1 gold bar of 10 taels weight is $238.2680. Constant (United States currency)_$238,268 Deduct charges and interest (variable) _ 0.800 Remainder_ 237. 468 In order to find the mint parity between Shanghai gold bars and United States dollars, divide the constant by the bank’s buying rate for telegraphic transfer on America and deduct charges and interest. If gold bars are obtainable below the figure obtained by such a computation, it will be possible to ship gold to the United States. BANKING For a clear understanding of banking in China it is important to mark the distinctions between foreign banks and Chinese banks. Of the foreign banks in China, there are 4 American, 1 Belgian, 4 British, 3 French, 2 Dutch, 1 German, 1 Italian, 35 Japanese, 3 Russian, and 1 Scandinavian. Notwithstanding the restrictions in business imposed upon them by operation of the treaty laws, the foreign banks have become powerful institutions in the principal trading centers of the country. FOREIGN BANKS Foreign banks are entitled to establish themselves only in treaty ports, and they have no right of operation in nontreaty port cities. They are, for the most part, subject to the laws of their respective countries, under the jurisdiction of the duly authorized representa¬ tives of those countries in China; hence they are ordinarily not sub¬ ject in any respect to the laws or control of China. Since, except in special cases, foreigners other than missionaries may not hold land in China outside of designated treaty ports, the foreign banks may not ordinarily participate in financial projects which would involve securities falling outside the limits of the treaty-port areas. There is nothing to prevent foreign banks from financing projects within treaty-port limits, but the main business of foreign banks in China CURRENCY, EXCHANGE, AND BANKING 173 is that of financing foreign trade. The life of their business is the handling of bills of exchange. Working through the fictitious tael units, of which there are many, and through other units of currency differing in one part of the country from those in another, the foreign bank in China probably has a more lucrative field in its exchange transactions than obtains anywhere else in the world. The manager of one of the foreign banks, when asked why his bank had not extended greater facilities to local merchants in financ¬ ing their business operations, answered that his bank’s turnover in exchange transactions could net the bank annual profits of 15 to 20 per cent, which was more acceptable to the stockholders than “ com¬ mercial banking,” in the American sense of the phrase. The largest and most influential of the foreign banks in China is a British institution which has celebrated its seventieth anniversary. Much of its strength lies in the fact that it is an indigenous institu¬ tion, with its head office in Hongkong and not in London. With its board of directors on the ground and with their knowledge of the details of the bank’s business in China, they can act with quick deci¬ sion and intelligence on all matters affecting the bank’s interests. second advantage which this bank possesses is the wide distribution of its shares among the substantial British and Chinese business public; hence it has in the mercantile life of China a considerable clientele which is financially interested in its success and which naturally con¬ tributes to its business. Thirdly, through its recognized position of strength in British financial circles it has been accepted by British financial interests as their natural representative in transactions in¬ volving loans and other finance accommodations, with the result that this bank is the depository for certain Chinese railway funds pledged for British loans and, through Great Britain’s predominant position in the customs and salt administrations, for a portion of the customs and salt revenues. The aggregate of all these probably amounts to an average balance of $10,000,000 silver in ready resources, some of which the bank holds free of interest charges. Through the strength of its position thus developed over a long period of years this bank is virtually dictator of the silver rates in the China ex- i , change market as they affect foreign trade. Many of the foreign banks have their notes in circulation in the ' principal treaty ports of the country. To the American it is a curious situation which permits a bank in one locality to discount its own notes issued for another locality; but the currency-exchange situation in China makes this possible, for the reason that money is always a commodity while serving as a medium of exchange. Hence the banks’ buying and selling rates of the various moneys in circulation differ as to net profits to the banks on all exchange transactions. CHINESE BANKS Chines banking is undergoing a transition. It was the failure of Chinese banks to meet the necessities of the foreign traders which encouraged foreign banks 3 to expand into the powerful institutions - - - -—— - — 3 A detailed description of foreign, semiforeign, and native banks in China may be found in Currency, Banking, and Finance in China, by Frederic E. Lee, published by the Bureau of Foreign and Domestic Commerce, Washington, D. C., as Trade Promotion Series No. 27. 174 COMMERCIAL HANDBOOK OF CHINA they have become. Gradually, however, the Chinese are developing modern banks and there are now in Shanghai, Tientsin, Hankow, Canton, and other trading centers Chinese banks possessing the facilities and discharging functions patterned after the foreign in¬ stitutions. They still lack an effective Government control, for China has still to develop a system of bank inspection and the effec¬ tive administration of banking laws for the control of note issues, reserves, loans, and similar functions of banks. Until about 1890 the Chinese Government showed little evidence of interesting itself directly in business enterprise, and prior to 1900 the banking of the country, other than that of a purely local community character, was for the most part in the hands of Shansi bankers. The Shansi bankers commanded more than 50 per cent of the larger banking business of the country. They had branches throughout the country, and their monopoly of the Government business and the resources which this emolument placed at their command gave them great strength. But they disappeared entirely as a corporate body in 1912. Thus native banks, even in Shansi, to-day are not necessarily Shansi bankers in the original sense of the word. An interesting sidelight on business methods in China, as practiced by the Shansi bankers and involving the mutual responsibility of individual and family, is shown in the extract below from a report made some years ago by Mr. T. W. Wright, of the Chinese Maritime Customs: A peculiar feature in the constitution of these banks is the extraordinary manner in which the employees are treated. The bankers themselves, being Shansi men, employ only natives of that Province, and, when possible, select men out of their own villages. When a man is appointed to a post at one of the branch offices, his family is taken charge of by the bank and held as security for fidelity and good behavior. At his post the employee may send no letter to his family, except an open one through his master; he receives no pay or salary of any kind while away; officials are enter¬ tained, clothing is purchased as required, and sundry expenses are incurred, and every item is met with the bank's money, the strictest account being kept of all expenditures on behalf of the individual. A man holds his appointment for three years, and then returns to his employer’s house, taking with him the account of the money expended during his term: he is duly searched, and the clothing he has purchased undergoes examination. Should it happen, after examination, that the accounts, etc., are satisfactory and the affairs of the bank have been prospering during the man's tenure of office, he is handsomely rewarded, and is allowed to join his family, who are immediately released. If, on the other hand, business has not prospered under the man’s management and he has presented an unsatis¬ factory account, clothing and everything are retained, and the family are held in bondage until a suitable fine is paid, or the man himself may be imprisoned. Following the settlement of the Boxer troubles, the Chinese cus¬ toms funds became a pledge for foreign loans, and gradually the foreign banks became the depositories of the funds necessary to meet these pledges. Also the loans pledged on the salt revenues and the loans for railway construction made the banks of the for¬ eign nationals negotiating these loans the depositories of funds for the meeting of interest and amortization charges. Thus the Shansi bankers lost their monopoly of the Government business. Moreover, the provincial banks—which have sprung up since 1900— absorbed much of the business originally given to the Shansi banks. 1 / CURRENCY, EXCHANGE, AND BANKING 175 In 1908 the central Government effected the organization of a State bank (Bank of China) and a special bank (the Bank of Communications) for the handling of funds for the Ministry of Communications. But during 1916 the disorganization of the central Government disrupted the management ol these banks as State institutions. Private business interests affiliated with them o-radually succeeded in wresting them from Government control and saved them from being completely wrecked. The Govern¬ ment’s interest in both the Bank of China and the Bunk of Com¬ munications was reduced to a minority interest, and these banks are now more private than public in character, although they con¬ tinue to enjoy certain privileges carried with their original charters. The greatest source of confusion in Chinese banking circles is the provincial bank, which has often been used as the instrument ot some provincial military governor who utilized it for the issuance of paper currency far in excess of the bank’s specie reserves. Probably no other agency has done more to disrupt Chinas cur¬ rency than provincial banks under the domination of liiesponsible military forces. The demoralization, however, has not proceeded as far ^as might be surmised by those unfamiliar with the power of the Chinese guild and other private agencies to combat them. Moreover, the average tenure of office of the ordinary military overlord in any one section of the country has been comparatively short. These factors have mitigated in some degree the damaging effects of the use by unscrupulous military governors of the pro¬ vincial banks. . . _ _ , . In all, there are between 100 and 150 individual modern Chinese banks with an aggregate paid-up capital of $150,000,000 to $200,- 000 000 silver. The Bank of China and the Bank of Communica¬ tions, which figure among the larger of these "modem banks, have, respectively, 113 and 60 branches throughout the country. The Bank of China has in circulation in China its notes to an aggregate value of $90,000,000 silver, secured by $50,000,000 silver specie reserves. Thus it may be said that, with the exception of the pi o vincial or semiofficial banks, the modern-style Chinese banks appear to be developing along sound and progressive lines. The bulk of the actual banking business in China, however, is still in the hands of the old-type native banks. Banks of the old type in China grew up without Government regu¬ lations, registrations, inspections, or assistance. It has been the policy of the Chinese Government to interfere as little as possible in the affairs of its subjects. The old-type native bank is an indi¬ vidual or partnership concern,, with all the members of the family and all the partners jointly and severally responsible to the limit of their liabilities. Except for its relations with the bankers guild, it is independent of all other banks. Its reputation and standing in the community depends, first, upon its proprietor and then upon its manager. These two are all supreme. # . . . The prime qualification for entering a banking business m China is evidence of a good financial standing among one s neighbois, coln- bined with sufficient capital to insure reasonable success. A capital of $50,000 silver ($25,000 gold) would be considered very substan- 176 COMMERCIAL HANDBOOK OF CHINA Fig. 6. —Interior of one of the leading Chinese banking institutions in Shanghai CURRENCY, EXCHANGE, AND BANKING 177 tial—in fact, is the usual limit for the old-style native bank. The statement has been made that one of the peculiar features of a Chinese bank is that it does not work for the account of outside funds, but that its asset business is carried out exclusively for the account of the proper capital of the banks and of loans made with larger credit institutions. (The native bank does not finance indus¬ trial concerns, nor does it grant long-term loans. The old type of nature bank did not seek palatial quarters, for officialdom might be attracted by what could be interpreted as evi¬ dence of prosperity, and tax exactions in some form or other would be sure to follow. Some protection from this menace could be expected from the bankers’ guild, but a banker would have himself to blame if he stepped out and unnecessarily gave evidence of wealth. If a banker is known to lneet his obligations, he may extend the issuance of credit to his dealers, and his orders will be accepted with¬ out question by other native bankers or dealers. The law did not require the banker to keep on deposit a certain security against \ notes issued. / The native bank receives deposits, for which it pays interest rates up to 10 per cent. These are on fixed deposits with a minimum period of six months. The Chinese public is not gen¬ erally educated, however, to depositing its money in banks, nor did these banks carry current checking accounts. There were no legal restrictions on loans made by banks or on interest charges which, from a western point of view, are often usurious. One and a half per cent a month is considered a reasonable rate. Some of the native banks maintain warehouses for the storage of grain and other f com- modities offered as security for loans, but these are unusual. Most loans are made on personal security backed by personal guarantors. The family system, whereby a person’s responsibility extends to the melnbers of his family (family in the generic sense of clan), made this a more practical custom than it would otherwise seem. Exchange transactions offer to the native banks probably the steadiest source of income. Some of the merchant organizations transact their own exchange business through a special class of native banks. These concerns have a very considerable turnover in the interchange of commodities between different places, hence, with very little shipment of coin or bullion, are able to pay bills drawn in one place against another place. The bankers’ guild is the one important bond which holds these native banks together and makes possible their continued operations along the lines which have characterized their activities over so many centuries. Each city in China has its bankers’ guild; in fact, in many cities it is the most important commercial organization. The guild fixes the rates of interest, exchange rates, regulations regard¬ ing procedure, and a multitude of details concerning the conduct of business. Membership is not obligatory, but it is of such advantage that no one can afford to remain outside the guild. One of its im¬ portant functions is the adjudication of disputes. The guild’s arbi¬ tration committee handles matters which elsewhere would lie within the functions of a court. / The guild also provides certain clearing¬ house facilities for members. The Shanghai native bankers’ guild provides that each money dealer may send his books to the exchange 100020°—26-13 178 COMMERCIAL HANDBOOK OF CHINA twice a day to square accounts, in fact, the clearing-house arrange¬ ment in Shanghai, which is under the auspices of the bankers’ guild, is much less cumbersome than that of the foreign exchange banks, which are obliged to make their settlements each day in specie, neces¬ sitating huge quantities of silver to be carted around the streets of Shanghai every evening in effecting settlements, which, it would seem, might be handled in a clearing house. An interesting comparison between the old-style native bank and the modern Chinese bank of the capital of Shantung Province, a city of about 300,000 population, is given in the November, 1924, monthly report of the Chinese Bureau of Economic Information: Notwithstanding the introduction of modern banking institutions into Tsinan, native banks continue to hold sway on the local market. Over 185 native banks are now flourishing. Forty per cent of these have been in existence since pre- Republican days. These older institutions, as a rule, are well managed and financially sound. Their proprietors are mostly wealthy merchants of Changkiu, a hsien (district) in Shantung Province, from which the majority of the bankers in Tsinan come. Those established in pre-Republican days are very conservative. They retain many old-fashioned practices. Their capital is counted by the string of cash instead of the dollar or tael. A string of cash in Tsinan is equivalent to about one-fifth of a dollar. The amount of capital pos¬ sessed by each of these institutions varies from 20,000 to 100,000 strings of cash. These banks are generally run by men who thoroughly understand their business, and are always on a sound basis, notwithstanding their moderate capitalization. Those which have sprung up since the establishment of the Republic have many new features. Their capital is counted by the dollar. Fifty thousand dollars is a very moderate sum for the capital of such a bank. Invariably they have connections with certain military leaders or high Government officials, who are of assistance in establishing their position, and, of course, benefit from their prosperity. These institutions are generally housed in well-built premises and present a better outlook than the old banks; but from the business point of view, they are considered less sound financially. Tsinan native banks usually confine their activities to general banking business, such as loans, deposits, and exchange. They are seldom engaged in business of a speculative nature. BUSINESS OF CHINESE NATIVE BANKS Mr. E. E. Kann, a Shanghai banker, describes the business of the Chinese native banks as follows: The native banks establish the official rates for internal exchange. They determine the official market rate for local dollars in relation to taels. They likewise fix interport quotations. The native banks fix the daily native interest rate. This latter is of great importance to the economic life of China. It corresponds to the interest rate for call loans in the Occident. Native interest is quoted twice daily in can- dareens per 1,000 taels per diem. According to existing rules the upper limit for native interest is 70 candareens. If the quotation is given, for example, as 20 candareens, this corresponds to an interest rate of 7.3 per cent per annum. (Multiply the native rate by 365.) The native interest quotation is subject to factors similar to those determining the rate for call money in Europe and America, yet in China it is much more sensitive. Generally it is an excellent barometer for the state of the local money market. Another branch of local exchange, left entirely to native banks, is the fixing of daily rates of exchange for small coin in silver, copper cents in terms of taels, and silver small coin pieces and coppers in terms of the Chinese dollar and vice versa. All the quotations given out by the native banks in Shanghai are the result of regular Bourse proceedings, held twice daily, except on Sundays. The following are some of the other categories of business as transacted by Chinese native banks: Deposits .—Current accounts as well as fixed deposits are accepted, the latter carrying interest at a rate to be specially arranged. Up to the present, native banks have not been catering for savings accounts. 179 CURBENCY, EXCHANGE, AND BANKING Current accounts are opened after a pass book lias been sent to the depositor by the bank. The latter employs a special outdoor staff to report on the standing of prospective clients and to acquire new customers. All deposits are simultaneously recorded in the pass book, and all native orders issued by the bank on behalf of its client must be entered at once in the pass book. In the majority of cases interest on current accounts is subject to the average monthly native interest rate, from which 5 per cent is deducted. Some of the larger institutions refrain from paying interest during the first and also during the last month of the Chinese year, because these embrace China’s great settling days and holidays. Inter provincial remittances .—Many native banks have branches in the principal trade centers of China and correspondents in others. Transfers are effected by means of drafts, letters, or cables. Drafts, when drawn at a usance of 3 to 10 days after sight, are subject to previous acceptance. Loans and overdrafts. —Most of a native bank’s clients receive shortly after the Chinese New Year a pass book, on the first page of which is written a brief by an authority to overdraw up to a given limit. In time of war or civil commotion, when business is thrown into confusion, the native banks are likely to stop granting further credits to clients, notwithstanding the written authority extended to customers in the beginning of the year. They even have the right to call for payment, without previous notice, of an over¬ draft already granted. The rate of interest on loans is a matter of arrangement. Interest rates on overdrafts are calculated and debited monthly. Issue of negotiable documents. —In place of money Chinese native banks often issue a sort of cashier’s order written on a small slip of native paper, which is payable on demand to bearer, is negotiable as a bank note, and, like the latter, will not be replaced in case of loss. In the lower right-hand corner there is a small seal meaning “ clearing.” This remark corresponds somewhat to the foreign custom of crossing checks and adding “ & Co.” The kind of document just referred to is given to lending banks by native banks, whenever the former grant call loans (chop loans) to the latter. It is typical that this kind of promissory note does not contain a due date, nor an interest clause, notwithstanding the fact that both have been clearly agreed upon, when the “ chop loan ” was negotiated. The inten¬ tional omission speaks well for the trust which the native banks bestow and obtain. Foremost amongst the negotiable instruments issued by native banks is the native bank order, called, in short, “ native order.” It is issued by the bank at the request of its clients, to whose account the face amount is debited at the time the native order is issued; but the value date always corresponds with the due date of the native order. The latter is usually payable 10 days after date, sometimes 5 days and sometimes at sight; in the latter case the order is stamped “ Tsi,” meaning immediate. Other usances are admis¬ sible, but not common. The 10-day native order is the one principally employed for purposes of trade. All orders are actually payable one day after that on which they are due. FINANCING BUSINESS THROUGH BANKS IN CHINA SETTLEMENT OF ACCOUNTS Among the Chinese, trade settlements are made twice each month, monthly, or quarterly, on certain festival days, and at the end of the year. Most business is done on the shorter-credit terms. The three festival days are very important for the clearing up of out¬ standing accounts, and the end of the year is the great settlement period for the whole mercantile community throughout the entire country. It is a custom among Chinese to settle all outstanding accounts before the dawn of the New Year. Chinese merchants do not discount bills for cash at any certain or fixed rates. They do, however, make deductions for cash payments, but each case is considered and treated individually. The rates of interest on money range from 1 to 2 y 2 per cent a month. 180 COMMERCIAL HANDBOOK OF CHINA PURCHASES BY CHINESE DEALERS The Chinese dealer handling foreign goods generally makes his purchases through resident importers, who are, for the most part, foreigners (non-Chinese). The importer opens credit at home through his bank in Shanghai. Bills are drawn on him in letter of credit, accompanied by shipping documents. He accepts them generally on 90 to 180 days’ sight. When goods arrive, bills of lading, invoice, and, if necessary, shipping papers are handed over to him by the bank, with indorsement. Goods are stored to the order of the bank. Landing and warehouse receipts are sent to the bank. The importer pays all charges. The Chinese dealer applies to the importer for the delivery of part of the goods, giving him a native bank order for an amount proportionate to the goods taken. The native order is sent by the importer to the bank, which issues a delivery order for the goods and at the same time credits the special account of the importer for the amount of the native order. When all goods pertaining to a certain bill are delivered and all the pay¬ ments credited, the bank sends out its account for the original bill in local taels and remits the face amount to the home bank. The importer has the privilege of settling the exchange whenever he likes before the due date of the bill. Bills are generally renewed by the banks in China for a reasonable period, in case goods have not during the period stipulated been all delivered. NATIVE BANK ORDERS A document that plays an important part in trade transactions between foreigners and Chinese is the native bank order. The average Chinese business house carries accounts in a number of Chinese banks and pays its bills in orders on these native banks. The orders are in local taels and are postdated 10 days. The for¬ eign banks charge a small fee for entering all native orders presented for credit—20 cents on each order, presumably the expense of sending a messenger to cash the order. BANKS OF ISSUE In Shanghai there are two classes of native banks (in addition to the modern Chinese bank) which issue money orders on a tael basis that are known to foreigners as “ native bank orders ” and to Chinese as “ chwang piao ” (tickets issued by banks). The two classes of banks are “ hwei hwa, 1 ' or registered banks, and a tiao t’ang,” or unregistered banks. The registered bank is recognized by the native bankers’ guild, the committee of which will settle all questions of dispute between banks and their clients or other parties. “ Hwei hwa ” means, literally, “ to transfer,” and “ tiao t’ang,” “ to jump and strike.” They are simply terms manufactured by the bankers themselves and convey no other meanings. The bank that registers itself at the guild must have a capital of at least 20,000 taels, while unregistered banks may open with any amount of capital and are not subject to the control or protection of the guild. Notwithstanding the fact that “ tiao t’ang,” or unregistered banks, as compared with “ hwei hwa,” or registered banks, are looked CURRENCY, EXCHANGE, AND BANKING 181 upon by the public in general as of inferior financial standing, they outnumber the hwei hwa and circulate their orders as freely as the latter, by reason of the fact that the Chinese mercantile community investigates the personnel represented by the bank’s capital. Mere registration carries but little significance, and there are a number of banks in Shanghai organized by men of wealth but unregistered because they prefer to save the 1,000-tael registration fee. From the standpoint of the Chinese business community, it is the financial standing of the bank’s proprietors and not the bank’s stated amount of capital that determines the willingness of the public to accept the bank’s orders as negotiable paper. For instance, one of the banks enjoys the highest public confidence, though its stated capi¬ tal is only 10,000 taels. It is owned by a man who is known to possess personal and real property worth several millions. In foreign trade it is the obliga¬ tion of the comprador of the for¬ eign firm to deal with only those Chinese banks whose proprietors are known to have a good financial standing, for in case of liquidation the personal and real property of the proprietors concerned will be realizable assets. Thus the com¬ prador in a leading firm or bank usually keeps a list of banks whose orders are acceptable, and it is of prime importance that he should from time to time reverify the financial condition of their proprietors. The foreign business men or bankers take little or no trouble to investigate the financial standing of native banks with which they deal, relying almost entirely upon their compradors. FORM AND NEGOTIABILITY OF BANK ORDER In form the native bank order is very simple. It is a piece of yel¬ lowish Chinese paper, usually 4 by 5 y 2 inches in size. There is no special printing distinguishing it from any other document. It is made out in the same manner as an ordinary Chinese invoice, con¬ taining red chop impressions and black-ink letters. Figure 7 is an illustration of such an order. A and B in the squares show the chops of the banks issuing the order, but in the case of A only half the chop impression is shown, the other half being impressed on the page of a stub book. In the space C are two Chi¬ nese characters, meaning that the order is payable by transfer at the date of the order, and payable in cash one day after the date of the order. D gives the words “ charges for collection ” and the hour after which cash payment is not possible. A' A' in dotted lines show the numbers of the order, and B' B' in dotted lines the amount of the order. The amount is usually on a tael basis, but may, at the Fig. 7.—Native bank order 182 COMMERCIAL HANDBOOK OF CHINA request of the client, be on a dollar basis, which is unusual. C' C' in dotted lines show the date of payment. The lunar calendar only is used. A merchant when receiving a bank order usually sends it to his own bank for collection, and D' in dotted lines gives the chop impression of the bank to which the order is sent for collection, show¬ ing the words, “This order is payable only to-Bank; anyone finding it can not realize on it.” In case the bank of collection sends it to another bank for collection, the bank to which it is sent usually cancels with dotted marks the chop impression given by the first bank for collections and chops thereon its own chop, showing similar words, except the difference in chop name. The half-circle mark above A in the half square means that the order has been certified by the bank of issue, the other half circle being impressed on the stub book. This circle mark is made with bamboo-brush pen in red ink. A bank order so certified carries with it the responsibility of the bank of issue, the responsibility of the maker toward the payee being thereby canceled. It is, however, important that certification of bank orders shall be made by the bank or banks to which they are sent for collection, for the banks of issue will not bind themselves if the orders are sent for certification by individuals or corporations other than bankers. When others send an order for certification the bank of issue will simply inform the bearer or holder of the order that it was issued by a bank, and it will not chop the circle mark as required. This circle mark is the essential of certification and is not obtainable by any person other than the banker. Chinese business men sometimes lose because they are ignorant of the requirements of this procedure. TERMS Among the trade in Shanghai the prevailing custom is to pay for goods obtained with a native bank order, 10 days postdated, with the date of issue and the name of payee not specified thereon. In a few exceptional cases bank orders are issued payable at sight. In this case the word “ tsi,” meaning u immediate,” is usually written in bold writing on the date space of the order. The bank that issues such an order usually charges its client as if it were issued one day previously. Foreign merchants who are newcomers in Shanghai often require bank orders of this description, and Chinese merchants dislike on this account to deal with them. There are bank orders that are issued in terms of 3 or 15 days, postdated, but the pre¬ vailing custom among the business community is 10 days, postdated. RESPONSIBILITY FOR PAYMENT As explained, a bank order, once certified, must be paid by the bank of issue. It is the prevailing custom in Chinese banking circles for the banks of issue to pay their own orders, whether certified or otherwise; and should a bank be unable to cash its own orders, it is forced into bankruptcy at once. Thus the orders are negotiable and are almost as good as cash. Chinese merchants hesitate to take for¬ eign bank checks in payment for their merchandise, as they do not know that checks can be certified as bank orders. Another advantage in the use of the native bank order is that it can not be cashed by strangers, and, except for small amounts, it is CURRENCY, EXCHANGE, AND BANKING 183 usually collected by the bank to which it is sent for collection. When a bank has been notified to suspend the payment of an order already issued, it is the usual custom of a registered bank to place in the bankers’ guild the funds necessary for payment. These funds will be released only after all questions of disputed ownership are settled. Some foreign firms issue checks to their compradors for merchandise purchased, and the latter change them into native bank orders, 10 or 15 days postdated, to the payee. This is a handsome source of profit to compradors of large firms. Some merchants, however, knowing the advantage of dealing with native banks, utilize this system of paying by native bank orders instead of by check, and they effect considerable savings thereby. However the case may be, foreign merchants must use native bank orders, either directly or through their compradors, since these native orders are used exclusively by Chinese business men in pay¬ ment of goods or for redemption of mortgages. All the leading for¬ eign banks accept native bank orders through the guaranty of their compradors. Many well-established foreign business houses accept such orders without certification at all and release the goods so paid. Especially is this the case when such orders are given by a known buyer of good standing. But the general practice among foreign banks is to have the order certified before its acceptance. Among business houses acceptance is left to the comprador, who usually accepts without certification if firms or merchants are of good standing. CHINESE BANK CHECKS There is another form of money order used to some extent by Chinese merchants, called “ chih tan,” or check, for which the bank against which it is issued accepts responsibility limited to that of the person against whose account it is drawn. The check book of these banks is in three parts—first, the stub; second, the check proper; and, third, the advice for sending to the bank by drawer as advice of issue. The bank chops across a portion of the second and third parts its seal, or chop, so that when the check is presented for payment it may agree with the advice already received. The customs and practices above outlined have developed in a country in which a body of law and legal procedure is in the making, so that merchants have had to devise ways and means of protecting themselves in business transactions and in documents used. For detailed information regarding the financing of imports into China, see the chapter in this handbook on China’s import trade. For information regarding financing exports, see the chapter on Chinese exports. [A list of foreign and modern Chinese banks in China may be secured by application to the Bureau of Foreign and Domestic Commerce, Washington, D. C.] BIBLIOGRAPHY Bouleau, M. Practical Guide to Far Eastern Exchange. 150 pp. 1923. China Weekly Review (Shanghai). Special banking and financial issue, June 30, 1923. China Year Book. Issued annually by-the Tientsin Press. Chinese Maritime Customs. Annual reports on foreign trade of China. The report and abstract of statistics and the ports reports contain much valuable current information regarding China’s currency, exchange, and banking. 184 COMMERCIAL HANDBOOK OF CHINA Easton, H. T. Arbitrage. London, Effingham Wilson, 1910. Jernigan, T. R. China in Law and Commerce. 400 pp. The Macmillan Co., 1905. Lee, Frederic E. Currency, Banking, and Finance in China. 220 pp. Trade Promotion Series No. 27. United States Department of Commerce, 1926. Morse, H. B. The Trade and Administration of China. Shanghai, Kelly and Walsh, 1912. This work contains a splendid chapter on China’s currency. Spalding, William F. Eastern Exchange, Currency, and Finance. 375 pp. Bath, Melbourne, New York, Sir Isaac Pitman & Sons (Ltd.). Spalding, William F. Foreign Exchange and Foreign Bills in Theory and Prac¬ tice. 234 pp. Otto. Die Arbitrage. Berlin, Haude & Spenerische Buchhandlung, Dr. G. On Chinese Currency. Amsterdam, J. H. de Bussy, 1912 and R. Finance in China. North China Daily News and Herald, 1914. Swoboda, 1921. . Sast two decades thousands of Chinese students have matriculated in western universities, imbued with the idea of making China over along modem lines; but the experience of the past few years has shown that the task is too stupendous and that no hasty progress in connection with the establishment of a new economic order in China may be expected. To some this has brought a keen sense of disappointment in the nfficacy of western ideas, and has in¬ duced reaction. There are those who lay the blame upon the foreign institutions, and advocate a reversion to the old order. The better balanced, however, realize that too much was expected of the super¬ ficial in western learning, as acquired by many of those who jour¬ neyed abroad, and who looked to it to serve in itself as a panacea for China’s ills. There is now a substantial realization, on the part of these better informed persons^ that what modern science and western learning have to offer must be adjusted to meet the peculiar needs of the Chinese environment. China was not prepared for the drastic changes which came with the overthrow of a monarchy of several thousand years, and the sudden inauguration of a republican form of government. Under the old order the family system had been accentuated to such a degree that the individual was trained to a deep and keen sense of responsibility in his relations to the family or clan, but with little or no appreciation of responsibility to the larger unit, the community or the nation. Thus public opinion, so essential to the success of a representative form of government, had not been developed under the monarchy. What protection the individual required in his rela¬ tions to society was secured through his affiliations with his clan and with his trade, craft, or provincial guilds. Custom and tradition carried more weight than law. The lawyer was unknown in Chinese society prior to the beginning of the twentieth century. A man’s relations to his fellow men were based upon equity rather than upon legal definition. On the whole, society was very loosely knit, so far as its relations to the larger unit, the central government, was con- china's economic structure 277 cerned. So long as China remained isolated, this condition of affairs might have continued. There were apparently no reasons from within for a change, but the inevitable contact with the civilizations of other peoples altered the entire situation. With the inauguration of the Republic, there has been a tendency to scrap the institutions of old China in wholesale fashion irre¬ spective of relative values, and to take on occidental institutions in form rather than in essence. For instance, the ideas of corporate business, as taken from the west, can not succeed in China without an accompanying sense of the responsibility of trusteeship. Poten¬ tially the Chinese possess the qualities necessary to the success of corporate enterprise, but before corporate business can be developed in a large way among the Chinese mercantile communities, it will be necessary to institute a body of law and courts competent to build a solid foundation for the new order. Fig, 11.— Automobile on new type motor road During the past decade, the Chinese have organized numerous manufacturing companies of a corporate nature. Under the extraor¬ dinary conditions resulting from the World War, huge profits were made, but, unfortunately, these were paid out in dividends wdtliout the building up of reserves or provisions for depreciation and main¬ tenance. Consequently with the leaner years following the termina¬ tion of the war, many of these companies suffered financial em¬ barrassments for lack of liquid capital. The family system, admirably adapted to the old order before the introduction of modern machinery and the application of the prin¬ ciples of modern science, handicaps in many ways the building up of trade and industry on modern lines. The responsibility of a successful member in a family for all his relatives is disastrous to the pay roll of a corporate institution in which the successful member 278 COMMERCIAL HANDBOOK OF CHINA is a director. The institution known in China as “ face,” which is so strongly identified with the family system^ militates against young men starting at the bottom of the ladder and working their way up. Students trained in engineering in the West return to China reluctant to participate in anything resembling manual labor. “ Face ” stands in the way. The trade and craft guilds’ apprentice system also adds to the difficulties of young men of education launching upon a career in business or industrial establishments. Gradually these handicaps to the successful institution of a modern economic order will disap¬ pear, but for many years after they have disappeared in form the essence will continue in evidence. An analogous situation exists in Japan, where in form fuedalism has disappeared while in essence it continues to embarrass industry and trade. The greatest handicap to the rapid institution of a successful modern economic society in China is the disintegration of central government authority. Following the dissolution of the monarchy, numerous individuals working through the control of military or¬ ganizations, have set themselves up in various parts of the country as semi-independent rulers, with the result that we now have in China over 1,000,000 men under arms serving various leaders, each pitted against the others in efforts to strengthen his own political position. The economic conditions in the country generally have encouraged individuals to join the standards of these semi-independent leaders as promising them a better means of livelihood than the struggle to eke out an existence otherwise. Thus, soldiering in China seems to be a matter of necessity rather than of choice. With improved economic conditions, particularly improved internal communications, the temp¬ tation to leave the productive employments for employment in brigand armies would be less in evidence. Thus, whatever may be done to improve the general economic conditions of the country would assist in hastening the development of a stronger central government. A promising aspect of the situation is the sense of nationalism which is growing, particularly among the business men, bankers, and the students of the country. This, together with the receptivity of the people generally to modern ideas, promises much for the future. The Chinese are esssentially an industrious people; they possess good ethical and educational ideals; and they are natural traders and show ability in handling the machinery of modern in¬ dustry. The problems confronting the country to-day are stupen¬ dous. The transition from a mediaeval civilization to that of a modern social and economic order, for a people possessing one- quarter of the world’s population and an area greater than that of the United States or Europe, must of necessity be attended with fric¬ tion and must involve the time element, especially as the evolution is one from the bottom up rather than from the top down. Nothing better exemplifies China’s backwardness in a modern eco¬ nomic sense than its per capita consumption of iron and steel, which is one one-hundred-and eightieth of that of the United States, one one-hundredth of that of England or Germany, one-tenth of that of Japan, and one-thirtieth of the average per capita consumption of the world generally. The country possesses the best coal and iron resources of the Pacific regions, but very little by way of develop- china's economic structure 279 ment has yet taken place in these two industries which constitute the backbone of the modern industrial society. Further details as to China’s productive capacity will be found in the section in this handbook on “ China’s export products.” These figures indicate clearly the backwardness of the country in a modern economic sense, and, at the same time, serve to convey to the minds of the American reader, who resides in a country very similar in topography to that of China, the enormous potentialities of the Chinese Republic as a modern economic society. Among western observers there are those who would discourage China’s rise as a modern economic and political society, fearing the competition of the 400,000,000 of industrious Chinese, when armed with the implements of modern science. A weak, undeveloped China is a far greater menace to the world than a strong, well ordered, well nourished population would be—especially one possessing the rich background of culture that characterizes the Chinese. The West need only fear a “ Yellow Peril ” so long as the economic level of China remains below that of the Occident. Through the de¬ velopment of China, and of Asia’s great treasure houses of natural resources, the economic level of the Chinese people can be elevated to that approaching America’s, with a corresponding advance in the earning and purchasing powers of the individual. It is then to the interest of the American people to assist in every possible way the improvement of the economic condition of the Chinese. CHINESE GOVERNMENT FINANCE By Assistant Commercial Attache A. H. Evans, Peking The power of government to tax and bring the proceeds into its own treasury is the first factor requisite to a successful administra¬ tion of public finance, whether on a large or small scale. The cen¬ tral Government in China has not held this power in the past and does not do so to-day. The wealth is in the country; the resources are there; but the methods of tapping them, while sufficient to sup¬ ply the comparatively modest needs of the Imperial dynasties, have broken down completely as a result of the hasty efforts made by the Republic to establish a centralized control of revenues which historically were always under provincial administration. Successful transition to the new centralizing policy would have been difficult in the most modern country, but in China the obstacles were out of all proportion to the facilities at the command of the Government to enforce obedience to the new order. The large area of the country, its numerous illiterate population, the unfamiliarity of the people with representative government and its methods, the scarcity of trained leaders, the inheritance of a corrupt office-holding class, and, above all, the unyielding resistance shown by the Prov¬ inces to the efforts made to centralize financial control, combined to make the task beyond the Government’s capacity. Attempts by outside interests to rivet their grip on various factors in the country’s economic life also have aggravated the situation. Since 1911 the financial condition of the central Government, both at home and abroad, has grown steadily worse under each succeed¬ ing regime. This condition is largely due (1) to the unfortunate borrowing policy adopted to meet administrative expenses and the contraction of other loans not used for productive purposes; (2) to the growth of the provincial practice of retaining central Govern¬ ment tax revenues; and (3) to the development of large military groups unwilling to acknowledge central Government authority but forcing the Government to support them. Prior to the revolution (1911-12) w T hich ended the rule of the Manchus and established the Republic, the Imperial Chinese Gov¬ ernment gave little attention to details of the financial administra¬ tion of the Empire. During centuries of time there had developed a decentralized system which vested in the provincial authorities power to collect all revenues. The Imperial Government Board of Revenue received regularly statements from the Provinces, pre¬ pared with decimal exactness, but these generally were estimates of collections rather than accounts of cash receipts. In theory, all revenue belonged to the Emperor. The requirements of the court, however, were comparatively small, and until the imposition of the Japanese w r ar indemnities of 1895 and the Boxer indemnities at the beginning of the present century there existed 280 CHINESE GOVERNMENT FINANCE 281 only a nominal burden of either internal or foreign indebtedness. By" imperial edict the court prorated its budgetary requirements among the Provinces according to their estimated abilities to pay, periodic remittances of goods and specie being made to Peking by the Provinces. No particular efforts were made by the court authori¬ ties to determine the specific tax from which the remittances had been derived, so long as demands were met promptly. Appoint¬ ments to important provincial treasury posts were made by the court in accordance with a carefully worked out system of values which graduated the appointment fees in proportion to the commercial importance and wealth of the district. When national emergencies arose and additional funds were required for defense purposes or to meet debt-service charges, new edicts were promulgated, placing upon the Provinces responsibility for securing the funds. The result of this system was to grant the Provinces a measure of financial inde¬ pendence which amounted practically to fiscal autonomy. The only important exception to this condition occurred in the case of the Chinese Maritime Customs, legally established through the Tientsin treaties of 1858 with the United States, Great Britain, France, and Russia, although it had begun to function four years earlier. This administration was under the general control of the central Government. Its actual receipts it made public in independ¬ ent statements published by the foreign inspector general. The reve¬ nues, it is true, still continued to go into the provincial treasuries, for the central Government was then in no particular need of these specific funds. The new method, however, of submitting reports founded on facts suggested to the court new possibilities in regard to the accounting that might be required of its provincial revenue¬ collecting agencies. Thereafter the central Government, w T hen its fiscal needs became most pressing, made intermittent efforts to strengthen control of provincial finance and to require more accurate accounts, but with small success. The situation is described by one writer 1 in the following lan¬ guage : There was general agreement on one point: that it was absolutely necessary the central Government should get more power into its hands, at least on purely financial matters. The Provinces had enjoyed from time immemorial the power of regulating their internal finances without any supervision what¬ soever, and it was only to be expected that they would not give way unless under extreme pressure. To exercise control of finances certainly meant that Peking intended to have a better grip over the Provinces in other respects. If the people had been profiting out of the misgovernment, if they had been paying less in taxes to the officials, a new call to bear additional burdens would not possibly have been felt; but the fact was that the taxpayer was ground down by the tyranny of the officials so much that no increase of taxation was possible wdthout exciting acute discontent. The officials were growing fat on the peculation which they were allowed to exercise freely so long as they paid sufficient in bribes to the court officials in Peking. The provincial officials had been emboldened, by the venal support they had in Peking, to offer less and less for the actual purposes of the Government. Repeated requests, demands, and appeals to patriotism met with very little response from the Provinces. The severe famines, floods, and other distress in the country, not to speak of the ever present and sporadic rebellions, not only led to increased provincial expenditures but also to frequent requests to Peking from the Provinces to forego, partly or entirely, or to postpone payment of the sums due from them. The central Government was only too well aware of the 1 Finance in China: S. R. Wagel (1914), pp. 10-12. 282 COMMERCIAL HANDBOOK OF CHINA fact that there were no means of enforcing the demand for increased contri¬ butions. The removal of a viceroy, a governor, or a treasurer as punishment for not fulfilling his duties diligently in the shape of sending contributions to Peking was one of the few courses that remained open. It was felt, however, that such expedients did not help toward the object in view. When the whole body politic was corrupt, it was impossible for the officials who were directly controlled and appointed from Peking to do anything in the way of increasing revenue. Following the war with Japan in 1894 China found it necessary to make three foreign loans in order to pay the indemnity de¬ manded by Japan. The central Government pledged the customs receipts as security for the Russian-French (1895) loan of 400,000,- 000 francs and the two Anglo-German (1896 and 1898) loans of £16,000,000 each, and used the proceeds to pay the Japanese. In 1901 the Boxer indemnity of 450,000,000 haikwan taels was added. No provision was included in the agreements specifically providing that actual customs funds were to be used in meeting the debt-service charges, nor were the customs rates increased to provide additional revenues to meet these new T charges. The representatives of the foreign interests received their payments as they fell due and asked no questions regarding the source from which they were derived. EFFORTS TO CENTRALIZE CONTROL OF REVENUES Following the revolution of 1911-12 and the establishment of the Republic, sweeping efforts were made by the new Government to cen¬ tralize control of all those revenues upon which it depended for financial support. The new policies and their results have been described by Sir Francis Aglen 2 as follows: The Maritime Customs revenue till then collected and accounted for but not directly handled by the foreign side of the Maritime Customs Administra¬ tion, came under strict control and was taken completely out of provincial hands. The Maritime Customs collection became identified as a central Gov¬ ernment fund in a way unknown before. President Yuan Shih-kai in the full tide of his centralizing policy attempted to do the same with the salt revenue, hitherto regarded as the mainstay of provincial finance, and for a time he succeeded. The salt revenue was pledged as security for two foreign loans, foreign control of receipts was introduced, and these receipts were definitely earmarked as central Government funds. A similar policy was pursued in the case of other inland revenues, notably the wine and tobacco revenue and the stamp duty. The Provinces were left to fill the vacuum caused by the withdrawal of these revenues as best they could. Another turn was given to the likin screw, recourse was had to usurious loans, and other even more questionable means for raising the wind were employed. But the vacuum was too great to be filled, and the inevitable results of building on an insecure foundation were not long in showing themselves. The financial structure of the State, never at the best of times very coherent, began to creak, and ere long it collapsed altogether. The Imperial Government had followed precedent and sound policy in placing responsibility in hands Tvhieh held the power. It had imposed the burden of supporting the State debt on provincial shoulders and had been careful not to sap the financial strength of the Provinces by too sudden a reversal of a highly decentralized system of administration which had endured for ages. The Republican Gov¬ ernment reacting to foreign impulses in its haste to centralize authority has thrown the machine out of gear. It has assumed the responsibility for State obligations without the power to meet that responsibility. Power has always been vested in the Provinces, and there it will remain. Already the pro¬ vincial authorities have resumed control over a large portion of the salt revenue and all but an insignificant fraction of the wine and tobacco revenue 2 China and the Special Conference—in Nineteenth Century, August, 1924. CHINESE GOVERNMENT FINANCE 283 and the stamp duty. Alone of all the so-called central Government revenues, the Maritime Customs collections remain intact. The divorce of responsibility from power has produced the situation in China which confronts the world to-day—an empty State treasury and a pile of debt. The Chinese Government missed a wonderful opportunity during the later years of the World War and until the end of 1920 to reduce some of its foreign indebtedness at the most favorable exchange rates for silver currency that have existed since the debts were con¬ tracted. Instead of the normal ratio of approximately $2 silver to $1 gold, the value of silver either exceeded or was nearly on a parity with the gold currencies for about three years. An internal loan floated during that period with the proceeds applied to retire¬ ment of gold debts would have represented a reduction of approxi¬ mately 50 per cent in the silver needed, as compared with require¬ ments at the exchange rates that have been current since 1920. The opportunity passed unheeded by the Government, and instead of making efforts to reduce the foreign debt under unusually advan¬ tageous circumstances, several new gold loans were contracted, the proceeds of which, when transferred into Chinese currency, produced only about 50 per cent of their normal silver value. DEBTS With the exception of the Japanese war and the Boxer indemni¬ ties, the outstanding debts 3 of the central Government have nearly all been created by the Ministry of Finance and the Ministry of Communications. Cabinet approval has been regarded as sufficient in most instances to make the agreements binding upon the Govern¬ ment. An official report, published April 16, 1924, by the Chinese Gov¬ ernment Commission for Readjustment of Finance, stated that “ secured obligations of the Ministry of Finance amount to silver $1,186,567,840.” The present securities for these obligations appear to be adequate, and the debts require no special consideration. The unsecured loans of the ministry, however, fall into quite a different category, for most of them are in arrears in payments on principal and interest, and both the creditors and the Government naturally are concerned over the situation. The commission stated in the report mentioned above that the unsecured loans of the Ministry of Finance, including overdue in¬ terest to the end of 1923, amounted to $536,303,000 silver. In com¬ paring this amount with other calculations it seems evident that the ministry has omitted the Austrian loan of £5,200,000, which (at $9 silver to £1 sterling) equals $46,800,000 silver. Mr. G. Padoux, financial adviser to the Chinese Government, in commenting upon this loan, makes the following statement: “ The agreement seems to have been canceled, but the money is nevertheless still owing to the present bondholders. 4 ” Inclusion of this loan would increase the unsecured debts to $583,103,000 silver. In addition, the commission stated there were $187,500,000 silver of Ministry of Communications debts which it expected the Ministry of Finance would have to as- A list comprising the details of China’s debts is found in Appendix D of “ Currency, Banking, and Finance in China,” by Dr. Frederic E. Lee. Memorandum for the National Commission for the Study of Financial Problems, Jan¬ uary, 1923. 284 COMMERCIAL HANDBOOK OF CHINA sume. This would bring the total unsecured debts up to approxi¬ mately $770,603,000 silver. It is understood that no allowance was made by the commission in this calculation for the unsecured debts of the railways and telegraphs on account of materials purchased. These debts, according to the official publication 5 of the Ministry of Communications, were at the beginning of 1923 as follows: Rail- wa} T s, $39,313,000 silver; telegraphs, $7,699,000 silver; total, $47,- 012,000. Even interest was not paid on many of these accounts during 1923 and 1924, so that at the beginning of 1925 it seems safe to estimate them as at least amounting to the above official figure, and it may be that the total amount has increased. Nearly all of them are overdue and they are entitled to receive consideration in any reorganization of the Government’s unsecured debt. The amortization service on the internal consolidated loans, 6 paid from surplus customs receipts after foreign-loan service has been met, was in arrears one year on January 1, 1925. Interest payments have been made when due, but the inadequacy of funds for principal payments indicate that the consolidated loans can at least be con¬ sidered as being imperfectly secured. The principal amount out¬ standing on these loans September 1, 1924, was $142,420,000 silver. If this amount, together with the railway-material debts mentioned above, is added to the unsecured indebtedness, the total reaches $960,035,000 silver. Simple interest at 8 per cent on this amount for the different periods involved, exclusive of interest on the inter¬ nal consolidated loans, adds in round figures $72,000,000 silver, bringing the total unsecured or imperfectly secured debt of the cen¬ tral Government up to approximately $1,032,000,000 silver at the beginning of 1925. An itemized summary of this amount would be approximately as follows (values in silver dollars) : Unsecured debts of Finance Ministry, including overdue interest to end of 1923_ $536, 000, 000 Simple interest at 8 per cent for 1924_ 43, 000, 000 Austrian loan of £5,200,000, at $9 silver per pound sterling_ 47, 000, 000 Simple interest at 8 per cent for 1923 and 1924_ 7, 000, 000 Ministry of Communications loan obligations transferred to Finance Ministry_ 187, 000, 000 Status of interest payments not definitely known but probably in arrears one year, at 8 per cent equals- 15, 000, 000 Ministry of Communications material debts as officially stated January, 1923_ 47, 000, 000 Simple interest at 8 per cent, 1923 and 1924- 8, 000, 000 Domestic consolidated loans imperfectly secured. (Interest pay¬ ments made but amortization in arrears one year)- 142,000,000 Estimated total unsecured or imperfectly secured central Government debt, end of 1924_ 1, 032, 000, 000 Exception may be taken to inclusion of the internal consolidated loans under the category of unsecured or imperfectly secured debts, inasmuch as they are now being served from the surplus customs receipts after payments are made on foreign loans and indemnities. The view of the foreign powers on this question is contained in the 5 Tables Showing Various Obligations of the Ministry of Communications Calculated up to Jan. 31, i923, pp. 15 and 19. 6 These loans are dealt with in detail in Doctor Lee’s “ Currency, Banking, and Finance in China.” Chap. XIV. CHINESE GOVERNMENT FINANCE 285 note quoted below, which appeared in the Peking press in Octo¬ ber, 1923: The undersigned representatives of the United States of America, France, Great Britain, and Japan have the honor to refer to their memorandum of December 23 last, in which they drew the attention of His Excellency, the Acting Minister of Foreign Affairs, to the fact that while the unsecured foreign debts and obligations of the Chinese Government had been left unprotected, China’s internal loans had been temporarily consolidated on the security of surplus customs revenues, and requested that in future such surplus customs revenues should no longer be applied exclusively to the service of the internal loans, but also to the liquidation of foreign debts and obligations guaranteed by the Chinese Goverment. The attention of the undersigned has now been called to a memorial of the Ministry of Finance published in the Government Gazette of September 21 and approved by mandate recommending the permanent continuance of the scheme for securing the service of the internal loans on customs surplus result¬ ing from the effective 5 per cent tariff and its extension to the service of the Chinese portion of the $96,000,000 loan of 1922, thus earmarking for the service of these internal loans the whole surplus accruing from the present customs tariff, and precluding the use of the latter as security for any general debt consolidation scheme. The undersigned aire compelled to record a formal protest against the action of the Chinese Government in disregarding their communication of December 23 last and making the above arrangements. They would remind His Excellency the Acting Minister for Foreign Affairs (1) that the foreign debts and obligations of the Chinese Government, certain of which are now in default, were contracted by the Chinese Government before the date of the conclusion of some of the internal loans which, according to the present pro¬ posals, are to be secured on surplus customs revenues; and (2) that under the terms of the agreements for such foreign loans the Chinese Government engages, in the event of the default or of the specific security pledged becom¬ ing ineffective, to provide from other sources the sums necessary for the due payment of principal and interest. The undersigned must, therefore, point out to His Excellency that those foreign loans are entitled to an automatic pri¬ ority over the later internal loans, which priority the above mentioned action of the Chinese Government entirely ignores. They accordingly request that they may be favored with an immediate explanation of, and a clear statement regarding the intention of the Chinese Government with respect to the employment in the future of surplus customs revenue toward the payment of foreign debts and obligations. Interest rates on some of the foreign portion of the unsecured debt run as high as 1.2 per cent per month or 14.4 per cent per an¬ num, and on much of the domestic portion the rates are even higher. Therefore the simple rate of 8 per cent used in the foregoing esti¬ mate probably is considerably less than the average rate on the entire debt. It also is true that some of the domestic loans were contracted by the Government at very high discount rates. When the political affairs of the Government finally justify the serious preparation of funding plans, it then will be desirable to examine the domestic debt from this standpoint, and to work out funding values on a basis approximating actual money received by the Government when the securities were issued. Adj ustment of usurious interest accumu¬ lations also appears to be very necessary. Since, however, these bonds are selling at a great discount they could probably be refunded at a much smaller figure. A debt con¬ solidation plan has been advanced, which assumes the total of the unsecured debt at a round billion dollars, on which payment of interest at 4 per cent would begin in 1927, advancing in 1929 to 5 per cent, and in 1932 to 7 per cent. Amortization would begin in 1927, at $5,000,000, increasing by a like amount annually—the total 286 COMMERCIAL HANDBOOK OF CHINA payments to extinguish the debt in 20 years. Tender this plan the annual payments on interest and principal would be as follows: Service of Consolidated Debt Years 1927. 1928 1929 1930. 1931. 1932. 1933. 1934 1935. 1936. 1937. 1938. 1939. 1940. 1941. 1942. 1943. 1944. 1945. 1946. Rate Interest Amortization Total service of debt Per cent 4 $40,000,000 $5,000,000 $45,000,000 4 59,800,000 10,000,000 49, 800,000 5 49, 250,000 15,000,000 64,250,000 5 48, 500,000 20,000, 000 68, 500,000 5 47, 500, 000 25,000, 000 72, 500,000 7 64, 750, 000 30, 000, 000 94, 750,000 7 62, 650,000 35,000, 000 97, 650,000 7 60, 200,000 40,000, 000 100, 200,000 7 57, 400,000 45, 000, 000 102,400,000 7 54, 250,000 50,000, 000 104, 250,000 7 50, 750,000 55,000,000 105, 750,000 7 46, 900, 000 60, 000, 000 106, 900,000 7 42, 700,000 65,000,000 107, 700,000 7 38,150,000 70,000, 000 108,150,000 7 33, 250,000 75,000, 000 108, 250,000 7 26,000,000 80,000,000 108,000,000 7 22,400,000 85,000,000 107,400,000 7 16,450, 000 90,000,000 106,450,000 7 10,150,000 95,000,000 105,150,000 7 3, 500,000 50,000,000 53, 500,000 In the case of payments on China’s debt, several unknown factors are involved; for over one-half of the payments must be made in gold currencies on which the exchange rates can not be forecast with any degree of accuracy. The silver requirements each year, there¬ fore, might be more or less than the amounts shown in the above tabulation, but if conversion into silver dollars of the debt items which make up the foreign portion of the total debt is considered reasonable (pounds sterling at 9; gold dollars at 1.90; francs at 7; yen at 0.90), then the yearly debt service would be approximately as shown in the above table. In this connection it is interesting to note how the haikwan-tael cost of payments of foreign loans and the indemnity secured on the Chinese Maritime Customs fluctuates. During 1922, 1923, and 1924 the cost is officially stated to have been in round figures: Years Foreign loans Indemnity 1922.....__ Haikwan taels 21,619,190 24,374, 800 23,629, 790 Haikwan taels 15,168,590 18,838,170 19,358,420 1923......... 1924....... INCOME In order to make clear the present financial status of the Chinese Central Government it becomes necessary to examine the current in¬ come account. The best official statement of the Chinese Government itself is found in the figures published in the report of the Financial Readjustment Commission in April, 1924, to which reference already CHINESE GOVERNMENT FINANCE 287 has been made. The statement in part is as follows, 7 all amounts being in silver dollars: Taking up first the question of revenue, it is a well-known fact that the income is far from being sufficient to meet the expenditures, owing to the fact that not only have the Provinces ceased to remit funds for the support of the central Government as was done in the past, but they have even gone to the extent of appropriating for local use revenues which belong to the central Government. At present the Government derives its revenue principally from five sources, namely: 1. The Maritime Customs and native customs within 50-li limit. 2. Native customs outside the 50-li limit and along the land frontiers. 3. The salt gabelle. 4. The wine and tobacco taxes. 5. The stamp duty. From the five sources enumerated above, the amount of revenue collectible each year is about $209,000,000. The net amount remitted to the Gov¬ ernment, however, falls far short of this sum, for among these only the cus¬ toms revenue has remained intact. Of the revenue from the native customs outside of the 50-li limit, besides the two million odd dollars from the Peking octroi, not more than $700,000 has reached the central Government through the other sources. As to the salt revenue, about $30,200,000 was retained by the Provinces, while about $10,300,000 was required for the cost of collection, so that the actual amount realized by the central Government was only about $49,300,000. As to the wine and tobacco taxes and the stamp duty, the actual amounts remitted to the central Government constituted only one-tenth of the amount collected, or about $1,400,000 in the first case and about $300,000 in the second case. It can thus be seen that out of a nominal total of $209,000,000 the actual sum realized by the central Government is about $148,000,000, out of which has to be again deducted a sum of $98,000,000 for the service of the domestic and foreign loans secured upon the customs and salt revenues and about $43,000,000 for military subsidies and the redemption of the different kinds of treasury notes secured upon the salt surplus, thus leaving only about $7,000,000 unappropriated which can be made use of by the central Government for administrative and other military expenses. Now according to the latest available figures the annual requirements for administrative expenses are about $58,000,000 and for military expenses about $70,000,000, making a total of $128,000,000. While this does not exceed the amount authorized by the budget of the eighth (1919) year of the Republic, which has been adopted by a mandate of November 29, 1923, as a standard for the Government’s retrenchment policy, yet the precariousness of the situa¬ tion is easily apparent when it is borne in mind that all these sums have to be met out of the meager amount of only $7,000,000 which is at the free dis¬ posal of the Government. In other words, the actual amount remitted to the Government is not more than seven-tenths of the amount collected, while the unappropriated portion available to the Government is only 5 per cent of that amount. A situation created by the fact that the expenditure of the Government exceeds the amount at its disposal by seventeen times is serious enough. But worse still is the fact that there is also a large amount of unsecured or inadequately secured loans which call for immediate readjustment. Calculating on the basis of the figures given in its official statement of September, 1922, the outstanding principal and interest of the loans of the Ministry of Finance amount to $536,000,000, and the portion of the loans of the Ministry of Com¬ munications which it can not itself take care of, according to a memorandum it has recently prepared and sent to the Commission for the Readjustment of Finance, amounts to $187,000,000, making a grand total of $723,000,000. If consolidation bonds were issued, bearing interest only at the rate of 5 or 6 per cent per annum, the sum required for the payment of interest alone will amount to $40,000,000 or $50,000,000 a year. Under the present financial stringency, when the Government is already facing a deficit of about $121,000,- 000 per year, the difficulty of oroviding an adequate sinking fund for the loan service can be readily appreciated. _ A very full resume of the preliminary report may be found in the China Year Book, 1924, p. 738 ff. 288 COMMERCIAL HANDBOOK OF CHINA It is therefore apparent that if national finance is to be reestablished upon a solid foundation, comprehensive measures for fundamental readjustments must be undertaken at once, both in the way of radically curtailing the expenses and also of effectively increasing the receipts of the Government. The foregoing resume by the chairman of the commission can but leave one with a feeling that possibilities for improvement in central Government finance are predicated upon so man}^ ifs over which the central Government has no control, that foreign unsecured cred¬ itors face a serious situation. The only practical way, therefore, for the Government to work out of its present financial predicament appears to be contained in the suggestion that the revenues of the central Government which are to be increased by the imposition of the 2 y 2 per cent surtax envisaged in the Washington treaty be applied as a sinking fund for readjustment of unsecured loans. The soundness of this plan has been generally recognized. DEBT CONSOLIDATION PLANS Use of the increased customs revenues as security for funding the present unsecured debts has been the broad basis upon which all recent studies of Chinese Government finance have rested, the chief reason being that the customs collections are recognized as the only dependable source of income which will be available to the Govern¬ ment or the creditors until radical political and constitutional re¬ forms are carried out. These will require considerable time, perhaps years, before they become effective. With the ratification of the nine "power treaty completed on August 5, 1925, the special customs con¬ ference was convened on October 26. 8 It was estimated at the time this treaty was arranged that imposi¬ tion of the 21/2 per cent surtax would produce approximately $27,- 000,000 silver, and the surtax of 5 per cent on luxuries something over $2,000,000 silver. Monsieur Padoux, adviser to the Chinese Government, in a pamphlet published January, 1923, made a con¬ servative estimate of $28,000,000 silver for returns from both sur¬ taxes, with an annual increase of $3,000,000 silver to be expected from the natural growth of trade. A committee of the American Chamber of Commerce in Peking also studied the question and came to the conclusion that these estimates were reasonable. Both Monsieur Padoux and the Chamber of Commerce prepared studies showing the extent to which the net customs revenues and the receipts from the surtaxes would meet the service charges on the unsecured debt if it were funded. The details of these plans involve differences in treat¬ ment of the foreign and domestic debt and suggest considerable scal¬ ing down of interest and principal of the domestic debts. The latter operation, as the American committee states, can best be considered by the Chinese themselves. AVAILABLE SOURCES OF REVENUE CUSTOMS SURPLUS The total loan charges now fixed on the customs revenue amount to approximately $90,000,000 (1926). These charges, according to b The articles of this treaty describing the purposes of the conference may be found in the China Year Book, 1924, pp. 1161—1164. CHINESE GOVERNMENT FINANCE 289 Monsieur Padoux, 9 are: (1) The Russo-Frencli loan of 1895; (2) the Anglo-German loans of 1896 and 1898; (3) -the 1901 indemnity (Boxer indemnity) ; (4) the reorganization loan of 1913; (5) several domestic loans. The situation as regards the loans of 1895, 1896, 1898, and 1913 is clear, these loans being charged in accordance with the interest and amortization tables attached to the original loan agreements. But the situation as regards the 1901 indemnity and the domestic loans is somewhat intricate. The Austrian and German share of the Boxer indemnity has been canceled, and the American, Russian, French, British, and Japanese shares have been remitted to the Chinese Government, or are in the process of being remitted; they are now to be used for specific domestic purposes. The remitted Russian portion has, however, been hypothecated for the service of several domestic loans which have been secured on it. The following table gives the foreign and domestic charges against the customs revenue for the years indicated. The figures under the heading, “ Remitted portion of 1901 indemnity,” include only: 1. The American, British, French, and Japanese shares. 2. The balance available from the Russian share after payment of the domestic loans secured on it. It is of interest to note in connection with the following figures that the Boxer indemnity payments still retained by the powers form- a very inconsiderable part of the total customs revenues. Charges on Customs Revenue [In thousands of silver dollars; i. e., 000 omitted] Years 1926 .. 1927 _ 1928 _ 1929 . 1930 . 1931 _ 1932 _ 1933 . 1934 _ 1935 _ 1936 .. 1937 . 1938...... 1939 . 1940 . 1941 . 1942 . 1943 . 1944 _ 1945.. 1946 . 1947 . 1948 . 1949 . 1950-1960. Foreign 4 per cent Russo- French loan of 1895 7,529 7,529 7,259 7, 529 7, 529 7,469 5 per cent Anglo- German loan of 1896 8, 548 8,540 8,532 8, 523 8, 515 8,505 8,495 4 Yi per cent Anglo- German loan of 1898 7,441 7,437 7,433 7,430 7,426 7,422 7,417 7,413 7, 408 7,403 7, 398 7, 393 7, 387 7, 381 7, 375 7, 369 7, 362 7, 355 Retained portion of-1901 indem¬ nity 3,259 3,259 2,642 2,642 2,642 2,642 3, 813 3, 813 3, 813 3, 813 3, 813 3, 813 3, 813 3, 813 3, 813 1,942 1,942 1,942 1,942 1,942 5 per cent re¬ organi¬ zation loan of 1913 13,464 13,464 13,464 13, 464 13,464 13, 464 13,464 13, 464 13, 464 13, 464 13, 464 13, 464 13, 464 13, 464 13, 464 13, 464 13, 464 13, 464 13, 464 13, 464 13, 464 13,464 13, 464 13,464 13, 464 Total foreign charges 40, 241 40, 229 39, 590 39, 581 39, 570 39,492 33,179 24,680 24, 675 24, 670 24,665 24,660 24, 654 24, 648 24, 642 22, 765 22, 758 22, 751 15, 396 15, 396 13, 464 13, 464 13, 464 13,464 13, 464 Domestic Remit¬ ted por¬ tion of 1901 in demnity 14,309 14,469 14, 629 15,641 15, 701 18, 821 29,168 29,168 29,168 29,168 29,168 29,168 29,168 33, 673 33, 673 15, 618 15, 618 15, 618 15, 618 15, 618 5,146 5,146 Domes¬ tic loans 34,985 36,164 37,366 24,328 23,416 20, 226 8,956 8,519 8, 962 5, 513 5,242 4, 973 4, 702 Total domes¬ tic charges 49, 294 50,633 51,995 39,969 39,117 39,047 38,124 37, 687 38,130 34, 681 34, 410 34,141 33, 870 33, 673 33, 673 15, 618 15, 618 15, 618 15, 618 15, 618 5,146 5,146 Total foreign and do¬ mestic charges 89,525 90,852 91, 585 79, 550 78, 687 78,539 71, 303 62, 371 62, 805 59, 351 59,075 58,801 58, 524 58, 321 58, 315 38, 383 38, 376 38, 369 31,014 31,014 18, 610 18,610 13,464 13,464 13, 464 0 Consolidation of China’s Unsecured Debt, by G. Padoux, British Chamber of Com¬ merce Journal, Shanghai, September—October, 1925. 100020 °— 26 - -20 290 COMMERCIAL HANDBOOK OF CHINA Monsieur Padoux, in the article just referred to, modified slightly his estimates on the increases likely in the customs revenue from the imposition of the surtaxes. The following table is the more recent estimate made by him of the possible increases, together with the total charges, domestic and foreign, against the customs, and the balances available for reconstruction. Balance of Customs Revenue Available 1 for Financial Reconstruction 1926 . 1927 _ 1928 _ 1929 . 1930 . 1931 _ 1932 _ 1933 _ 1934 _ 1935 _ 1936 _ 1937 _ 1938 .. 1939 _ 1940 _ 1941 . 1942 _ 1943 . 1944 _ .1945_ 1946 . 1947 _ 1948 _ 1949-1960 1961. Years Net customs revenue Charges Foreign Domestic Surplus T $125, 000, 000 128, 000, 000 131, 000, 000 133, 000, 000 135, 000, 000 137, 000, 000 139, 000, 000 141, 000, 000 143, 000, 000 145, 000, 000 147, 000, 000 149, 000, 000 151, 000, 000 153, 000, 000 155, 000, 000 157, 000, 000 159, 000, 000 160, 000, 000 160, 000, 000 160, 000, 000 160, 000, 000 160,000,000 160, 000, 000 160, 000, 000 160, 000, 000 $40, 250, 000 40, 250, 000 39, 600, 000 39, 500, 000 39, 600, 000 39, 500, 000 33, 200, 000 24, 700, 000 24, 700, 000 24, 700, 000 24, 700, 000 24, 700, 000 24, 700, 000 24, 700, 000 24, 700, 000 22, 800, 000 22, 800, 000 22, 800, 000 15, 400, 000 15, 400, 000 13, 500, 000 13, 500, 000 13, 500, 000 13, 500, 000 $49, 250, 000 50, 600, 000 52, 000, 000 40, 000, 000 39, 100, 000 39, 000, 000 38.100, 000 37, 700, 000 38, 100, 000 37, 000, 000 34, 400, 000 34.100, 000 33, 800, 000 33, 600, 000 33, 600, 000 15, 600, 000 15,600, 000 15, 600, 000 15, 600, 000 15, 600, 000 5, 100, 000 5, 100, 000 $35, 500, 000 37, 150, 000 39, 400, 000 53, 500, 000 56, 300, 000 58, 500, 000 67, 700, 000 78, 600, 000 80, 200, 000 85, 600, 000 87, 900, 000 90, 200, 000 92, 500, 000 94, 700, 000 96, 700, 000 118, 600, 000 120, 600, 000 121, 600, 000 129, 000, 000 129, 000, 000 141, 400, 000 141, 400, 000 146, 500, 000 146, 500, 000 160, 000, 000 ^rom British Chamber of Commerce Journal, Shanghai, September-0ctober, 1925. SALT SURPLUS Other sources of revenue which might be increased for the re¬ habilitation of Chinese finances are the salt revenue, the wine and. tobacco tax, the Peking octroi, and the stamp tax. The salt revenues come into mind first. The annual collections from this source have varied during the past 10 years from $70,000,- 000 to $85,000,000, but of these collections a constantly increasing share—partly authorized, partly unauthorized—has been retained by the provincial governments. The salt revenue collections, with the amounts retained by the provincial authorities, the amount devoted to obligations secured on these revenues, and the amount released to the central Government is shown for the years 1918-1924 in the following table. Statement of Salt Revenue 1 Years Total collec¬ tions Retained by provincial authorities Applied on obligations secured on salt revenues Released to central Gov¬ ernment 2 1918_____ $71, 566, 000 80, 637, 000 79, 064, 000 77,988, 000 85, 789, 000 79, 545, 000 70, 544, 000 $15, 546,000 26, 341,000 23,912,000 18,413,000 31, 669, 000 30, 207, 000 31, 669, 000 $4,173, 000 11,622,000 13,876,000 5, 526, 000 8,051,000 9,492, 000 8,111,000 $71,761,000 75, 213,000 64, 620, 000 52, 060,000 47, 193, 000 41, 543, 000 31, 257,000 1919__ 1920_ 1921_ .. 1922___ 1923....._. 1924...... 1 Statement of the Chinese Government Central Salt Administration. 2 This does not represent the remainder after deducting the previous two items from total collections, as certain other charges (transfers, etc.) are met and a balance retained with the administration. CHINESE GOVERNMENT FINANCE 291 The fixed charges on this revenue are: (1) The Anglo-French 5 per cent loan of 1908, which requires from 1926 to 1938 yearly payments decreasing from £396,250 down to £261,250. (2) The 5 per cent Crisp loan of 1912, which requires yearly pay¬ ments of £327,257 from 1926 to 1952. (3) Part of the 5 per cent Hukuang loan. This loan is sec'ured on the railway and on the salt and customs revenue, but both sink¬ ing fund and interest have been met entirely out of the latter two. Its service requires £391,284 from 1926 until 1951. The salt revenue is also collateral security for the Anglo-German loan of 1898, the reorganization loan, and the Boxer indemnity, but these charges have so far been met from the customs revenue and therefore may be omitted. In addition, however, it is known that the service requirements on about 40,000,000 yen of the u $96,000,000 ” loan is withheld by the Yokohama Specie "Bank from salt revenue which otherwise would be released to the Government. From the foregoing it will be seen that the fixed charges on the salt revenue will continue down to 1938 at around $8,000,000 to $9,000,000 annually, depending upon the rate of exchange, and from 1938 to 1952 at between $4,000,000 and $5,000,000 annually. Assum¬ ing the present rate of collection for the next 25 years and the reduc¬ tion of the charges to $5,000,000 beginning 1938, the amount available for debt consolidation and rehabilitation will average around $32,000,000 until 1938, and $35,000,000 thereafter until 1952. OTHER REVENUES The principal remaining source of revenue is the wine and tobacco tax, on which net collections have averaged around $15,000,000 yearly. Of these total collections, however, a likewise diminishing share has been remitted to Peking, the amount being in 1919, $2,673,000; 1920, $2,299,000; 1921, $1,784,000; 1922, $1,449,000. By stopping the dissipation of these funds, a possible $1,500,000 may be counted on annually. The Peking octroi has been recently reformed and improved, and annual revenue of $2,500,000 may safely be estimated from that source. The stamp taxes amount annually to around $2,500,000, but of these collections not more than $200,000 or $300,000 are remitted to the central Government. From these three sources annual revenue of $4,300,000 may be anticipated. The following table shows the collections of these three taxes for the most recent years available. Other revenues 1919 1920 1921 1922 Wine and tobacco (net collections) 1 _ _ $12, 443,000 2, 673, 000 1, 306, 900 2, 354, 000 $13, 012, 000 2, 229, 000 1,488, 000 2, 646, 000 $12, 722, 000 1, 784, 000 1, 591, 000 2, 522, 000 $12, 726, 000 1, 449, 000 2, 500,000 ( 3 ) Remitted to Peking. Peking octroi (net collections)__ Stamp taxes (net) 2 .. 1 Excludes several south and southwestern Provinces. Total collected for all China is estimated at $26,000,000 silver. 2 Peking Government receives only from $200,000 to $300,000 per year. 3 Not known. 292 COMMERCIAL HANDBOOK OF CHINA TOTAL AVAILABLE REVENUE FOR REHABILITATION Assuming a net return of $4,300,000 from the wine and tobacco tax, the Peking octroi, and the stamp taxes, a continuation of the salt surplus at around $32,000,000 until 1938 and thereafter $35,000,000 until 1952, and an expanding customs surplus according to the table given above, the total available revenues for debt consolidation dur¬ ing the next 25 years will be approximately as indicated in the fol¬ lowing tabulation. The fifth column represents the amount neces¬ sary for the service of the unsecured debt as consolidated under the proposed plan described on page 286, while the last column gives the estimated surplus available for administrative expenses of the central Government. (The amounts are in silver dollars.) Available Sources of Revenue for Rehabilitation Years Customs surplus Salt surplus Wine and tobacco tax, stamp tax, and Peking octroi Total Estimated service of consolidated debt 1 Balance available for adminis¬ tration expenses, etc. 1926 $35, 500, 000 $32, 000, 000 $4, 300, 000 $71, 800, 000 1927.__ 37; 150, 000 32, 000, 000 4, 300, 000 73, 450, 000 $45, 000, 000 $28,450, 000 1928_ 39, 400, 000 32, 000, 000 4, 300, 000 75, 700, 000 49,800, 000 25,900, 000 1929__ 53, 500, 000 32, 000, 000 4, 300, 000 89, 800, 000 64, 250, 000 25, 550, 000 1930_ 56, 300, 000 32, 000, 000 4, 300, 000 92, 600, 000 68, 500, 000 24,100, 000 1931__ 58, 500, 000 32, 000, 000 4, 300, 000 94, 800, 000 72, 500, 000 22, 300, 000 1932__ 67, 700, 000 32, 000, 000 4,300, 000 104, 000, 000 94, 750, 000 9, 250, 000 1933....._. 78, 600, 000 32, 000, 000 4, 300, 000 114, 900, 000 97, 650, 000 17, 250, 000 1934.. 80, 200, 000 32, 000, 000 4, 300, 000 116, 500, 000 100, 200, 000 16, 300, 000 1935_ 85, 600, 000 32, 000, 000 4, 300, 000 121, 900, 000 102, 400, 000 19, 500, 000 1936__ 87,900, 000 32, 000, 000 4, 300, 000 124, 200, 000 104, 250, 000 19, 950, 000 1937... 90, 200, 000 32, 000, 000 4, 300, 000 126, 500, 000 105, 750, 000 20, 750, 000 1938. 92, 500, 000 32, 000, 000 4, 300, 000 128, 800, 000 106,900, 000 21, 900, 000 1939...... 94, 700, 000 35, 000, 000 4, 300, 000 134, 000, 000 107, 700, 000 26, 300, 000 1940_ 96, 700, 000 35, 000, 000 4, 300, 000 136, 000, 000 108, 150, 000 27, 850, 000 1941... 118,600, 000 35, 000, 000 4, 300, 000 157, 900, 000 108, 250, 000 49, 650, 000 1942_ 120, 600, 000 35, 000, 000 4, 300, 000 159, 900, 000 108, 000, 000 51,900, 000 1943_ 121, 600, 000 35, 000, 000 4, 300, 000 160, 900, 000 107, 400, 000 53, 500, 000 1944...... 129, 000, 000 35, 000, 000 4, 300, 000 168, 300, 000 106, 450, 000 61, 850, 000 1945_ 129, 000, 000 35, 000, 000 4, 300, 000 168, 300, 000 105,150, 000 62,150, 000 1946_ 141, 400, 000 35, 000, 000 4, 300, 000 180, 700, 000 53, 500, 000 127, 200, 000 1947 141, 400, 000 35, 000, 000 4, 300, 000 180, 700, 000 180, 700, 000 1948 146, 500, 000 35, 000, 000 4, 300, 000 185, 800, 000 185, 800, 000 1949 146, 500, 000 35, 000, 000 4, 300, 000 185, 800, 000 185, 800, 000 1950 146, 500. 000 35, 000, 000 4, 300, 000 185, 800, 000 185, 800, 000 1951 146, 500, 000 35, 000, 000 4, 300, 000 185, 800, 000 185, 800, 000 1952 146, 500, 000 35, 000, 000 4, 300, 000 185, 800, 000 185, 800, 000 1953 146, 500, 000 40, 000, 000 4, 300, 000 190, 800, 000 190, 800, 000 i Estimate based on debt consolidation plan discussed on pp. 285-286. GOVERNMENT EXPENDITURE Various estimates have been made as to the amount necessary for the administrative expenses of the Chinese Government. The Fi¬ nancial Readjustment Commission, in its report of April 16, 1924, which has been adverted to, placed the amount required to carry on the necessary functions of the Government in the neighborhood of $197,500,000 silver, divided as follows: 293 CHINESE GOVERNMENT FINANCE Government departments and agencies Expenditures Ordinary Contingent Organs under the central Government ... _..... $22,441, 350 4, 048, 428 3, 446, 932 29, 519, 302 52, 814, 744 8, 643, 296 1,817, 191 3, 255, 270 1, 541, 800 1, 323, 747 1,109, 915 $2, 748,192 1,130,106 2, 282, 466 6, 878, 455 53, 512, 245 120, 000 Ministry of Foreign Affairs_ ______ Ministry of Interior ___ _ . . _ . ... Ministry of Finance 1 ____ _ Ministry of War 2 _________ Ministry of Navy._ ------- __ _ -. _ _ .. Ministry of Justice..__ ___ _ _ .. Ministry of Education____ _ _ _ .. _ 301, 740 410, 447 149, 218 50,000 Ministry of Agriculture_ _ - . . _ __ Ministry of Communications__ ____ ___ . .. . Bureau of Mongolian and Tibetan Affairs. ... __ __ _ _ Total..... . . _____ 129, 961, 975 67, 582, 869 1 Includes customs, $14,416,256; salt, $10,866,578. 2 The large proportion of ordinary expenditure under this heading (approximately 40 per cent) is worthy of note. The figures given above may be taken as a liberal estimate, based upon a unified China and providing for future reforms in adminis¬ tration. Monsieur Padoux in September, 1925, 10 considered that, excluding expenditure of various self-supporting ministries and bu¬ reaus, a total of $48,000,000 was sufficient for governmental expendi¬ ture under a reconstruction scheme, Avhile others have estimated $30,000,000 to $35,000,000 as sufficient to start, increasing gradually as revenue expanded. From the data and estimates given above it would seem that with the proposed increase in the customs surtax there are sufficient reve¬ nues in sight to provide for a consolidation of the unsecured debt and a substantial surplus for the administrative expenditure of the Government. Whether the actual form of debt consolidation will follow the outline indicated above, whether only partial consolida¬ tion will be considered, or whether the plan of dividing the unse¬ cured debt into categories enjoying different priorities are problems which are to be met and decided by the customs conference now in session, as is likewise the corollary consideration of what amount is to be considered necessary for the proper administration of the Chinese Government. SITUATION OF THE RAILWAYS In the report of the Financial Readjustment Commission no refer¬ ence to the financial situation of the railways was made except to state that $187,500,000 silver of Ministry of Communications debts was being transferred to the Ministry of" Finance. It is possible, by referring to the official tables published in 1923 by the Ministry of Communications, to describe more in detail the difficulties confront¬ ing the railways. Total obligations as of December 31, 1922, were as follows, all amounts in silver dollars: Direct obligations of ministry_$43, 692, 571 • Railways- 622,065,812 Telegraphs- 54, 698, 822 Postal service- 1, 662, 584 Total- s 722,119,789 10 Consolidation of China’s Unsecured Debt. British Chamber of Commerce Journal, Shanghai, September, 1925. 294 COMMERCIAL HANDBOOK OF CHINA According to the report of Mr. Lo Wen Kan, mentioned previously, certain loans contracted by the Ministry of Communications already have been transferred to the Ministry of Finance, as follows: Loans Amount in original currency Rate of exchange Silver dollars Ching Yu Railway advance... - _ francs.. Kao Hsu Railway loan... ......... ...yen . Ki Huei Railway loan____do... Manchurian Mongolian Railways._ . ... _ .. ..do..-. Feng Ching Railway loan_ ___ 9, 352, 431 20, 000, 000 10, 000, 000 20, 000, 000 £375, 000 £22, 500 20, 000, 000 2, 400, 000 7 1 1 1 i 10 2 9 i 1 2 0,90 1,336,061 20, 000,000 10, 000, 000 20, 000, 000 3, 750, 000 202, 500 20, 000. 000 2,160, 000 Feng Ching Railway loan interest ....... . Telegraph loan__ ... . ..... ...yen.. Telegraph loan interest__ ___.do_ Total. ... ... . . ____ 77, 448, 561 1 Rate used by Ministry of Communications. 2 Rate used by Ministry of Finance. Eliminating the above loans and accrued interest, the indebted¬ ness of the Ministry of Communications on December 31, 1922, can be summarized as follows: Debts Millions of silver dollars Foreign Domestic Total Direct obligations of ministry: Short-term loans and interest... ... 0.8 8.5 34.3 9.3 34.3 Nationalization of railways and interest. .. .. Total ...... .8 42.8 43.6 Railway obligations: Share capital and interest. .. ..... 2.8 2.8 411.6 66.8 29.2 40.0 16.3 Mortgage loans and interest . ... .. 411.6 49.3 3.2 34.6 3.3 Obligations with securities and interest _ __ 17.5 26.0 5,4 13.0 Obligations without securities and interest _ _ ... Obligations for materials __ .. . .. _ .. Obligations unspecified .. . Total. ........ 502.0 64. 7 566.7 Telegraph Department obligations: Mortgage loans.. . ... 22.0 2.5 .2 7.8 22.0 2.5 .2 7.8 Interest on mortgage loans _. ........ . Short-term loans _ . . ... Obligations for materials. ....... Total.. ...... 32.5 32.5 Postal obligations . .. . 1.7 1.7 Total indebtedness_... _ .. _______ 535.3 109.2 644.5 The above figures include the German issues of the Tientsin-PukoAv and Hukuang Railways which, though received by China in the financial settlement with Germany completed in June, 1924, it is understood have not been canceled, and several items of interdepart¬ ment indebtedness as follows: Obligations without securities : Hukuang Railway_$12, 945, 000 Obligations for materials : Pien Lo Railway_ 496, 000 Obligations unspecified: Shanghai-Nanking Railway_ 2, 653, 000 Pien Lo Railway_ 3,453,000 Kirin-Changchun Railway_ 511, 000 Total_ 20, 058, 000 CHINESE GOVERNMENT FINANCE 295 The greater portion ($567,000,000) of the debt is directly in con¬ nection with the railways. Of this railway debt, approximately $411,000,000 consists of loans classified by the Ministry of Com¬ munications as mortgage loans; $156,000,000 consists of imperfectly or entirely unsecured debt, which includes bills for materials and unpaid accounts of a current nature. The term “mortgage,” how¬ ever, has been used in a loose sense and denotes the naming of some general security, such as “revenues of Government utilities,” in the case of the Peking-Hankow redemption loan, or likin revenues in the case of the Tientsin-Pukow original and supplementary loans, rather than a pledge of the railway property itself. Of actual mortgages on railway property, the total is estimated as under $250,000,000. The Peking-Hankow funded debt, the Hukuang, and the Tientsin-Pukow loans are all secured by pledges of various Government revenues rather than by a pledge of the railway prop¬ erty. It should be observed that the railways underlying these $250,000,000 of real mortgages are not in particularly difficult straits. It is the other $317,000,000 of obligations that constitute the real problem. Some of the short-term domestic debt (about $12,000,000 silver) bears interest at 18 and 20 per cent per annum. For the most part this is a nominal interest—that is, it is not paid but is added to the present obligation. In order to show how this accumulation of debt has piled up, the following table of debt maturities has been pre¬ pared from information contained in the debt schedules of the minis¬ try, and amortization tables for the years 1923 to 1928, inclusive. The debt maturities, including interest, are as follows: Millions of silver dollars Debt maturities 1923 1924 1925 1926 1927 1928 Railways: Mortgage loans ... ..... 52.3 34.5 31.0 34.5 32.0 1 34.1 Obligations with securities .___ 22.2 11.0 1.4 0.2 0.2 0.2 Obligations without securities.... 7. 1 0.9 0.6 0.6 0.6 0.6 Obligations for materials __ _ . . 39.3 Obligations unspecified- . 4.8 • Total..... 125.7 46.4 33.0 35.3 32.8 34.9 Telegraphs: Mortgage loans . .... 2 6. 6 12.9 1.6 1.6 1.5 1.5 Materials . .. . _ 7.8 Short-term loans- . - . .... 0.2 14.6 12.9 1.6 1.6 1.5 1.5 Grand total yearly maturities... 140.3 59.3 34.6 36.9 34.3 36.4 1 Includes interest and amortization, Kia-Tsi (Shantung) Railway loan on 10-year redemption basis. 2 Includes $2,214,000 supposed to have been transferred to railways. In studying this table it should be remembered that during 1923 and 1924 practically nothing was paid on the railway debts except on mortgage loans. Therefore, there has been a large carry-over from these years. If we assume that the mortgage loans were paid in full during 1923 and 1924, and that payments were not made on the other items, then the cumulative maturities due in 1925 would amount approximately to $147,400,000 silver. 296 COMMERCIAL HANDBOOK OF CHINA The net income of the railways to meet these charges has been inadequate. In 1922 the net revenue collected was approximately $34,000,000 silver. The postal service earned a net above expenses and development of service charges of about $2,000,000 silver, giv¬ ing the ministry a total net income of about $36,000,000 silver. This was not increased during 1923, and in 1924 it was less than the above amount. It is apparent, therefore, that if the creditors are to secure payment of tlieir accounts and the Government be saved the ignominy of collapse and repudiation, plans must be made at a very early date to bring railway revenues more into line with debt- service requirements. To make this financial feat possible, three fundamental conditions which do not now exist are necessary: (1) Peace and order within the country; (2) adoption of budgets and adherence to same by railway management; and (3) use of com¬ munications’ funds for communications’ purposes only. Given these conditions the demonstrated earning capacity of the railways and telegraphs appears sufficient to extricate them from their present embarrassing condition. Referring again to the table of debt maturities, it should be noted also that the charges for 1923 and 1924 are abnormally high, owing to the inclusion for these years of large amounts of unsecured floating obligations. If these were cared for in a consolidated long¬ term funding operation adequately secured, the financial position of the railways and telegraphs would be fairly satisfactory in compari¬ son with their normal income, but their normal income is not being received. The best indication of how military disturbances within the country during the latter part of 1924 affected railway income is afforded by the following comparison of actual net operating revenues for 1923 with approximate revenue for 1924 of the more important lines: Chinese Government Railways 1 Net operating revenues Railways 1924 (ap¬ proximate) 1923 (actual) Peking-Hankow.... Peking-Mukden .. Tientsin-Pukow_ Peking-Suiyuan... Shanghai-Nanking.. Shanghai -Hangchow-Ningpo Cheng-Tai_ Canton-Kowloon_ Kirin-C hangchun_ Taokow- C hanghwa_ Lung-Hai... Kaifeng-Honan.. Hupeh-Hunan_ Chuchow-Pinghsiang_ Ssu-Tao___ Kiaochow-Tsi nan__ Total... $16, 000, 000 5, 366, 510 7, 912, 007 2, 567, 000 3, 932, 094 1, 346, 305 2, 292, 867 2 43, 000 750, 000 1, 074, 840 2, 000, 000 1,182, 000 115, 042 7, 000 1, 724,119 3, 702, 770 49, 929, 554 $19, 347,647 6, 951, 447 9,135,644 2, 667, 018 3, 613, 715 1,150,131 2,713, 949 2 61, 257 938,164 831, 932 2, 052, 918 1,310,052 2 73, 249 2 113, 000 1,098, 168 3, 004, 898 54, 568,177 1 Source: C S. Liu, Director of Railway Department, Ministry of Communications, Apr. 1, 1925. 2 Deficit. The only logical conclusion that can be reached while present con¬ ditions continue in China is that the unsecured foreign debts of the CHINESE GOVERNMENT FINANCE 297 Ministry of Communications should receive consideration on an equal footing with all other unsecured debts of the Government in any plans that are devised for readjustment. The international character of the obligations has been indicated in a general way in this study, though without specific reference to the unsecured debts owed to any single country. The principal cur¬ rencies involved are pounds sterling, gold dollars, yen, and francs. These are also the currencies used by the nations which are mem¬ bers of the International Consortium for China. It would seem to be a natural function of the consortium, therefore, to carry out what¬ ever funding operation is finally decided upon. THE OLD CONSORTIUM In 1913 the Chinese Government floated a reorganization loan through a consortium of banks in five nations known as the “Five- Power Group.” Under the terms of this loan contract the Chinese Government agreed to give the lending banks the option of under¬ taking future loans issued by the Government at a commission of 6 per cent when secured by a tax on the revenues of the Salt Ad¬ ministration or when issued for the same purposes as named in the reorganization loan agreement. The European war disrupted the “Five-Power Group” organization, and the Chinese Government has since borrowed through other channels, having received a num¬ ber of loans from the United States and Japan. THE NEW CONSORTIUM In 1918 a new consortium for China, representing bankers of Great Britian, France, Japan, and the United States, was proposed. The new consortium received the sanction of the State Department at Washington in the following terms (letter to the bankers, July 9, 1918) : The formation of a four-power group, to consist of financial interests of the United States, Great Britain, France, and Japan, to deal with the Government of China for the purpose of making loans to that Government seems advisable. If the terms and conditions of each loan are submitted to and approved by this Government and the other cooperating Governments and by the Govern¬ ment of China, this Government would not only interpose no objection, but, on the contrary, would consider such an arrangement an assurance that the welfare of China and the proper interests of the other Governments were of such a mutual character as to permit of close and friendly intercourse for their common good. * * * This Government would be opposed to any terms or conditions of a loan which sought to impair the political control of China or lessen the sovereign rights of the Republic. On October 8, 1918, the State Department announced to the French, British, and Japanese Embassies that 31 banks had joined the American group and were representative of all sections of the country. The principal terms of the new consortium agreement, dated October 15, 1920, are summarized in the China Year Book, 1923, on pages 774-777. The execution of the consortium agreement and its confirmation and approval by the four Governments whose banking groups were signatory to it were made known to the Chinese Government by official communication dated January 18, 1921, signed by the min- 298 COMMERCIAL HANDBOOK OF CHINA isters to China of the four Governments concerned. The Chinese Government, however, has not accepted the consortium agreement, and is not a party to it (January, 1926). At the meeting of consortium representatives held in London, July, 1924, the organization was made perpetual, with the proviso that any member might withdraw by giving 12 months’ notice to the other members. THE NATIVE (CHINESE) CONSORTIUM Another important financial development was the formation in 1920 of a Chinese banking group headed by the Bank of China and comprising 27 of the leading native banks. The combined authorized capital of these banks is $150,000,000 silver, and their paid-up capi¬ tal is estimated as $65,000,000 silver. 11 Early in 1921 a conference of the native consortium at Tientsin passed the following resolutions relative to future loans to the Government: 1. Loans are not to exceed one-half the value of the revenues as¬ signed or securities pledged. 2. Value of revenues assigned or securities pledged must be stated, and stocks or bonds pledged must have a fixed date of redemption. 3. Positively no loans are to be made without adequate guaranties or security. 4. No sum of any considerable amount is to be advanced to the Government before a loan agreement is signed. 5. Pavment of interest must not be deferred. */ 6. Redemption of principal must be made as it falls due; on no account is payment to be deferred or the loan refunded. Later in 1921 the native consortium presented to the Government a series of memoranda covering the following points: (1) That the Government afford opportunity to the native consortium to finance any proposal that it might be the purpose of the Government to take up with the international consortium; (2) that measures be taken for the unification of the Chinese railways under centralized control; (3) that the Chinese currency system be reformed by the adoption of a gold standard, the abolition of the tael, the unification of the cur¬ rency, and the control of note issue by the Government. In extending loans to the Government the native consortium has tried to insist that satisfactory assurance be given that the money borrowed should be expended for the purpose for which it was loaned and for no other, and that it should not be applied to current expenses or to administrative purposes. Two loans of the Govern¬ ment in 1921 were financed by the native consortium, the first being the railway-car loan for $6,000,000 silver and the second the Shang¬ hai Mint loan for $2,500,000 silver, in both of which the banking group retained in its own hands the proceeds of the loans and dis¬ bursed them direct to the contractors, reserving the right of veto on all contracts. In the case of the railway-car loan the native con¬ sortium reserved the right to inspect the cars periodically and insure proper maintenance; to receive direct remittances to meet the service 11 Details of the organization of the member banks of the Chinese consortium may be found in Appendix B of “ Currency, Banking, and Finance in China,” by Dr. Frederic E. Lee. CHINESE GOVERNMENT FINANCE 299 of the loan from the railways to which the rolling stock had been assigned; to deduct interest from funds remaining in its hands in case of default; to hold as contingent security a lien on the surplus revenues of the Peking-Hankow Railway; and to audit and publish the accounts of that railway. Military interference with the railways and the Government has prevented the banks from putting into effect these protective stipulations. CONCLUSION This report is intended to present only a broad outline showing the general financial condition of the central Government. That the Government is temporarily unable to realize upon many of its exist¬ ing assets, and so is unable to pay immediately the interest and principal of its debts is evident. It would be wrong, however, to leave the impression that the situation is hopeless or that the Chinese themselves can not improve it. There is more wealth noiv within the country than at any previous time in the nation’s history, but trade is hampered by a multiplicity of restrictions and exactions probably never equaled elsewhere in the world. Furthermore, as China does not yet enjoy tariff autonomy, because of existing treaties and the complications of loan agreements, the situation is compli¬ cated. To bring about permanent improvement of the Government’s finances, political and constitutional changes are involved that China must work out for herself. As has been shown, the total unsecured indebtedness of the Govern¬ ment has reached the point whereby the action of interest alone it increases nearly $100,000,000 silver per year. The total cost to China of a continuation of the present situation is thus almost $10,- 000,000 silver a month. BIBLIOGRAPHY American Chamber of Commerce, Peking. Chinese Government Finance. Study made by a committee from the American chamber. 1923. Baylin, J. R. Foreign Loan Obligations of China. Peking, Chinese Govern¬ ment Bureau of Economic Information. 1925. Chang Ying Hua (Director of the Bureau of Currency). The Financial Recon¬ struction of China. 1923. Chinese Government. Tables showing various obligations of the Ministry of Communications, calculated up to January 31, 1923. Chinese Government Bureau of Economic Information. Bulletins and supple¬ ments, 1923 and 1924. Financial Readjustment Commission. Preliminary report, published April, 1924. Kimber’s Record of Government Debts and Foreign Securities. 1923. Lee, Frederic E. Currency, Banking and Finance in China. 220 pp. Trade Promotion Series No. 27. United States Department of Commerce. 1926. MacMurray, J. V. A. Treaties and Agreements with and Concerning China. 2 vols. 1921. Overlach, T. W. Foreign Financial Control in China. 1919. Padoux, G. (Adviser to the Chinese Government). The Financial Reconstruc¬ tion of China and the Consolidation of China’s Present Indebtedness. 1923. Report of Chinese Minister of Finance, Mr. Lo Wen Kan, September, 1922. Published in China Year Book. 1923. Seligman, E. R. A. Essays in Taxation. 1923. Senate Document No. 124, February, 1922. Armament Conference Treaties. Wagel, S. R. Finance in China. 1914. Willoughby, W. W. China at the Conference. 1922. Winston, A. P. Chinese Finance Under the Republic. 1916. PROBLEMS OF FOREIGN CAPITAL IN CHINA By J. V. A. MacMurray, American Minister, Peking [Reprinted by permission from Foreign Affairs, an American quarterly review, New York, Vol. Ill, No. 3] Among the economically less-advanced areas of the world China is peculiar in that it is not a new country awaiting the beginnings of an ordered civilization, like much of the African and South American continents; it is a country of dense population, not only with a distinctive culture and a high degree of social organization, but already possessing a very considerable industrial, commercial, and financial development of its own. Industrial enterprises, there¬ fore, and more especially the modern means of communication, such as railways and steam shipping, find in China a field already plowed and harrowed for the sowing. Once built wfith honesty, and operated with even a minimum of efficiency, a railroad in China pays for it¬ self almost from the beginning. Its course lies through a region already under intensive cultivation, and through towns which imme- morially have possessed local industries, whose opportunity for ex¬ pansion has hitherto been limited by the enormous transportation costs incident to the old methods of conveyance by donkey, by camel, or by wheelbarrow; and within reach of it dwells a population more densely settled than in any region of the world, except perhaps some portions of northwestern Europe. A railway in China has not, therefore, to develop the country which it is to serve and from which it is thereafter to derive its revenue. The economic problem which it resents is rather one of adjustment and development, which takes place automatically as between the industries and the markets of the region which has been awaiting this quicker and cheaper means for the disposal of its products. China is also peculiar among the economically less-advanced areas of the world in that its development through foreign capital has been undertaken, not by the nationals of any single power, but by various nationalities simultaneously—some of them inspired by political at least as much as by economic motives. Among these powers the Chinese Government has intrigued, playing off one for¬ eign influence against another, and offsetting concessions to one set of interests by “ compensations ” to other interests. This has re¬ sulted in a haphazard development, neither continuous nor consistent, often ignoring economic necessities in favor of considerations of im¬ mediate political expediency. It has, moreover, had other results more positively dangerous alike to Chinese interests and to the in¬ terests of the foreign investing nations. It has from time to time resulted in acute international rivalries which have in turn led to an accentuation of particularistic and exclusive designs, such as have found expression in the various claims to so-called “ spheres of interest,” or, as they are sometimes designated, “spheres of in- 300 PROBLEMS OF FOREIGN CAPITAL IN CHINA 301 fluence.” Under these conditions, economic and political motives have interacted one upon the other, and have become blended and confused to an extent that is perhaps not equaled elsewhere in the world. As has been said: “Financial, economic, and industrial conces¬ sions have been made the objects of international policies; such advantages have been sought by governments—both directly, in the form of general conventional stipulations, and indirectly, in the form of special grants to particular banks or industrial organiza¬ tions—through all the means available to one state in its intercourse with another; the holders of such concessions have often spoken with the voice of their governments in insisting upon their own con¬ struction of the rights granted to them; and such commitments to individuals of one nationality, even when left unutilized and allowed to lapse by the terms of the concessions, have now and again been claimed as a basis of protest against a grant to the nationals of any other country. The result of this merging of individual with governmental interests has been that matters which would elsewhere be of merely commercial character, susceptible of judicial determina¬ tion in case of dispute, are in China matters of international political concern, for the settlement of which the ultimate recourse is to diplomatic action. It is thus in a sense true that the international status of the Chinese Government is determined and conditioned by its business contracts with individual foreign firms or syndicates, scarcely, if at all, less than by its formal treaties with other govern¬ ments.” It would be unfair, however, to convey the impression that the reliance of China upon foreign private capital is intrinsically bad or harmful to Chinese interests. Harm has indeed been done to the interests both of China and of the other powers in certain cases in which nations ambitious of political advantage, or of exclusive economic position, have insisted upon an admixture of uneconomic elements designed to serve ulterior ends. This is, of course, most marked in cases involving encroachments upon the territorial or administrative integrity of China, or upon the principle of the open door or equality of economic opportunity for all nations in China. It has been exemplified particularly in connection with certain rail¬ way lines constructed by nominally private enterprise—enterprise, however, which was in fact a disguised agency of government, assuming to exercise within Chinese territory the administrative and fiscal functions of a government, and insisting upon a fantastic reverence for the sacredness of its property rights. Along their right of way such railway companies have assumed to nullify the treaty rights of foreign residents in China, to assume jurisdiction over their persons and property, and to levy taxes upon them; and the railway right of way has been treated as so far identified with the national territory of the foreign company that roads could not be built across it, nor could Chinese troops in hot pursuit of bandits be permitted to trespass upon the line even for the purpose of putting down lawlessness. But these are instances not of the harm¬ fulness of private financial enterprise in itself, but of the perversions which have from time to time occurred in consequence of the desire of governments to use business enterprises as pretexts for political penetration. 302 COMMERCIAL HANDBOOK OF CHINA In those eases in which foreign economic developments in China have been left free of political designs, however, and allowed to develop with a sole view to the security of the bondholders and the success of the enterprise, the record is on the whole one which China is not warranted in resenting, and in which the operations of international finance appear in a favorable light. Even where the safeguards have involved a degree of foreign supervision over Chinese revenues (so as “to touch very nearly the administrative independence of China,” as it was put by President Wilson in the public announcement of withdrawal of support from the American group of the consortium, in 1913), it must in fairness be admitted that the arrangements of this sort actually made up to the present time have more than justified themselves by the inestimable service which they have rendered to the Chinese Government. One has but to point to the international services established in connection with the Maritime Customs and the salt revenues. The customs service, as is well known, had long ago grown up as a result of historical circumstances, under the organizing genius of Sir Robert Hart; but in connection with the Anglo-German loans of 1896 and 1898, made for the purpose of paying the Chinese in¬ demnities to Japan after the war of 1894-95, it was stipulated that the system of foreign supervision over the administration of the customs should remain unaltered during the life of these loans, which were charged upon the customs revenues; and the provisions of these loan contracts, therefore, constitute the basic agreement with regard to the continuance of the present system of international supervision over the customs administration. In 1913 a similar service, of an international character, was provided for by the terms of the reorganization loan, in connection with the security of that loan upon the revenues of the Salt Gabelle. Both of these organizations have rendered to the Chinese Government loyal and efficient service, of which they may well be proud, and which has won for them in an extraordinary degree the confidence of the Chinese people. In a brief review of the operations of private financial enterprise in China, it is possible to deal only with a few of those aspects of the problem which are fundamental and peculiar to the case of China. This paper will therefore confine itself almost exclusively to the question of railways, making only incidental reference to the important series of administrative loans by which China was enabled to meet the indemnities imposed upon her as a result of the war with Japan, and by which after the revolution of 1911 she was sup¬ plied with the means of organizing and consolidating the new Re¬ publican Government. It will be necessary to leave almost without comment the activities of the original consortium—a combination of American, English, French, German, Japanese, and Russian bank¬ ing interests—which in 1910 and the following years took so momen¬ tous a part in establishing international financial cooperation in China, but which dealt solely with administrative rather than with industrial financing. From the time, 30 years ago, when China first had recourse to foreign capital to aid in her internal development, there has grown up a sharp though somewhat artificial distinction between loans for the general purposes of the Government, conveniently designated as PROBLEMS OP FOREIGN CAPITAL IN CHINA 303 administrative loans, and those devoted to industrial developments undertaken by the Government—these so-called industrial loans be¬ ing’ in practically every case for the purpose of railway construction. The building of railways was a task for which neither the Chinese Government nor the Chinese people were competent by training or tradition. They lacked the necessary technical education and ex¬ perience, and were not familiar with the kind of cooperation on a considerable scale which is necessary for public works or corporate undertakings. Without undue reflection upon the Chinese people, it may be recalled that their standards of public or corporate re¬ sponsibilities as trustees have never been developed, as in the case of western nations. For reasons peculiar to their social and political fabric, the Chinese have developed standards different from our own—in some respects more punctilious than those of western peo¬ ples, but involving none of that regard for the sacredness of a trust which is so conspicuous in the legal and moral concepts of the Occi¬ dent. To risk a generalization so broad that it must necessarily be at least partly faulty, one might say that the Chinese are singularly conscientious about the obligations of a debt, but equally unrespon¬ sive to the obligations of a trust. This has been evident in such cor¬ porate activities as the Chinese have undertaken during the past generation. Directors of corporations have not felt any inhibition upon their borrowing corporate funds for the purpose of speculation, in stocks or in exchange, for their personal profit. It has resulted that Chinese corporations have frequently ended in bankruptcy through some fluctuation in shares with which the corporation itself was in no wise concerned. As the result of these and other handicaps, Chinese financiers have never yet succeeded in building a railway; and the failure of the effort in the case of the Province of Szechwan railway was so conspicuous and so disappointing that it constituted one of the causes which brought on the Chinese revolution in 1911. Nor has the Chinese Government itself ever built more than a few odd miles of railway, except in the case of the Peking-Kalgan line, which was indeed a fine technical accomplishment and a successful enterprise, but which during the past few years has been made the sport of political and personal ambitions, until at present it has lost its orig¬ inal independence of foreign influence and has become almost irre¬ trievably burdened with debts. Apart from certain more or less experimental efforts, the first rail¬ way concessions in China were in the strict sense of the word “ con¬ cessions.” They involve the grant, to foreign interests, of the right to build and exploit railwa}^s in Chinese territory as foreign enter¬ prises independent of the Chinese Government. To this group be¬ long the Chinese Eastern Railway (the Russian Government’s agency of penetration in Manchuria), the German railway in Shan¬ tung, and the French railway in Yunnan. These railways, however, are examples of what was in fact a governmental activity, rather than of the use of private capital; and they were possible of develop¬ ment only in connection with adjacent territorial possessions, of which they served as extensions. In regions more remote from foreign territorial possessions there was an opportunity for the development of a type of contract which 304 COMMERCIAL HANDBOOK OF CHINA has become known as the underwriting contract or bankers’ contract. This type of contract provides for a loan to be floated in the foreign money markets by the bankers as underwriters. The bankers then have the railway built for the Chinese Government; they choose the engineer themselves, as also the auditor to supervise the expenditures. In the earlier contracts of this type, the loan was secured upon the railway itself, and under the guise of joint foreign and Chinese supervision the bankers in fact retained what was an effective con¬ trol of the operation of the railway. But, beginning with the Anglo- German contract for the Tientsin-Pukow Railway, in 1908, this type of contract has been modified by omitting the mortgage upon the railway, and by relaxing foreign supervision in engineering and auditing after the line has been built. With many variations in detail, this is the general basis upon which the railways in China have been built by foreign private capital. Without attempting too detailed an analysis, it may be pointed out that the essential elements of foreign supervision, alike over con¬ struction and operation of railroads of this type, are embodied in these so-called “engineering rights” (the right of the bankers to have the road constructed under the direction of an engineer nomi¬ nated by them), and “auditing rights” (the control of expenditure, during construction, by a financial representative of the bankers). Closely connected with the “engineering rights ” is the question of a preference for materials and equipment manufactured by firms of the same nationality as the bankers. In many of the contracts of this type, provision is made for the establishment of a purchas¬ ing agency, which, for a fixed commission, is to purchase all mate¬ rial required for the construction and operation of the line. In practice this has usually meant that all material for the road was purchased from a firm affiliated with the lending bank. Even where no such provision exists, however, it generally works out in practice that the necessary material for the road is supplied by the industry of the country which furnished the money and which nominated the engineer in chief. The tendency presents a real difficulty only in cases where several nationalities have cooperated in the build¬ ing of a line. An attempt to obviate this difficulty was made in the case of the Hukuang Railways, in the construction of which American, British, French, and German capital participated. Sec¬ tions were allotted to the several nationalities, but the contract pro¬ vided for an “ impartial preference,” on all the sections, for the materials of all the lending nationalities. It was assumed that free competition among the manufacturers of the four interested countries would obviate any disposition on the part of the various section engineers to favor materials of their own nationality. But the theory found in human nature an obstacle to its successful realization. The whole training of an American engineer makes him look askance at the rigid type of locomotive suitable to English railways, which in his opinion are wholly impracticable for such pioneer lines as are required to-day in China; and he regards as a mere extravagance the eternally substantial British type of bridges, with their rivet holes individually drilled by hand. The British engineer, on the other hand, trained in the practice of a country where the railroad system has long ago ceased to cover new territory and devoted to PROBLEMS OF FOREIGN CAPITAL IN CHINA 305 the perfection of the existing system, regards with complete con¬ tempt what he considers the jerry-built rolling-stock and bridge work of his American colleague. Here is an honest difference of views which presents one of the most difficult of the problems inci¬ dent to international financial cooperation in railway development in China. It is difficult for us to realize the extent to which the construction of a railway in China constitutes a new focus for the whole economic life of the area traversed. In the present rudimentary stage of the country’s railroad development there is almost nowhere any com¬ petition by rail or by water. The construction of a new line gives an outlet for industries which theretofore had never dreamed of being more than merely local. Inevitably, the whole economic and commercial organization of the district crystallizes around the new line. Districts that were formerly as remote from each other as China is from us, suddenly have rapid intercommunication. And this new facility, for conference and for the dispatch of troops and supplies, brings the Government and the people into closer, though not always more harmonious, contact than was possible before. It is not strange that these wonder-working lines of steel rails, which were to so large an extent subject to the control of one or •another foreign interest, became each the nucleus of an influence which was both economic and political. They became, in fact, the primary means of economic and political penetration of China by the several powers; and each became, at least potentially, the basis for the assertion of a sphere of influence and for consequent claims to “ special interests ” and a particularly favored position. Such claims were at times asserted consciously, with a deliberate impli¬ cation that the property interests involved were such as required for their protection the acknowledgment of privileges superior to the governmental rights of China and to the treaty rights of third parties. There have also been occasions where the foreign con¬ trol of railways, without actually asserting any superior rights, has nevertheless resulted in practical trade advantages to citizens of a given nationality, as against all others. These discriminations have seldom been so pronounced as to present a concrete issue. More often they have taken the form of through traffic arrangements which were in practice available only to shippers of a particular nationality, and of technical formalities in regard to applications for cars, customs declarations, way-billing arrangements, and the like. Frequently these discriminations have been the result not of deliberate policy, but of an attitude of self-conscious nationalism on the part of subordinate employees who regarded with interest and zeal the consignments covered by documents in their own language. But whether one considers these practices as warranted or unwarranted, the result was that railway lines came to be identified with claims to spheres of interest where, as the years went by, the trade and enterprise of third countries found themselves more and more ex¬ cluded, and in which more and more definite claims to paramountcy or predominance of influence were asserted in behalf of the nationali¬ ties originally concerned. 100020°—26-21 306 COMMERCIAL HANDBOOK OF CHINA It was in the attempt to remove these tendencies toward national discrimination that Secretary Knox in 1909 proposed his plan for the so-called neutralization of railways in Manchuria. The plan provided that the interested countries—including Russia and Japan, wdiich possessed railways in that region, and the United States and Great Britain, whose nationals held contracts for railway construc¬ tion there—should pool their interests with a view to establishing a single system of railways to be operated by an international syn¬ dicate. In the light of what is now known regarding the arrange¬ ments existing among the powers at that time, it is evident that this plan never had any prospects of success. It was in fact supported only by Germany, which, like ourselves, was an outsider to the arrangements by which France, Great Britain, Japan, and Russia had arrived at a mutual accommodation of their respective interests on the Continent of Asia. Even in its failure, however, the Knox proposal gave an impetus toward international cooperation among the powers most interested in questions of Chinese finance. So far as concerned railways, this cooperation found expression only in the joint financing of the Hukuang Railways by capital from the United States, Great Britain, France, and Germany. For the purpose of administrative loans, however, the bankers of these four countries and of Japan and Russia associated themselves, in 1909, in what has become known as the consortium. The American group dropped out in 1913; but the remaining five powers went on with the flotation of the reorganiza¬ tion loan, which marks an epoch of progress in that it caused the development of the Salt Gabelle, a producer of revenue almost as dependable as the customs. The consortium did not attempt to deal with industrial loans, however, and therefore failed to con¬ tribute anything toward the solution of the problem created by the railways as agencies of economic and political penetration. The difficulties of this problem became accentuated with the passage of time until in 1917, when an American firm obtained contracts for the construction of a number of lines in different parts of China, it met with protests from Russia against its building of a line northward and westward into Mongolia, from France against its building of a line southward into Kwangsi, and from Great Britain against its building of a line from the lower Yangtsze Basin westward into Szechwan. In each case the American projects were held to conflict either with a general superiority of rights in the region in question or with the particular privileges of a corporation which claimed that the new line would be in effect an extension of a railway which it had contracted to build. It is not to be wondered at that the Amer¬ ican contractor in question, in the course of a conversation in which certain of the opposing interests pointed out to him the extent of their several spheres of interest, scrutinized the map with some puzzlement and finally asked, “ Then where is China ? ” The crux of the whole difficulty appears in the fact that in each case the Chinese Government, which had selected these lines for develop¬ ment by the American company, actually asked the contractor to forego work on them, in the hope that later opportunities for his enterprise might be found which would not raise an issue with the claims of other nationalities. PROBLEMS OF FOREIGN CAPITAL IN CHINA 307 This was one of the conditions which the American Government had in view when, in 1920, it proposed to the British, French, and Japanese Governments that the consortium should be reconstituted, or rather that there should be formed a new consortium, which should deal not only with administrative loans but with loans for such in¬ dustrial enterprises as railways in China. It was proposed that the several national groups should pool into the common resources of the new consortium such rights as they possessed with regard to the construction of railways and similar enterprises. For a time, there was determined opposition to this proposal on the part of the Japanese Government, which declared itself unwilling to authorize its nationals to enter into this form of international cooperation unless Manchuria and the adjacent portion of Mongolia were ex¬ cluded from the activities of the new consortium. The ensuing con¬ sultations among the interested governments involved a considera¬ tion of Japan’s claim to special interests in the area in question; but in the end, when it had been made clear to Japan that the proposal did not contemplate the surrender to the consortium of vested in¬ terests in railways which were already in operation as going con¬ cerns, the Japanese Government gave its consent to the participation of its bankers in the new consortium, the understanding being that each national group, while retaining its individual rights with re¬ spect to all railways actually constructed or which had made sub¬ stantial progress toward completion, should pool all of its contracts for enterprises which had not yet been seriously taken in hand. The new consortium thus furnishes a means by which future railway con¬ struction in China may be made a matter of general international concern, and divorced from particular political pretensions. The Chinese Government has not yet seen fit to avail itself of the facilities offered by the new consortium. But if and when the Chinese are ready to deal with it, it will be in a position to make the requisite funds available for them under conditions far less danger¬ ous or subversive to Chinese sovereignty than those effective in the past. Not only will any railway so constructed be purged of implica¬ tions that it is the basis of a claim to a sphere of influence, but the very fact of its construction under these auspices will negative any such claim heretofore asserted in that region. In the meantime, the mere fact of the consortium’s existence as the result of an agree¬ ment for international financial cooperation has been of real service in arresting the tendency of railway contracts to establish rights partaking of the nature of a protectorate. Closely related to this question is that phase of the work of the Washington Conference on the Limitation of Armaments which dealt with the principles and policies to be adopted by the participat¬ ing powers in their relations with China. Most of the decisions of the conference in this regard were embodied in one of the treaties concluded on February 6, 1922. That treaty is not yet technically in force, as it awaits the ratification of France; but the principles which it incorporates have been adopted and followed by all the interested governments as fully and as punctiliously as though the treaty had in fact become the law of the land for all the participating powers. Perhaps, then, while we are awaiting the ratification of France (which it is to be assumed will in due course be given) even the strict 308 COMMERCIAL HANDBOOK OF CHINA legal constructionist will pardon a reference to that treaty as though it had actually entered into force. The treaty not only accepts the mutually dependent principles of the open door and the integrity of China—formulas which, like a worn coin, had lost all distinguish¬ ing marks—but it also makes precise provisions for certain applica¬ tions of these doctrines; it expressly discountenances claims to spheres of influence; and it gives to the doctrine of the open door, or equality of economic opportunity in China, a definition more pre¬ cise and more far-reaching than has ever hitherto been attempted. In connection with the treaty, the conference adopted a resolution which should go a great way toward clearing away the atmosphere of secret intrigue which has so often surrounded foreign enterprise in China, by providing for the practically immediate publication of all contracts for concessions from the Chinese Government or from the Provinces. With the consortium available as a means of international coopera¬ tion, and with the open door principle of fair play accepted and defined by mutual agreement, the way is open for a healthy and normal development of the resources and opportunities of China through the participation of foreign capital on a genuinely economic basis, to the advantage of China at least as much as to the profit of foreign investors. It is to be hoped that we are on the eve of an economic development which will take account of the fact that a fair bargain is profitable to both parties, and that no nationality need strive to establish exclusive claims through fear that it must suffer loss in consequence of another’s gain. We know that the wealth of China, particularly in mineral resources, has been exaggerated to the point of fable, but it may well be doubted whether, in our dreams of a Chinese Eldorado, we have ever adequately realized the more substantial, because inexhaustible, wealth that lies not in the soil of China, but in the industry, the intelligence, and the fine character cf the Chinese people. These are resources which are capable of an incalculable wealth-making power. China, for its own good no less than for the good of those who look forward to supplying its grow¬ ing market with their commodities, is destined to provide opportuni¬ ties such that no nationality need have occasion to grudge what falls to another for development. At present the obstacle to such a development is the prevailing political chaos in China, and the accompanjdng disintegration of administrative authority. This is doubtless a crisis through which China is compelled to pass as a result of the political and social tra¬ ditions formed by her people during the longest coherent history of any nation now extant. One may feel discouraged that the end of this period of disorganization is not yet in sight. But no one familiar with the fine qualities of the Chinese people can doubt that there will eventually be a reintegration of their national life. When that time comes, China will inevitably pattern herself more and more closely after our western world, and of course largely through the means provided by foreign capital. The way in which foreign capital meets its responsibilities in serving the ends of the neAv China will, more than any other factor, determine the solution of that greatest of all problems confronting mankind—the relationship that is to exist between the civilizations of the East and the West. RAILWAYS IN CHINA By J. E. Baker, Adviser to the Chinese Ministry of Communications The railways of China and its dependencies do not exceed an aggregate length of more than 7,500 miles. For the most part they are confined to the coastal plain and Manchuria, although there are a number of small lines scattered throughout the country. These railways are as follows: Lines 1 Location Miles c Contigu¬ ous f line Scat¬ tered MANCHURIA 1. Chinese Eastern.- _. .. North Manchuria_ 1, 078 Timber concession lines in connection .- . __do.. __ .. 286 2. Tsitsihar (narrow gauge)..... __do.. ___ 18 3. South Manchuria. .. ..... .. South Manchuria_ 681 4. Ssu-Tao .. ... Central Manchuria 266 5. Kirin-Changchun .. ..... . . ...do_ 77 6. Peking-Mukden (outside wall) . ... . North China_ 324 Branches (privately owned)_ __ .do... 56 Mining railways. ___ . .. .. ... _do.... 21 20 COASTAL PLAIN 6. Peking-Mukden (inside wall)....... .. North China.. 293 7. Peking-Hankow.. .. _ _ ... _ ... Central China. 822 8. Tientsin-Pukow_ ... _ _ ... _do_ ___ 691 9. Shanghai-Nanking_ . _ _ .. _ Yangtze Valley_ 204 10. Shanghai-Hangchow . . _ do_ _ 131 Ningpo section. .... . . .do. . . _ 49 11. Peking-Suiyuan.. ... Northwest China_ 461 12. Cheng-Tai.. Shansi__ 152 13. Taokow-Chinghwa.. _ ... Honan.. __ 95 14. Lung-Hai (including Kaifeng-Honan) ... .. ... . 446 15. Hupeh-Hunan_ . . ___ _ __ South Central China 264 16. Chuchow-Pinghsiang.. . _ . .. _ ... __do... .. 56 17. Shantung (Kiao-Tsi)l_ . .. .... _ Shantung . __ 283 18. Chung Hsin Mining Co_ ... . ... . ... .. _ . _do_ .... 32 Mentowkow-Chaitang_ .... _ _ Peking.. _ _ . 38 Nanking City_. . _ __ __ Nanking. 5 Poshan Light Railway.. . ... . . _ ___ ... Shantung_ .... 14 19. Kiukiang-Nanchang... ......... Kiangsi.. 79 Tayeh Mining Railway... . .. Hupeh.. 15 Shantung Wen_ . ."._ . . .. _ . . . Shantung ... 42 Lin-Kiang Yangho...__ ___ Chihli... 14 Yu Ning_ _ ... . . _do 23 Ching Shih_ ... . __do 18 Tsehsien Ya Lu_ 19 Lung Yen Iron..__ Chihli.. 13 OTHER PARTS OF CHINA 20. Canton-Kowloon (including British section).. 119 21. Canton-Samshui _ 30 22. Changchow-Amoy__ . . Fukien 18 23. Kwangtung_"_ North of Canton 141 24. Sunning Near Canton 93 25. Chaochowfu-Swatow. 26 26. Yunnan. Southwest China 288 Ko Chu Pishih_ Y unnan 33 Miscellaneous mining lines 140 1 Numbers refer to railway map and serve as a guide to location. 309 310 COMMERCIAL HANDBOOK OF CHINA In Manchuria the railway lines, though continuous for the most part, do not constitute a single system, but rather three systems— the Chinese Eastern, the South Manchuria, and the Government Railways. The two Government-OAvned lines, the Kirin-Changcliun and the Ssu-Tao, connect with the South Manchuria only and are operated by it as branch lines. At Changchun the South Manchuria line forms a junction with the Chinese Eastern, but between them there is an unbridgeable break due to the fact that the Chinese Eastern track is built to the 5-foot gauge of the Russian State Railways, while the South Man¬ churia follows the standard Chinese gauge, 4 feet 8 y 2 inches. At Mukden, where the South Manchuria joins the Chinese Govern¬ ment railway system, there is another break. The lines have the same gauge, but the automatic coupler on the Chinese railways is 6 inches higher, owing principally to the greater wheel diameter on the Chi¬ nese rolling stock. The lines of the coastal plain form a continuous system of over 3,500 miles. However, this continuity is broken in a physical sense by the Yangtze River, over which there are neither bridges nor car ferries. Out of the 3,541 miles of railway on the central plain, but 650 miles of the continuous system are south of the Yangtze. Most of the short industrial lines north of the river connect with the trunk lines, but south of the river such short lines lead to ports rather than to railways. Radiating from Canton are three short lines, which in time should be merged into a regional system corresponding somewhat to the systems that serve the coastal plain and Manchuria; but at present these lines must be regarded as in the category of scattered lines, for none of them is continuous with another, and their combined length is less than 300 miles. HISTORICAL SURVEY From the inception of the idea of railways in China to the present is about 60 years. The first efforts to build railways in China were put forth in Shanghai even before the close of the Taiping Rebellion (1864). The merchants of the port—foreigners for the most part— presented a petition to the great Viceroy, Li Hung Chang, for per¬ mission to build a railway to Soochow. The petition was emphati¬ cally denied; but the agitation was immediately renewed, only the line fostered was in the opposite direction—that is, from Shanghai to Woosung. After 10 years of effort, a charter was obtained by Jardine and Matheson, a British firm, and on January 20, 1876, the first rail was laid. The track was of but 30-inch gauge; and the locomotive, the “ Pio¬ neer,” which ran upon it for the first time on the 14th of February, weighed less than 1 ton. A dispute arose as to the right to use a locomotive. Some time later a Chinese, evidently determined on sui¬ cide, was run over by the train. This incident was used to such good effect that Jardine and Matheson were forced to sell out to the local authorities, who tore up the track and shipped it, together with the rolling stock, to Formosa, where it was dumped on the beach. This was the last of railroads around Shanghai for some years. RAILWAYS IN CHINA 311 In the meantime, Li Hung Chang had been transferred as Viceroy to the Province of Chihli. His friend, Tong Kin Sin, had organized the China Merchants Navigation Co., which was conducting a coastwise trade in steamships in competition with foreign shipping, but the company was in difficulty because of the high price of coal. The Tongshan mines which produced it were so far inland that the cost of transportation rendered its price at Tientsin practically prohibitive. English engineers convinced Tong that his remedy lay in building a railroad, and, accordingly, a petition was presented to Li Hung Chang for permission to build from Tongshan to Peh- tang, at the mouth of the Pehtang River. Li Hung Chang was entirely favorable, but political enemies at court were to be found in opposition, and although Li was in high favor he could obtain imperial sanction for only 6 miles of line, which connected the mines with a canal built to Hsukuchuang. This line was laid out with standard gauge of 4 feet 8 y 2 inches, the foreign engineers being inspired with the idea that it was the nucleus of a continental system. The- only motive power contem¬ plated in the charter was that of animals or men; but with the same enthusiasm, the engineers set about the construction of a locomotive out of a stationary boiler and channel iron, together with wheels which had been shipped in as “old iron.” On June 9, 1881, the one-hundredth anniversary of the birth of George Stevenson, this engine was christened the “ Rocket of China ” and given its first run over the 6 miles of track then in existence. While the run of the “ Pioneer ” at Shanghai antedated that of the “ Rocket of China ” by more than 15 years, the latter was the first locomotive run on a permanent railway in China. It was five years before the attempt to extend the line was suc¬ cessful. The Kaiping Railway Co. was formed with Wu Ting Fang (later Minister to the United States) as president, and on April 12, 1887, a railway prospectus was issued soliciting subscriptions for the purpose of building the line to Tientsin. This purpose was accomplished in 1889, but in the meantime the name, “ Kaiping Railway Co.,” had been changed to “ China Railway Co.” China was smarting under defeat in Indo-China at the hands of the French, and those in authority were led to perceive that lack of communications was the explanation of why the immense resources of the Empire were not able to overcome the relatively small forces by which the French had effected their conquest. Hence, in 1891, the Imperial Government ordered the line extended to Shanhaik- wan, avowedly for purposes of military expediency. Although the China Railway Co. enjoyed support from person¬ ages of official importance, it was not until 1894 that the Government itself concluded to take over railway enterprises for its own. The Tientsin-Shanhaikwan line was then pushed in both directions, reaching Fengtai that year, and surveys were carried on in the direc¬ tion of Vladivostok. Construction had reached some 40 miles north of the Great Wall when war broke out with Japan. The ease with which Japan defeated China probably surprised foreign countries more than it dismayed the Chinese. The idea was voiced that China w y as utterly without cohesion and about to fall apart. Under such conditions nations with possessions along the 312 COMMERCIAL. HANDBOOK OF CHINA Chinese borders expected to be able to incorporate portions of the Chinese Empire, and those without such possessions began to scheme actively for means of removing that disability. In swift succession came treaties or agreements between China and Russian, French, German, and British interests, all closely backed by their home Governments. The Chinese Eastern, to be built across northern Manchuria by a private institution created by the Russian Govern¬ ment for the purpose, was the first agreed upon. The Yunnan Rail¬ way, to be built from Yunnan to a connection with the French rail- wa} 7 s in Indo-Cliina, was the next. The German Government ob¬ tained railroad construction rights in Shantung and the control of the harbor of Kiaocliow. Russia thereupon obtained the right to build a railway northward from the harbor of Port Arthur on the Gulf of Chihli to a junction with the Chinese Eastern at Harbin. Great Britain secured control of Weihaiwei and secured the general promise that the construction of railways in the Yangtze Valley should be confided to companies of British nationality. The various foreign nations, in thus securing railway concessions, were justified by their statesmen, who spoke broadly of the advantages which would accrue upon the occurrence of the expected break-up of China. The Chinese, however, were taking active measures to meet this danger. A shrewd bargain was being made for the construction of a trunk line from Lukowkiao, near Peking, to Hankow. American interests made the first reconnoissance, believing that a contract for construction would follow. British interests appeared in competi¬ tion, but while the Chinese negotiators were flitting back and forth between the British and the American representatives, Belgian agents appeared, who were willing to negotiate an agreement upon the terms for which China was holding out. When the Belgians discovered that they could not float the loan upon the agreed terms, they began immediately to negotiate for safeguards similar to those demanded by the British and the Americans; and with the support of the French and the Russian Legation they were able to obtain these terms. This combination led to important results which will appear later, the most immediate of which, however, was the granting to an American syndicate the construction of the line from Hankow to Canton. Similarly, China negotiated with British capitalists a loan for the extension of the Imperial Railways of North China from a point north of the Great Wall, where construction had ceased, to Hsinmintun. The Russian Government, however, raised a strong protest, and after months of negotiation reached an understanding (to which China was not a party) with Great Britain, permitting the agreement to be carried out and providing, further, that Great Britain would raise no objections to any Russian projects north of the Great Wall, while Russia would raise no objections to British projects in the Yangtze Valley. Thus the Russian and the British “ spheres of influence ” were definitely outlined, and the policies of spheres of influence became duly recognized. In the case of the Chinese Eastern, the Yunnan, and the Shantung Railways, the entire ownership and risk of the enterprise was con¬ veyed without reservation to the foreign concessionaire, who, in all cases, though appearing in the agreement as a private concern, was RAILWAYS IN CHINA 313 known to be the direct agent of its home government. In the case of the Peking-Hankow and the Peking-Mukden, however, owner¬ ship was vested in the Chinese Government, w T hich not only accepted responsibility for the repayment of the loan and interest thereupon, but pledged the general revenues of the Government for the pur¬ pose. The agreements for these loans provided as additional se¬ curity a very comprehensive degree of administrative control of the lines by nominees of the loaning syndicate. DEVELOPMENTS SINCE 1900 Following the suppression of the Boxer uprising, the support which foreign military forces gave to the Manchu throne by re¬ calling the Empress Dowager from her flight, resulted in a large number of contracts with foreign financiers for the construction of railways for the Chinese Government. In 1903 and 1904 agreements were made for the Shanghai-Nanking, Cheng-Tai, and Kaifeng- Honan lines, modeled after the Peking-Hankow agreement, which placed practically the entire administrative control of these lines in the hands of the foreign nominees. In the meantime what is known as the “local movement” had been developing. For 20 years Chinese youth had been going abroad for modern education, and bringing back with them ideas of corpo¬ rate organization and the ambition to put their learning to the test. As early as 1898 a number of short lines, such as the line from Shang¬ hai to Woosung and from the Pinsiang collieries to the Hsiang River, were begun by the Chinese themselves, and the 1903 group of con¬ tracts gave a new impetus to the native desire for building its own railways. The Americans, who appeared to have sold out the Can- ton-Hankow agreement to the Belgians, were forced to surrender their agreement (for a consideration) and the project was parceled out to provincial companies. After 1904 the Imperial Government found itself practically unable to make further extension of the rail¬ way system by means of foreign loans. It contracted for extension of the British-built railway within the concession of Kowloon in 1907; but this line covered only the 90 miles to Canton and was the last contract to be negotiated by the Empire under the old terms. With 1905 may be said to begin the success of China in regaining control of the railways within its borders. A concession which had been given a mining concern in Hongkong was taken back by the Government and the line, which is now known as the Taokow- Chinghwa, was made a Government railway. Native companies were formed to build railways between Tientsin and the Yangtze River; Shanghai to Hangchow and Ningpo; Kiukiang to Nanchang; Hankow to Szechwan; and several other scattered projects in various Provinces of the central plain. In 1906 the central Government began the construction of the Peking-Kalgan line. In 1908 China regained control of the Peking-Hankow line, which had proved unexpectedly profitable. It soon became apparent that the native forces were not equal to the task they had taken in hand. Charges of corruption were made by stockholders against the officers. Countercharges of failure to meet stock assessments were made by officers against the stockholders. Mismanagement, favoritism, and intrigue for personal ends were 314 COMMERCIAL HANDBOOK OF CHINA common accusations. The central Government found itself in an embarrassing position. On the ground that native capital was available, it had denied to foreign contractors the right to build lines—a principle agreed upon as far back as 1898. Native capital proving itself thus incompetent rendered the central Government helpless, diplomatically, when foreign interests reappeared to enforce their claims. Thus, early in 1908 British and German interests obtained a contract for the construction of the Tientsin-Pukow line, and the same British concern which had made the Peking-Mukden loan in 1898 and the Shanghai-Nanking loan in 1903 obtained a con¬ tract for the construction of the Shanghai-Hangchow-Ningpo line. An attempt was also made at this time to work out an agreement to cover the building of the Canton-Hankow line as well as a line from Hankow into Szechwan. Under the terms of these agreements, known thereafter as “ Pukow terms,” while the Chinese Government bound itself to employ maintenance engineers nominated by the foreign syndicate, these officers are specifically under the direction of a Chinese managing director, and all funds of the line are in absolute control of Chinese officials. In making the Tientsin-Pukow and the Shanghai-Hangchow- Ningpo contracts, the central Government had taken over the invest¬ ment of the local gentry and provincial officials at cost, by paying cash or by guaranteeing dividends upon their shares. When it came to the Canton-Hankow and Hankow-Szechwan line, however, the charges of maladministration were so great that the central Govern¬ ment refused to follow this precedent, and announced, instead, that an investigation would be instituted and that punishment of guilty officials would follow. Naturally, local opposition to the conclusion of a contract with foreign interests for these lines was very great. By 1911, however, a contract was made with the “ four nation group,” consisting of bankers representing England, Germany, France, and America. It aroused a storm of protest and was represented in the Provinces as a partition of South China among the four powers named. Naturally this opposition was greatest where the imperial power was weakest—namely, in the inacessible Province of Szech¬ wan. Representatives of the Government were driven out and a special envoy to the Province was murdered en route. Storm clouds of revolution had been gathering in the important centers for several years, and by accident one of these broke at Wuchang late in 1911. Revolutionary activities then began in all of the important provin¬ cial centers, in the face of which, after making practically no opposi¬ tion, the Manch'us abdicated on February 12, 1912. With the passing of the Manchus local opposition to building of railways with foreign capital absolutely ceased. Within a year the provisional President of the new Republic was advocating the con¬ struction of 50,000 miles of trunk lines within the ensuing 10 years by means of foreign loans. That same year an agreement was made for the extension of the Kaifeng-Honan line eastward to the coast and westward to the interior of Kiangsu. This line is now known as the Lung-Hai. The following year an agreement was made with similar interests, Franco-Belgian, to build a north and south trunk line from Tatungfu in Shansi to Chengtu in Szechwan. Almost simultaneously an agreement was made with a British company for RAILWAYS IN CHINA 315 the building of a line from Pukow west to the Peking-Hankow line, with possible extensions beyond. In 1914 contracts were made with British and French interests for the gridironing of the territory south of the Yangtze. Altogether between 6,000 and 7,000 miles of line were contracted for within these two years, and, most remarkable of all, the terms agreed upon granted to the foreign contractors an administrative control over the lines to a degree almost equal to those known as “ Pukow terms.” CHANGES BROUGHT BY THE WAR The outbreak of the World War in 1914 most effectively frustrated nearly all plans for railway construction. In 1915 an American com¬ pany attempted to secure a railway construction contract, and in 1917 and 1918 the Japanese succeeded in obtaining several contracts. Later, with acknowledgment from their home Governments, the im¬ portant financial institutions of France, England, Japan, and America made an agreement for joint financing of future railway construction and other large industrial enterprises in China, which combination was known as the “new consortium.” It was expected that this combination would to some extent nullify the “ spheres of influence,” that were beginning to overlap, and would allay China’s suspicions that certain countries had perhaps more than an altruistic interest in her development. The effects of the new consortium, however, proved exactly the opposite of those anticipated. The Chinese, instead of being assured of immunity from foreign aggression, conceived the idea that its effect would be to subject them absolutely to foreign dominations. Their opposition to the consortium was pronounced. As the result of this and of the conditions brought about by the World War, rail¬ way construction during the 12 years of the Republic has totaled only 1,000 miles, compared with the 6,000 miles constructed in the final 12 years of the Empire—industrial lines being disregarded. PROGRESS DURING PERIOD OF THE REPUBLIC It would be incorrect to assume, however, that no progress has been made during the period of the Republic. One of the first acts of the new regime was to attempt to cement the various lines into a national system. The negotiators of the original contracts made no provision for this feature. Each line had been constructed as a separate entity, with its own designs for material and structures, and with no provision for cooperation between them. Trains arrived and departed at junction points with no consideration of connec¬ tions. Tickets had to be purchased and baggage rechecked as one passed from one line to another. If passing beyond the originat¬ ing Jine cargo had to be transferred from the cars of one line to those of another, and even the language spoken was different. Dur¬ ing the 12 years of the Republic the general accounts of all of the railways subject to the jurisdiction of the central Government have been reduced to a common standard. Through trains run between principal centers. Tickets can be bought and baggage can be checked from any point to any other point upon any of the con¬ tiguous lines. Uniform rules for the packing and shipping of goods 316 COMMERCIAL HANDBOOK OF CHINA have been provided. The metric system of distance and weight has been put into effect upon all lines. Even through billing of goods and the interchange of rolling stock have been introduced; and, while not 100 per cent effective, such practices are being rapidly ex¬ tended. The accounting for through passenger traffic and through shipments is now performed in a central office. Arrangements have been made also for through traffic between Chinese Government lines with the South Manchuria, Chinese Eastern, Chosen, and Imperial Railways of Japan. The standardization of physical equipment has been agreed upon in principle, but the actual working out of the de¬ tails will require considerable time. An agreement was entered into by Japan and China in 1922 for the retrocession of the Shantung Railway. The line was purchased by the delivery of treasury notes, executed by the Chinese Govern¬ ment; and, by a resolution passed at the Washington conference, the powers recorded their hope that “to the utmost degree consistent with existing legitimate rights, the future development of railways in China shall be so conducted as to enable the Chinese Government to effect unification of railways into a railway system under Chinese control, with such foreign financial and technical assistance as may prove necessary in the interests of that system.” However, the realization of this aspiration undoubtedly has been deferred by recent political events in China. STATISTICS OF PRINCIPAL LINES The following table gives the names of the principal lines, the char¬ acter of the ownership, origin of construction funds, length of line, cost of construction, extent of funded debt, and amount of shares or Government investment. 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Railways Chinese Eastern. South Manchuria.. Yunnan.... Kowloon-Canton (British section) Peking-Hankow.. Peking-Mukden__ Tientsin-Pukow. Shanghai-Nanking... Shanghai-Hangchow-Ningpo_ Peking-Suiyuan.. Cheng Tai.... Taoko w- Chinghwa... Kaifeng-Honan. Lung-Hai.. Kirin-Changchun.. C huch o w - Pi ngsi ang__ Canton- Kowloon_.. Canton-Samshui.... Changchow-Amoy.. Hupeh-Hunan__ Ssu-Tao. Kiao-Tsi..... Kiukiang-Nancbang__ Sunning.. Kwangtung Provincial__ Revenues Expenses Oper¬ ating ratio Net revenue R. 33, 333, 770 R. 27, 577, 675 S2V 2 R. 5, 756,095 Y. 87, 662, 013 Y. 34,099, 801 39 Y. 53, 562, 212 Fr. 28,241,625 Fr. 21,210, 785 75 Fr. 7,030,845 $710,295 $562,144 79 $148,151 26,388,117 11,444, 303 43 14,943, 814 20, 690, 449 12, 933, 499 63 7, 756, 950 16,121, 893 9, 678, 609 60 6, 443, 284 7,572, 529 4, 525, 891 60 3, 046, 638 3, 603, 009 3,183, 613 88 479, 396 6, 593, 825 4, 536, 041 69 2,057, 784 3, 590,118 1, 597, 419 44 1, 992, 698 1, 389, 3S6 626, 087 45 763, 250 2,418, 907 1,045, 709 43 1,373,198 3,162, 842 1, 383, 401 43 1, 779,440 2, 789, 552 1, 790, 525 64 999,027 525, 055 543, 832 136 C 1 ) 1,541,494 1,028, 745 67 512, 748 2 962,091 2 487, 435 51 2 474, 656 76, 826 85, 774 112 3 8, 948 1,895, 980 1, 632, 803 86 263,177 1,661,353 1,167, 062 70 494,291 Y. 8,455, 683 Y. 4,411,618 52 Y. 4,044,065 4 $539, 734 4 $606, 818 112 ( 4 ) 0) 4 1,764,136 4 1,048, 623 90 4 115,373 2,490,000 ( 5 ) ( 6 ) ( 6 ) 1 Deficit. 2 Data for 1916. 3 Less $8,948. 4 Data for 1921. 5 Not reported. MANAGEMENT OF CHINESE RAILWAYS On the lines constructed under special concessions the form of management follows generally the practices in the homeland of the concessionaire, with special features provided to meet special con¬ ditions. CHINESE EASTERN RAILWAY The agreement of September, 1896, between China and Russia for the construction of the Chinese Eastern Railway provided that the president should always be a Chinese and should reside in Peking. When the first president died, however, in 1903, the vice president, a Russian and an officer of the Ministry of Finance at St. Petersburg, became president and continued to hold that office during the life of the Russian Imperial regime. Theoretically the Chinese Eastern Railway was governed throughout that period by a board of direc¬ tors under the Ministry of Finance at St. Petersburg. Always under the direction of the Ministry of Finance, the board exercised a cer¬ tain degree of supervision through the device of a revision commit¬ tee, whose representatives were attached to each department of the railway and had the right of criticism and, to a certain degree, of censorship. Actually, however, direction of the railway was in the hands of the general manager, who resided at Harbin. This power¬ ful personage was not only at the head of all Russian civil adminis¬ tration within the railway zone, with full direction of the railway (accounting department, transportation, maintenance of way and equipment, police control, and the making of rates and municipal legislation), but in the later years of the Czarist regime he was also RAILWAYS IN CHINA 319 commander in chief of Russia's military forces in the railway zone. The Chinese Eastern Railway was thus in itself a kind of political state as well as an industrial institution, with its general manager possessed virtually of the powers of a dictator, subject only to the will of his imperial master. After the collapse of Imperial Russia the management of the rail¬ way underwent a change. The residence of the board of directors was changed to Harbin and 5 of the 10 members were Chinese, the president being a Chinese. Police control was taken over by Chinese military authorities. In each department a Chinese was appointed assistant chief, but his powers were limited largely to observation rather than direction. It is too early to forecast the possible changes that must result from the settlement with the Russian Soviet Government, although undoubtedly important changes are bound to take place. The pres¬ ent agreement provides merely a substitution of Soviet representa¬ tives for former representatives of the Russo-Asiatic Bank, but it is not improbable that the Russian representatives will endeavor even¬ tually to recover civil administration within the railway zone. At present all civil institutions in the railway zone which were formerly under the railway control are subject to Chinese civil administration. SOUTH MANCHURIA RAILWAY The South Machuria Railway Co., like the Chinese Eastern, tran¬ scends the ordinary functions of a railway. It has charge of police control along the railway, directs general civic and educational mat¬ ters, engages in extensive mining operations, and generally directs matters of commerce and industry within its area. A board of direc¬ tors determines the policies for and harmonizes the interests of the several institutions connected with the railway. The railway itself is under the direction of a general manager, who, subject to the board of directors, has charge of all its activities. All important changes of policy, however, with respect to its different departments must be confirmed by the board of directors before the general manager’s decision can become final. The board of directors is finally subject to the jurisdiction of the Minister of Railways of the Japanese Imperial Cabinet. CHINESE GOVERNMENT LINES On Chinese Government railways the organization is generally uniform, but the distribution of powers within the organization varies. The typical organization is that of a managing director, to whom the traffic manager, locomotive superintendent, mainte- nance-of-way engineer, chief accountant, and chief of police make their reports. The traffic manager has jurisdiction not only over rates, fares, and conditions of shipment, but over transportation also. Stores are usually under the jurisdiction of the particular depart¬ ment using them. The Peking-Hankow, Peking-Suiyuan, and Shan¬ tung Railways have separate stores departments. The typical organization is considerably *modified by two factors; (1) Loan agreements, and (2) the consolidation policy pursued dur¬ ing the period of the Republic. 320 COMMERCIAL HANDBOOK OF CHINA On lines built with foreign loans a certain number of foreign officials are provided for and tlieir powers are enumerated in the agreement. On most lines a foreign general manager, with the title “ engineer in chief," is named, to whom the heads of departments report rather than to the managing director. In such instances the managing director has ordinarily little active control over the techni¬ cal operations of the lines, but is the medium of communication be¬ tween the railway and the Government. In addition to the foreign engineer in chief, or general manager, the loan agreement usually specifies a foreign chief accountant, whose powers cover not only the organization of the system of accounts and matters affecting personnel, but who has custody of the entire railway funds. Only upon his signature can these funds be drawn from the depository specified in the agreement. In the agreements prior to 1908 not only are foreigners named as heads of the important departments, but they are specified also for other technical positions of responsibility. Thus on the Peking- Mukden, Shanghai-Nanking, Cheng Tai, Kaifeng-Honan, and Tao- kow-Chinghwa not only are the engineers in chief, chief accountants, locomotive superintendents, maintenance engineers, and traffic man¬ agers foreigners, but also most of the district engineers, traffic in¬ spectors, and locomotive inspectors are foreign. For the “most part these foreign officials have complete control of their departments, including the making of rates and of rules for the packing and ship¬ ping of goods and the right to discharge subordinates. On the Peking-Mukden, however, a considerable limitation upon the latter power has been imposed by a provision in the contract which places the hiring of native employees entirely in the hands of the man¬ aging director. The result is that practically the full control of personnel under any department is in the hands of the chief engi¬ neer's Chinese assistant, rather than under control of the head of the department. On lines built as the result of contracts made in 1908 and there¬ after, foreign participation in the organization has been very con¬ siderably modified. For example, on the Shanghai-Hangchow- Ningpo (management of which was later consolidated with that of the Shanghai-Nanking), although the same foreign officers and Chinese officers participate in the management of the two lines, their posi¬ tions are reversed. The foreign departmental chief on the Shanghai- Nanking has a Chinese assistant, who on the Shanghai-Hangchow- Ningpo is in effect the chief to whom the foreigner is an assistant. The heads of departments on the Shanghai-Nanking road report to the chief engineer for instructions; on the Shanghai-Hangchow- Ningpo, they take orders from the managing directors. However, the custody of the funds belonging to the railway is by contract in the control of the foreign chief accountant. On the Tientsin-Pukow line there is no foreign engineer in chief, but all heads of departments report to the managing director. The traffic manager is a Chinese. The two maintenance departments are divided into districts. In the southern district both the locomotive superintendent and the chief maintenance engineer are British, but in the northern district they are Chinese. The chief accountant is a RAILWAYS IN CHINA 321 Chinese, and has full control of the funds. These same conditions apply to the Hupeh-Hunan section of the Canton-Hankow Railway, except that it has only the one district. Organization on the Peking-Hankow was originally similar to that of the other lines contracted for prior to 1908; but in 1909, when the original loan was refunded, the new loan made no reference to personnel of administration, and hence all the foreign depart¬ mental chiefs were reduced to the position of assistants to their former Chinese assistants, who then became chiefs. Their functions did not change radically; but gradually the influence exercised by the foreigners has been reduced, until they are now virtually in the position of mere advisers on technical matters. RELATIVE IMPORTANCE OF LINES The relative importance of the various lines is shown by the following tabulation, which divides the various lines into groups according to the amount of revenue (figures are for 1922 unless other¬ wise indicated) : CLASS I. REVENUES MORE THAN $10,000,000 Railways Miles Revenue Service units Total units Ton- kilometers Passenger- kilometers South Manchuria__ 681 1,078 822 293 691 Y. 87,662,013 R. 33,333, 770 $26,388,117 20,690,448 16,121, 892 Thousands 4,047,832 866, 768 1,120, 510 825, 568 830, 819 Thousands 732,130 437,551 490,260 826,008 479,601 Thousands 4, 779, 962 1,304,319 1, 610, 770 1,651,576 1,310,420 Chinese Eastern. ... Peking-Hankow.. .. .. .. .... Peking-Mukden (inside wall only)_ Tientsin-Pukow_ . . .. CLASS II. REVENUES $5,000,000 TO $10,000,000 Shantung Railway .... 283 Y. 8,455,683 441,459 217, 899 659,358 Shanghai-Nanking.. __ 204 $7, 572, 528 318,377 648, 709 967,086 Peking-Suiyuan_... _ __ 461 6, 593, 824 230,658 88, 460 319,118 Lung-Hai (including Kaifeng-Honan)_ 446 5, 581, 748 111,454 215, 872 327,326 CLASS III. REVENUES $1,000,000 TO $5,000,000 Shanghai-Hangchow-Ningpo _ 180 $3,663,009 103, 200 262,273 365,473 Cheng Tai_ 95 3, 590,117 111,689 36, 368 148,057 Kirin-Changchun... 77 2, 789, 552 68, 014 35, 754 103, 768 Yunnan___ . . _ . 288 2,658, 661 0) 75, 570 75, 570 Kwangtung ____ 141 2,490, 000 0) 0) Hupeh-Hunan .... 264 8; 855; 980 764, 000 62,259 63,023 Ssu-Tao...__ __ 266 1, 661, 352 48, 744 19, 764 68, 508 Canton-Kowloon. ____ 90 1,541,493 10,411 136, 856 147, 267 Ta oko w- Chinghwa____ 95 1,389, 336 81,197 14, 781 95,978 Sunning.___ 93 2 1,164,136 0) 0) CLASS IV. REVENUES LESS THAN $1,000,000 Kowloon Canton.. _ 29 $710,295 0) (*) Kiukiang Nanchang. . __ ... . 79 2 539, 734 (>) 0) [ Swatow Chaochowfu_ 26 220, 537 0) 0) L 1 Not reported. 2 For year 1921, 100020°—26-22 322 COMMERCIAL HANDBOOK OF CHINA PROPERTY AND EQUIPMENT 1 The standard gauge for railways in China is 4 feet 8 y 2 inches. Exceptions to this are the Chinese Eastern, with 5-foot gauge; the Cheng Tai and Yunnan Railways, with meter gauge; and numerous scattered industrial lines with various gauges. BRIDGES On each line the practice followed in bridge construction has been that of the nation to which the loan syndicate belonged. The longest bridge in China is that on the Peking-Hankow line over the Yellow River, which is 9,875 feet long. The Tientsin- Pukow bridge over the same river, although it is about 200 miles downstream, is only 4,080 feet long. The Chinese Eastern bridge over the Sungari River at Harbin is also an imposing structure, and the Liao River bridge on the Peking-Mukden consists of twenty 100- foot spans. BALLAST Except on the Chinese Eastern and lately built extensions of other lines, Chinese railways are ballasted with broken rock. A portion of the Tientsin-Pukow utilizes broken brick in part. The Chinese Eastern depends principally on gravel and sand. On its Harbin- Changehun section a clay ballast is covered with broken rock to give the appearance of rock ballast and to keep down excessive dust. PURCHASING OF MATERIALS Purchasing of materials for the railways in China differs with the various lines, thus indicating the individuality which has character¬ ized each line from its inception. On the Chinese Eastern Railway purchases have been conducted hitherto by the superintendent of the materials department, acting under the suggestion and advice of the heads of the various operating departments regarding the introduc¬ tion of special appliances or new materials. With respect to all the more important purchases the general manager was consulted. The new regime inaugurated by the special agreement made between the Manchurian Provinces and the Soviet Government will probably not alter this situation to any considerable extent. On the South Manchuria Railway the usual materials are pur¬ chased by the stores department at Dairen. The Tokyo office has been employed at times in placing orders. The using departments instruct the stores department as to specifications and the use of new or improved devices. The South Manchuria Railway, operating as it does the two Chinese Government railways—the Kirin-Changchun and the Ssu Tao—does their purchasing. On the Chinese Government railways the various loan contracts limit, to a considerable extent, freedom of purchase. On several of these, although specific reservation is made in favor of articles produced in China, preference is stated for articles manufactured 1 Far Eastern Markets for Railway Materials, Equipment, and Supplies, by Trade Commissioner Frank Rhea, published by the Bureau of Foreign and Domestic Commerce as Special Agents Series No. 180, gives a detailed discussion of the various types of equipment used in China. This publication can be obtained from the Superintendent of Documents, Government Printing Office, Washington. Price, 35 cents. RAILWAYS IN CHINA 323 by the nationality of the loaning syndicate. This reservation, how¬ ever, has no greater practical effect upon preferences in purchasing than the provision that the principal using officers shall be of the nationality of the loaning syndicate. It is inevitable that officers will specify materials of the type and quality with which they are familiar, and it is likewise inevitable that they will be more familiar with the types and specifications of materials manufactured in their home countries. Specific provision is made in favor of British man¬ ufacturers (after Chinese manufacturers) on the Shanghai-Hang- chow-Ningpo and Canton-Kowloon lines and on the British section of the Tientsin-Pukow line. The presence of Belgian officers on the Lung-Hai, Kaifeng-Honan, and Cheng Tai lines gives them all the practical advantages of contractual preference on these lines, as does the presence of British officers on the Shanghai-Nanking, the Hupeh-Hunan section of the Canton-Hankow, the Taokow-Ching- hwa, and the Peking-Mukden. For a long time the presence of Belgian officers on the Peking-Hankow operated in this manner. However, on that line, as well as the Peking-Suiyuan and the Shan¬ tung Railway, purchasing is now entirely in the hands of the Chinese administration, which conducts it largely by means of tenders, al¬ though there is a considerable tendency, induced by straitened finances, toward small local purchases. On these lines the arrange¬ ments for tenders are made by the chief of the materials department, but must be sanctioned by the managing director. Large purchases and the introduction of new and improved devices must be nego¬ tiated to a considerable extent through the managing director’s office. Regarding the purchasing of material, the Ministry of Communi¬ cations has recently laid down certain regulations which apply to all railways, except in the face of contrary provisions in the loan agreements. Under these standard regulations whenever any single purchase of material or of similar materials will involve a payment estimated to be over $5,000 Chinese currency an invitation to tender must be made, unless the material is produced solely by one manu¬ facturer and is handled by an exclusive agency or unless a supplier has made a long-term agreement with respect to a certain quantity of material. Firms submitting tenders are required to make a de¬ posit as a guaranty of good faith, and in addition are required to pay for the cost of specifications and drawings furnished by the railway to the firm in preparation of the submission of its tender. The amount of this deposit is fixed by the railway according to cir¬ cumstances. These deposits are returned to the bidders after the award of tender, except that the deposit of the successful tenderer is transferred to a deposit against the contract entered into. The invitation of tender can be made by the railway only after approval by the Ministry of Communications. In case the estimated cost of the materials exceeds $50,000, representatives of the Ministry of Communications are present at the time of opening the tenders. Railways are not bound to accept the lowest bid, except that it is prescribed that when several bidders are equally known and pro¬ viding that their terms of delivery and payment are similar, the one whose bid is lowest shall be selected. 324 COMMERCIAL HANDBOOK OF CHINA OPERATING METHODS AND ORGANIZATION . There is little to distinguish the organization of the departments of maintenance of way and maintenance of equipment in China from those in America, ^except that the number of employees is consid¬ erably greater. The personnel of train crews is under the control of the traffic department, while engine crews are under the jurisdiction of the locomotive department. The engine crew and the train crew are entirely independent of each other and there is little cooperation between them. The responsibility for getting trains over the line devolves princi¬ pally upon station masters. The “ token ” system of train movement is that in use on all lines. On the less important lines that delivery of the token or u staff,” as it is called in China, is controlled by the station master by means of the telegraph, but on all of the important lines automatic, electrically controlled instruments are installed. On the Chinese Eastern a train-control system was installed through the influence of John F. Stevens. This system in effect combines the American dispatcher system with the token system as a means of facilitating train movement. On the Shanghai-Nanking Railway the same system is now under trial, with the distinction, however, that the Shanghai-Nanking so far has omitted the record of train move¬ ments on the train sheet. As traffic becomes more dense upon other lines and as managements become more exacting with respect to regularity of train movement, an extension of the train-control system may be expected. TRANSPORTATION METHODS Passenger equipment is divided into at least three classes—first, second, and third—and on the lines radiating from Shanghai (the Tientsin-Pukow and the Peking-Mukden) there is, in addition, a fourth class. Practically every train contains cars of the first three classes. Nearly all of the first-class cars are of the coupe type. The privacy which the compartment affords is particularly appreciated by Chinese women, who are emerging only now from a seclusion maintained for centuries. The great diversity of nationalities repre¬ sented by first-class travel, with the consequent differences in lan¬ guage and etiquette, also makes a strong argument for the coupe type. However, on the run between Peking and Tientsin the Peking- Mukden line has made the experiment of a so-called parlor car, arranged not unlike American day coaches. The seats in most of the coupe cars are convertible into berths for night use. On the longer runs second-class cars are arranged similarly to those of the first class except that four berths to a coupe prevail instead of two. On the shorter runs, however, the second-class car is merely a rough counterpart of the American day coach, seats usually being upholstered in rattan or composed of narrow w y ooden slats. Third- class cars are even cruder, and fourth-class travel is mostly in freight cars on mixed trains. Freight traffic moves principally in carload lots and in through trains between large centers. Less-than-carload freight, and the oc¬ casional carload to be picked up at small stations, is hauled in mixed trains upon which passenger traffic predominates. Most of RAILWAYS IN CHINA 325 the freight equipment comes under three headings—box cars, coal cars, and flat cars. There are a few tank cars, but most of these are owned by the oil companies operating in China. On the Shantung Railway there are special cars for the use of lime shipments. This type consists of a steel gondola, fitted with a roof which can be swung up one-half at a time. Livestock is shipped in high-sided coal cars, although a few lines have stock cars which serve a variety of other purposes. Since most of the grain comes to market after the close of the summer monsoon, open cars can be used with safety for this purpose; and since the rate system charges for the entire capacity of the car, whether the same is used or not, open cars are favored by shippers for all the lighter commodities as well as for grain, as not only can the car be conveniently loaded but a larger proportion of the capacity can be availed of. Thus, cotton and wool in bags or bales are heaped up to the limit of clearance. Fruits, such as apples and pears, are first picked in baskets and then piled on the open cars. There are no refrigerator cars in China. Against the occasional snow or out-of-season rain, bamboo mats are tied over the cargo in the open cars. Some of the lines are furnishing tar¬ paulins for especially valuable or easily damaged shipments. On the South Manchuria and Chinese Eastern lines heavy rope nets are placed over the tops of open cars to prevent pilferage. PILFERAGE Pilferage is a very serious matter on Chinese railways, and the Chinese Government railways accept shipments only at owner’s risk, except at special rates, some 10 per cent higher than the normal rate. The result is that most of the shippers send a watchman with their cargo. Each Province levies one or more transit taxes; there¬ fore it is necessary for some sort of agent to accompany cargo going long distances. As these taxes are more or less arbitrary and without system, it is profitable for those who are familiar with the situation to make special arrangements with the tax collector at each of these likin stations. Thus the railway risk rate is attractive to only the occasional small shipper over short distances. Yet the presence of a watchman is not full guaranty against pilferage. Closed cars are perhaps more often subject to such depredations than are open cars, unless the former are fitted with steel floors. The poverty of the people is so compelling in China that almost any risk and labor will be undertaken to bore through the floor of a closed car into a possible tin of oil or other liquid. The sharpened end of a hollow bamboo thrust into a sack of grain leaves no evi¬ dence of violence, but in the course of half an hour sufficient dry wheat will rattle through to feed a family for several days. RATES Passenger rates on the Chinese Government railways are fixed on a distance basis according to class. There are four classes under ordinary passengers; excursion traffic is grouped under three classes; and in addition to these are privileged passengers (mostly members of the families of employees) and Government passengers, both civil and military. About 90 per cent of the total passenger move- 326 COMMERCIAL HANDBOOK OF CHINA ment falls under the head “ ordinary,” and nearly 90 per cent of this consists of third and fourth class travel. Third-class rates average about iy 2 cents per mile; fourth-class rates are somewhat less than half the third-class rate; second-class rates average nearly double the third-class; and first-class rates are more than three times the third-class rate. While this spread between the different classes is fairly constant throughout the Government lines, there is consider¬ able variation in the general level of rates, depending principally upon the extent of competition from water transportation. Thus the rates on the lines radiating from Shanghai and from Canton are fully a third lower than those in the other parts of the coastal plain, while those in Manchuria are a third higher. The system of freight rates charged on the different lines originally varied with each line, but within the past five years the Government railways have worked out a uniform classification and basis for rates. This uniform classification recognizes six classes, in addition to which there are special rates for dangerous articles and goods of extraordinary value. In classifying goods the following factors have been given consideration: Value of goods; bulkiness; amount of traffic from a given source; need of encouragement to a new industry; special services required; special considerations. For the most part mineral products, as coal, sand, and gravel, are to be found under the sixth class; most agricultural products come under the fourth and fifth classes; crude manufactures under the third class; finished and high-class manufactures under the second class; and highly valuable goods under first class. The range in rates is from as low as three-fourths cent per ton- mile for coal to 7 cents per ton-mile for manufactures. However, this represents the range between the lowest rate on the line with the lowest level to the highest rates on the line with the highest level. Within each class three sets of rates are offered—picul rates, ton rates, and carload rates (per ton). The tapering principle is recognized. However, not only is there a different general level of rates on each line, but the rapidity with which the taper runs out differs on the various lines. A typical example, however, is afforded by the Peking-Hankow line, in which six zones are provided—1 to 20 kilometers; 21 to 50; 51 to 100; 101 to 200 ; 201 to 400; above 400. The lines lying on the coastal plain have, roughly, the same average length of haul and the same rate level. A distinctly higher rate level is observed, however, by the Cheng-Tai and the Peking-Suiyuan lines, which traverse mountainous country. Compared with the Chinese Government railways, freight rates on the South Manchuria line and its branches average about 25 per cent higher. Those on the Chinese Eastern are nearly double, and those on the Yunnan Railway more than treble. In addition to the six classes of goods recognized on the Chinese Government railways, there has come to be a considerable number of commodity rates. These commodity rates, however, are generally based on distance rather than being a flat rate from a given source to a given destina¬ tion. Most of these special commodity rates occur in connection with the movement of coal. Five years ago the number of commodities recognized in the classification of any line did not exceed 600. The uniform classification, however, at the present time contains about RAILWAYS IN CHINA 327 1,500 names, this including a considerable duplication for purposes of easy reference. On the South Manchuria line freight is carried under two cate¬ gories, ordinary and special. Ordinary freight comes under four classes. Special freight includes dangerous articles and articles which are carried at special piece rates. Numerous commodity rates also exist. On the Chinese Eastern about 30 classes are recog¬ nized; there are also a number of special commodity rates. The passenger classification on these lines is similar to that on the Chinese Government railways. BIBLIOGRAPHY Anonymous. Investment Values of Chinese Railway Bonds. 1923. Charignon. Les Chemins de Fer Chinois. 1914. A description of the lines in existence in 1913, written from an engineer’s standpoint. Maps and program for the development of a continental system. China Year Book, 1924. Tientsin Press. Synopsis of railway history, and latest statistics available up to year of issue. Hsu, Dr. M. C. Railway Problems in China. Columbia University Studies in Political Science, Vol. XLVI, No. 2. Columbia University, 1915. A discussion of loan and working agreements written from the Chinese standpoint. Kent, P. H. Railway Enterprise in China. 1907. (Out of print.) A narrative of the negotiations leading to construction agreements, written from the foreign point of view. Appendixes contain text of agreements. Laboulaye. Les Chemins de Fer de Chine. 1911. MacMurray, J. V. A. Treaties and Agreements with and Concerning China, 1894-1921. Carnegie Foundation, 1921. Contains all treaties, agreements, and known notes affecting Chinese railways. Arranged principally in chronological order. Has the advantage of good translations into English. Ministry of Communications, Peking: Railway Loan Agreements of China. 1921. In the original language. Minutes of the Commission for the Unification of Railway Accounts and Statistics. 1918. Regulations for the Purchase of Materials for Chinese Government Rail¬ ways. 1921. Statistics of Railways, Republic of China. 1922 et seq. “A model of its kind, probably more up to date than that produced in any other country in the world.” (East India Railway Commission, p. 45, par. 134.) Overlach, T. W. Foreign Financial Control in China. Macmillan, 1919. A discussion of “ spheres of interest ” and related subjects. Rhea, Frank. Far Eastern Market for Railway Material, Equipment, and Supplies. Special Agents Series No. 180. United States Department of Com¬ merce, 1919. Stringer. The Chinese Railway System. Shanghai, Kelly & Walsh, 1922. A brief treatise on the construction and administration of Chinese railways, with special chapters on engineering features. Willoughby, W. W. China at the Conference. Johns Hopkins Press, 1922. A report of the proceedings and results of the Washington Conference. A few pages treat of railways in general and of the Shantung Railway in particular. CHINESE POSTAL SERVICE Until 1923 Great Britain, France, Japan, and America—and, earlier, Germany and Russia—maintained postal agencies in China, but the powers assembled at the Washington Conference, recogniz¬ ing the efficiency of the Chinese postal service, agreed in December, 1921, to withdraw those agencies. As a result the work of approxi¬ mately 100 foreign postal agencies was turned over to the Chinese offices at the beginning of 1923. Japan, however, has retained those of its offices situated in the South Manchuria Railway zone, though all other Japanese post offices in China were withdrawn at the ap¬ pointed time. The Chinese postal service is under the control of the Ministry of Communications at Peking. The Directorate General of Posts is headed by a Chinese Director General and a foreign Co-Director General, in whose hands rests executive authority. A staff of about a hundred foreigners and many thousands of Chinese is employed under a system similar to the civil-service system in administrative departments of the United States Government. China is a member of the Universal Postal Union and participates in all the usual business conducted by postal services throughout the world. Ordinary and registered mails, parcels, insured letters, and money orders are exchanged with most of the rest of the world. As this chapter is intended mainly for Chinese and American business men, only the domestic service and the services between America and China will be dealt with here. DOMESTIC SERVICE i The total number of places provided with postal facilities at the end of 1923 exceeded 40,000. Serving these places are mail routes totaling 260,000 miles, of which but 7,000 miles are railway. Water routes, consisting of steamer, launch, and native boat lines are used for 21,000 miles. This leaves 232,000 miles of overland courier lines on which mails are transmitted by every available means, from wheelbarrows to motor cars, including the coolie and the camel. One of these courier lines stretches from the railhead in Honan for 3,600 miles (more than the distance from New York to San Francisco) to Kashgar in western Chinese Turkestan. Mails are dispatched over this line and over all other lines leading to important cities every day in the year. Printed matter and trade circulars .—Unaddressed trade circulars, in single sheets or small pamphlets, are distributed by the post office at 10 cents per 100 copies. Advertisements thus distributed reach that part of the public which oftenest receives mail, and such per¬ sons are the most likely “ prospects ” for the sale of foreign goods, as they are of the more prosperous classes. Trade circulars printed in a 328 CHINESE POSTAL SERVICE 329 foreign language are delivered to foreigners and to those Chinese who habitually receive foreign mails. Money orders .—There are over 2,000 post offices which handle money orders. As the currency of China is not standardized, the fees charged are variable, but are based upon the relative value of the currency in use in the various Provinces, as indicated by actual market quotations. Money orders issued in 1923 exceeded $95,000,- 000, an increase of 25 per cent over the previous year. Parcels .—Domestic parcel postage includes registration fee. Post¬ age between all steam-served offices east of Szechwan is 20 silver cents for the first kilo and 10 cents for each additional kilo. The limit of weight is 10 kilos (about 22 pounds). Insurance .—Insurance of domestic parcels containing gold or silverware and of letters containing bank notes is compulsory. SINO-AMERICAN POSTAL ARRANGEMENTS Mails between the United States and Chinese post offices are exchanged directly between the exchange offices of the two countries, and each administration sorts mails by districts and cities for dis¬ tribution by the other. Thus, for instance, Chinese mails for New York City are tied in bundles or inclosed in separate bags in China and need not be re-sorted by the Seattle or San Francisco office upon landing in America, but may go directly to New York by the first train available. The business man in China may also utilize the San Francisco to New York air-mail route upon payment of the fee for transmission by that service. Postage rates from China to America are those found in the union tariff of postage. The rates on insured letters do not, however, apply, as the United States has not adhered to the union convention for exchange of insured mails. A special agreement exists for exchange of parcels between the two countries. All the usual sorts of merchandise and printed mat¬ ter may be sent by parcel post. Letters, post cards, and written matter, or articles which violate the internal laws and regulations of either country may not, however, be inclosed in parcels. Poisons, firearms, obscene or immoral matter, and dead animals are pro¬ hibited. The maximum weight of a parcel is 22 pounds except to or from Shanghai, where 50 pounds is the limit. The limit of size is 84 inches in length and girth combined. Postage on parcels is 12 cents gold (24 cents Chinese) per pound or fraction thereof. Registration fee is 10 cents in addition to postage. In the case of parcels to or from places in China not served by steam (i. e., railway, steamer, or launch), domestic post¬ age is charged in addition to the above rates. A tax of 50 cents per parcel is charged on each parcel destined for places in Manchuria north of Changchun and for places in Yunnan reached via Hong¬ kong and Indo-China. In the case of parcels posted in America, this tax is collected from the addressee. A customs declaration on a form furnished by the post office is necessary for each parcel. In addition to the customs declaration, senders of parcels from China to the United States are strongly advised to inclose in each parcel a list of contents showing value. 330 COMMERCIAL HANDBOOK OF CHINA This list should be a copy of a consular invoice for parcels valued at over $100 in United States currency. Article XII of the Sino-American parcel-post agreement reads: The Post Office Department of either of the contracting countries will not be responsible for the loss or damage of any parcel, and no indemnity can consequently be claimed by the sender or addressee in either country. Loss or damage to parcels is, however, very rare except in in¬ stances of poor packing. Senders of parcels should be very careful to pack breakable articles in strong boxes, as considerable strain and great weight must be provided against in transmission by sea. In apparent cases of loss or delay of parcels, parties interested should communicate at once with the postal authorities, who will gladly investigate. A fee of 10 cents should be sent with the inquiry if it is desired that a parcel be traced to destination. Parcels are not insured by the postal service if forwarded by direct service, but they may be insured in private companies for a small fee. Parcels from China to the United States, if transmitted through the British postal service, may be insured, but the postal rate is higher and the time en route much longer. CUSTOMS TREATMENT OF PARCELS Parcels entering China destined for the treaty ports are nominally subject to the ordinary customs duties of, but, owing to the miscellane¬ ous nature of a parcel-post trade, a 5 per cent ad valorem duty is usually levied and is paid by the addressee or his agent upon delivery. Parcels destined to places beyond treaty ports are subject to transit duties of 2y 2 per cent additional. For convenience, the post office collects both tariffs on behalf of the customs administration. Parcels for export are subject to the same duties as incoming parcels. The Chinese customs usually pass duty free all single parcels valued at less than $10 Chinese currency (about $5 L T nited States). MONEY-ORDER SERVICE Money orders may be purchased at any United States post office for payment at any money-order office in China. The orders are made for United States currency and are converted at a Chinese exchange office. Foreign bank-exchange rates are used in making the conversion. Money orders payable by post offices in the United States in United States currency may be purchased at post offices in China in Chinese currency, the exchange being at the rate of the day. The fee is 10 cents per $10 or fraction thereof and the maximum amount in a single money order is $100, United States currency. As all money orders must pass through the exchange offices of both countries, they require a little longer time to reach the payee than a letter would require. TARIFFS AND INTERNAL TAXES 1 By Commercial Attache Julean Arnold For 60 years prior to the treaties of 1842 and 1844, the merchants of western nations trading with China had no contact with Chinese customs duties. All taxes against foreign trade were paid by the Chinese ko hong merchants at Canton, who held the monopoly of trade rights with foreigners. The treaties of 1842 and 1844 with Great Britain, the United States, and France stipulated that: (1) Foreign trade with China was permitted at four ports other than Canton; (2) the monopoly of doing business with foreigners, held for decades by the Canton ko hongs, was abolished; (3) foreign merchants could rent land at designated places, called treaty ports, for business and residence, and could transact business in the open market with their persons and property under the protection and . jurisdiction of the laws of their respective countries instead of under Chinese law; and (4) foreign import and export trade should be subject to the levy of moderate customs (averaging 5 per cent ad valorem) according to a published tariff. Following these treaties, certain irregularities began to crop up in the Chinese administration of the customs which the consuls of the United States, France, and Great Britain earnestly endeavored to correct. The difficulties were not all of Chinese creation. The attitude of certain foreign merchants, now beyond Chinese jurisdic¬ tion, who endeavored to take advantage of every opportunity to evade payment of the stipulated duties, had its part in complicating the situation. The Taiping rebels captured Shanghai native city on Septem¬ ber 7, 1853, and on the following day the customhouse in the foreign settlement was looted and burned. In order to protect their trade interests, the western powers, whose nationals occupied the area north of the Shanghai wallecl city, which by treaty had been set aside for foreign business and residence, declared their territory neutral and refused to allow either the Imperial Government forces or the rebels to use it as a base of operations. It became a refuge for numerous Chinese officials, and in June, 1854, the u taotai,” who functioned as superintendent of customs and was a refugee in the foreign settlement, was prevailed upon by the British, American, and French consuls to appoint for the port of Shanghai a commission of three foreign (French, American, and British) inspectors of customs. A year later the “ taotai ” was impeached and banished by the central Government. The French and American inspectors retired from the commission, and this left authority entirely with the British repre¬ sentative, who developed the administration to include others of® the treaty ports. Buie 10 of the supplementary tariff schedule of the British treaty of Tientsin in 1858 prescribes one system for the collection of cus- 1 Indebtedness to Consul J. E. Jacobs is acknowledged for very helpful data on China’s internal taxes. 331 332 COMMERCIAL HANDBOOK OF CHINA toms duties at all treaty ports in China. It contains the following stipulation: The high officer appointed by the Chinese Government to superintend foreign trade will, accordingly, from time to time, either himself visit, or will send a deputy to visit, the different ports. The said high officer will be at liberty, of his own choice, and independently of the suggestion or nomination of any British authority, to select any British subject he may see fit to aid him in the administration of the customs revenue; in the prevention of smuggling; in the definition of port boundaries; in discharging the duties of harbor master; also in the distribution of lights, buoys, beacons, and the like, the maintenance of which shall be provided for out of the tonnage dues. This, then, is the treaty provision for foreign administrative assistance in the Chinese customs. The conventions of Peking of 1860 provided for the payment of certain indemnities from customs receipts. This led to the organization of a consolidated service under the direct control of the central Government. Accordingly, the British assistant to the Chinese Superintendent of Foreign Trade was elevated to the post of Inspector General of Customs in January, 1861, to exercise a general supervision over all things pertaining to the customs revenue and to foreign trade. On November 15, 1863, Sir Robert Hart was appointed Inspector General of Customs with headquarters at Peking. The American Minister, Mr. Anson Burlingame, at that time made the statement, “Mr. Hart has deserved their (the Chinese) confidence. For two years past he has acted in the place of Mr. Lay, and by his tact and ability has won the regard of everyone. Our countrymen were par¬ ticularly well pleased with him.” On February 10, 1898, the Tsung Li Yamen, which functioned in foreign affairs, in reply to a British note, stated that it agreed, in view of the immense preponderance of British trade with China over that of other countries, that the Inspector General of Customs should in the future as in the past be of British nationality. (In 1885 Sir Robert Hart resigned to accept the post of British Minister to China, recommending his brother as his successor. At first the Chinese sug¬ gested the appointment of an American and later a German to the post of Inspector General, whereupon Sir Robert Hart withdrew his resignation and retained his post as Inspector General until his death in 1911.) CUSTOMS ADMINISTRATION The customs administration is under the immediate direction of the Shui Wu Chu (Revenue Council), and the Inspector General functions directly under this branch of the central Government. The foreign personnel is of international character and has been presumed to reflect the proportionate interests which the various foreign nations have in China’s foreign trade. Of the total number of 978 foreign employees in the Chinese Maritime Customs in 1923, however, one-half were British, about one-quarter Japanese, and only one-nineteenth American. CUSTOMS FUNCTIONS The Chinese Maritime Customs collects duties on imports and exports, duties on coasting trade in foreign-built bottoms, tonnage TARIFFS AND INTERNAL TAXES 333 dues on shipping, and transit dues. It has charge of lighthouses, harbor works, pilotage, and conservancy works. Since 1901 the native or regular customs within a 15-mile radius from each Maritime Customs station came under the direction of the commissioner of customs of that port. It must be borne in mind, however, that the Maritime Customs functions only at treaty ports. There are now about 50 Maritime Customs posts in China, which correspond some¬ what to ports of entry in the United States. The Maritime Customs has under its jurisdiction the creation and management of a loan and indemnity service in connection with loans and indemnities secured by the customs revenues. CUSTOMS VALUATIONS The schedule of valuations as agreed upon in 1843, which supple¬ mented the British treaty of 1842, had, by 1858, resulted in giving the Chinese more than a uniform 5 per cent ad valorem; hence, according to Article XXVI of the Tientsin treaty, provision was made for a revision of this schedule. A joint commission drafted a new schedule of valuations both for imports and for exports which embodied also 10 rules of trade, defining customs procedure, English equivalents of Chinese weights and measures, etc. Article XXVII of the British treaty of 1858 provides that either contracting party may by six months’ previous notice call for a revision of the tariff at the end of each 10-year period. Li Hung Chang, in 1896, made an unsuccessful effort to get the foreign powers to agree to a revision, rightly contending that China was not getting more than 2 or 3 per cent on the important items in its foreign trade under the schedule of valuations of the 1858 supplementary agree¬ ment. The final protocol following the settlement of the Boxer uprising provided that the specific duties of the customs tariff on imports should be raised to an effective 5 per cent ad valorem. The com¬ mission for the adjustment of values chose the average market values for the three years 1898 to 1900. The new schedule became effective October 31, 1902. During 1918 the second readjustment of values since 1858 was made, the international commission choosing the averages of the val¬ uations for the years 1912 to 1915, inclusive. This schedule became effective in April, 1919. It provided that a further revision might be requested after two years following the close of the European war. The Washington conference likewise made provision for a postwar revision of valuations. Accordingly, in 1922, an international commission sat at Shanghai, at China’s request, and again adjusted the values for the import tariff so as to give China an effective full 5 per cent ad valorem tariff. This schedule became operative Jan¬ uary 17, 1923. Several important changes were also made in the customs rules which form a part of the schedule of duty-paying values. It is estimated that about 80 per cent of the aggregate value of China’s imports pay duty on a fixed value basis as stipu¬ lated in this schedule, while about 20 per cent are subject to a direct 5 per cent ad valorem levy. 334 COMMERCIAL HANDBOOK OF CHINA EXPORT TARIFF The schedule of export values for duty-paying purposes, against which a 5 per cent rate is imposed, has not been revised since 1858, although certain alterations have been made which have not called for protests from the foreign powers. FRONTIER CUSTOMS TARIFF A special rebate of one-third on the regular import and export duties is granted on overland or frontier trade. The idea originated with a Russo-Chinese agreement, before China had railway connec¬ tions with adjoining nations, to help an expansion in the overland caravan trade. Taking advantage of the most-favored-nation clause of their treaties, this special privilege has been appropriated by those neighbors who subsequently developed railway communications. For instance, the one-third saving in duty for Japanese goods enter¬ ing Manchuria through Chosen (Korea) covers the freight charges and has resulted in probably 75 per cent of Japan’s imports with Manchuria going by rail through Chosen instead of by sea to Dairen. At the port of Dairen, which is in the Japanese leased territory, there is a free-trade zone. By agreement with China the personnel of the Chinese customs, under the direction of a Japanese commis¬ sioner of customs, is employed in the Chinese customs service. FUTURE CUSTOMS REVISIONS The nine powers treaty of the Washington conference relating to China’s customs tariff stipulates that immediate steps shall be taken looking to a special conference in China to prepare the way for the speedy abolition of likin, in accord with the treaties with China of Great Britain, the United States, and Japan, of 1902 and 1903. The special conference is empowered to authorize the levying of a surtax at a uniform rate of 2% per cent, with a special provision for a maximum 5 per cent ad valorem tax on articles of luxury, pending the conclusion of an agreement for the abolition of likin and the raising of the Chinese import tariff to a uniform 12% per cent ad valorem. The treaties above mentioned provide for the abandon¬ ment of likin and all other transit dues throughout China and the abolition of the institutions maintained for their collection, in lieu of which these treaty powers agree to a maximum additional 7% per cent ad valorem import tariff. The treaties also stipulate that taxation on native goods intended for export abroad shall in the aggregate not exceed 7% per cent ad valorem, and provide for an adjustment of the schedule of valuations every seven years. CHINESE CUSTOMS PROCEDURE UNITS OF CURRENCY, WEIGHT, AND MEASURE Because of the lack of a uniform currency or a uniform standard of weights and measures, the foreign powers in treaty negotiations with China fixed the units of currency and weight for customs pur¬ poses. TARIFFS AND INTERNAL TAXES 335 All duties are payable on the basis of the haikwan tael, a fictitious unit equal to 584 grains of silver of 992.3 fineness. A tael is a Chinese ounce equal to 1 % avoirdupois ounces of silver. The Chinese currency is based on a decimal scale, the mace being one-tenth of a tael, the candareen one-tenth of a mace, and the cash one-tenth of a candareen. The duties are paid in local taels or in Mexican dollars converted into haikwan taels at the prevailing bank rates of the day. Weights are computed on the basis of the picul (133% pounds avoirdupois), the catty (1% pounds), and the liang (1% ounces). One Chinese chang is equal to 10 Chinese feet, or 141 English inches. One Chinese chih is equal to one-tenth of a chang, or 14.1 English inches. These are the weights and measures fixed for customs purposes for the whole of China, but not those that are current throughout China otherwise. ASCERTAINING VALUES FOR AD VALOREM DUTIES Imports unenumerated in this tariff will pay duty at the rate of 5 per cent ad valorem; and the value upon which duty is to be cal¬ culated shall be the wholesale market value of the goods in local currency. This market value, when converted into haikwan taels, shall be considered to be higher than the duty-paying value by the amount of the duty on the goods and 7 per cent of the duty-paying value of the goods. If the goods have been sold before presentation to the customs of the application to pay duty, the gross amount of the bona fide con¬ tract will be accepted as evidence of the market value. Should the goods have been sold on c. i. f. terms, that is to say, without inclu¬ sion in the price of duty and other charges, such c. i. f. price shall be taken as the value for duty-paying purposes without the deduc¬ tion mentioned in the preceding paragraph. FILING PROTESTS AGAINST ASSESSMENTS The importer, if dissatisfied with the decision of the customs as to the value or classification of imported goods, or the amount of duty or charges assessed thereon, may, within 20 days after the filing of the application to pay duty or other customs entry, file a protest in writing with the commissioner of customs, setting forth specifically his objection thereto. Pending a final decision in the case, the merchandise may be released to the importer upon the deposit of full duties and such additional duties as may be claimed by the customs, provided that the case, in the opinion of the cus¬ toms, can be heard satisfactorily after the release of the merchandise from customs custody. Upon the filing of protest the commissioner shall, within 15 days thereafter, review his decision, and if the protest is not sustained the case shall be referred to a board of arbitration, composed as follows: An official of the customs; a merchant selected by the consul of the importer; and a merchant, differing in nationality from the importer, selected by the senior consul. Questions regarding procedure, etc., which may arise during the sittings of the board, shall be decided by the majority. The final finding of the majority of the board, which must be announced 336 COMMERCIAL HANDBOOK OF CHINA within 15 days of the reference (not including holidays), will be binding upon both parties. Each of the two merchants on the board will be entitled to a fee of 10 haikwan taels. Should the board sustain the customs valuation, or in the event of not sustain¬ ing that valuation should it decide that the goods have been under¬ valued by the importer to the extent of not less than 7!/2 per cent, the importer will pay the fees; if otherwise, the fees will be paid by the customs. Should the board decide that the correct value of the goods is 20 per cent (or more) higher than that upon which the importer originally claimed to pay duty, the customs authorities may retain possession of the goods until full duty has been paid and may levy an additional duty equal to four times the duty sought to be evaded. INVOICES In all cases, invoices, when available, must be produced if re¬ quired by the customs. DUTY-FREE ARTICLES The following will not be liable to import duty: Foreign rice, cereals, and flour; gold and silver, both bullion and coin; printed books, charts, maps, periodicals, and newspapers. A freight or part freight of duty-free commodities (gold and silver bullion and foreign coins excepted) will render the vessel car¬ rying them, though no other cargo be on board, liable to tonnage dues. Drawbacks will be issued for ships’ stores and bunker coal when taken on board. PROHIBITED ARTICLES Except at the requisition of the Chinese Government, or for sale to Chinese duly authorized to purchase them, import trade is pro¬ hibited in all arms, ammunition, and munitions of war of every description. No permit to land them will be issued until the customs officials have proof that the necessary authority has been given to the importer. Infraction of this rule will be punishable by confiscation of all the goods concerned. The importation of salt is absolutely prohibited. The importation of opium and poppy seeds is absolutely pro¬ hibited. The importation of the following articles is prohibited except under bond by qualified medical practitioners, druggists, and chemists: Morphia and cocaine and hypodermic syringes; anti¬ opium pills containing morphia, opium, or cocaine; stovaine, heroin, thebaine, ganja, hashish, bhang, Cannabis Indicw ,, tincture of opium, laudanum, codeine, dionin, and all other derivatives of opium and cocaine. FOREIGN GOODS IMPORTED FROM CHINESE PORTS All foreign goods imported from a Chinese port, unless they are covered by exemption certificate or are exempted from duty by an entry on the cargo certificate issued at the port of shipment (cf. below, “Foreign goods sent to a Chinese port”), are charged duty according to the revised import tariff of 1922. TARIFFS AND INTERNAL TAXES 337 FOREIGN GOODS REEXPORTED TO FOREIGN COUNTRY Foreign goods reexported to a foreign country within three years from the date of importation are passed free of duty and given a drawback for the amount of import duty originally paid on them, provided that they remain intact and unchanged in their original packages. Goods of undoubtedly foreign origin, which have been in port more than three years or whose date of importation can not be traced, are passed free of duty on shipment to a foreign country. FOREIGN GOODS SENT TO CHINESE PORT Foreign goods, the particulars of whose importation can be traced, which remain in their original packages without these packages hav¬ ing been opened, are passed free of duty when shipped to another treaty port, and an exemption certificate is issued freeing them from duty at the port to which they are shipped. FOREIGN GOODS SENT INLAND w Foreign goods sent inland for which a transit pass is taken out are charged transit duty at the rate of half the import duty originally paid on them. Goods which are free of duty are charged transit duty at the rate of 2 y 2 per cent ad valorem. DUTY ON NATIVE GOODS EXPORTED Native goods exported from a treaty port in China to a foreign country pay according to the schedule of the export tariff of 1858, reprinted in 1920 with certain alterations as made by the Chinese Government. Goods not enumerated in this schedule pay 5 per cent ad valorem. Chinese goods moved from place to place in China are subject to inland taxation. But as an importer can escape payment of divers inland taxes on foreign goods shipped inland from a treaty port by taking out an inward transit certificate, the exporter of Chinese goods may escape payment of the inland taxes accruing on their way out by taking out an outward transit certificate. The transit dues, equal to half the export duty, are levied at the treaty port upon the arrival of the goods and are paid to the Maritime Customs. Transit certificates can be taken out only on goods destined to a foreign country. Native goods not covered by an outward transit certificate are subject, when moved from place to place, to internal taxes, usually greatly in excess of the dues imposed under transit certificate. In addition to the ordinary inland taxation, from which goods under transit pass are exempt, native goods shipped from one treaty port to another pay at the point of shipment full export duty, and at the port of destination a coast-trade duty equal to half the export duty. If the goods are subsequently shipped to a foreign country the coast-trade duty is refunded. CHINESE GOODS IMPORTED FROM CHINESE PORT Chinese goods imported from a Chinese treaty port are charged a coast-trade duty at half the rate of export duty; but the following 100020°—26-23 338 COMMERCIAL HANDBOOK OF CHINA goods—Chinese factory products, rice, and raw cotton—although they pay export duty, are exempt from coast-trade duty. CHINESE GOODS REEXPORTED To a foreign country .—Chinese goods that have been imported from another treaty port and reexported to a foreign country within one year of their arrival in Shanghai are passed free of duty and given a drawback for the coast-trade duty paid on importation, pro¬ vided that they remain in their original packages or have been granted permission to be repacked. To a Chinese port .—Chinese goods that have been imported from a treaty port and are reexported to another treaty port within one year of their arrival in Shanghai, are passed free of duty, provided that they remain in their original packages, BONDED CARGO If applications are not entered with the customs for goods, or payment of duty is not effected within 15 days after their arrival, they must enter bond, either through the agents or the consignees. Bonded cargo may be released upon the payment of a fee of 5 taels for each invoice in addition to duties and storage dues. The time limit for storage in bonded warehouses is 12 months; the storage charges are determined by the nature of the article stored. TONNAGE DUES AND DUES CERTIFICATE Tonnage dues are payable at the rate of 4 mace per ton by vessels of more than 150 tons burden, and 1 mace per ton by vessels of 150 tens or under. Tonnage dues having been paid, a four months’ certificate is issued on clearance, from which date the vessel is exempt from tonnage dues. CHINESE FACTORY PRODUCTS EXEMPTION In order to encourage the manufacture in China of foreign-type products, the Chinese Government grants to factories and mills, foreign or Chinese, in China special privilege treatment, whereby their products pa} r a single duty once and are thereafter free from any further taxation. The British treaty of 1902, which makes provision for an increase in China’s import tariff to a 12y 2 per cent ad valorem and a 7 y 2 per cent ad valorem export duty, also provides for an excise of 10 per cent on products of foreign type manufac¬ tured by factories and mills in China—goods, however, paying this excise to be free of all export duties and consumption taxes. It also makes provision for a rebate of 10 per cent (out of a 12 y 2 per cent ad valorem) of the import duty for all materials used in the manu¬ facture in China of articles of foreign type. These provisions were made to protect British imports, especially yarns and cloths. TIENTSIN TRADE WITH MANCHURIA Tientsin enjoys special privileges in business with Manchurian trade marts such as Mukden, Harbin, Antung, etc. Foreign goods TARIFFS AND INTERNAL TAXES 339 having paid import duty or native goods having paid export and coast-trade duties may be sent to these ports without further duty treatment. INTERNAL TAXES It is only since the Taiping rebellion (1853-1867) that internal taxes in China have developed into a matter of serious concern. Since the Boxer disturbances of 1900, and more particularly follow¬ ing the revolution of 1911, these internal taxes have become severe handicaps to China’s internal trade. China’s standing army of up¬ wards of a million men, who are allied with various independent military governors since the weakening of central Government au¬ thority over the Provinces after the downfall of the monarchy, is a drain on the country, being in the main responsible for the develop¬ ment of the numerous and irregular internal taxes. There are but few American business men who are in intimate contact with the internal tax situation in China because they are mostly concerned only with the disposition of their goods or the purchase of Chinese goods at the principal treaty ports. On the other hand, American companies who follow their goods from the treaty ports to the consumers in the interior get these goods to the consumers with lighter tax burdens than when these commodities are left to reach them through the ordinary channels of trade. VARIETIES OF INTERNAL TAXES China’s internal taxes on trade may be listed as follows: Transit taxes .—By payment of one-half of the import duty, about 2y 2 per cent ad valorem, foreign goods transported into the interior away from treaty ports are entitled to transportation to destination free of further taxes. Similarly, foreigners may purchase Chinese products in the interior and ship them to a treaty port with a transit pass for which they pay 2y 2 per cent ad valorem tax. Theoretically the system is admirable, but in practice it is subject to irregularities. Inspection fees are charged at the likin barriers for examination of the goods covered with the pass, and more often than otherwise they are assessed a destination tax when they reach the Chinese consignees. Thus, in some cases, foreigners find it more profitable to pay the likin and other assessments than to take out transit passes, especially if the point in the interior is in relatively close contact with a treaty port. Likin .—Of the various internal taxes, likin is the best known. The word is sometimes used by foreigners to cover all sorts of internal taxes on trade. The Government was obliged during the trying years of the Taiping rebellion to devise new forms of taxation. It was then that likin was instituted. The words “ lee-kin ” mean literally “ one one-thousandth contribution.” The original idea was a levy of one-tenth of 1 per cent on the value of commodities enter¬ ing into the internal trade of the country. This would impose no great burden on trade; but it did not stop there. This tax has been increased to such proportions and has taken on such forms as to constitute a serious menace to foreign as well as native trade in the interior of China. 340 COMMERCIAL HANDBOOK OF CHINA At one time likin constituted the only form of internal tax on trade. Originally it was a pure ad valorem tax, but it is now both ad valorem and specific. On the average, it amounts to about 2 per cent ad valorem, but in some sections it reaches as much as 5 per cent. In some cases the rate is high, but the schedule of valuations of commodities against which it is assessed is considerably below actual market rates. As stated elsewhere in this chapter, one of the important items in the Washington conference agreements is an arrangement for the abolition of likin and other forms of internal taxes on trade. Loti shui or destination tax .—A destination tax is almost uni¬ versally applied in the interior of China on foreign goods shipped on transit passes when they reach the Chinese consumers. It is not a substitute for likin, but an additional tax. It averages about 2 per cent. The foreign treaty-power representatives have found this tax the most difficult against which to make effective protests. T'ung chuan or tfung shui .—A through tax intended to replace other transit charges within a Province with one levy made at the first likin barrier would be of much advantage to the trade, even though the rate were double the usual likin. However, owing to lack of coordination in tax assessments and collections, this tax has not fulfilled its purpose, and hence has fallen in popularity. Jen chuan and pao chuan .—Upon the basis of the agreement be¬ tween the authorities and an association of producers or shippers, it is possible in some quarters to make lump-sum payments. It is no definite amount, but depends upon the strength of the organization as to the nature of the arrangements. Transportation and forward¬ ing companies and larger concerns often find this arrangement satisfactory. Monopoly hong taxes .—Following the general principle of farm¬ ing out tax collections to the highest bidders, in some places certain Chinese hongs, or companies, are granted a monopoly of collecting production taxes for definite commodities. The taxes are paid to these hongs in a lump sum by the guild controlling a certain industry in a particular community. The members of the guild are assessed on a prorata basis for the taxes paid, and purchasers of the products in question pay this tax on a price basis as fixed by the guild to in¬ clude the tax in question. CK'an hsiao shui , or production and consumption tax .—This form of tax obtains in certain sections of the country. For instance, in the Manchurian Provinces it is assessed in lieu of likin. It takes the form of one tax at the place of production and another tax at the place of consumption, averaging about 2 y 2 per cent for each tax. It is fairly equitably administered in the three eastern Provinces. Wine and tobacco taxes .—These probably represent the highest tax exactions on commodities of trade, but at the same time the larger concerns dealing in cigarettes and wines have been able to effect agreements whereby, through the payment of definite stated sums, goods bearing stamps indicating the payment have been more successfully marketed in the interior, without further embarrass¬ ments, than has been possible in general lines of trade. Here, again, there is considerable irregularity in the assessments in different sec¬ tions, some Provinces raising the rates to almost prohibitive propor- TARIFFS AND INTERNAL TAXES 341 tions. In some sections of the country manufacturers of cigarettes have found it impossible at times to keep certain brands of cigarettes on a fixed price basis on account of increased tax exactions in that section, and they have been forced to withdraw these brands and to substitute others. Foreign wines and tobaccos pay an import duty of approximately 5 per cent, having the same status as other com¬ modities in the import tariff. Boat taxes .—Boat taxes exist throughout the country wherever there is boat traffic. They are numerous, and work on the basis of taxing the traffic what it will bear. Boat guilds, however, have some influence in holding the rate down to fairly reasonable proportions in some sections. Again, in some places the military officials have taxed the native boat traffic so heavily as to force many out of the business. Railway goods taxes .—While there are certain agreements with some of the railways for paying lump-sum taxes in lieu of other internal exactions on commodities carried by these railways through the territory of likin barriers, yet, on the whole, the rail traffic is less hampered by these exactions than is native traffic otherwise. The Harbin customs returns of trade for 1923 show that Manchouli in north Manchuria has 10 different organizations for levying duties or taxes on goods. In north Manchuria the brigand organizations demand and collect regular tax levies on every cube of firewood prepared as fuel for steamers and on other commodities. In Mon¬ golia an entirely new set of taxes for import and export trade has been devised and put into effect. One of the factors which has made for the success of the South Manchuria Railway is the exemption of likin charges for goods carried over the railroad. By way of contrast the junk traffic on the Liao River using the port of New- chwang is subject to likin charges. Internal tax barriers assess goods transported to and from trains away from treaty ports. Peking Octroi .—Peking is not a treaty port. Upon entering the city gates foreign goods are assessed a 3 per cent ad valorem duty, in addition to the 2% per cent transit dues in carrying the goods from a treaty port. Chinese goods pay 4 per cent octroi. % SUMMARY In connection with the above taxes there is no uniformity as to impositions or methods of collection. Some taxes are imposed in one place and not in another; some are peculiar to certain Provinces. In some Provinces similar taxes take on different names. However, throughout the country generally, there are upwards of a thousand internal tax barriers, commonly called likin stations. These local taxes are handled under provicial rather than central Government auspices. Thus excepting transit dues practically none of the revenue collected from the above-mentioned taxes reaches the central Gov¬ ernment. The provincial governors farm out the privileges to the highest bidders. Chinese merchants secure a certain amount of pro¬ tection through their guild organizations, but on the whole are taxed more heavily than are foreign merchants. In other words, they have less protection. It is to the interests of the provincial taxgatherers to discourage as much as possible the use of transit passes held by foreigners and covering foreign goods or native goods destined to foreign countries, 342 COMMERCIAL HANDBOOK OF CHINA as the transit fees are collected by the customs and go to the central Government. The provincial authorities often make special induce¬ ments or place particular obstacles in the way of goods covered by transit passes so as to encourage the payment of likin or other internal taxes in lieu of transit dues. Thus the transit-pass system serves as a weapon tending to beat down the internal tax impositions on goods handled by foreigners. It may thus be stated that foreign imports pay: 1. An import duty approximating 5 per cent ad valorem entitling reshipment to any other treaty port in China without further assessments. 2. An additional 2 y 2 per cent duty w T hen shipped to the interior— that is, to any place other than a treaty port—under a transit-pass system. In lieu of a transit pass, they may pay likin or similar taxes, or both; and also are likely to have to pay something in addition to the transit fees—at least, fees for examination at likin stations en route. To enter Peking an additional 3 per cent octroi tax is as¬ sessed, or, on the aggregate, 10per cent. 3. A destination tax of about 2 per cent when goods are shipped to the interior. This tax is imposed in most places in China at the time the goods reach the Chinese consignee after shipment on a transit pass. Native or Chinese goods pay: 1. Approximately 5 per cent ad valorem duty when exported from a treaty port to a foreign country. 2. An additional 2 V 2 per cent at port of arrival when shipped from one treaty port to another. 3. A 2% per cent transit duty, or, in lieu thereof, the usual likin and similar charges plus the 5 per cent export duty, when purchased or shipped from the interior by a foreign merchant for export to a foreign country. 4. Likin and/or similar levies, when transported in the interior in any other way than above described. BIBLIOGRAPHY Chinese Maritime Customs. Annual returns of trade. These reports contain excellent summaries of China’s trade and industry. Chinese Maritime Customs. Regulations general and local for China’s cus¬ toms districts. 2 vols. Shanghai, 1921. Chu, Dr. Chun. The Tariff Problem in China, 1916. Columbia University Studies. Longmans, Green & Co. Handbook of Customs Procedure at Shanghai. Shanghai, Kelly & Walsh. Con¬ tains reproductions of all forms used in customs work. Morse, H. B. The International Relations of the Chinese Empire. Volumes 2 and 3 will afford the reader an excellent description of the development of the Chinese customs service. Schedule of the Export Tariff for China. Reprinted, 1920. Shanghai, Kelly & Walsh. Schedule of the Revised Import Tariff for China, with Tariff Rules, 1922. Shanghai, Kelly & Walsh. TRADE-MARKS, COPYRIGHTS, AND PATENTS By Commercial Attache Julean Arnold TRADE-MARKS Of all the factors that enter into the successful marketing of an imported article in China, one of the most important is its chop, or trade-mark. The chop, once it becomes widely known and asso¬ ciated with a particular kind and quality of goods, sells the goods. So potent is its influence with the buying public that its importance can hardly be overemphasized. The Chinese customer asks for the chop he knows and will not easily take any other. Clever imitation of a favorite trade-mark is about the only stratagem that succeeds in enticing him away from the line of goods which has gained his confidence. Similar goods at a lower price, but under a trade-mark which he can distinguish as different from that to which he has been accustomed, will not ordinarily tempt him. Some manufacturers appear to have the opinion that on account of the low purchasing power of the masses, price is the only considera¬ tion with buyers in China. But of the 7,000,000 cans of condensed milk imported into China each year over 80 per cent is of one brand, which is sold at a higher price merely on the strength of its familiar trade-mark. Through years of advertising and use the Chinese have come to regard it as the only brand. Manufacturers of other brands have offered special inducements, prices 10 or 20 per cent lower than the favorite, but have succeeded in capturing very little of the trade. The owners of this trade-mark have guarded it with ex¬ treme jealousy, and have successfully protected it against many at¬ tempts at imitation. At one time a certain brand of American underwear commanded a very extensive sale throughout China. Through effective adver¬ tising and by keeping up the quality of the goods the chop, or trade¬ mark, of this underwear came to be recognized by the Chinese public as the symbol of a superior article. Its sales amounted to an average of 500 cases a week. Unluckily the manufacturers took no steps to safeguard their trade-mark against imitations, and to-day there are several imitations on the market which after a period of years have now practically replaced the original. Thus, by his failure to pro¬ tect his chop, the American manufacturer has lost a valuable mar¬ ket to competitors of another nationality, who have profited by his pioneering work. The choice of a trade-mark for use in China should never be hap¬ hazard, but should be the result of careful consideration of many factors peculiar to the Chinese people. The trade-mark should be simple, graphic, and distinctive. As the Chinese masses have little acquaintance with the English language, words or names in English have no meaning for them. Furthermore, such words, so far as 343 344 COMMERCIAL HANDBOOK OF CHINA the Chinese are concerned, are easily imitated, as the Chinese, un¬ familiar with the letters of our alphabet, will often count the letters in a word, and if the general formation appears similar to that to which they are accustomed in connection with a certain trade-mark, they will confuse the genuine with an imitation. This result is almost certain where color and details of the mark seem to offer an equal similarity. Pictures and graphic symbols easily understandable to the eye are the preferable forms of trade-marks for use in China, but if it is necessary to use words because the commodity is marketed elsewhere under such words as a trade-mark, great care should be taken to accentuate in advertising any distinctive features which might be difficult of imitation. In using a picture trade-mark it is advisable also to incorporate the name in the picture, as a double safeguard against the possibilities of imitation. In the choice of pictures for trade-mark purposes much caution must be exercised to avoid selecting something which may not har¬ monize with Chinese customs or which may give offense to Chinese tastes and superstitions. For example, the dog does not stand high in Chinese regard and carries no complimentary significance when used for advertising purposes. A rabbit is far worse, and the use of a turtle would condemn from the outset the article carrying it as a trade-mark. A green hat carries a very sinister meaning, and Chinese refrain from wearing this color of headgear. There are many other phases of Chinese customs and points of view which, as distinguished from those obtaining in the West, must be given consideration before a choice is made of the trade-mark for articles designed for sale in China. Hardly less care must be exercised in the translation of English into Chinese in the use of literature descriptive of American trade¬ marks or American products. For use in China, some manufac¬ turers have distinctive trade-marks bearing Chinese characters; some have Chinese characters printed on the English labels; some, in order to preserve the original label and yet add sufficient Chinese descriptive matter to enlighten the public as to the character and application of the article, use special labels of transparent paper upon which are printed Chinese characters descriptive of the article. But in any use of Chinese characters it is necessary to exercise care against poor translations, or translations which carry misconcep¬ tions. Merely because a man is Chinese, does not necessarily qualify him to make a translation which will convey the right idea to the public. An American manufacturer who wished to market in (Tina a product bearing his trade-mark had the characters trans¬ lated into Chinese quite correctly, but, as ordinarily interpreted by the Chinese public, they meant something very different from the English interpretation. It was then necessary to change the trans¬ lation and the character so as to convey the idea that the American trade-mark represented. It is advisable to check, from several sources, translations into Chinese, if one wishes to be sure that the article will not be ridiculed or that the business will not be injured by the use of wrongly selected characters. TRADE-MARKS, COPYRIGHTS, AND PATENTS 345 The protection of trade-marks in China is a matter of much importance to any manufacturer who would market in that country a commodity bearing a trade-mark and whose business might be damaged through placing upon the same market an imitation of this trade-mark. Now that the Chinese are developing modern manufacturing plants and are manufacturing articles similar to those imported from abroad, it becomes even more necessary that the trade-marks of foreign manufactured products be protected against Chinese imitations of these commodities. The United States Government, in appreciation of the necessity of the development of the machinery for the proper protection of American trade-marks, prescribed in Article IX of its treaty of 1903 with China as follows: Art. IX. Protection of trade-marks.—Whereas the United States undertakes to protect the citizens of any country in the exclusive use within the United States of any lawful trade-marks, provided that such country agrees by treaty or convention to give like protection to citizens of the United States: Therefore, the Government of China, in order to secure such protection in the United States for its subjects, now agrees to fully protect any citizen, firm, or corporation of the United States in the exclusive use in the Empire of China of any lawful trade-mark to the exclusive use of which in the United States they are entitled, or which they have adopted and used, or intend to adopt and use as soon as registered, for exclusive use within the Empire of China. To this end the Chinese Government agrees to issue by its proper authorities proc¬ lamations, having the force of law, forbidding all subjects of China from infringing on, imitating, colorably imitating, or knowingly passing off an imitation of trade-marks belonging to citizens of the United States, which shall have been registered by the proper authorities of the United States at such offices as the Chinese Government will establish for such purpose, on payment of a reasonable fee, after due investigation by the Chinese authorities and in compliance with reasonable regulations. During May, 1923, the President of China promulgated the Chinese trade-mark law and detailed regulations as enacted by the Chinese Parliament. Except for the recognition of the general principle of priority of use rather than priority of registration, the trade-mark law and regulations of China follow the Japanese and continental systems. The methods of adjudicating disputes, however, under the China trade-mark law are similar to those prescribed in the Japanese patent law. The representatives of the treaty powers, whose nationals in China are under extraterritorial jurisdiction, are in communication with the Chinese Government for the purpose of securing for their respective nationals certain safeguards in harmony with their stipu¬ lated treaty rights, as precedent to the acceptance of the trade¬ mark law and regulations as applicable to the nationals of these powers. In the meanwhile many holders of foreign trade-marks have registered under the new law. In fact, a very large number of business houses in China seem to find it necessary to register their trade-marks to safeguard their interests. Under date of September 15, 1924, the Bureau of Trade-Marks, issued a statement regarding the method of procedure in the regis¬ tration of trade-marks. The substance of these regulations is as follows: 1. Application. —First, there should be drawn up an application, for which no official form is necessary. (For the convenience of applicants the Bureau of Trade-Marks in Peking has at its office printed forms which may be obtained 346 COMMERCIAL HANDBOOK OF CHINA gratis on application in person or by letter.) The form should be rendered in duplicate for each trade-mark to be registered. 2. What must accompany application. —The application should be accom¬ panied by the following: (a) A zinc block of the trade-mark measuring not more than 4 inches by 4 inches (new standard measurement, i. e., 12.8 centimeters) in length and breadth and eight-tenths of an inch (i. e., 2.56 centimeters) in thickness. (&) Five black and white prints of the block made on strong paper, not exceeding 5 inches by 5 inches (i. e., 16 centimeters). (c) Ten colored specimens of the trade-marks, in case of colored trade¬ marks. (d) The necessary fees. (The above requirements are increased pro tanto in case the same trade¬ mark is for more than one class of goods.) 3. Fees. —The fees payable for each trade-mark for each class of goods are: (a) Application, Mex. $5; (&) registration, Mex. $ 40 . A trade-mark which is filed at the Bureau for Provisional Registration of Trade-Marks, Chinese Maritime Customs, Shanghai, 1919, and for which the requisite fee has been paid in connection therewith, is exempt from payment of the above-mentioned application fee of $5, on production of the receipt of such payment and a certificate from the Chinese Maritime Customs, Shanghai, giving the date and number under which it is filed. This certificate should be attached to the application. 4. Nationality of applicant. —A foreigner should submit evidence of nation¬ ality. For this purpose a declaration signed by a consular official is admitted as evidence. In case of registered companies or corporations a declaration signed by the registrar of companies is also acceptable. The requirement of evidence of nationality applies also to agents acting on behalf of their prin¬ cipals. 5. Authority of agents. —Any person acting as agent for another in applying for the registration of trade-marks must be provided with a power of attorney, which, together with its translation in Chinese, must be presented to the China Trade-Mark Bureau at the time of application. The owner of a trade-mark who has no residence or a business office in China must make his application through an agent having such residence or office. (Art. 8 of the trade-mark law.) It appears that the China Trade-Mark Bureau has ruled that if priority of use in China can be established for a trade-mark over one that has had priority of registration, the cancellation of the latter may be effected by following the procedure stipulated in the trade-mark law. The China Trade-Mark Bureau publishes a monthly gazette in English as well as in Chinese. The subscription price for the Eng¬ lish edition is $4.48 silver (including postage to foreign countries) per year. Arrangements have been made by the China Trade-Mark Bureau to secure the services of a foreign trade-mark expert through the International Trade-Mark Bureau at Berne. The bureau is planning to open branch offices at Shanghai and other important commercial centers in China. COPYRIGHTS No copyright law has been enacted by the Chinese Government. Americans desirous of securing protection for their copyrights in China are obliged to rely on Article XI of their commercial treaty of 1903, which reads as follows: Art. XI. Protection of copyrights. — Whereas the Government of the United States undertakes to give the benefits of its copyright laws to the citizens of any foreign State which gives to the citizens of the United States the benefits of copyright on an equal basis with its own citizens: Therefore, the Government of China, in order to secure such benefits in the United States for its subjects, now agrees to give full protection, in the 347 TRADE-MARKS, COPYRIGHTS, AND PATENTS same way and manner, and subject to the same conditions upon which it agrees to protect trade-marks, to all citizens of the United States who are authors, designers, or proprietors of any book, map, print, or engraving es¬ pecially prepared for the use and education of the Chinese people, or transla¬ tion into Chinese of any book, in the exclusive right to print and sell such book, map, print, engraving, or translation in the Empire of China during 10 years from the date of registration. With the exception of the books, maps, etc., specified above, which may not be reprinted in the same form, no work shall be entitled to copyright privileges under this article. It is understood that Chinese subjects shall be at liberty to make, print, and sell original translations into Chinese of any works written or of maps compiled by a citizen of the United States. This article shall not be held to protect against due process of law any citizen of the United States or Chinese subject who may be author, proprietor, or seller of any publication calculated to injure the well-being of China. * It is suggested that those interested in securing protection for copyrights in China consult the American Legation at Peking. PATENTS Article X of the United States commercial treaty with China, 1903, reads as follows: Art. X. Protection of patents.—The United States Government allows subjects of China to patent their inventions in the United States and protects them in the use and ownership of such patents. The Government of China now agrees that it will establish a patent office. After this office has been established and special laws with regard to inventions have been adopted it will thereupon, after the payment of the prescribed fees, issue certificates of protection, valid for a fixed term of years, to citizens of the United States on all their patents issued by the United States, in respect of articles the sale of which is lawful in China, which do not infringe on previous inventions of Chinese subjects, in the same manner as patents are to be issued to subjects of China. The Government of China has not yet established a patent office. As China is only at the inception of modern industrialism, the ques¬ tion of protection of patents has not become one of commanding importance. However, it is advisable to protect certain devices against infringement, and the only means at present available for securing this protection is by making application to an American consulate in China, at the same time depositing the duly certified records of the patent granted by the United States Government. This will serve to place on record local evidence of the assertion of certain patent rights on a particular date and will indicate priority of use as a basis upon which protection may be claimed from the Chinese authorities in the event of infringement. TREATIES REGARDING RECIPROCAL PROTECTION The nationals of certain treaty powers in China are, by virtue of extraterritorial treaty rights, under the jurisdiction of their own respective laws and courts rather than those of China. The United States Government concluded agreements with certain of these powers for the reciprocal protection of inventions, copyrights, and trade-marks in China. Of these, that with Japan is probably the most significant to holders of American trade-marks, copyrights, and patents. The text of the agreement reads as follows: Article I. Inventions, designs, and trade-marks duly patented or registered by citizens or subjects of one high contracting party in the appropriate office of 348 COMMERCIAL HANDBOOK OF CHINA the other contracting party shall have in all parts of China the same protec¬ tion against infringement by citizens or subjects of such other contracting party as In the dominions and possessions of such other contracting party. Art. II. The citizens or subjects of each of the two high contracting parties shall enjoy in China the protection of copyright for their works of literature and art, as well as photographs, to the same extent as they are protected in the dominions and possessions of the other party. Art. III. In case of infringement in China by a citizen or subject of one of the two high contracting parties of any invention, design, trade-mark, or copy¬ right entitled to protection in virtue of this convention, the aggrieved party shall have in the competent territorial or consular courts of such contracting party the same rights and remedies as citizens or subjects of such contracting party. Art. IV. Each high contracting party engages to extend to the citizens or subjects of the other contracting party the same treatment in China in the matter of protection of their commercial names as they enjoy in the dominions or possessions of such contracting party under the convention for the protec¬ tion of industrial property signed at Paris March 20, 1883. “ Hong ” marks shall be considered to be commercial names for the purpose of this convention. Art. V. Citizens of possessions belonging to the United States and subjects of Korea shall have in China the same treatment under the present convention as citizens of the United States and subjects of Japan, respectively. Art. VI. It is mutually agreed between the high contracting parties that the present convention shall be enforced so far as applicable in any other country in which either contracting party may exercise extraterritorial jurisdiction. All rights growing out of the present convention shall be recognized in the insular and other possessions and leased territories of the high contracting parties and all legal remedies provided for the protection of such rights shall be duly enforced by the competent courts. Art. VII. Any person amenable to the provisions of this convention who possesses, at the time the present convention comes into force, merchandise bearing an imitation of a trade-mark owned by another person and entitled to protection under said convention shall remove or cancel such false trade-mark or withdraw such merchandise from market in China within six months from the date of the enforcement of this convention. Art. VIII. Unauthorized reproductions by the citizens or subjects of one high contracting party prior to the operation of this convention of the works of literature and art, as well as photographs, of the citizens or subjects of the other contracting party published after the 10th of May, 1906, and entitled to protection in virtue of this convention shall be withdrawn from sale or circu¬ lation in China within one year from the date of the enforcement of this convention. Particular attention may perhaps be directed to Article I of the above convention; and it should be specifically pointed out that the registration of trade-marks with the Japanese Patent Office in Tokyo is thereby provided as a necessary condition precedent, in order that the remedies contemplated by the convention may be available to Americans for the protection of their trade-marks against infringe¬ ment, in the market of China, by Japanese subjects. TRADE-MARKS, COPYRIGHTS, AND PATENTS IN HONGKONG Hongkong is a British Crown colony, and Hongkong Ordinance No. 40 of December 10, 1909, prescribes the procedure for the pro¬ tection of trade-marks and copyrights in the territory under the jurisdiction of the Hongkong authorities. AMERICAN OFFICIAL AID The American consular officers in China are ready at all times to render to Americans all possible assistance in connection with the protection of their rights covering trade-marks, copyrights, and TRADE-MARKS, COPYRIGHTS, AND PATENTS 349 patents in China. Those desiring legal counsel in China in connec¬ tion with this subject may obtain from the Bureau of Foreign and Domestic Commerce at Washington lists of attorneys at law in the principal commercial centers of China. BIBLIOGRAPHY Bryan, jr., Robert T. American Trade-marks, Trade Names, and Copyrights and Patents in China. Shanghai, The Millard Publishing Co. Bureau of Trade-Marks, Peking. China Trade-Mark Law and the China Trade- Mark Bulletin. MacMurray, J. V. A. Treaties and Agreements with and Concerning China, 1894-1921. Consult general index for references to treaties regarding trade¬ marks, copyrights, and patents. Ruege and Graham. Trade-Mark Laws of the World. 1002 pp. New York, Trade Mark Law Publishing Co., 1922. AMERICANS IN CHINA AMERICAN POPULATION IN CHINA By Commercial Attache Julean Arnold American firms in China aggregate GIT and American citizens 12,530. According to the customs reports, there were in China 24 American firms and 410 resident Americans in 1882, compared with 32 American firms and 1,152 resident Americans in 1890. Accord¬ ing to reports from the same source, other nationals resident in China for 1882, 1890, and 1923, respectively, numbered as follows: Nationalities 1882 1890 1923 British: Firms____ __ _ _ 298 327 661 Residents. _ _____ _ 2, 402 3,317 14, 775 German: Firms___ 56 80 244 Residents_ . 474 648 2,233 242 French: Firms___ _____ 12 19 Residents_ 335 589 3,361 Russian: Firms .. . _. .. . .. _ . __ 17 12 1,034 85, 856 Residents . ...... 78 131 Japanese: Firms __ ... 12 29 4,067 201, 704 Residents . 472 883 One-half of the American citizens registered in China is embraced in the missionary population, which comprises 4,000 adults, of whom 2,500 are women and 1,500 men. The children of missionary parent¬ age resident in China number about 2,100. Of Americans in the mer¬ cantile population, there are about 1,200 adult men, TOO women, and 600 children. In professional employment the figures show 200 men, nearly 200 women, and 180 children. United States Government service accounts for 1T5 men, 100 Avomen, and 90 children. In the Chinese Government service we have 100 men, whose wives and children bring the total up to about 225. The register shows about 400 Americans of nonspecified occupations. This is probably due to difficulty in securing fully accurate data in consular registrations. There is included in the American population in China a certain number of American-born Chinese, who, according to the United States Constitution, are entitled to American citizenship and who have claimed and continue to claim American citizenship. Of those, 400 are men, 250 women, and 600 children, making a total of 1,250. The Philippine population in China is very small. It is, however, under the American flag, and includes, as registered in the consu¬ lates, T5 men, 50 women, and about 100 children. If we allow for about 1,000 Americans who are resident in China but not registered at the consulates, it would about offset those of 350 AMERICANS IN CHINA * 351 the Chinese race who are registered, thus leaving the total number at about 12,000. The largest American population in China is located at Shanghai, where there are nearly 4,000. At Shanghai the mercantile popula¬ tion is considerably in excess of that of the missionary element. In fact, over half of the American mercantile population in China is resident in Shanghai. Next to Shanghai is Tientsin, where we have a very large mercantile population, aggregating about 400. Hankow ranks third in American mercantile population and Hong¬ kong fourth. As for those in professional pursuits, the Tientsin consular district, which includes Peking, has the largest number. This is accounted for by the fact that the Rockefeller Foundation’s medical school and hospital at Peking carry a very large American personnel. Canton and Hongkong absorb the bulk of the population of American-born Chinese, as practically all of the Chinese who have gone to America are from Canton. Shanghai shows a number of Americans of the Chinese race. These also are of Cantonese extrac¬ tion. The Americans of Chinese race accredited to the Amoy con¬ sular district number about 90 and are Philippine born, hence, strictly speaking, might well be included in the Philippine popula¬ tion, the bulk of which is resident in Shanghai. There are in the aggregate about 4,000 children of American par¬ ents resident in China, half of whom are of missionary families. Of the 4,100 American women in China, 1,600 are unmarried, the majority engaged in missionary w T ork. It is interesting to note that there are fewer single men than single women in the American population in China, there being but 1,400 unmarried men. The married men number about 2,500. In short, the American population in China has increased fourfold during the past 20 years. This is indicative of the substantial devel¬ opment of American interests in the country. Of American firms established in China, Shanghai can claim 3,200. This is in keeping with the commercial and industrial impor¬ tance of that great city at the base of the Yangtze Valley, which has now become China’s most populous city. Many American estab¬ lishments in other sections of China are in reality branches of houses at Shanghai. In order of importance from an American trade standpoint, following Shanghai are Tientsin, Hongkong, Han¬ kow, Canton, and Harbin. The following table shows the number of American firms and American citizens in the various consular districts in China: Consular districts American firms American citizens North China: Harbin... __ _ _ _ _._. 32 104 Mukden___ . _ _ _ _ . 10 85 Antung_ ___ _ _ 2 7 Kalgan_ _ 11 49 Dairen____ 7 43 Tientsin _ _ _ 95 1,904 Cheefoo..__ _ 6 ' 137 Tsingtao___ 12 69 Tsinan______ 4 472 352 COMMERCIAL. HANDBOOK OF CHINA Consular districts Central China: Nanking... Shanghai L Hankow_ Changsha.. Chungking South China: Foochow... Amoy_ Swatow_ Canton 1 2 ... Hongkong. Yunnanfu.. Total American firms American citizens 12 1,041 302 4,000 28 1,300 2 366 17 259 6 474 2 156 8 108 30 1,377 30 537 1 42 617 12, 530 1 Including 400 of Chinese race and Filipinos. 2 Including 613 Chinese born in United States. RIGHTS OF AMERICAN CITIZENS The first foreign community in China of any commercial impor¬ tance was the one that grew up in Canton, beginning at the end of the eighteenth century. Merchants of British and other nationalities resided there in considerable numbers until as late as 1840, transact¬ ing their business and pursuing their affairs generally without their respective Governments having come to an}^ definite understanding with the Chinese Government relative thereto. Foreign residents were under strict Chinese regulations, and their business was con¬ fined to a semiofficial group of Chinese monopolists called the ko hong. The British merchants, preponderating in the community, were not satisfied with the situation at Canton, but to no avail were repeated efforts to conclude a treaty between Great Britain and China which would establish a more satisfactory basis. The war of 1840 between China and Great Britain resulted in the treaty of Nanking, concluded in 1842, by which adjustment of many of the causes of dispute was undertaken and through which the acquiescence of the Chinese Government was obtained to an extension of the privileges accorded British subjects. In 1844 the United States sent Caleb Cushing to China for the purpose of negotiating a treaty between the two Governments. Mr. Cushing arrived at the Portuguese port of Macao in February and immediately set to work. In June the Imperial Chinese commis¬ sioner arrived, and after a fortnight's negotiations the treaty of 1844 between the United States and China was signed at the village of AVanghia, near Macao. The British treaty was accepted as its basis, but the American commissioner did not fail to consult the American community as to the modifications that should be made. This document, supplemented by subsequent American and other treaties and by usage, constitutes the foundation of the rights en¬ joyed by American citizens in China to-day. Most of the treaties concluded by China with foreign nations provide that the citizens of such foreign nations shall enjoy all of the privileges accorded to “ the most favored nation”; and the rights enjoyed by American citi¬ zens in China, therefore, include all rights granted to the citizens or subjects of any nation more favored. European and American mer¬ chants residing in Canton had developed evidence that the Chinese AMERICANS IN CHINA 353 judicial system was unsuited for application to the citizens of mod¬ ern Christian nations, and it was provided in the treaties of 1842 and 1844 that British and American citizens residing in China should be amenable to the jurisdiction of their own courts. TREATY OF 1844 The more important subjects dealt with in the treaty of 1844 are summarized in the succeeding paragraphs. Tariffs .—Since a fixed scale of import and export tariff duties was of great importance to the merchants, the treaty provided that American citizens should pay these duties in accordance with a tariff which was made a part of the treaty. The intention was to fix the duty at approximately 5 per cent ad valorem, which rate was con¬ firmed in subsequent treaties and continues to the present day. Treaty ports .—Prior to 1842 the residence of foreigners had been restricted to Macao and Canton. The new treaty provided that for¬ eigners might reside at four additional ports—Amoy, Foochow, Ningpo, and Shanghai. Subsequent treaties opened “ ports ” in all parts of the country generally, but not always on the seacoast or on rivers; and in addition to these places the Chinese Government has of itself designated “ self-opened ports ” as places wherein foreign¬ ers may reside and transact business. Consuls .—The treaty provided that the American Government might appoint consuls or other officers “ for the superintendence and negotiation of the concerns of citizens of the United States ” doing business at the open ports. It further provided that American citi¬ zens should be permitted to hire Chinese for the performance of “ any necessary service ” without interference on the part of local officers of the Chinese Government. Internal taxation and prohibition of monopolies .—An important article of this treaty is the one that permits citizens of the United States engaged in the purchase or sale of goods, of import or export, to trade with any and all subjects of China without distinction, and provides that they shall not be subject to any new limitations nor impeded in their business by monopolies or other injurious restric¬ tions. The internal taxation of commerce, principally of merchan¬ dise in course of transportation, is a serious factor; and the treaty wisely provided that all such internal taxation of goods of import or export might be compounded by the payment of an additional 2 y 2 per cent transit tax. The injunction against monopolies has been of great service in keeping open to American citizens lines of enterprise that might have been closed by monopolistic concessions. Recovery of debts. —The treaty provides that a debtor shall be sued in his own court, the redress in each case being sought through the assistance of the American consul—that is to say, an American creditor seeking to recover his money shall present his complaint to his consul, who will thereupon negotiate with the competent Chi¬ nese local authority to obtain satisfaction of the debt; and if a Chinese citizen is creditor he shall file his suit in the American consular court. 100020°—26-24 354 COMMERCIAL HANDBOOK OF CHINA Residence in open ports. —Although four additional ports were opened to foreign residence and trade by the earliest treaties, such residence was strictly circumscribed. No particular areas were pro¬ vided for at the open ports, but in later years areas known as “ con¬ cessions ” and “ settlements ” were, at many of the treaty ports, assigned either to one nation or to foreign nations in general, and in such districts foreigners might reside under the municipal control of the nation or nations concerned. The “ area of open ports ” is a matter that has no so far proved itself susceptible to rigid definition. Chinese protection of American citizens. —The treaty provides that citizens of the United States in China who peaceably attend to their own affairs shall enjoy for themselves and everything apper¬ taining to them the special protection of the local authorities, who shall defend them from all insult or injury of any sort on the part of the Chinese; and that if the consul shall warn the local authori¬ ties of impending danger from mobs or other lawless persons the local authorities shall immediately dispatch a military force to disperse such rioters, apprehend the guilty individuals, and punish them with the utmost rigor of the law. It is on the basis of this and similar provisions of the treaties, under which the Chinese Govern¬ ment assumes, on its own behalf and on behalf of the provincial authorities, an especial responsibility for the protection of foreigners residing or traveling in China in conformity with rights granted them by the treaty, that foreign governments hold the Chinese Government to strict account in such matters. Extraterritorial 'jurisdiction. —It is expressly provided that Chi¬ nese citizens guilty of any criminal act toward citizens of the United States shall be arrested and punished by the Chinese authorities according to the laws of China, and, reciprocally, that citizens of the United States who may commit any crime in China shall be subject to trial and punishment by the consul or other public functionary of the United States authorized thereto, according to the laws of the United States. To provide the machinery required by this system of extraterritorial jurisdiction, the United States Govern- men has created a consular court (of which the consul or consul gen¬ eral is the judge) in each consular district, and the United States Court for China, a court of original and appellate jurisdiction over all American citizens in China. Communication between Americans and Chinese authorities. —The treaty provides that American citizens desiring to communicate with the Chinese authorities shall do so through the American consuls, and that Chinese citizens desiring to communicate with American consuls shall do so through the Chinese authorities. This provision undoubtedly serves to prevent a great deal of friction between the citizens and officials of the two nationalities. Suits between Americans and other foreign residents. —The treaty provides that controversies occurring in China between citizens of the United States and citizens of any other government not Chinese shall be regulated by the treaties existing between the United States and such governments. Consequently, in the case of the foreign plaintiff, the defendant being an American, the action is brought in an American consular court. If the defendant is a foreigner of AMERICANS IN CHINA 355 another extraterritorial power, the suit is brought in a court of the defendant’s nationality. If the plaintiff is an American and the defendant a foreigner not possessed of extraterritorial rights, the suit is brought in a Chinese court. TREATY OF 1858 In 1858 another treaty was negotiated between the United States and China largely reaffirming the older one. Immunity from religious 'persecution. —The treaty of 1858 guar¬ antees that no person, whether Chinese or American, engaged in peaceably teaching or promoting the principles of Christianity shall be molested or interfered with. This article of the treaty has been frequently invoked for the assistance of the missionary enterprises conducted in China by citizens of the United States, although it should be stated that, by and large, neither the authorities nor the citizens of China have ever shown pronounced antagonism to Chris¬ tianity or to Christian missionaries. Most-favored-nation treatment .—Allusion has already been made to the most-favored-nation clause which is found in most treaties between foreign countries and China. In the treaty of 1858 it was agreed that should China at any time “grant to any nation, or the merchants or citizens of any nation, any right, privilege, or favor connected either with navigation, commerce, political or other inter¬ course which is not covered by this treaty, such right, privilege, and favor shall at once freely inure to the benefit of the United States, its public officers, merchants, and citizens.” It is this clause and similar ones found in other treaties that have given to the citizens of all countires having such agreements with China what amounts substantially to a common body of rights in the country, and that have created a remarkable uniformity of interests. TREATY OF 1880 In 1880 there was negotiated a short supplementary treaty, the most important provisions of which are summarized as follows: Trade in opium. —It w T as agreed that Chinese and American citizens should be prohibited absolutely from engaging in trade in opium between the two countries. This prohibition was sub¬ sequently embodied by Congress in legislative enactments. Assessors. —The treaty elaborate# the method by which the citi¬ zens of one country may secure legal redress from the citizens of the other, by adding that a properly authorized official of the plaintiff's nationality may attend the trial, which, as already stated, must be held in the court of the defendant’s nationality. This of¬ ficial, who is called an “ assessor,” is to be granted all proper facilities for watching the proceedings in the interests of justice. He may present, examine, and cross-examine witnesses, and if he is dissatisfied with the proceedings he may protest against them in detail. In cases of original jurisdiction the judge is generally a Chinese dis¬ trict magistrate and the assessor a vice consul; in appealed cases the judge is customarily the provincial commissioner of foreign affairs and the assessor may be a consular officer of higher rank. 356 COMMERCIAL HANDBOOK OF CHINA COMMERCIAL TREATY OF 1903 In 1903 a commercial treaty was negotiated between China and the United States which was designed to enlarge the status of Amer¬ ican citizens in China so as to make it more in accord with the changed conditions of their economic and social environment. It also provided additional facilities for the protection of American interests, such as copyright and trade-mark protection. Open ports .—The treaty is most specific in defining the rights of American citizens at ports or localities open to foreign residence and trade. It states that American citizens at such places may “ carry on trade, industries, and manufactures or pursue any lawful avocation ” and may rent or purchase houses or rent or lease land in perpetuity and build thereon. Mining regulations. —The treaty provides that the Chinese Gov¬ ernment shall enact mining regulations which, “ while promoting the interests of Chinese subjects and not injuring in any way the sov¬ ereign rights of China, will offer no impediment to the attraction of foreign capital, nor place foreign capitalists at a greater disadvantage than they would be under generally accepted foreign regulations.” Up to the present time no such regulations have been agreed upon. Consequently the employment of American capital in mining enter¬ prises in China is attended with many difficulties. Trade-mark regulations. —The Chinese Government, the treaty provides, shall arrange for the establishment of offices for the regis¬ tration and protection of trade-marks in accordance with “ reasonable regulations.’’ Attempts have been made by the Chinese Government from time to time to provide these essential facilities, but at the present writing no regulations which have been promulgated by the Chinese Government have been of a nature to receive the unqualified approval of the foreign governments. There have been trade-mark regulations promulgated, however, under which, to a certain extent, foreign citizens have registered their trade-marks, but without the formal acceptance of these regulations by their respective govern¬ ments. Patents and copyrights. —The Government of China has not yet established a patent office nor provided machinery for the protection of patents. Protection to copyrights is provided under the terms of the treaty, but the subject can not be considered to have been satis¬ factorily disposed of. Inland steam navigation. —The treaty confirms regulations issued by the Chinese Government in 1898 opening u the navigable inland waters of the Empire to commerce by all steam vessels, native or foreign, that may be specially registered for the purpose, for the conveyance of passengers and lawful merchandise,” and provides that American citizens, firms, and corporations may engage in such com¬ merce on equal terms with those granted to the citizens of any foreign power. As an instance of the restricted interpretation which is sometimes offered upon treaty provisions, however, it may be noted that Chinese authorities are not always inclined to admit to vessels of native type the navigation rights thus granted steam vessels. In one of the Provinces the question has recently arisen of the right, under the treaty, of an American firm to own and operate craft of AMERICANS IN CHINA 357 native type on inland waterways for the transportation of its own merchandise. Missionary enterprise .—The treaty reaffirms with greater minute¬ ness the freedom of American and Chinese citizens alike to practice and peaceably teach the principles of Christianity. Since a great deal of American money has been invested in real property in China for the purposes of missionary work, it may be pertinent to quote verbatim the wording of the treaty, as it is the latest definition of the rights under which such land is acquired. Missionary societies of the United States shall be permitted to rent and to lease in perpetuity, as the property of such societies, buildings or lands in all parts of the Empire for missionary purposes and, after the title deeds have been found in order and duly stamped by the local authorities, to erect such suitable buildings as may be required for carrying on their good work. Extraterritoriality .—The United States Government agrees in the treaty of 1903 to give every assistance to the Chinese Government in the re-formation of its judicial system and indicates its readiness “ to relinquish extraterritorial rights when satisfied that the state of the Chinese laws, the arrangements for their administration, and other considerations warrant it in so doing.” Recent internal dis¬ sensions in the country and the consequent delay in perfecting the Chinese judicial system, as well as the weakening of the general administrative system, have tended to caution foreign nations against a too precipitate relinquishment of the extraterritorial po¬ sition in China. PRESENT TREATMENT NOT EXHAUSTIVE The foregoing is no more than a brief summary of the more im¬ portant aspects in which the treaties between the United States and China have established the foundations of American life and enter¬ prise in that country. There are many subjects, controversial and otherwise, discussed in the treaties, to which the limitations of space permit no allusion here. The reader is referred to the treaties con¬ cluded by China with foreign nations and to the many instructive and interesting books which have been written about them, also to officials of the United States Government, for more specific in¬ formation in regard to the rights and privileges enjoyed by Amer¬ ican citizens in their pursuits in China. AMERICAN COURTS IN CHINA By Charles Sumner Lobingier, Formerly Judge of the United States Court for China The United States seems to have been the first power to commis¬ sion a consul in China. The other countries do not appear to have sent such representatives until after the treaty of Nanking in 1842 had opened five great ports to trade. 1 But as early as 1790 Maj. Samuel Shaw, 2 who had arrived at Canton in 1784 as supercargo of the ship Empress , was given a commission 3 as American consul at Canton by President Washington. 1 Williams, The Middle Kingdom, II, 567. 2 A sketch of Major Shaw and an account of the voyage appears in Asia, XVII, in an article by John Ford, entitled “ Outward Bound.” 3 Reprinted in American Journal of International Law, V, 426. 358 COMMERCIAL HANDBOOK OF CHINA But Americans, as well as others, found it impracticable to live and conduct business under existing native laws, which were fun¬ damentally different from those to which they had been accustomed. The Chinese authorities, too, found it annoying, and often embar¬ rassing, to decide questions and dispose of cases involving the rights of foreigners, and they desired to be relieved of the whole burden. The solution of this common difficulty was found in the adoption by China of the system known as extraterritoriality, by which for¬ eigners were accorded the same legal status as if living in their own country, and the authorities of each treaty-making power were made responsible for punishing crime and administering justice among their own nationals. There was, of course, nothing novel in the adoption of the system in China, for it had long been in vogue in other parts of the world. Indeed, there is reason to believe that it was once in vogue every¬ where. An eminent authority 4 has recently said: We venture to suggest, with diffidence, that the naturalness of the extra¬ territorial privilege as explained by the author might be more emphatically illustrated by the “ personality ” of all law, as distinguished from its “ terri¬ toriality,” which prevailed throughout the vast Carlovingian Empire till nearly 1000 A. D.; that is, instead of saying, with the author, that extraterritoriality was “ in accordance with usage which became generally recognized with the gradual extension of commerce,” we should prefer to believe that it was in accord with a universal prior custom prevailing in the first half of the Middle Ages. For the United States this arrangement with China was effected by the treaty 5 signed at Wanghia, a suburb of Macao, on July 3, 1844. It was drafted by Caleb Cushing, afterwards Attorney General of the United States, and Article XII provided that “ citizens of the United States who may commit any crime in China shall be s'ubject to be tried and punished only by the consul, or other public function¬ ary of the United States thereto authorized, according to the laws of the United States”; 6 and Article XXV declared that “all ques¬ tions in regard to rights, whether of property or person, arising between citizens of the United States in China, shall be subject to the jurisdiction of and regulated by the authorities of their own Government. And all controversies occurring in China between citizens of the United States and the subjects of any other govern¬ ment shall be regulated by the treaties existing between the United States and such governments, respectively, without interference on the part of China.” 7 ORGANIZATION CONSULAR COURTS The “ authorities ” to which this extensive responsibility was com¬ mitted were the consuls, and, as each consul became thereby a judge, the consular courts were thus brought into existence. For more than 60 years these, as reviewed and supervised by the Minister, were the 4 John H. Wigmore, reviewing Brown’s “ Foreigners in Turkey,” Illinois Law Review, X, 451. 5 “ Its fullness of details and clear exhibition of the rights conceded by the Chinese Government to foreigners dwelling within its borders made it the leading authority in settling disputes among them until 1860.” Williams* “ The Middle Kingdom,” II, 567. 6 Malloy, Treaties, etc., I, 202. 7 Id. 203, AMERICANS IN CHINA 359 only American courts in China. Their jurisdiction as to subject matter was unlimited, 8 and questions coming before them were often of the highest importance. In 1906, when the United States Court for China was created, the jurisdiction of the consular courts was left to be exercised “ in civil cases where the sum or value of the property involved in the contro¬ versy does not exceed five hundred dollars United States money and in criminal cases where the punishment for the offense charged can not exceed by law one hundred dollars’ fine or sixty days 1 imprison¬ ment, or both, and shall have power to arrest, examine, and dis¬ charge accused persons or commit them to the said courts.” 9 There are now 15 American consular courts in China, and it will be seen that the jurisdiction retained by them is important, even if limited. Especially in the probate of wills and administration of estates they are the only courts to which a considerable section of Americans in China have occasion to resort. UNITED STATES COURT History .—As American interests in the Far East gradually ex¬ panded it became apparent that the important and far-reaching judicial power which the Nation had acquired there should be exer¬ cised, or at least supervised, by those trained especially for that purpose. Our ministers and consuls doubtless made the best of a difficult situation, but they were laymen, as a rule, and it was not to be expected that they should find themselves at home in the technical field of law. In 1881 Secretary Blaine, in an opinion which was transmitted to Congress by President Arthur, recommended that “men of legal training should be chosen for certain judicial offices independent of the consular system, and the establishment of a separate system of courts, at least in China, with an appellate court at Shanghai.” Bills embodying these recommendations were introduced into Con¬ gress in 1882 and 1884, but were not acted upon. Nothing daunted, Ihe advocates of a better system continued their efforts. In March, 1906, Congressman Edwin Denby, son of a former Minister to China, introduced his bill. It passed the House under his guidance, received the support of Senator Spooner in the Senate, and became a law. Elsewhere, 10 Mr. Denby has said of the conception and purpose of his measure: I thought of our United States judge as much in the light of an ancillary, unofficial ambassador of the United States, as of a judge of a court for the trial of cases in which Americans were concerned. I had hoped at that time, judging of conditions as I had known them before, that this high judicial officer, the highest American official in the land next only to the minister, un¬ hampered by diplomatic restrictions and with an eye single to the best interests of the Chinese Empire and of the United States, might, having placed himself on terms of friendship and confidence with the chief officials of the Empire, exercise in an entirely unofficial w T ay a considerable influence in matters affecting foreign relations. The court’s sittings were to be at the points indi¬ cated—four great viceregal seats—and I hoped that perhaps some good might 8 There are several recorded cases where they granted divorces ; Moore, Int. Law Dig., Ill, 459 ; North China Herald, LXIX, 1138, 1194. 9 Act of June 30, 1906, 34 U. S. Stat. L., Pt. I. 814, sec. 2. 10 Far Eastern American Bar Association Publications, I, 14, 15. 360 COMMERCIAL HANDBOOK OF CHINA be accomplished through the influence of the court in an entirely unofficial and friendly way, relying upon the judge himself to exercise tact and discretion and to use whatever influence he might acquire in the best manner. Thus to Dean Wigmore’s conception of a a judicial superintendent,” elsewhere noted, must be added that of Mr. Denby—of an “ unofficial ambassador ”—if we would comprehend the purposes that under¬ lay the creation of the United States Court for China. How far these purposes have been carried out is not, of course, for those administering the court to say; but the latter can be materially assisted by their own nationals in attaining such purposes, if these are clearly understood and if all unite in seeking their achievement. Both United States and consular courts exist in order to serve Americans in China and those who deal with them. The measure of their success is the degree of serviceability attained, and in this respect their founders anticipated and applied an ideal that is only now being ditfused by the most advanced school of law reformers in America. While nominally established by the act of June 30, 1906, the court was not actually opened for business until early in 1907. Of the nearly 700 cases disposed of by it since then, there have been some of unusual importance either in the legal questions arising or in the amounts involved. Jurisdiction .—A court’s jurisdiction may be considered under three aspects: (1) Territorial, (2) personal, and (3) topical—the last be¬ ing known in technical parlance as jurisdiction of the subject matter. This third jurisdiction is again subdivided into (a) original, (b) ap¬ pellate, and (in this instance) (c) supervisory. The territorial jurisdiction of this United States Court extends to and its process runs throughout all Chinese territory. Sessions of the court are held almost continuously at Shanghai, and one regular term is held each year at Tientsin in the north, Hankow in Central China, and Canton in the south. Special sessions are authorized at any place in China having an American consulate. The organic act also conferred jurisdiction in Korea, but while this provision has never been repealed the jurisdiction has not been exercised in recent years. Should the Government ever decide to extend the court’s jurisdiction to Siam, where extraterritoriality was granted in 1856, 11 it would require no more than the addition of a couple of words to the organic act and the slight expense of a yearly session at Bangkok. The test of jurisdiction over the person in all these extraterritorial courts is the nationality of the defendant. Anyone may be a plain¬ tiff, but there must be a defendant subject to American authority in order to confer jurisdiction. This includes Filipinos, of whom there are many in China, and also Porto Ricans, as well as regular American citizens, and all such in China are amenable to these courts in any cause, criminal or civil, which may be instituted therein against them. And where the cause is what is technically known as “in rem” (concerns property or status alone) it may be brought in these courts, though there is no such defendant, or even where the nominal defendant is an alien. 12 Original jurisdiction of the subject 11 Treaty of May 29, 1856. Malloy, Treaties, etc., I, 1629. 12 See Richards v. Richards, United States Court for China, No. 424, where the defendant was a Chinese woman but the object of the action was divorce without ali¬ mony—i. e., change of status only. AMERICANS IN CHINA 361 matter is exercised by the United States Court in all cases arising within its territory which are not recognizable by the consular courts—that is, in all civil cases where the amount involved exceeds $500 and in all criminal cases where the penalty prescribed exceeds “one hundred dollars fine or sixty days’ imprisonment or both.” 13 It sometimes happens, especially in administration matters, that a cause is commenced in a consular court under the belief that it involves less than $500 and is afterwards found to involve more. ' In that event it is transferred to the United States Court and the prior proceedings are treated as having been conducted under its authority. 14 The grant of jurisdiction in “ all civil cases ” of the prescribed amount is an extensive one and includes proceedings of every recognized class without limit as to the maximum amount or character of relief sought. Thus while the United States Court for China is a part of the Federal judicial system, corresponding in grade mainly to the district courts, it assumes cognizance of certain causes (such as probate, divorce, and adoption) which, in America, are entertained only by the State courts. The amounts involved are often very large, running into hundred of thousands. All judgments of the consular courts are subject to review by the United States Court for China on appeal, while from the latter, which is considered as located in the ninth judicial circuit, appeals lie to the court of appeals sitting at San Francisco. But besides its ordinary appellate cognizance the United States Court also exercises a supervisory or administrative jurisdiction in all probate and administration causes, whether appealed or not. Thus it is provided that the consular judge “ shall pay no claims against the estate without the written approval of the judge of said (United States) court, nor shall he make sale of any of the assets of said estate without first reporting the same to said judge and obtaining a written approval of said sale * * *.” 15 The lat¬ ter is also empowered “ to require at any time reports from consuls or vice consuls in respect of all their acts and doings relating to the estate of any such deceased person.” 10 The statute further provides “ that the procedure of the said court shall be in accordance, so far as practicable, with the existing procedure prescribed for consular courts in China in accordance with the Revised Statutes of the United States: Provided , however , That the judge of the said United States Court for China shall have authority from time to time to modify and supplement said rules of procedure.” 17 The relation between the two is, therefore, something more than that usually existing between appellate and “nisi-prius” courts. What Congress apparently intended by this, particularly as regards probate and administration matters, was the creation of an office re¬ sembling the “ chief judicial superintendent ” of the up-to-date law reformers, who is invested, among other things, with the rule-making function. 13 U. S. Stat. L., ch. 3934, sec. 2. 14 In re Jaeger’s Estate (Apr. 26, 1918), No. 613, Millard’s Review, IV, 374. 15 Act of June 30, 1906, 34 U. S. Stat. L., ch. 3934, Pt. I, 814, sec. 2. 16 Id. 17 Id., sec. 5. 362 COMMERCIAL HANDBOOK OF CHINA John H. Wigmore, a leader of advanced legal thought in America, expresses 18 this conception as follows: What we preach is a chief judicial superintendent, who shall have the power and the duty to inquire into each and every sort of botch-product of our justice system, and to take measures to improve it against the recurrence of such fail¬ ures. When the people bring themselves to permitting and demanding such an innovation, they will be in a fair way of getting substantial improvements in their justice—but not before then. JURISPRUDENCE AND LEGISLATION LAWS OF THE UNITED STATES The treaty cession to the United States Government of extraterri¬ torial jurisdiction from China was first rendered effective by the act of Congress of August 11, 1848, which contained the following pro¬ vision : Such jurisdiction in criminal and civil matters shall, in all cases, be exer¬ cised and enforced in conformity with the laws of the United States, which are hereby, so far as is necessary to execute said treaty, extended over all citi¬ zens of the United States in China (and over all others to the extent that the terms of the treaty justify or require), so far as such laws are suitable to carry said treaty into effect. 19 In 1860 a more elaborate act 20 was passed in which the foregoing section was almost literally repeated, so that it affords the basis of American jurisprudence in China. The practice of extending over one jurisdiction laws originally passed for another is not new in American jurisprudence. It was often resorted to during the formative period of western America when new territories were created. Thus the laws of Iowa were ex¬ tended over the newly formed Territory of Nebraska in 1855, while a generation later the Nebraska laws were extended to Oklahoma, organized in 1889. Meanwhile, in 1884, the laws of Oregon had been extended over Alaska. 21 It is said 22 also that the laws of Arkansas were once extended over the Indian Territory. Congress had applied the same principle as early as 1825, when it extended the criminal laws of each State over all Federal territory and property within its boundaries, 23 thus making a violation of such State law “ an offense against the Uinted States.” Congress was merely following precedent, therefore, in enacting the laws above noted. 25 “ What are ‘ the laws of the United States ’ referred to so frequently in these quotations?” is the question sought to be answered as follows in one 26 of the earliest cases presented to the writer after he had assumed charge of the court: Not the treaties, for they are mentioned separately; hardly the Constitution, for it has been declared 27 to have no extraterritorial operation; certainly not 18 Illinois Law Review, XI, 49. 10 9 U. S. Stat. L., 276, sec. 4. 20 12 U. S. Stat. L., 74. sec. 4. n United States ex rel. Raven v. McRae, United States Court for China, No. 586, Mil¬ lard’s Review, I, 7. 22 Hearing before Committee on Foreign Affairs, Sept. 27, 1917 ; H. R. 4281, p. 6. 23 4 U. S. Stat. L., c-h. LXV, sec. 3. 24 Biddle v. United States, 156 Fed. 759, 763. 25 United States ex rel. Raven v. McRae, Millard's Review, I, 7. 26 United States v. Allen, United States Court for China, No. 89. 27 In. re Ross, 140 U. S., 433, 35 Law Ed, 581. AMERICANS IN CHINA 363 State legislation; principally, therefore, the acts of Congress then or subse¬ quently in force. And their extension results quite independently of the orig¬ inal purpose of the acts themselves. Thus Congress may enact a law for a limited area under its exclusive jurisdiction, such as Alaska or the District of Columbia ; by its terms it may have no force whatever outside of such area; but if it is “ necessary to execute such treaties ” (with China) and “ suitable to carry the same into effect ” it becomes operative here by virtue of the act of 1860 above quoted. Such we understand to be the doctrine announced by the Court of Appeals in a leading case. This last 28 was a prosecution for obtaining money under false pre¬ tenses, and in upholding the lower court’s jurisdiction of such a crime the appellate tribunal observed: It is true there is no general statute applicable to every State in the Union making this an offense against the United States; nor could there be, in view of the fact that under our system of government the right to punish for such acts, committed within the political jurisdiction of the State is reserved to the several States. But in legislating for territory over which the United States exercises exclusive legislative jurisdiction, Congress has made the act of ob¬ taining money under false pretenses a crime * * *. In view of the legislation of Congress to which we have referred (the acts relating to Alaska and the District of Columbia, and the statute of July 7, 1898), our conclusion is that obtaining money or goods under false pretenses is an offense against the laws of the United States within the meaning of the statute conferring jurisdiction upon the United States Court for China. 28 Though the laws there involved were criminal ones, the funda¬ mental basis of the decision applies equally well to civil laws which have since been treated by the United States Court for China 29 as extended here. For there can be no half-way adoption of that doctrine; it includes all such laws or none. It can not logically be restricted to any particular class of acts. It is just as applicable to civil laws as to criminal; just as necessary in respect to corporations as to procedure. 30 It is true that the phrase “ law of the United States ” as used in one paragraph of that section of the Judicial Code 31 relating to appeals has been construed as not including an act of Congress for the District of Columbia. 32 But the “ratio decidendi” was the declared purpose of the paragraph to limit appeals, 33 and it Avas conceded that the same phrase in another paragraph might be construed dif¬ ferently. 34 In fact, it had been so construed in an earlier case 35 which was not overruled by those above cited. Moreover, in a de¬ cision later than any of them the Supreme Court in construing a similar statute 36 regulating appeals from the Philippines declared the Philippine tariff act, which applied to the archipelago alone, “ a 28 Biddle v. United States, 156 Fed. Rep. 759. 29 Cavanaugh v. Worden, No. 313. 30 United States ex rel. Raven v. McRae, No. 586, Millard’s Review, I, 9. 31 Sec. 250 ; 36 U. S. Stat. L. 1159. 32 American Security, etc., Co. v>. District of Columbia, 234 U.. S. 491, 56' Law Ed. 856, 32 Sup. Ct. 553 ; Washington, etc., R. Co. v. Downey, 236 U. S., 190,; 59 Law Ed. 533 ; 35 Sup. Ct. 406; American Surety Co. v. American Fruit Product Co., 238 U. S. 140, 59 Law Ed. 1238; 35 Sup. Ct. 828; American Security, etc., Co. v. Rudolph, 38 App. Cas. (D. C.) 32. 33 American Security, etc., Co. v. District of Columbia, 224 U. S. 491, 56 Law Ed. 856 ; 32 Sup. Ct. 553. 34 “ Of course there is no doubt that the special act of Congress was in one sense a law of the United States. It well may be that it would fall within the meaning of the same words in the third clause of the same section : ‘ Cases involving the constitu¬ tionality of any law of the United States.’ ” Id. Cf. American Surety Co. v. American Fruit Product Co., 238 United States 140, 59 Law Ed. 533, 35 Sup. Ct. 406. 36 Parsons v. District of Columbia, 170 U. S., 45 Law. Ed. 36 36 U. S. Stat. L., Ch. 1369, sec. 10. 364 COMMERCIAL HANDBOOK OF CHINA statute of the United States. 37 The doctrine of the Court of Appeals would seem, therefore, to be quite consistent with that of the Supreme Court. It appears to be settled then that the phrase, “ laws of the United States,” as used in the legislation first above quoted, includes all applicable acts of Congress regardless of the locality for which they were originally intended. This rule provides for American courts in China a mass of legislation without which they would be sadly handicapped; for the general acts of Congress contain little con¬ cerning the subjects with which those courts are most called upon to deal, such as crimes, domestic relations, contracts, etc. It happen¬ ed, however, that, shortly before the establishment of the United States Court for China, Congress had enacted for various juris¬ dictions a series of fairly satisfactory codes and statutes, which covered these and kindred subjects, and which, by the rule above stated, were rendered available to said courts. 38 Where two or more of such acts cover the same subject and are equally suitable, a rule of statutory construction as old as the Twelve Tables 39 requires that the latest enactment be applied. Moreover, although Alaska was provided in 1913 with a legislature of its own, Congress will doubt¬ less continue to legislate indefinitely for the District of Columbia, and a fair supply of new legislation may be expected from that source. The statutory equipment of American courts in China is, therefore, on the whole, about as complete as that of most courts. UNWRITTEN LAW In any jurisdiction there are, of course, many subjects not covered by legislation and these “ lacunae ” were early provided for in extra¬ territorial countries by enacting that “ in all cases where such laws are not adapted to the object, or are deficient in the provisions neces¬ sary to furnish suitable remedies, the common law, including equity and admiralty, shall be extended in like manner over such citizens and others in the said countries.” 40 The “ common law ” here speci¬ fied has been “interpreted to mean those principles of the common law of England and those statutes passed in aid thereof, including the law administered in the equity, admiralty, and ecclesiastical tribunals, which were adapted to the situation and circumstances of the American colonies at the date of the transfer of sovereignty, as modified, applied, and developed generally by the decisions of the State courts and by the decisions of the United States courts, and incorporated generally into the statutes and constitutions of the States.” 41 37 Gsell v. Insular Collector, 239 U. S. 93, affirming 24 Philippine 369, which in turn affirmed the decision of Lobingier, J., in Philippine Law Rev. 229—233. 38 Act of Mar. 3, 1899, 30 U. S. Stat. L., 1253 et. seq. (Criminal Code for Alaska) ; act of June 6, 1900, 31 U. S. Stat. L., ch. 786 (Civil Laws for Alaska) ; act of Mar. 3, 1901, 31 U. S. Stat. L., ch. 854 (General Code for the District of Columbia) ; act of July 1, 1902, 32 U. S. Stat. L. ch. 1369 (Organic Act for the Philippines but, with its successor, containing provisions which may prove useful in China). This was supple¬ mented though not entirely repealed by the act of Aug. 29, 1916, 39 U. S. Stat. L., ch. 416. 30 XII, 5 ; 36 Cyc. 1130 ; Cavanaugh v. Worden, No. 313. 40 Act of Congress of June 22, 1860, 12 U. S. Stat. p. 73, ch. 179, sec. 4. 41 United States v. Biddle (United States Court for China), American Journal of Inter¬ national Law, I, 793, 796, reversed on another point, 156 Fed. 759. AMERICANS IN CHINA 365 THE RULE-MAKING AUTHORITY Finally, as supplementing all of the above, the act of 1860, follow¬ ing closely upon that of 1848, further provided that “ if defects still remain to be supplied, and neither the common law, including equity and admiralty, nor the statutes of the United States furnish appro¬ priate and suitable remedies, the ministers in the said countries, re¬ spectively, shall, by decrees and regulations which shall have the force of law, supply such defects and deficiencies.” 42 In exercise of this authority, the Minister to China, prior to 1906, promulgated various “ Consular Court Regulations,” 43 and these, though recognized in part as “ gravely defective,” have been given force in China even over acts of Congress. 44 A communication to the minister from the Department of State in 1917 announces “ that the department is clearly of the opinion that section 5 of the act of June 30, 1906, 45 should be construed as effecting a transfer of the authority to modify and supplement existing rules of procedure from the minister to the United States Court for China.” Here, then, we have the “ judicial superintendent,” in fact if not in name, with not only “ the power and duty to inquire into each and every ” important act of the primary courts and to require reports from them but also to frame the rules by which all these courts shall operate. When it is remembered that American jurisprudence in China is a new field, and that these “ rules of procedure ” may be made to cover nearly the whole subject of remedial law, it will be seen that the possibilities involved in this idea of superintendency are very extensive. Acting under this authority the writer has already promulgated rules for admission to practice in all of these courts 46 and has sent out, for comment and suggestion before promulgation, a draft of proposed rules of evidence 47 which aim to cover in brief space the whole field of that subject. So far as the growing business of the court will permit, it is the writer’s intention to follow these with successive drafts of rules on various procedural subjects until the whole field of remedial law is completed. The full realization of that plan may have to be deferred for some time, but it will be pursued as steadily as conditions allow, for the opportunity is unique and the task inviting. 42 12 U. S. Stat.. L., eh. 179, sec. 4. 43 Reprinted in Hinckley, American Consular Jurisdiction in the Orient, pp. 226—236. 44 U. S. v. Engelbracht (United States Court for China, Oct. 25, 1909), American Jour¬ nal of International Law, III, 735. 46 See ante, p. 48. 46 Millard’s Review, IV, 68. 47 Id., I, 164-168, 192-196; American Bar Association Journal, IV, 218, 242. JUDICIAL PROCEDURE IN CHINA By judicial procedure in China is meant not only Chinese judicial procedure but that of those other powers which maintain courts in China in accordance with the provisions of the system known as extraterritoriality. In respect to any claim involving court proceed¬ ings, therefore, the first step in determining what judicial procedure will apply is to make sure of the nationality of the defendant, since this factor determines the court in which the action must be brought. Claims against persons or firms in China naturally, then, fall into three classes: (1) Claims against Chinese; (2) claims against for¬ eigners enjoying extraterritoriality; (3) claims against foreigners not enjoying extraterritoriality. In accordance with the treaties granting extraterritorial priv¬ ileges, the powers which negotiated such treaties with China have established courts in that country wherein claims and complaints against other nationals mav be tried. Such courts are extraterrito- rial courts, but are more commonly known as consular courts, since the trial officers in general have been and still are officers of the Con¬ sular Service. The laws which are applied when Chinese citizens are defendants are Chinese laws. When foreigners enjoying extraterritorial rights are defendants the laws of the country or countries of which they are citizens apply. If foreigners not enjoying extraterritorial rights are defendants, Chinese law is applied except in certain matters such as family questions and the like. The nationality of the plaintiff or complainant has no bearing upon the law applicable in either civil or criminal suits, the nationality of the defendant being the sole de¬ termining factor. AMERICAN CONSULAR OFFICERS IN RELATION TO AMERICAN CLAIMS American citizens and firms having claims against persons or firms in China may always consult their consuls regarding their claims. In claims against ‘Chinese citizens or firms the treaties pro¬ vide that the claim be forwarded through the medium of the con¬ sulate to the proper Chinese authorities. In the case of American claimants against foreigners in China, consular officers of the United States are frequently able to be of much assistance; but consular officers can not become the attorneys or business agents for the handling of these cases. In the larger ports, such as Shanghai, Tientsin, Hankow, and Har¬ bin, there are American attorneys who handle legal claims, and in important and complicated cases it is usually advisable that an attorney be engaged, since the consular officers can not act in such a capacity. Lists of these attorneys may always be obtained upon application to the consulate. 366 JUDICIAL PROCEDURE IN CHINA 367 China is divided into a number of consular districts, and claims arising in any particular consular district should be taken up with the consulate located in the district. As American consular officers can act only in the interests of bona fide American citizens and firms, application for consular assistance should invariably state the applicant’s American nationality. In some instances satisfactory proof of such nationality may be required before the consular officer will undertake to proceed with the claim. CLAIMS AGAINST CHINESE CITIZENS When an American has a claim against a Chinese, the claimant should formally address his claim to the consulate of the consular district in which the Chinese is domiciled, setting forth the nature of his claim and the evidence in support of it, together with the statement or proof of the claimant’s American citizenship. It is im¬ portant that the Chinese characters for the names of places and per¬ sons be given along with the English text. Upon receipt of a claim so framed, the consular officer, if satisfied of the bona tides of the case, will communicate with the proper Chinese authorities. Often the case is settled without further recourse than an exchange of letters between the consular officers and the Chinese authorities. If not thus settled, the case may come to trial. The trial is held in the court of the district magistrate having jurisdiction over the defendant. The plaintiff has the right—and usually exercises it—to have a consular assessor present. Appeals from the decision of the magistrate are heard by the commissioner of foreign affairs, with whom consular officers may also sit to ob¬ serve the proceedings in the interest of the plaintiff. In certain ports where the number of foreign claims against Chinese are numerous, special courts have been created to try these cases. Since they involve the nationals of two governments, they are often termed mixed courts. A consular representative, usually des¬ ignated an assessor, almost invariably attends trials in the mixed courts. In Shanghai there exists two highly specialized mixed courts known as the International Mixed Court of Shanghai and the French Mixed Court of Shanghai. The International Mixed Court hears cases arising in the International Settlement in which Chinese and subjects of those powers which do not enjoy extraterritoriality are defendants. The claims of American citizens against Chinese in and about Shanghai are all heard in the International Mixed Court. To hear cases involving only Chinese and nationals of nonextra¬ territorial powers, the consular body of Shanghai elects from among the national assessors a number of assessors to sit with the Chinese magistrates. These assessors are known as consular body assessors, and their powers are coequal with those of the magistrate. When an American citizen or firm desires to file a civil claim or criminal complaint against a Chinese under the jurisdiction of the International Mixed Court, he must first submit his claim or com¬ plaint to the American consulate general in triplicate, two copies of which must be in the Chinese language. Petition or complaint is then forwarded by the consulate general to the court, after which it 368 COMMERCIAL HANDBOOK OP CHINA comes up for trial before a Chinese magistrate and the American assessor, who hand down a joint judgment. CLAIMS AGAINST FOREIGNERS Claims against foreigners in China fall into two classes: (i) Against foreigners who enjoy extraterritorial status, and (2) against foreigners who do not enjoy extraterritorial status. The principal powers whose citizens enjoy extraterritorial rights by treaty are United States, Great Britain, France, Italy, Belgium, Spain, Nether¬ lands, Sweden, Norway, Portugal, Peru, Japan, Denmark, Brazil, and Switzerland. In the event of litigation with the nationals of these powers the case will come up in the court of the defendant, and the laws of the defendant’s country will govern. This is a point that can not be overemphasized. An American entering into a contract with a citizen of one of these powers may view the transaction from the standpoint of American law, only to find when he undertakes to sue the other party to the contract that a law and judicial procedure totally different must apply. In business transactions of any mag¬ nitude entered into by Americans with the nationals of extrater¬ ritorial powers, it is highly advisable, therefore, to consult an at¬ torney as to the laws involved. UNITED STATES COURT FOR CHINA The United States maintains a special court in Shanghai known as the United States Court for China, which also holds sessions in Hankow, Tientsin, and Canton each year; and it may, if deemed necessary or expedient by the judge of the court, hold session in any of the consular districts. In addition there is a consular court for each American consular district in China—18 in number—with the consular officer in charge as judge. The jurisdiction of the American consular courts is limited to criminal cases in which the penalty does not exceed 60 days’ imprisonment or $100 fine. In civil cases the amount involved must not exceed $500. Cases involving larger pen¬ alties or amounts, and appeals from the decisions of the consular courts, must go before the United States Court for China. Appeals from the decision of the latter may be made to the United States Circuit Court of Appeals of the Ninth Judicial District of San Francisco; and final appeal may be had to the Supreme Court of the United States. Trial by jury is not a part of the present Ameri¬ can judicial system in China. OTHER EXTRATERRITORIAL COURTS Great Britain maintains a special court at Shanghai known as His Majesty’s Supreme Court for China and a court in each British consular district—25 in number—known as a provincial court, with powers not quite so limited as those of the American consular courts. Appeals from the provincial court decisions may be made to the supreme court in Shanghai, and thence to the Privy Council at London. The other powers enjoying extraterritorial rights in China also maintain a consular-court system—that is to say, each consul is, or may be, a judicial officer authorized to try his nationals. JUDICIAL PROCEDURE IN CHINA 369 When an American citizen or firm undertakes to sue a national of an extraterritorial power, he must prepare his petition in ac¬ cordance with the procedure of the court of the defendant’s nation¬ ality and file it, together wih the required fees, with that court. Such petitions are filed strictly with the court concerned, and not through the American consulate. They must generally be in the language of the court. INFRINGEMENT OF TRADE-MARKS, PATENTS, AND COPYRIGHTS With regard to claims growing out of the infringement in China of American-owned trade-marks, patents, and copyrights by na¬ tionals of extraterritorial powers, there exists a peculiar situation. Extraterritorial nationals, being subject to the laws of their own countries, can not be prosecuted for the infringement in China of trade-marks owned by another extraterritorial national unless there is some agreement existing between the powers relative thereto. The United States has entered into such agreements with Great Britian, France, Japan, Italy, the Netherlands, Belgium, Sweden, Denmark, Germany, and Russia. These agreements provide, as a requisite for the protection of trade-marks, patents, and copyrights belonging to the nationals of one power by the courts in China of another power, that the marks, patents, and. copyrights be registered with the proper departments of the respective governments con¬ cerned, and registration in China in accordance with the laws and regulations of China confers no protection in this respect. If, for instance, an American citizen desires to prosecute a British subject for the infringement of his trade-mark, the mark must first have been duly registered at the British Trade-Mark Bureau in London before the British courts in China can render any protec¬ tion, even though the mark might be registered in China under the provisional system of registration now in existence. It is highly important, therefore, that the American owners of trade-marks, patents, and copyrights register them in the countries above named if they expect protection in China in respect to infringements by the nationals of these powers. With regard to the other extraterritorial powers, namely, Norway, Peru, Spain, Portugal, Brazil, and Switzerland, there exists no agreements between them and the United States for the mutual protection in China of the trade-marks, patents, and copyrights of their respective nationals. With respect to the infringement of trade-marks, patents, and copyrights of treaty-power nationals by nationals of powers who do not enjoy the extraterritorial privilege, an interesting question has arisen in connection with the new Chinese trade-mark law which was promulgated in May, 1923. This law has not been recognized by the extraterritorial powers as applicable to their nationals, but it is operative in so far as Chinese citizens and the nationals of non- extraterritorial powers are concerned. The nationals of the extra¬ territorial powers continue as formerly to file their trade-marks with the Maritime Customs, which gives protection as against Chinese citizens, but not as against the nationals of nonextraterritorial powers. U)0020°—26-25 TRADE ORGANIZATIONS CHINESE GUILDS AND CHAMBERS OF COMMERCE By Commercial Attache Julean Arnold A few years ago a Chinese lad was run over and killed in the streets of Peking by a motor car owned by a Chinese. Ordinarily the court would have awarded the deceased lad’s family a few hundred dollars 1 damages and the matter would have been closed. In this case, however, the family happened to be connected with the provincial guild representing citizens of the Province of the family’s ancestors, and through the influence of the guild such pressure was brought to bear upon the owner of the car that $10,000 damages were paid over to the family. GUILDS The incident is indicative of the power of the guilds in China. In every city there are guild organizations representing the citizens of other sections of the country, but representing more particularly specific trades and crafts. Some of the guilds are of such strength and wealth that they maintain guildhalls which vie in magnificence with the best of China’s temples. Other guilds in more humble circumstances meet in ordinary temples, in shops, or in private establishments. Though China is now emerging from a civilization analogous in many respects to that of the Middle Ages in Europe, the guild will continue as an institution in China for many decades. The guilds developed through the course of centuries in which the laissez faire policy of government in China left it to the merchants, craftsmen, and people far removed from the power of their clan or family ties to devise ways and means of protecting themselves. The govern¬ ment existed as a thing apart from the people. They were left to manage their own affairs, so long as they contributed the taxes exacted of them. But when the government exactions became heavier than the tradesmen felt they could bear, it was the guild organizations which came to their rescue. With no definite body of law, no reliable machinery for the execution of such law as existed, and little or no confidence in the administration of government, the guild organizations came to oc¬ cupy an essential position in the body politic of the country. Under the monarchy no official was allowed to hold office in his native Province; hence, higher officials and the magistrates who presided over the courts were never in intimate touch with local conditions. Even though they wished to adjudicate disputes in a spirit of equity, their ignorance of local practices frequently made it difficult for them to dispense justice in cases that would ordinarily arise between 370 TRADE ORGANIZATIONS 371 members of a guild. Guild committees, therefore, especially desig¬ nated for the purpose, handled most of these cases, and though the parties to the disputes were always privileged to appeal the com¬ mittees’ decisions, it is worthy of note that but few appeals are recorded. The guild, in fact, was inclined to assist its members in appeal cases, but of the appeals noted it is found that the courts more often than otherwise confirmed the findings of the guild com¬ mittees, whose evidence was admitted by the courts in hearing the cases. It would thus seem apparent that in the great majority of cases the judicial functions of the guild have been satisfactorily dis¬ charged. CLASSES OF GUILDS Chinese guilds may be divided into two classes: (1) Trade and craft guilds, and (2) the provincial guilds. Trade and craft guilds .—All important trade and handicrafts have guilds throughout the cities of China where their interests are of sufficient importance to encourage organizations. The lot of the tradesman or of the craftsman who remains outside his guild is an unhappy one. In a society such as the Chinese, where competition is so severe and where means of individual self-protection are so inadequate, few indeed are there who do not find it to their advan¬ tage to seek membership and subscribe to the rules of the guild. There is, generally speaking, no distinction between the trade and craft guilds throughout China. That is, craftsmen or workers often belong to the same guilds as their employers. The purpose of the guild is to protect the monopoly of interest, both for the workers and the proprietors, which the members have in their special line of industry. With handicraft industry, and with individual rather than corporate business, this is possible, but so soon as modern manufacturing with division of labor and corpo¬ rate capital become general, the guild in this form can not longer endure. Already in Canton, even in cases where domestic handi¬ craft industry still prevails, workers’ guilds have been organized as distinct from merchants’ guilds. Also, in North China the rail¬ way workers in the Government railway have their workers’ guilds. For some years, and possibly decades, however, the old type guild will undoubtedly continue to be a force of much consequence in China’s economic life. Sidney D. Gamble’s excellent book, “ Peking, a Social Survey,” describes the guild apprentice system as follows: The boy who plans to enter manufacturing or selling ordinarily starts his training when he is 14 or 15 years of age. At that time he is bound to a master by a contract, drawn according to the rules of the guild. This con¬ tract is usually for a three-year term, though it may be for only a one-year term, as in the Confectionery and Incense and Cosmetic Gilds; or it may be for even 11 years, as it is for the most expert workers in the Jade Gild. The apprentice is required to serve out his full time, or his master will expect to be reimbursed for the money that he has spent for his board and lodging, and in some gilds will collect damages for the breaking of the contract. The apprentices of the Cooks’ Gild who do not complete their term must pay for their board and also pay a fine of a feast of 10 tables and 300 catties of rice. Such payments are always made, as two men must act as guarantors for the apprentice when this contract is signed. During the time of his apprenticeship, the boy is entirely under the control of his master. He lives in his store, eats his rice, is subject to his disci- 372 COMMERCIAL HANDBOOK OF CHINA pline, does any work that is given him, and has a elianoe to go home only on vacation days or when there is a wedding or funeral in the family. All of the reports telling of the duties of the apprentice state that he is to sweep out the store, make his master’s bed, do the cooking and other menial tasks, and then work at his trade. In return for the services of the apprentice, the master is required by all the gilds to give him his food and lodging, and teach him the trade. Some gilds also require the master to furnish clothes for the apprentice, and still others that, besides clothes, he supply medicine or doctor’s services when needed. In Peking there seems to be no limit to the number of apprentices that may enter any gild. An employer is apparently allowed to have all the apprentices for whom he can find work. It has been impossible to find in Peking any trace of regulations, known to exist in other cities, that limit apprenticeship to the sons or relatives of the men already engaged in the trade. Although there is no limit to the number of apprentices, and the proportion of apprentices and graduate workers varies from gild to gild, most of the gilds have one apprentice to every three or four workers. The extremes are found in the Fur Gild, where the apprentices outnumber the workers 3 to 1, and in the Cotton Dyeing Gild where there are 9 workers to every apprentice. The detailed study of all the stores in a district of Peking showed that there the proportion was 1 apprentice to every 5.8 workers. Many of the rules for apprentices and some of the philosophy of the Chinese concerning the man who is beginning his business life have been written down and are taught apprentices by constant drill. When he has finished his term of service, an apprentice is graduated and received as a regular member of the gild. Some gilds require a man to work in his master’s shop for a year after his graduation, but ordinarily he is free to work wherever he can find employment. If the apprentice has any real ability, his former master is usually willing to employ him, and so most of the men stay right on in the shop where they have received their training. It is this close relationship between the employers and the employees that makes it possible for both to belong to the same organization without a clash of in¬ terests, and this explains how it is that the employers are willing to raise wages even when the workers do not force the increase. At the time of graduation the apprentices usually give some public recog¬ nition and thanks to the master who has trained them. In some cases they simply bow to him before the shrine of the patron saint of the gild, but in others the rules of the gild require that they give a feast to their master and some of the gild members. The rules of the Cooks’ Gild require an apprentice to give his master a pair of shoes, a hat, a belt, and a long coat. Whatever we may think of the apprenticeship system as compared with our western methods of training, it has undoubtedly fitted well with the Chinese life. In the past there has been but little chance for a boy to get an education unless he studied the classics—a long and laborious process. It led to official position if a man kept at it long enough and had the necessary ability, but it w r as too expensive a process for most. The apprenticeship train¬ ing gave the boy the education he needed for his trade, made him thoroughly acquainted with hard menial work, and then taught him his trade by constant daily contact. It also made it! possible for him to get his training without expense to his family, a very considerable item when so many families have just enough to live on. For the master it supplied cheap labor for the menial work around the store and house, while for the gild it secured the strength and solidarity of the organization. With a three years’ apprenticeship required, there could not be a rapid influx of men in times of prosperity, and the men could not leave in times of depression. Gild traditions and customs were easily maintained, as a boy in constant contact with them for three years would be ready to accept them without question, particularly when he had learned them from his master and teacher. In China the relation between the teacher and pupil is such that what the teacher says is accepted without question, and a pupil is always unwilling to do anything that will go against his teacher. The development of the national educational system and the increase of new manufacturing methods will end the apprenticeship system in time, par¬ ticularly as the schools develop methods whereby the boys can get more and better training in industrial lines in a shorter time; but during the transition period many of those with the school training are going to find it hard to, make use of their skill because of the conservatism of the gilds. TRADE ORGANIZATIONS 373 There is little that is autocratic about the internal administration of the guild. The elections of the officers are generally by popular vote and are frequent, the nominees being men of good standing and generally popular with the members. The ordinary craftsmen or workers in a guild, while eligible to office, seldom hold office, mainly because of lack of influence and education. An instance is cited of one guild whose rules prescribed that 12 of the 28 directors must be workers, the others being either storekeepers or managers. Gamble refers to geographical representation on the board of directors of the Peking Fur Guild in the following: Its members are almost all natives of Chihli, Shansi, and Shantung Prov¬ inces, and it is a rule of the gild that natives of each of these three Provinces constitute not less than one-quarter and not more than one-tliird of the board. The 48 members of the board are divided into 12 committees, each of which is responsible for the affairs of the gild for one month each year. These com¬ mittees must include a native of each of the three Provinces, so that every man may be able to get a sympathetic hearing by bringing his case before one of his fellow provincials. In and about Canton there are upward of a hundred trade guilds, some of which have been in existence for more than 500 years. These are the rice merchants’, pawn shops’, coffin merchants’, drug merchants’, poultry merchants’, vegetable-oil merchants’, silk- piece-goods merchants’, timber merchants’, and wine merchants’ guilds. There are also among the merchant guilds of Canton abacus merchants, secondhand-clothing merchants, actors’ clothes tailors, Chinese clothes tailors, pig butchers, ginseng and deerhorn merchants, silk-shawl merchants, oil merchants, restaurant and tea¬ house proprietors, junk owners, joss-stick merchants, pawnshop brokers, pills and powders merchants, and vermicelli merchants. These guilds make regulations governing prices of their products, working hours, rules for apprenticeship, and matters generally con¬ cerning their interests. When the local authorities become unduly autocratic, to the detri¬ ment of the guilds, the latter come forward and protest, often with salutary effects. In cases of excessive or unjust tax impositions against members of the guild, influence is brought to bear by the guild to overcome these impositions. The principle of arbitration is probably more thoroughly estab¬ lished in China than elsewhere. Reputable Chinese refrain from taking cases into court except as a last resort. However, in Shang¬ hai there is a noted weakening of the legal functions of the guilds due to the position achieved by the Shanghai International Mixed Court in the adjudication of disputes, even among the Chinese mer¬ cantile community. In Shanghai also the street associations, which are organizations of Chinese shopkeepers on certain streets, have cut in heavily on the functions of some of the guilds. These asso¬ ciations, of recent development and less conservative in policy, con¬ cern themselves in a larger way than do the guilds in civic and politi¬ cal matters. At present they are confined to Shanghai. The Chinese guilds generally are concerned with defensive and protective functions. They have shown but little disposition to in¬ terest themselves in measures for extending or improving civic conditions. They are distinctly individualistic institutions, almost wholly concerned with the immediate welfare of their members. 374 COMMERCIAL HANDBOOK OF CHINA The guild regulations provide punishment for many offenses. If a member is charged with having sold goods below a rate fixed b;y the guild and confesses to his guilt, he is punished but not expelled. Competition in China is severe; hence it is difficult for guilds to prevent members from underselling so-called fixed market rates. A common form of punishment is to inscribe the guilty person’s name and address on a piece of red paper, along with the nature of the offense and a statement of the fine imposed by the guild. This fine generally takes the nature of a feast to the members of the guild at an appointed time, accompanied by a theatrical entertainment, after which the recalcitrant member is admitted back into the fold. For a second offense the guilty member may be expelled. Similarly, wages are fixed and employers are fined for paying their labor less than the established rate. Piecework wages are, however, common where conditions will permit their application. Hours of work are long and trying. The lot of the apprentice is particularly hard. Most of the guilds maintain fairly elaborate sets of rules, with provision of punishment for infraction, which, however, vary with different guilds and in different places. In the benevolent sense the guild looks after the welfare of its members. Bonuses are given to store managers and oftentimes to workers at the end of the year. At a member’s death the guild do¬ nates a coffin, if the family is unable to defray this expense. It also arranges for the sending of the body to the ancestral burying ground if the deceased was away from home or the family poor. Each guild has its patron saint, and days are set aside for special worship before the special deity or hero of the guild. It appears, however, that the trade and craft guilds of any one city are inde¬ pendent of those in other cities, although the rules, regulations, and administrative practices for the same trades and crafts seem to fol¬ low similar lines. Provincial guilds .—The provincial guilds are more general in character than the trade or craft guilds. These have to do mainly with the interests of individuals of one Province who are domiciled in another. The active members are of the middle or wealthier classes, but the guild is bound to render assistance to needy fellow provincials if they are deserving. One of the strongest provincial guilds in Peking is the Canton guild, which in a sense is the club¬ house of the Cantonese residents. Under the monarchy and before the abolition of the civil-service system natives of Canton who came to Peking to take civil-service examinations were privileged to oc¬ cupy quarters in the Canton guildhouse. If Cantonese in Peking are involved in litigation, the guild offers its services in settling the difficulty peacefully. It looks after stranded or destitute Cantonese who may be handed over to it by local courts, and arranges, if possi¬ ble, for their return to their homes. It maintains its own cemetery, where deceased members are temporarily interred until relatives or friends may arrange for the transportation of the bodies to the native district. Periodical sacrifices are offered to the dead on festival days, and religious rites are peformed for fellow pro¬ vincials. Ceremonies are held at stated times honoring the guild’s patron saint. The Cantonese guild pays obeisance to Kwan Ti, the god of war, mainly because of his reputed high business qualities. TRADE ORGANIZATIONS 375 This guild also assists worthy students domiciled at the capital city and helps in the education of children of Cantonese residents. The Canton guild in Shanghai was, until 1918, a far more influ¬ ential and a wealthier institution than its counterpart in other cities in China. It maintains in Shanghai schools for children of Can¬ tonese parents. It retains a paid secretary and staff which function under the board of directors. In 1918 disagreement among its mem¬ bers caused the wealthier and more influential of the Cantonese to withdraw from the guild and form the Cantonese Merchants’ Asso¬ ciation of Shanghai. The guild still functions, but is far less influ¬ ential since the organization of the new association. The Cantonese Merchants’ Association at Shanghai has a membership of 120 firms and 400 individuals. It has constructed and equipped, at a cost of $300,000 silver, a modern hospital building on a 3-acre plot of ground, with both modern and old style Chinese physicians in attendance. The hospital has 300 beds and cares for Cantonese patients at nominal charges. This association incorporates in its activities many of the features of a modern club. Among Chinese resident in the United States the counterpart of the provincial guild is seen in the so-called “ six companies,” or “ tongs,” which represent groups of Chinese from different sections of Kwangtung Province, all the permanent Chinese residents in the United States being from the neighborhood of Canton. The spirit which tends to the perpetuation of this provincialism on the part of the Chinese generally has commendable as well as disadvantageous features. It serves to protect and assist those who otherwise would receive little protection or assistance from any other source. It has, however, the objection that it perpetuates a clan spirit which is the natural outgrowth of the family system in China, which decrees that every man is his brother’s keeper, but imposes little responsibility upon him in his relations to the larger unit, the State. While there is evidence of the scrapping of the guild of the old China in its transition to a new order because of its inadaptability to a modern economic system, yet, in the process of evolution, we shall probably find that the tracU and craft guilds will separate, the one incorporating the features of the merchants’ associations and the other probably that of the modern trade-unions. It is only to be expected that the guilds will play a prominent and powerful part in the molding of the new China. Modern transportation and improved communication facilities will lead to a greater intermingling of the peoples of the different sec¬ tions of the country, with the eventual eradication of provincialities and dialectic differences. These, with a uniform system of schools, a uniform currency, a uniformity of institutions generally, and more effective governmental agencies, together with the development of a code of law and the machinery essential to its equitable administra¬ tion, will gradually remove the necessities which called into existence the Hui-kuan, or provincial clubhouse, in its present form. However, it is well to bear in mind that, through the agencies of their guilds, the Chinese have acquired capacity for organization and for the settlement of disputes by arbitration, two valuable contributions to their social system, 376 COMMERCIAL HANDBOOK OF CHINA In whatever capacity a foreigner may have to deal with the Chinese, particularly as regards the relations of the foreign business man and capitalist to the Chinese trader and laborer, he will find that it will be necessary to continue to reckon with the influence and power of the varied Chinese guilds. CHINESE CHAMBERS OF COMMERCE The Chinese guilds lacked a coordinate agency. They functioned independently of each other, although a neutral guild was often called upon to settle a dispute between members of different guilds. Thus it was not difficult for the chamber-of-commerce idea to take root in China, for it could fill a gap as a clearing house for the guilds. This was not only true with regard to its position as arbi¬ trator of disputes between members of different guilds, but it also served as a medium through which the guilds could secure unity of action. The first Chinese chamber to be organized was in Canton, prob¬ ably owing to the larger contact of Cantonese with westerners and their earlier appreciation of the advantages which such a trade or¬ ganization might have to offer. The Canton chamber came into being about 40 years ago. It was not, however, until after 1900 that Chinese chambers of commerce became more general. The Man- chu dynasty discouraged in every possible way the development of new organizations or associations among the people for fear of their political influence. It was after the founding of the Republic that chambers of commerce spread rapidly over the country, although during the five years leading up to the revolution they had already achieved strong positions in the leading commercial centers. At the end of the year 1914 there were 1,243 ordinary chambers of commerce and 55 general chambers of commerce among the Chinese mercantile communities. Szeclnvan Province, in West China, where they number 130, boasts the largest number of ordinary chambers. Shantung ranks next with 93. The provisions for the organization of chambers of commerce in China were promulgated September 12, 1914, and revised on De¬ cember 14, 1915. These serve as the organic law under which cham¬ bers of commerce function. Considerable latitude is allowed the mercantile communities in the handling of the details of organization maintenance. Some months ago the Shanghai General Chamber of Commerce became involved in a dispute over the election of a new chairman. The Ministry of Agriculture and Commerce sent its representative to Shanghai and the dispute was settled in accord with the ministry’s ruling. The Shanghai General Chamber of Commerce at the end of 1924 had 518 members, of whom 123 were representatives of guilds. Among the 395 individual members are 26 compradors of foreign firms. There are also 11T “special individual members,” who are members in good standing for upward of five years in the Chinese company of the Shanghai Volunteer Corps and who were elected to a sort of honorary membership as a testimonial of the Chinese mer¬ cantile community’s appreciation of their services. As for the actual governing force, however, the Shanghai chamber is in the main a federation of trade guilds. There are about 150 guilds represented TRADE ORGANIZATIONS 377 in the chamber’s membership. Some of the larger guilds, such as the Native Bankers’ Guild, which represents 120 member banks, pay annual dues as high as 1,000 taels. A designated number of repre¬ sentatives in the chamber is allowed each guild in proportion to its wealth and influence. In some chambers—Canton, for instance—only representatives of guilds are accepted into membership, and in all Chinese chambers the local merchant or trade guilds either com¬ pletely control the affairs of the chamber or exert a dominating influence. The Chinese chamber of commerce is an intermediary between the Government and the merchant classes. Its assistance is often solic¬ ited by the Government authorities in securing the enforcement of a new law or regulation affecting mercantile interests. A Chinese court will often refer cases to a chamber for its opinion or ask the chamber to arbitrate in disputes between individuals. Information regarding trade practices and customs will be sought by officials in adjusting difficulties with the people, and the chamber’s opinion in these matters will carry much weight with both the officials and the people generally. For this purpose the Shanghai chamber maintains a “ commercial certification department,” which renders service as witness in arbitration courts and gives information to official courts concerning (1) commercial agreements and contracts; (2) actual capital of business firms; (3) firms’ trade names; (4) trade-marks. Firms applying for such certification service must pay a minimum fee of $20 silver per case, graduated upward to a maximum fee of $100 silver. One of the very useful functions of the Chinese chamber of com¬ merce is its judicial capacity. Although efforts are being made under the Republic to build up a code of civil law and develop courts competent to administer it, yet for some years established customs and usages will continue to receive recognition. In China the guild and the chamber of commerce serve as the interpreters of the com¬ mon law of business practices. Before these tribunals the majority of disputes in the Chinese mercantile community are settled. In Shanghai the International Mixed Court has come to occupy such a prominent position in the handling of disputes between Chinese, as well as between foreigners and Chinese, that the judicial functions of both the guild and the Chinese chamber of commerce have been de¬ creasing in importance. This is a situation, however, which is some¬ what exceptional for China as a whole. Even in Shanghai the cham¬ ber does maintain an arbitration court which transacts a very con¬ siderable amount of business. Its court is made up of a president, 26 arbitrators and investigators, 4 clerks, and 1 legal adviser. A fee of not more than 2 per cent of the amount involved is charged on the losing party, but this is equally shared by the disputing parties where both sides show good cause for bringing their case to arbitra¬ tion. In case of refusal by the disputing parties to abide by its awards, the tribunal may petition the court to enforce the award. In order to develop uniformity in methods of procedure in the chamber of commerce arbitration courts and to prevent clashes with the regularly constituted legal authorities, the Ministry of Justice, in cooperation with the Ministry of Agriculture and Com¬ merce, drafted a set of regulations for the Arbitration Court of 378 COMMERCIAL HANDBOOK OF CHINA Commerce as promulgated January 28, 1913, and revised detailed regulations relating to the administration of the Arbitration Court of Commerce were promulgated June 10, 1917. The failure of the Chinese to have developed, up to this time, a strong central Government militates against strict enforcement of these regulations. Their degree of application varies with various communities. It is anticipated, however, that the regulations will become increasingly effective, as there appears to be no opposition to them and they are generally recognized to be helpful for the purpose for which they were devised. In consequence of the visit to China in 1910 of the representatives of the Affiliated Chambers of Commerce of the Pacific Coast, the Chinese chambers a few years later organized the Associated Cham¬ bers of Commerce of China. At the annual conferences of this association matters of nation-wide importance to the business men of the country are considered, and representations are made upon behalf of the commercial interests of the country generally. There is, however, a noticeable tendency upon the part of this organization to interest itself in politics. The Chinese bankers’ associations are probably accomplishing more in a constructive way for the business interests of the country through their annual conferences because of their freedom from petty political influence. Americans desirous of communicating with the Shanghai, Canton, Hongkong, Tientsin, Hankow, or Peking Chinese chambers of commerce may do so directly and in English. Communications to other Chinese chambers may best be addressed through the Ameri¬ can consuls who function for the districts in which these chambers are located. It is necessary in all cases to use the designation Chinese Chamber of Commerce, as there are also chambers of other nationalities in the important commercial centers of China. FOREIGN CHAMBERS OF COMMERCE By J. B. Powell, Honorary Secretary American Chamber of Commerce, Shanghai There is said to be filed away somewhere in the records of the State Department at Washington a letter which was written by an association of American merchants in Canton, between 1806 and 1815, which contained a petition to the President of the United States asking for a more efficient American consular establishment in China. This letter is of historical interest because it indicates the existence of an organization corresponding to a chamber of commerce, com¬ posed of American merchants on the coast of Asia, at a date preced¬ ing by many years the establishment of some of the oldest cham¬ bers of commerce in the United States, and also because it shows that associations of merchants, even in the early days of American commerce in the Orient, provided an important point of contact whereby the American Government and people were kept in touch with problems affecting the welfare of their commercial and other interests in that part of the world. According to the Encyclopedia Sinica, the first definite organiza¬ tion of a foreign chamber of commerce in China was that estab¬ lished by British merchants in Canton on August 25, 1834, the TRADE ORGANIZATIONS 379 purpose being to “insure unity of action at the time when Lord Napier was trying to force open the door of China.” According to the same source of information, a general chamber including all foreign merchants was formed in Canton in November, 1836, but was dissolved in 1839 owing to trouble arising between the foreign merchants and the Chinese over the question of opium importation. A statement published at the time of dissolution is significant: “The chamber dissolves until the restoration of our trade, the lib¬ erty of egress from Canton * * * enables the chamber to serve the community in a legitimate manner.” A chamber of commerce was formed in Hongkong on May 29, 1861, composed of some 60 firms, and some insight into its purpose and activity is shown in the statement that “ from the beginning it has frequently communicated directly with the (British) minister in Peking, and it rejected the suggestion of a consul some years ago that all communications should be with the colonial government. In 1884 it received the privilege of electing one member to the Hongkong Legislative Council.” Although there doubtless had existed associations of merchants in Shanghai for purposes of mutual protection from the time the port was opened to foreign trade on November 17, 1843, there is no record of a chamber of commerce until 1847, when the Shanghai General Chamber of Commerce w T as formed. The General Chamber of Commerce, which is still in existence, was international as to membership, and differed from the general idea of a chamber of commerce in the United States in that it was not a “ trade promo¬ tion ” body. The primary interest of the general chamber from its beginning, and even to-day, is the standardization of trade practices, the settlement of misunderstandings, and the correction of trade abuses which may develop between foreign merchants as a body and the Chinese. For example, in the report for the year 1923, we find published a “ scale of fees for arbitrators and umpires,” a “ scale of commissions and brokerages,” and a mass of correspondence between the chamber and the Chinese chambers of commerce on matters affecting trade. We also find a general report on political and financial conditions of the Chinese Republic. Among the subjects covered are the problems of cargo pilferage at Chinese ports, con¬ gestion on Soochow Creek (an important trade artery connecting Shanghai with the hinterland), cotton and silk testing stations, negotiations with the licensed pilots’ association over the subject of fees, standard forms of contract for dealers in raw cotton, a protest against bandit outrages upon foreigners, and so on through the scale of relations between the foreign merchants and the Chinese. Owing to the fact that the general chamber for a long period of years was the chief organization of consequence among foreign merchants at Shanghai, it came to exercise broad powers and was looked upon by the foreign consular authorities and the Chinese as having almost semiofficial status. In brief, if the general chamber recommended certain action in reference to trade matters it usually was adopted as a matter of course, the foreign consuls recommending the action to their own nationals as well as to the Chinese Govern¬ ment. This situation continued up to the outbreak of the World War. 380 COMMERCIAL HANDBOOK OF CHINA Although the general chamber at Shanghai was the principal organization dealing with trade matters, it would be incorrect to infer that it was the only organization. On December 16, 1898, there was organized at Shanghai the American Association of China, the membership being open to “ citizens of the United States residing in China, Japan, Korea, the Philippine Islands, and elsewhere in Asia,” and the purpose of which was to “ foster and safeguard the commercial and other interests of the citizens of the United States.” British subjects in the Far East had a similar organization in the British China Association, and there doubtless were others. But in view of the fact that membership in these bodies was not strictly confined to persons directly interested in commercial matters, a detailed consideration is not pertinent. At the beginning of the World War, 1914, the national, as distinct from the international, chamber of commerce came into being in the commercial history of Shanghai. The Americans and British or¬ ganized their chambers of commerce in 1915, and since then other foreign nationals have established chambers, until we now find listed also in the Shanghai directory Belgians, French, Germans, Italians, Japanese, Dutch, Norwegians, and Russians, organized in chambers of commerce for the purpose of protecting and pro¬ moting their national commercial interests in China. The relation¬ ship between these national chambers and the general or international chamber has not yet been definitely defined, but the American Chamber of Commerce has adopted the policy that American repre¬ sentation on the committee of the general chamber should be sub¬ ject to the recommendation of the American chamber. If this pro¬ cedure is ultimately followed by the other national chambers, the general chamber in time will come to occupy the position of a central clearing house or coordinating body, where the composite viewpoint of the foreign commercial interests may be expressed either to the Chinese Government or to the foreign governmental representatives in China. Although entirely unofficial, the foreign chambers of commerce in China exercise an important influence upon the relations of the various foreign nations in respect to policies adopted toward China. They accomplish this largely through the adoption and circulation at home of resolutions pertaining to problems in their field, which have the effect of stimulating public opinion and often of encourag¬ ing definite diplomatic action, and, upon occasion, even legislation. In recent years the Americans, British, and some other nationals have formed associations of their chambers of commerce located in the various Chinese ports, such as Canton, Tientsin, Peking, Hankow, Harbin, Hongkong, and elsewhere. These bodies meet annually, discuss problems affecting the commerce of their nationals in the Chinese Republic, and adopt resolutions which are circulated among their nationals in China and to chambers of commerce and Government officials in the respective homelands. At the present time the American chambers of commerce in China, in association with the American Chamber of Commerce in the Philippine Islands and the American Merchants’ Association of Tokyo, are considering a plan for the formation of an association of all American chambers of commerce in the Far East. TRADE ORGANIZATIONS 381 NATIONAL ORGANIZATIONS Since Shanghai is the chief commercial port of China, it is of in¬ terest to summarize briefly the following information regarding the various national chambers of commerce: American .—The American Chamber of Commehce was formed in 1915 as a direct outgrowth of the problems affecting the development and maintenance of American trade and commerce on the Pacific Ocean at the opening of the World War. Among its early activities were the advocacy of (1) an American merchant marine on the Pacific; (2) development of American business in China; (3) the passage of an American Federal incorporation law providing uni¬ form corporate regulations for American companies trading in China, in order to place them on an equal footing with competing foreign companies. The chamber also promoted the formation of American chambers of commerce in other Chinese ports, an im¬ provement and increase in the trade promotion activities of the American commercial attache in China, and better facilities for the exchange of news between America and China. It urged the placing of the United States consular and diplomatic services in China on a better footing, supported a proposal for the American Government to purchase property and erect suitable buildings for the housing of its consular officers in China, and it has continuously actively fav¬ ored the development of an intelligent and sustained policy on the part of the American Government in respect to China and the Far East. The Associated American Chambers of Commerce in China was formed on October 23, 1922, when delegates of the American cham¬ bers of commerce in Shanghai, Tientsin, Peking, Hankow, and Harbin met in Shanghai. Since that time three annual conferences have been held, which have had the effect of coordinating American commercial and industrial activities in China. British .—The British Chamber of Commerce was a war product, though for many years prior to the war the desirability of such an institution had been discussed among British firms. It had long been felt that, while in certain respects the interests of the various nationals doing business in China were to a great extent identical, interests distinctively British ought to be looked after by an associa¬ tion distinctively British. This feeling, however, was not strong enough to break through the very cosmopolitan atmosphere of pre¬ war Shanghai. It was not, in fact, until the eleventh month of the war that it was given expression. In May, 1915, at a meeting of British piece-goods firms, called pri¬ marily to discuss ways and means of preventing trading with the enemy, it was resolved to invite British firms in Shanghai to meet with the object of inaugurating a British chamber of commerce, and at this second meeting the British Chamber of Commerce of Shang¬ hai came into being. In moving the resolution which created it the chairman said: For years past British firms in China have been compelled to fight their own battles, and it is to their credit that handsome results have been achieved in the face of strong competition from alien combines. Now is our opportunity, gentlemen, to form a combination of our own wnich will add to our strength, a combination which will work strenuously for the expansion of British trade and which will uphold British prestige. 382 COMMERCIAL HANDBOOK OF CHINA Belgian .—The Belgian Chamber of Commerce in China was started in January, 1922. Every commercial firm and every finan¬ cial or industrial concern of Belgian nationality in China took part in the organization, which was definitely concluded in March, 1922. The central committee was established in Shanghai, with branches in Peking, Tientsin, and Hankow. Each of the local committees, being part of the Belgian Chamber of Commerce in China, adheres to the general rules and statutes, but has authority to resolve questions of local interest. The Belgian Chamber of Commerce does not limit its activity to questions of general interest. Many decisions have been given by the committees or their delegate, acting as arbitrator, in regard to dif¬ ferences between exporters and importers. French .—The French Chamber of Commerce in China was estab¬ lished in Shanghai at a general meeting of 26 French firms on Janu¬ ary 13, 1916. It was originally intended to be a purely local cham¬ ber, but as early as March of the same year it was requested by French firms in Tientsin and Hankow to extend its organization throughout China. Its present organization is as follows: One central committee of nine members in Shanghai, the central .committee having full responsibility for all matters of management and direction of the chamber and the exclusive right to speak and write in the name of the chamber; six branch committees in Tientsin (one delegate for Peking, Harbin, Hankow, Hongkong, Canton, and Yunnanfu). Every branch of the chamber enjoys full administrative autonomy and acts as a local chamber for any question of local interest. Where questions of general interest are concerned, the branch committee refers it to the central committee in Shanghai. The French Chamber of Commerce has been approved and recog¬ nized by the French Government as an official corporation by minis¬ terial decree of May 13, 1918. It is associated with the leading eco¬ nomic associations of France and has the privilege of direct corre¬ spondence with the Board of Trade of Paris. The French commer¬ cial attache for China is a statutory member. Japanese .—The Japanese Chamber of Commerce of Shanghai was the outgrowth of the Japanese Business Men’s Association of Shang¬ hai, organized in November, 1911. In April, 1919, the name was changed to Japanese Chamber of Commerce. At the present time the organization has 103 individuals and 73 firms as members, of which number 20 constitute the general committee. The chamber publishes weekly and annual reports and, in addition, an extensive monthly and annual statistical report of Japanese commercial activi¬ ties in China. German .—The German Chamber of Commerce was founded in March, 1923, at a general meeting of the members of the German Association. The German Association existed in China long before the outbreak of the war. Any German firm registered with the German consulate general or with predominating German interests may, according to the stat¬ utes, become an ordinary member of the chamber. Individuals may, on certain conditions, become extraordinary members. The chamber consists at present of about 50 ordinary members and issues annual reports dealing with German trade in China. TRADE ORGANIZATIONS 383 Netherlands .—The Netherlands Chamber of Commerce of China was formed in 1922. It confines itself to questions affecting foreign trade between the Netherlands and the Far East, and among matters considered in recent years are the Chinese trade-mark law, China’s import duty, and extension of river police for the protection of for¬ eign shipping. The general purpose is to establish the point of view of Dutch merchants in Central China. The chamber maintains close relations with sister institutions in the Netherlands, and, in matters arising in the Far East affecting manufacturers at home, obtains the views of home interests before adopting resolutions or making specific suggestions. Norwegian .—The Norwegian Chamber of Commerce for China was founded at Shanghai on November 30, 1920. The chamber’s object is to further Norwegian commerce with China, to enable Nor¬ wegian exporters and importers to obtain advice and reliable infor¬ mation about business possibilities in China, and to act as arbitrators or to appoint arbitrators in cases of disputes and claims. Eligible to membership are all Norwegian firms in China and at home, and also individuals residing in China. The chamber is registered in Shanghai. Russian .—The Russian Chamber of Commerce, composed of Rus¬ sian business men, was organized in Shanghai on April 21, 1917. The main principle of the organization was to unite the Russian com¬ mercial firms in the Far East and to promote Russian trade in China. Since its formation the general work of the chamber of commerce has been handicapped because of political conditions in Russia. Italian .—The Italian Chamber of Commerce of China was organ¬ ized in 1903, but remained comparatively inactive until the }^ear 1917, when it was reorganized and its jurisdiction was extended over other sections of the Far East. It has now a branch in Tientsin, which has jurisdiction over North China. The total membership of the Italian chamber is 120, and the Italian consul general at Shanghai is ex officio honorary president. The chamber claims the credit of having secured the inauguration of the Italian navigation steamship service, the Lloyd Triestino, with direct communication between Italy and China. BIBLIOGRAPHY Gamble, Sidney D. Peking, a Social Survey. New York, George H. Doran Co., 1923. MacGowan, Rev. J. Chinese Guilds. Journal North China Branch Royal Asiatic Society. 1886. Morse, H. B. Guilds of China. New York, Longmans, Green & Co., 1909. THE COMPRADOR By Commercial Attache Julean Arnold In their early relations with China foreign traders were obliged to confine their transactions to Chinese hong merchants, who held monopoly rights conferred upon them by the Chinese Government officials. Up to the early decades of the nineteenth century British trade was for the most part in the hands of the East India Company, which held a royal charter. Morse, in The International Relations of the Chinese Empire, says: The hong merchant was responsible for every act of the foreign trader and his ships; and, to enable him to carry the burden, he alone could buy from the foreigner and sell to him ; he provided house accommodation, compradors, and servants, and every act of the foreigner was under his control and super¬ vision. By the Nanking treaty of 1842, “All this monopoly was swept away, and the foreign merchant was now free to buy and sell with whom he pleased, at prices to be settled by mutual agreement; engage without restraint his own compradors and servants, * * * .” CHANGES IN TRADE METHODS Up to the beginning of the twentieth century foreign trade with China was in the main concerned with staples of commerce, such as cotton piece goods and yarn, tea, and silk. Since 1900 conditions in China which concern foreign trade have changed very considerably. China has been brought into much closer communication, both in¬ tellectually and physically, with the occidental world. Modern in¬ dustrial developments in China have opened new channels for trade. Improved internal transportation, responding to better oversea ship¬ ping facilities, have opened the markets of the world to the products of China. Foreign traders have penetrated into the interior of the country with the opening of many new treaty ports. Many of these foreign traders have familiarized themselves, to some degree at least, with Chinese customs and the language of the Chinese people. On the other hand, during the past few decades many Chinese have gone abroad and have become familiar with western ideas and with the English language. Furthermore, the dissemination of western ideas and learning in China have produced substantial changes in the commodities of commerce and in trading methods. POSITION OF THE COMPRADOR In connection with these changes it is only natural that the posi¬ tion of the comprador, the intermediary between the foreign and Ihe Chinese business man, should have evolved into a position of less rela¬ tive importance than that which it formerly enjoyed. Formerly the comprador guaranteed the obligations with Chinese dealers which were entered into by the foreign firm whom he served. His salary was nominal compared with the aggregate of the commissions allowed 384 THE COMPRADOR 385 on the business which passed through his hands. He had to be a man of capital, to have a knowledge of business, and to be influential in Chinese mercantile circles. In the days when the teacup and the opium pipe were more potent factors in business than the telephone or the telegraph it was the comprador who at all hours of the day or night entertained Chinese merchants, dealers, and brokers and handled their business transactions involving the exchange of com¬ modities with foreign countries. In years gone by the word of the Chinese merchant was as good as gold. In a tribute to the character of the Chinese business man the manager of the Hongkong and Shanghai Banking Corporation stated some years ago that he had never known a Chinese defaulter. However, during the past decade or two adventurers from abroad are partially responsible for the introduction of questionable meth¬ ods involving trading on Chinese credit money advanced through compradors who were often left in the lurch. Furthermore, the increase in the numbers of foreign business men in China stimulated the demand for Chinese compradors, so that some concerns took on men, who, they later found, to their regret, pretended to be more than they actually were. To the majority of foreign business concerns in China the compra¬ dor is still an indispensable factor, and will probably so continue for some time, but in a decreasingly effective way. With no com¬ mercial credit rating agency, with a complicated currency, with dif¬ ficulties in realizing on native securities because of the treaty stipula¬ tions whereby foreign business activity is confined to certain treaty ports, and with differences between Chinese and foreign business customs, the importance of the comprador’s position in the foreign firm becomes apparent. It is a noteworthy fact, however, that during the past 10 years many well-established foreign business houses in China have come to depend upon their compradors much less than formerly. In many cases the compradors are no longer obliged to guarantee the full amount of the monetary transactions with Chinese dealers. It is not uncommon now, in contracts with compradors, to specify a 25 per cent limit of responsibility. The functions of the comprador in South China, particularly in Canton, have changed less during the past decade than in Shanghai and North China. In most cases in Canton a comprador still gives a full guaranty against loss, to the extent of his liability under his agreement, although there are in¬ stances, even in Canton, where the comprador’s guaranty has been cut down to 75 per cent of his contractual liability. In Canton the Chinese “ broker ” is becoming an important in¬ termediary between foreign firms and Chinese dealers. He is a free lance, and in export lines, for instance, visits the Chinese mer¬ chants daily, secures prices on merchandise, then shops around among the foreign concerns, seeking the best offer which he can secure. In import commodities he makes connections with a num¬ ber of export houses and goes out among the Chinese merchants to secure sales commitments. In Shanghai and North China the mar¬ ket shroff, who is definitely attached to a certain foreign firm and functions under the compradors, partially performs this service. 100020°—26-26 386 COMMERCIAL HANDBOOK OF CHINA The day has passed when the foreign trader can come to China, engage a comprador, intrust him with advances greater in amount than the actual amount of his security, and expect that business will move smoothly with a net profit to the foreign trader concerned and with no obligations on his part to safeguard himself against losses through an intimate knowledge of the situation. In other words, it is necessary for one to know one’s comprador and to inform one¬ self on the details of the transactions intrusted to him. The firms that proceed in this manner are having little or no difficulties with their compradors. They use the same degree of common sense in handling their business in China as they would in handling it in their own home communities. There is a distinct tendency on the part of many Chinese dealers to purchase directly from manufacturers abroad. This obligates the foreign business house in China to be on the alert in seeking Chinese customers, rather than to intrust the sales entirely to its Chinese staff. This fact influences considerably the functions of the comprador. It places him more in the position of credit man, Chinese adviser, and Chinese assistant than in that of intermediary between the foreign concern and the Chinese dealers. Owing to the clannish spirit of the Chinese, there is a tendency on the part of a comprador to cul¬ tivate a clientele among his friends, his fellow clansmen, or fellow provincials. Sometimes he depends too much upon this small cir¬ cle for his business contacts and thereby limits the activities of the firm which he represents. The comprador of an ordinary foreign import firm will receive a salary of about 150 taels a month (about $100 United States gold) and will provide a native bookkeeper and shroff. His contract will allow him a certain commission on all business done, depending on the volume and character of the business. In some cases the com¬ prador hires and is responsible for the native salesmen. THE BANK COMPRADOR The position of the bank comprador is different from that of the comprador of an import or export firm. In former days a bank comprador was permitted to offer as security bonds signed by a guarantor for a certain maximum amount, with a cash deposit equal to one-quarter of the bonds. On this cash deposit the bank allowed an interest of 5 to 6 per cent. At present most of the banks require a cash deposit, usually about 100,000 taels. The bank com¬ prador receives a salary of 200 to 500 taels a month, from which he pays his staff. He receives brokerage allowances of 1 to 1% P er cent on sums deposited through the comprador, on the principal of loans issued by the bank and negotiated through the comprador, on the interest on renewed loans, on the purchase and sale of drafts and telegraphic transfers, and on the purchase and sale of dollars and taels; y 2 to 1% per cent on the purchase and sale of drafts and telegraphic transfers in gold currency, and on the purchase and sale of coins and bank notes in the gold currency of various countries. The brokerage to the comprador for special transactions must be fixed before the closing of the transactions. In the issuance of loans to Chinese firms or individuals through the comprador, he THE COMPRADOR 387 Fig. 13.—International Banking Corporation’s building at Peking 388 COMMERCIAL HANDBOOK OF CHINA must countersign the loan contracts or promissory notes; in buying drafts or telegraphic transfers from native banks, he must guar¬ antee against nonpayment or delays in payment. He usually car¬ ries on his staff an assistant comprador, a market reporter, a silver expert, one or two bookkeepers, and several shroffs, through whose hands coins received and paid out must pass in order that counter¬ feits may be detected and the various silver dollars current in the market handled to the best advantage. He usually employs several money collectors, who count the coin, who are responsible for deliv¬ ery of the money to customers outside the bank, and who collect money due the bank. He has also a cashier, who, jointly with a foreign cashier, keeps the two or more keys to the bank vault. AGREEMENT FOR SERVICES There appears below a sample form of agreement for the services of a comprador, which is representative of the forms used by import and export houses and which enumerates in detail the functions, responsibilities, and remunerations of the comprador. By a perusal of this document the American business man should be better able to gauge the nature of the relations of foreign business men with their compradors than they could do from a mere description of details. The old-time comprador is becoming an institution of the past. While he is still an indispensable factor to the business of the majority of the foreign firms in China, yet it is inevitable that he will, in the not distant future, give way to Chinese assistants trained under modern methods and placed in positions of responsibility as managers of agencies in the interior, as salesmen, or as credit men, leaving to foreigners only the executive and supervisory positions. FORM OF AGREEMENT The following is given as illustrative of the form of agreement used in employing a comprador: This Agreement made and entered into this_day of_, 19_ , by and between the_(name of company) and_(nationality) corporation having offices and transacting business at_(name of port) and_(name of port) (hereinafter called the “company”) party of the first part, and_a Chinese citizen of_(name of city in China) (hereinafter called the “comprador”), party of the second part, Witnesseth : The said company hereby agrees to employ the comprador, and the comprador hereby agrees faithfully and diligently to serve the company as comprador for the period of three (3) years, commencing on the_day of_,_, and this agreement shall bind the parties hereto and apply to all business transacted from the_day of_, Salary .—The comprador shall receive a salary of_ (kind of dol¬ lars) dollars_ Staff .—The comprador shall engage and pay at his own expense a sufficient Chinese staff to consist of not less than the following: 1 assistant comprador; 1 Chinese accountant1 delivery order and invoice shroff; 1 small shroff; 3 special import commodity shroffs; 1 sundry commodities shroff; 2 office coolies, and any other additional Chinese staff as the company may require from time to time without extra charge. The appointment of each and every member of the Chinese staff shall be subject to approval by the company and the comprador shall dismiss any member or members of the Chinese staff when directed so to do by the com¬ pany. THE COMPRADOR 389 The comprador shall be responsible for the honesty and good conduct of each and every member of the Chinese staff and shall indemnify the company against any loss or damage caused by the default or misconduct of any mem¬ ber or members of such Chinese staff. The comprador further agrees that the said staff and every member thereof shall be amenable and subject at all times to the supervision and management of the company. The comprador further agrees to suitably furnish and equip at his own expense such office room or rooms as shall be assigned to him and his said staff by the company. Guarantee. —The comprador agrees to deposit with the company at the time of the execution of this agreement, as security for the fulfillment and per¬ formance by the comprador of all the terms, convenants, and conditions and obligations of this agreement on his part to be kept, performed, and observed: (1) Foreign title deeds for property in value not less than_thousand taels_ (name of city in China) sycee, which said title deeds shall after the execution hereof be transferred into the name of the company; (2) _ (name of Chinese currency) dollars _ cash to be deposited in such bank as shall be designated by the party of the first part, and to remain there until all obligations under this contract are completed; the regular bank interest on this amount to be paid to the party of the second part. Provided that whenever the guarantee shall, in the opinion of the manager of the company for the time being at_(place), China, become insufficient security for the aforesaid sum, the comprador shall within one (1) week after notice thereof furnish other additional satisfactory security to make up such deficiency; and provided further that the amount of such security shall be increased from time to time by the deposit of further title deeds and the transfer of the same into the name of the company, whenever in the opinion of the manager of the company for the time being at_ (place in China) the volume of the business transacted by the company shall require it. Commission. —The company agrees to pay the comprador a one per cent (1 per cent) commission upon all import contracts obtained and guaranteed by the comprador in connection with the import business of the company. Said commission shall be computed and figured on the gold f. o. b. cost price of the goods covered by said contracts, exclusive of advances, charges, and commissions. Said commissions shall be settled every month, as early as the accounts can be presented, and checked and approved by the _ (name of location in China) office, and are due and payable to the comprador when said goods have been delivered to the local merchants and the company has received payment in full for the same. Advances. —The comprador shall during the term of this agreement make advances to the company from time to time to the extent of not more than _ (designation of currency) taels_per month, for proper and necessary expenses in connection with the business, upon instructions or written orders duly signed by the manager. Whatever sum or sums shall have been so advanced by the end of each calendar month the same shall be repaid to the comprador by the 10th day of the ensuing month, in default of which the comprador shall not be obliged to advance any further money until such sum or sums so advanced have first been repaid, and even though the agreed amount to be advanced, namely,- (designation of cur¬ rency) taels_, shall not have then been exhausted. It is agreed that there shall be no interest due or payable on such advances, if paid when due, but if not so paid, then such advances shall draw interest at the rate of seven per cent (7 per cent) from due date until paid. Books .—The comprador undertakes and agrees to keep just and true accounts of all sums of money passing through his hands in connection with the business of the company and of all matters connected therewith, said accounts to be kept in book form in the English language, which said book or books shall be at all times accessible to the company. Collections. —The comprador agrees to report within 24. hours of collection all cash, checks, or native orders in his hands belonging to the company and to deliver to the company immediately at its request any sum or sums of money or negotiable papers belonging to the company, and to be prepared to report daily the balance brought forward from collections and all other sources. Godotvns. —The comprador shall have the charge, care, and supervision of the safe and proper storage and keeping of all goods in the godowns of the 390 COMMERCIAL HANDBOOK OF CHINA company or in godowns or part of godowns hired for the purpose by the com¬ pany, and while such goods or samples are under his care and custody as aforesaid he shall be responsible for any loss thereof or damage thereto by reason of theft, pilferage, or otherwise, except of fire, flood, riot, or by any reason or cause beyond the control of the comprador. The comprador shall be responsible that goods in his care and custody as aforesaid are delivered from godowns only against delivery orders signed jointly by himself and by the company. The comprador shall inspect the cargoes on arrival at_ (name of port in China) to ascertain whether the packages be in a good and sound condition and shall report to the company immediately if any of such cargoes are being short landed and shall report the discovery of any damage or other defect in the general condition of the packages, so as to enable the com¬ pany to take such action as may be necessary against insurance companies or others responsible for the loss or damage to recover for said loss or damage. The company shall lie responsible for the payment of storage, insurance, transportation, and other proper charges for the transmission of any goods from steamer to wharf and from wharf to godown or other destination, or vice versa, if for export, and the comprador shall be responsible for the de¬ livery of all cargo- to be taken from wharf or godown or other destination after such cargo has been delivered by the wharf authorities to the compra¬ dor or to any other person acting in his behalf, and shall be responsible for the delivery on board carrier of all export cargo. Responsibilities for payment of bills, orders, and checks. —The comprador shall not be responsible for the payment of any bills, native orders, or checks received in the course of business by the company from others, unless before such bills, native orders, or checks are accepted by the company they are first approved and chopped by the comprador with a special chop to be used and kept solely for that purpose. And in the event that any such bill, native order, or check be due or not paid or dishonored, the parties hereto agree to give each other mutual assist¬ ance to enforce payment of such bill, native order, or check, or any claim in connection therewith. Responsibilities for losses. —In the event delivery of goods sold to local merchants on contracts guaranteed and signed by the comprador shall not be taken within contract time or not at all and said goods can not be resold to other parties at invoice cost, together with expense incident to delivering such goods into godowns in_(name of place in China), the comprador undertakes and agrees to be responsible for and to pay the company the total loss or difference between the actual cost at_ (port in China), as above stated and the amount realized on resale. The company agrees and undertakes in all instances when delivery of goods is not taken as aforesaid to use its best efforts and endeavors to dispose of said goods upon the most ad¬ vantageous conditions possible, and the comprador agrees to render the com¬ pany all possible assistance in recovering losses sustained by it on contracts not guaranteed by the comprador. Responsibilities for export cargo. —The comprador agrees and undertakes to be responsible that all goods intended for export conform to sample sub¬ mitted and agree with specifications of the seller and are in first-class con¬ dition in every respect as regards quality and packing; and in event that the company shall question the quality of goods offered by the comprador from time to time for export the comprador agrees to abide by the decision of such qualified chemist or surveyor as may be selected by the company to examine the same. In respect to goods purchased for export by the company from or through the comprador, terms as to payment shall in each case be first arranged be¬ tween the parties. In arranging for payment it is understood and agreed that the company shall pay for cargo when delivered to them according to the terms and conditions under which said cargo was purchased or agreed to be purchased. Exclusive service. —The comprador undertakes and agrees to devote his entire time to the business of the company. Notice. —It is mutually understood and agreed that this agreement may be terminated by either party by giving sixty (60) days’ notice in writing to the other party, provided all claims and accounts between the parties are settled within said sixty (60) days, and provided further that this agreement may be extended or redrawn at any time by mutual agreement of the parties hereto, THE COMPRADOR 391 and it is further mutually agreed and understood between the parties that upon the termination of this agreement as aforesaid or otherwise, the guar¬ antee hereinbefore mentioned shall remain in full force and effect until all contracts connected with the business of the company and guaranteed by the comprador have been fulfilled and all sums of money due upon said contracts or in connection therewith have been duly paid to the company, but in any case the full amount of the monthly advances made by the comprador shall be repaid by the end of a period of one (1) month. In witness whereof the parties have hereunto set their hands this_ day of_, 19- [Signed] -, Witnesses ; Oriental Manager. CHINESE SOCIAL CUSTOMS AND ETIQUETTE By Commercial Attache Julean Arnold The days when the American or English merchant in China could complacently leave all his Chinese business transactions to the com¬ prador are gone. The commission house which handled everything from garters to locomotives is also a phase that is passing in foreign trade with China. The Chinese buyer wants to deal with the spe¬ cialist who knows his line, and the tendency to eliminate unnecessary intermediary agencies is becoming more pronounced. Hence, knowl¬ edge of the social customs and etiquette of the people is of increas¬ ing importance to the American who would be successful in his busi¬ ness with the Chinese. The Chinese knows the American better than the American knows the Chinese. This condition can not be perpetuated to the advantage of American trade in China. There is no cast in China. The people are very democratic. It can hardly be said that there is an aristocracy, unless it be that of the educated man. In the social scale the official and the scholar stand first, followed by the farmer and the merchant. In modern China, however, the merchant is forging to the front. The soldier, who once occupied a very lowly position in the Chinese social order, is now a factor of some consequence, although the reputation of the military element is not always such as to command respect. The greater part, probably at least 80 per cent, of China’s popula¬ tion is agricultural. The rural population lives in villages, under the patriarchal system. All the members of a family, including several generations, live—figuratively speaking—under one roof. In reality the Chinese household comprises a number of separate buildings, and the larger or the wealthier the family, the greater the number of buildings, though they are in connecting series and are generally surrounded by one wall. The family and not the individual is the unit in Chinese society. The villages and cities of North China are, for the most part, walled, and the people live within walled compounds. The Chinese village or city has no sidewalks and seldom has suburban residential sections. In the south, and in a large section of the great Yangtze Valley region, where rice is the main crop and where the country abounds in waterways, there are no roads as Americans understand the word. There are paths, only, and with the exception of wheel¬ barrows—and, in some cities, rickshas—no wheeled vehicles are in use in those regions. However, railways are gradually making their appearance, and a few miles of modern roads permit the use of motor cars. RESPECT FOR ANCESTORS Chinese everywhere have great respect for the dead. The graves of the departed are sacred spots. In sections where there are hill lands, the people generally bury their dead on the sides of the hills; 392 CHINESE SOCIAL CUSTOMS AND ETIQUETTE 393 but on the plains, they are interred on the family estates, often in spots planted with clusters of trees. In some respects, the dead ap¬ pear to receive more attention than the living. Ancestral tablets are kept in the households, and ceremonies are performed before them on days designated for the purpose. Ancestry worship is common throughout China. These ideas are inextricably interwoven with that remarkable institution, the Chinese family. It is not uncommon for a Chinese to trace his ancestry back a thousand or more years. The seventy-fifth lineal descendant of Confucius lives to-day in Shantung on the Confucian estate, where the great sage was buried during the fifth century before the Chris¬ tian era. Practically ever Chinese has an ancestral home. For this reason, the remains of Chinese who have died abroad or away from their ancestral homes are sent back to the ancestral burying ground. SOCIAL CUSTOMS According to Chinese customs, white is used for the mourners at a funeral, while red, which is symbolic of joy, is the color for the bride. Some modern Chinese respect western conventions for funerals and weddings. The bride in China is married at the home of the groom and enters his family. An important part of the marriage ceremony is the prostration of the bride and groom before the ancestral tablet of the groom. Marriages or courtships are arranged by the parents and go-betweens, and the sons and daughters are by duty bound to accept these arrangements. Often bride and groom meet for the first time on the wedding day. In making wedding gifts, custom among the Chinese decrees that they be in pairs. Those invited to the wedding feast, who have not given a present to the married couple, often make a gift in money, which goes toward the expenses of the feast. Western marriage customs are in favor among some of the modernized Chinese in some of the larger commercial centers where foreign influence is a factor of consequence. There is much rejoicing in the Chinese family on the birth of a son. The primary object of marriage is a male heir to carry on the continuity of the family and to worship at the graves and before the tablets of the ancestors. One does not inquire of a Chinese “ How many children have you ? ” but rather, “ How many sons have you ? ” and “ How many daughters have you ? ” While every father must have sons, and sons are encouraged to marry at an early age so as to present their fathers with grandsons, daughters are not slighted in the manner which some westerners seem to imagine, although it is anticipated that they will leave at a marriageable age to join another family. The way to the heart of a Chinese is through consideration for his children. China is, however, still a country where men take precedence over women. While concubinage is doomed when the Chinese woman will have acquired a position sufficiently powerful to enforce its discon¬ tinuance, yet, the concubine has a recognized social position analog¬ ous to that of a secondary wife. The children of a concubine are on an equality with those of the wife. They are nominally the chil¬ dren of the wife, who is the mother of the family. A man can not put aside a concubine at will. He must provide for her throughout 394 COMMERCIAL HANDBOOK OF CHINA life. Hence, it is only the wealthy who can take on concubines, al¬ though in South China, as a satisfactory business arrangement, a man will often take on a woman employee in the capacity of a con¬ cubine. Few, indeed, are the bachelors and spinsters in Chinese so¬ ciety. There is a very limited social intermingling of the sexes. First and last, woman’s place is considered to be the home. Accord¬ ing to Chinese etiquette, the man’s wife does not appear when he is entertaining his freinds. Much of the entertaining, however, is done in restaurants and cafes, where men and women do not sit down together. Generally speaking, respectable Chinese women do not frequent restaurants and cafes. When women go to the old- type Chinese theater, they are seated in a section set aside for them. Even in churches, two sections are usually provided, one for the men and the other for women. In such cities as Shanghai, Tientsin, Peking, and Canton, one may see Chinese men and women inter¬ mingling at functions. Beyond the primary schools, boys and girls are educated in separate schools. The idea of coeducation is becom¬ ing popular in some sections, but it is not in general favor. In Shanghai, the New York and Paris of China, many Chinese are adopting western social customs. As Shanghai sets the stand¬ ard for the rest of the country, it may be expected that western ideas will gain gradually in popularity, modifying certain old Chinese customs. In Peking and Shanghai some of the Chinese women have taken to dancing and to western forms of social entertainment. AMUSEMENTS The Chinese are a theater-loving people. Many of them seem to be born actors. Famous Chinese actors command big pay. Contrary to the common impression in America, the usual Chinese play is not a two or three days’ performance. It is usually a short sketch, con¬ suming upon the average about half an hour’s time, one number fol¬ lowing another. There are some historical plays that are put on in serial form and continued over several days, but these are very un¬ usual. The popularity of a Chinese actor depends more upon his voice than upon his acting. This adds to the difficulties of popular¬ izing the Chinese motion-picture play. However, historical plays, with elaborate settings depicting famous historical events, as well as modern-style Chinese plays featured in the movies, are popular with Chinese audiences. It is because of the great difference between the social customs of the Chinese and western peoples that to the ordinary Chinese audi¬ ence American photoplays seem curious productions. The animated cartoons, and, in fact, humorous productions generally, are greatly appreciated, as the Chinese possess a marked sense of humor. On the other hand, the sensational photoplay does westerners more damage than good, because of the misconceptions to which such plays give rise in the Chinese mind. The Chinese are fond of festivities of all sorts. In fact, without the wedding and funeral festivities, the itinerant theatrical troupes, and, last but not least, the New Year celebration, the Chinese vil¬ lage would be a very sordid institution. There is no Sabbath Day in the Chinese calendar. Officially China observes the Gregorian calen- CHINESE SOCIAL CUSTOMS AND ETIQUETTE 395 dar, but unofficially the full moon continues to appear on the 15th day of the month. The whole nation drops its work and closes shop on the Chinese New Year. For 10 days everybody who can possibly do so joins his family and relatives, even at the expense of traveling a long distance, to enjoy the festivities of a real holiday. Prior to the dawn of the New Year every Chinese is supposed to have settled all outstanding accounts. He must at least have made satisfactory arrangements with his creditors for those accounts which can not be settled. The New Year does not, supposedly, dawn until this is clone, hence, it is related that there are some whose lights are still burning on New Year morning. They have been a bit tardy in ushering out the old year. The servants in a household receive a half or a full month’s extra pay as a New Year’s gratuity. Employees are gener¬ ally given bonuses as New Year’s gifts. DRESS In South China the men have discarded the use of the queue, which was in reality the emblem of loyalty to the Manchu dynasty. In the central or Yangtze Valley region, the queue is still to be seen among the country people. In the north the queue is more frequently seen, although it is said that in Shansi Province a queue on an adult male is about as scarce as are snakes in Alaska. Among the men of China foreign shoes and hats are popular, but the number adopting foreign dress is increasing very slowly. The gentleman still clings to his long gown, which is preferably of silk. The Chinese lady wears trousers, preferably of silk, but the skirt is growing in popularity. Customs in dress, among both men and women of the better classes, change with as great frequency as in the West. The women of China wear no millinery, but adorn themselves with jewels and hair ornaments. Foreign-style shoes are gaining in popularity among the Chinese women, but brocades are the preferred material. The binding of girls’ feet is gradually dying out. In some sections it is a custom of bygone days, and the next generation will appear with normal feet. Most Chinese dress for the weather, hence there is not a heavy demand for heating stoves. In the north, where the people are obliged on account of the severe cold to provide heat in addition to heavily padded clothing or furs, charcoal and briquet braziers and oven beds are used, but comparatively few heating stoves. Modern buildings and modern sanitary and heating appliances are gaining favor among the wealthier classes. ETIQUETTE The Chinese are a very polite people. The child is taught good manners from the beginning. During the many centuries of Chinese civilization, a certain degree of culture has filtered down through the masses. Even the servant or coolie is able to render thanks in a graceful manner for a gratuity or favor. Fistic encounters are of infrequent occurrence. Disputes are generally settled by peaceful means. The important consideration in the mind of the Chinese involved in a dispute is what is known as “ face.” Compromise settlements through which the “ face ” of the parties to the dispute 396 COMMERCIAL HANDBOOK OF CHINA will be saved are the usual practice. Thus it is essential in dealing with a Chinese that due consideration be given to avoid placing him in a position to lose “ face.’' Also it is well in disputes with Chinese to settle them through the friendly mediation of a third party, if possible, rather than to drag the case into a court. While the western salutation of a handshake is being received with increasing favor among the Chinese, yet one would do better in calling, to let the advances come from the Chinese themselves, as many are still unfamiliar with this form of greeting and their method of bowing and raising clasped hands to the chin is simple and cordial. The Chinese reception room usually has a divan at the end farthest from the entrance, with chairs arranged along the sides. For serving tea and light refreshments small tables are interspersed between the chairs. Even if the arrangement is not strictly in this order, more often than otherwise it will be based upon this plan. The seat of honor is that on the left of the divan. (In some sections of the country local customs make for deviations from this rule.) The visi¬ tor or guest should not, until after he is pressed by his host and until he is satisfied that others present have not a greater right to this con¬ sideration than he, accept the invitation to occupy this seat. He should, when he enters the room, act at least as though he is prepared to take the seat farthest removed from the seat of honor, which under his arrangement, is the one nearest the entrance. In awaiting the host, he should never occupy the seat of honor or any in imme¬ diate contact with it. When entering a room with a number of guests already assembled, one is expected to bow first to those on the right, then to those on the left, after which one may greet any particular friends or acquaintances individually. In conversation it is not bad form—in fact, it is the usual thing—to inquire as to a man’s age, his position, his plans for the future, the price paid by him for this or that. One is always expected to inquire as to a man’s sons and parents and their welfare. The order of seating at a Chinese dinner differs greatly from that in vogue in the West. The order of seats for square and round tables is shown in Figure 14. Hound tables are less formal. The seat marked 1 in the plan is the place of honor. That marked 6 in plan No. 1 and 8 in plan No. 2 or No. 3 are the seats for the host. Some Chinese who are familiar with western customs respect the western seating arrangements. The Chinese feast is a most elaborate affair. The Chinese have been at work for 4,000 years on a menu, and, in the opinion of many, CHINESE SOCIAL CUSTOMS AND ETIQUETTE 397 they are the greatest epicures on the face of the earth. The Chinese cook is an artist and is keen on getting out new dishes. The saving grace of their food is the fact that it is thoroughly cooked. The Chinese host serves his honorable guest with a great variety of dishes, hoping that among these humble dishes the guest may find some which may be to his liking. The feast begins by the host’s raising his wine cup to the guests, who are supposed to empty their cups in response. The ricksha coolie or the chauffeur who brings the guest should be given a gratuity while waiting. The guests at a Chinese dinner are supposed to take their leave shortly after the feast is actually concluded; in fact, it is permissible for the guest to excuse himself after indulging in a few courses and leave before the-feasting is over. According to Chinese etiquette, gifts or other objects presented by one person to another are presented and received with both hands. When a Chinese sends a number of articles as a gift to a friend, the recipient is supposed to choose one or two and return the others. He is also expected to give about one-tenth of the value of the gift ac¬ cepted, in a monetary gratuity to the servant bearing the gift. One should be careful not to be too effusive in admiration of objects of art in the home of a Chinese, as to the mind of the Chinese this savors of a hint that the guest would appreciate being presented with it. It is well politely to refuse offers of presents unless one is convinced that there exists a genuine reason for their presentation. The foreigner should bear in mind that Chinese are accustomed to taking time to come to decisions, that business is done over the teacup rather than over the telephone, and that friendship plays an important part. The people are kindly, polite, reasonable, good- natured, possessed of a sense of humor, and respond generously to friendly consideration from others. CHINESE NAMES One should be careful in speaking of the Chinese to use the appella¬ tion “Chinese,” and not “Chinamen,” “John Chinaman,” or “ Chinks,” all of which are objectionable to these people. Thus one should speak of a “ Chinese ” and not a “ Chinaman.” Similarly, Chinese object strongly to the use of the appellation “heathen.” To make a distinction of this nature, the appellation “ non-Christian ” is not objectionable. Americans intending to conduct business or maintain social inter¬ course with Chinese should provide themselves with calling cards bearing on one side their names and occupations and addresses in English, and on the other, in Chinese. It is customary to have a three-character name. Foreigners usually aim to get Chinese characters that resemble in sound the foreign name. For instance, the name “Wilson” may be rendered in Chinese by the three characters “Way-Lee-Son.” It must be borne in mind that Chinese custom places the family name first; thus, “George Wilson” in Chinese would appear “Wilson George.” Mr. Wu Ting Fang is Mr. Wu, and not Mr. Fang. Chi¬ nese often try to assist the foreign to understand the English rendition of their names by hyphenating the given names, thus, “Wu Ting-Fang,” or, if placed in English style, “Ting-Fang Wu.” 398 COMMERCIAL HANDBOOK OF CHINA In choosing Chinese names it is preferable to take them from the recognized surnames in China, of which there are about 150. It is well to consult several Chinese, including a scholar, so as to secure names the meaning of which will not tend to subject their bearer to ridicule. It is preferable to have a name that bears a good mean¬ ing from a Chinese viewpoint rather than one that attempts to carry the English sound but conveys a ridiculous meaning. Similarly, American business men, in choosing Chinese firm names, should do so with the utmost care and only after consulting those who are able to give good counsel. Merely because a man is Chinese, should not be conclusive evidence that his education and training are such as to entitle him to speak with authority upon delicate shades of meaning of various Chinese characters. Chinese do not usually employ family names in designation of their business. They choose such appellations as the house of “ abundant prosperity ” or “ pre¬ cious virtue,"’ etc. These shop signs become valuable assets to estab¬ lished business concerns. Any American Government official in China will gladly assist his nationals in securing good counsel for the choosing of Chinese personal or business names. PERSISTENCE OF TRADITIONS In spite of the fact that China is now in the midst of an intel¬ lectual renaissance and is undergoing a transition—which is prob¬ ably the most momentous in the several thousands of years of its history—yet customs and practices which are the resultant of cen¬ turies-old traditions will not soon disappear. Outwardly many rad¬ ical changes may take place, but the essence and influence of the old institutions will long persist in coloring the thoughts and actions of the people. That remarkable institution, the Chinese family, which decrees that a man is his brother’s keeper, will continue to project that principle for many decades after legal enactment may have decreed otherwise. An interesting compilation, which throws considerable light on Chinese customs and traditions, is a set of eight beautifully illus¬ trated volumes under the title, “ Researches into Chinese Supersti¬ tions,’" by Henri Dori, S. J., translated by M. Kennedy, S. J., T’usewei Printing Press, Shanghai. KEEPING WELL IN CHINA Dr. W. W. Peter, Director, Council on Health Education, China A POINT OF VIEW This is written primarily for foreigners, particularly newcomers and travelers, rather than for Chinese, but the rules of the road to health are the same for all. That Chinese often observe them in the breach is no reason why you should do so; and their average length of life is probably much shorter than you want yours to be. Health is a purchasable thing. More of it can be bought by brains than by money. You will see many rich Chinese (and foreigners) die because they used the one and not the other. Use both. Certain major rules of health apply to everybody everywhere in China. Some of these will be suggested later. Other minor ones depend upon such factors as environment, occupation, individual habits, and geographical location. China is a big country with widely differing health assets and health hazards. Seasons, climate, food, and living conditions are not the same everywhere. Orient yourself and ascertain, for the locality in which you are, just what you are up against Only a crank or a fool would attempt, therefore, to enumerate minor health rules in minute detail. There is no such manual of healthy living prescribable to everybody everywhere under all cir¬ cumstances. One must use discrimination and common sense. If you want to keep well in China you must acquire one thing which is indispensable—an inquisitive, but not morbidly disposed, mind on health subjects. Learn how the best players where you live play the game. Be constantly on the alert to secure reliable information from those around you on what health-conserving prac¬ tices are commonly followed by the intelligent healthy who have learned to overcome health hazards. Should you change residence, your health practices may have to be changed also. The health game varies markedly as between north and south; between living in an international settlement and a place 10 miles away; between port cities and the interior. You will have to work out your own health “ dope sheet ” as you move around. You could take many things for granted u back home.” Better not do too much of that in this land, which has often been stigma¬ tized as “ the fountainhead of epidemic diseases.” Nose around and get such facts as how your household is run. It will pay to visit your own and your servants’ kitchens, latrines, servants’ living quar¬ ters, and outhouses frequently. Get to know the health habits of your entire household. Occasionally have a qualified doctor check up on these and throw light on any problems which reveal themselves. Then, if you wish to take things for granted, you can do so with your eyes open. Practice vigilance, which is for the larger part just another word for cleanliness. 399 400 COMMERCIAL HANDBOOK OF CHINA The sciences of medicine and public health have developed certain safeguards which may be relied upon. Many others are still in the making. The use of the known safeguards demands three things: Intelligence, knowledge, and common sense. By the proper exercise of them all there is no reason, under the ordinary circumstances of living which obtain in China, why you can not live as happily, as effectively, and as long here as you would back home, where profes¬ sional experts think through many of your health problems for you and hand out the answer in the form of prescribed health laws. In China, unfortunately, health maintenance is still very largely an individual and not a community matter. This means that you will have to keep your eyes and mind open and work a little harder at it. The responsibility is yours. You can not “pass the buck.” So much for this subject of a point of view. I consider it of greater importance for me to have stressed this than to have started right in to enumerate a list of “ dos ” and “ don’ts.” Also, if you acquire the right point of view, it will not be a serious matter how many important, definite “ rules ” I may omit. You will discover them for yourself. The rest of this article is only for healthy, normal persons who wish to remain such. They are the only kind who should be allowed to come to China to live. If you are sick, go to see a doctor. What follows may explain perhaps how you got that way and how to watch your step next time, but it is not meant to be a consulting room in print. HEALTH INSPECTION The time is soon coming when no American w-ill be sent to China permanently who has not passed a standard physical and medical examination. If you did not have one before you came, take it upon yourself to secure a trained worker familiar with the intri¬ cacies of the human machine to do this. You owe it to yourself and to those dependent upon you to know your physical assets and liabilities. Do not go blindly along on the mere, but unestablished, hope that your machine is functioning properly. It probably is— but know T . This physical and medical examination should be re¬ peated annually. It is a form of health insurance which everyone should carry. IMMUNIZATION Be vaccinated against smallpox every three years. Be inoculated against typhoid and paratyphoid fevers every two years. If you have children, do not neglect giving them this protection also. I vaccinated my last baby during a smallpox epidemic at the age of 3 days. I inoculated her against typhoid and paratyphoid at the age of 5 years. You will find that authorities differ on the subject of both age and frequency. Follow your doctor’s advice and hold him responsible for results. It would be interesting to know in terms of dollars just how much the failure on the part of Americans in China to acquire and maintain immunity against these diseases is costing our Government, business concerns, and missionary organizations annually. One of the largest missions in China still reports typhoid fever as standing at the top of the list of diseases causing death and incapacitation. KEEPING WELL IN CHINA 401 All this lost money and time, this inefficiency and disruption of plans and hopes in the lives of individuals and families, is quite unnecessary. It is sheer waste. These diseases are rife in China. They are to be found in almost all parts of the country, for the total absence of quarantine regula¬ tions, the system of sewage disposal, and the sources of our food and water supplies all combine to facilitate easy communication of these diseases from the sick to the well. The barriers are all down or do not exist at all. Play safe. The value of the protection which modern medical science offers you against these diseases is better and more spectacularly estab¬ lished than almost anything else. If you neglect these simple, fun¬ damental, but far-reaching precautions, you may as well ditch all other precautions as well. I am not striking at air. Sickness and death from these preventable causes still occur all too frequently among Americans in China. * I stress this point also because there are not yet available similar preventives against some of the other communicable diseases found in China. The application of the Schick test will indicate those who are susceptible to diphtheria. A small prophylactic dose of toxin- antitoxin will confer immunity, but it lasts for only a very short time. Similarly, there are preventives against cholera and bubonic plague, but these too are short-term insurance and vary. Against cer¬ tain other major diseases—typhus, pneumonic plague, pneumonia, dysentery, scarlet fever, 1 measles, and others—there is nothing. Also, for some on this list there is no specific treatment. Treatment is palliative and symptomatic; diet and nursing are important, but you either get well or you don’t. Therefore, take what established pro¬ tection you can get and reduce the total possible risks by at least that much. In the organization to which I belong these immunizations are compulsory. Anyone who does not wish to comply for reasons of his own is permitted to take his chances elsewhere. THE GASTROINTESTINAL TRACT Into the gastrointestinal tract go all of the solid and liquid raw materials which are used to maintain our bodily machine and pro¬ duce energy for work. Not counting the luxury of the afternoon- tea habit, three main shipments of raw stock daily are sufficient. Not all of the stock is sterile, nor should it be. This gastrointestinal trunk line in an adult is about 30 feet long, not counting the numerous branch lines along the way. The line twists and turns, has dilated and contracted points, and the whole of 1 Regarding scarlet fever, the following statement based upon the latest medical dis¬ covery is worthy of consideration : The streptococcus hemlyticus found in the throats of scarlet-fever patients has been shown by Dochez, Avery, and Bliss to belong to a separate biological group. Drs. Gladys and George Dick have produced scarlet fever in human volunteers with strep¬ tococci from the throats of scarlet-fever patients. They have made a toxin from these strains and have shown that the skin of susceptible individuals is injured by it, while the skin of immune individuals is not. They have produced active immunity by suit¬ able doses of the toxin. Dochez and the Dicks have produced antitoxin in the horse. This has been used therapeutically and prophylactically with marked success by Blake and Trask in New Haven. It is known, therefore, that scarlet fever is caused by the absorption of a toxin produced by the growth, in the t.hroa,t of a. certain type of streptococcus. An antitoxin is produced in the process of immunity. This antitoxic immunity is measured by the skin test with the toxin. Active or passive immunity to the disease can be produced by the injection of toxin or antitoxin. 100020°—26-27 402 COMMERCIAL HANDBOOK OF CHINA it is operated in darkness. It is a warm, roomy, well-stocked breed¬ ing place for germs or worms, once they get in. Apart from insects, most of the communicable ailments to which we are subject concern this gastrointestinal tract. We get cholera, typhoid, the various dysenteries, and a marvelous assortment of worms through the mouth. Our intake is bulky and frequent. It passes through many hands before it reaches ours. The organisms and worm eggs are microscopic, and there you are. We have only to eat a sufficient number of these bolshevik organisms to start things going. If our bodily resistance is unable to arrest them, they succeed in blowing up the government. Sometimes it is the doctor and nurse who succeed in pulling us through. Sometimes the under¬ taker. To avoid this kind of a showdown, certain precautions are in order. The chief precaution you have to take is simple cleanliness. It sounds simple, but !t is not always so easy to execute. Flies, fingers, and filth are three fundamental objects of concern. Without piling in too many details, this means stamping out fly breeding places to the limit. But you can do this only on your own property. Hence it means further proper screening (and this is quite a subject by itself) and swatting. It means washing your hands before you eat and seeing to it that the servants have adequate facilities in soap, hot water, and towels, and that they are used. The hands and finger nails of your servants should be kept as clean as your own. Do not permit them to wear white gloves while serving. They can not wear them while preparing food. It means the application of the point of view I stressed in the beginning. A lot of nonsense has been written and passed on by word of mouth about the danger of Chinese food. If you have a passably fair di¬ gestion you can eat almost any kind of food. Our gastrointestinal system is so marvelously constructed that one of its chief character¬ istics is its adaptability to handle without ill effects all kinds of raw stock. The Chinese are unexcelled in preparing delicious foods. In many respects Chinese food surpasses foreign food. But no food is safe if it is not prepared in a cleanly manner, served in clean dishes, by clean servants, and eaten properly. The danger of Chinese food lies right at this point. Chinese cooks never heard of bacteria, or if they did, they probably do not believe in them. Soap costs money and takes time to use. The constant changing of garments; scrubbing of this, that, and the other thing in kitchen and dining room—well, no Chinese cook in good standing believes in it, if left to his own devices. The solution of the difficulty is not to refuse invitations to eat Chinese food, but to confine your intake to the foods which are served hot. Chinese food is as good as foreign food. The risk in either is not the make-up but the manner of preparation, serving, and eating. Eat plenty of raw fruits. China abounds in fine fruits. First wash it in ordinary water. Safety is acquired bv dipping the fruit in boiling water. You will not be safe if the fruit is cracked, blem¬ ished, or bruised. Peel after the dipping and not before. Use a clean knife. KEEPING WELL IN CHINA 403 The eating of raw salads is attended with risk. There is no known method whereby such vegetables as lettuce can be sterilized and used safely in this manner. Make exceptions only in the case of vegetables which you know are grown in soil not fertilized by human excreta. All ordinary vegetables should be thoroughly cooked. All raw milk should be boiled or Pasteurized, covered with clean cloth while cooling, and kept cool till used. Chinese prefer hot tea to cold water, and that for a very good reason. Empirically, if not rationally, they have discovered that somehow raw water is not safe. Drink plenty of water, but have it boiled and stored as carefully as in the case of milk. The use of native ice is dangerous. Great care should be exercised in the making of ice cream and in the preparation of cold drinks, in order to avoid consuming some of the ice or the ice water. All left-over foods should be stored in a “ safe made of fine-mesh screen and kept in a cool place. In hot climates food, especially meat and fish, deteriorates rapidly. Constipation can be generally avoided by cutting down on the meats and increasing the vegetables, especially those with plenty of fiber, like celery, spinach, and native oranges. Some people sit around so much in their offices, clubs, and homes that their abdo¬ mens might as well be encased in a plaster cast. At the same time they keep on stoking in the food. Naturally their food line becomes clogged up. Play something requiring vigorous bodily movement. This excludes the phonograph and table games. If you do not known how to play, take exercise. Just walking and walking is bitter medicine to many, but at that it is better than caseara or some other blockade remover. Do not get into the habit of depending upon cathartics. Get a doctor’s advice, if necessary, and change your habits of living. Certain ailments have their origin in a chronically foul mouth and decayed teeth. Your teeth should be kept clean by brushing twice daily and should be cleaned by a dentist twice each year. On these occasions he should examine your teeth for decay and should per¬ form any necessary repairs. Most dentists need no urging to do this. Your grinding outfit requires this care, for upon it falls the task of giving the first treatment to the raw stock which you take in daily. By proper attention you avoid the much advertised halitosis (bad breath), as well as rheumatism and other ailments, to say noth¬ ing of preventing or postponing your having to sit for one or two artificial plates. FLUSHING Sweat, Produce it from within. Work up a sweat or two every week even in the winter time. In summer in many parts of China nature will give you generous assistance, but even in hot weather work your bones and muscles up to the point where you really sweat. What method you use to secure this is largely immaterial. Do not let your body become soft, flabby, and nothing more than a self-propelling vehicle to carry around your head. Over 80 per cent of the body is made up of water. Each cell is surrounded by it. Each cell eats, works, and produces wastes. If the wastes are not removed the cell and its neighbors and the whole body become unfit for their maximum output. The tang is taken 404 COMMERCIAL HANDBOOK OF CHINA out of living. Work remains work and is no longer a great game. The processes by which you sweat flush out the body. The circula¬ tion increases. Stored-up food is rushed to the working parts, and the toxic wastes are flushed away through skin, bowels, kidneys, and lungs. The idea back of a cold shower followed by a brisk rub is not only cleanliness but flushing the inside of the body. Play and exercise are physiological requirements unless you wish to go pre¬ maturely stale. Hence mere sweat resulting from hot weather is not sufficient. That is a thermal arrangement whereby the body is kept at a normal temperature by evaporation on the surface. CLOTHING By observing local practices you will be able to make a selection suitable to your own comfort. I have no opinion as to the relative merits of wool, cotton, or silk. Some people, especially from con¬ tinental countries, will try to persuade you to lay in a stock of so- called “ cholera belts.” In my opinion, these wool contraptions are an awkward, irritating, worthless abomination. INSECT BITES The bites of certain insects may be dangerous. Their great num¬ ber and small size constitute their defense and our danger. Unless infected from biting a previously infected person, their bites are harmless, but as to this, one can never tell. Malaria in its several forms, and dengue (“ bone-break fever ”) are transmitted by the mosquito; typhus fever through lice; bubonic plague by the rat flea; “ three-day fever ” by the sand fly; and tuberculosis, intestinal dis¬ eases, and perhaps others, by the ever-present, common house fly. PROTECTION FROM SUN Wear a pith hat in summer to protect the temples and the back of the neck. The hat should have apertures for ventilating the top of the head. The use of colored glasses decreases eyestrain. If you wear lenses, have a pair of colored glasses ground to your refraction. The difference in sunlight in China is probably chemical rather than thermal. MENTAL ATTITUDE Your mental attitude will influence your physical health. If the Chinese people were like your people in every respect and in all their ways of doing things you probably would have stayed at home. Cultivate tolerance and patience. Learn to laugh. It requires some thirty different muscles to produce a good laugh, but it is easy once you know how. You will And enough in the course of time in your surroundings and your work to make you weep. Do that, too, if you must, but then laugh. Learn from the Chinese. Even the poor, oppressed, ignorant, hardworking coolie has an en¬ viable sense of humor and can smile. Avoid imitating such foreign¬ ers as you may see stalking about China, each like Atlas with a world on his shoulder, growling at the slightest pretext and dissatis¬ fied with everything generally. You are a guest here, and every KEEPING WELL IN CHINA 405 decent guest should be easy to please. For purely health reasons it might be well for all Americans to come up annually for an ex¬ amination in humor. All those found to have lost this gift should be returned home on the next ship at half pay. BIBLIOGRAPHY Association of Medical Officers of Missionary Societies, London. Health In¬ structions for Missionaries in the Tropics. Boone. Cousland, and Davenport. Health Hints for Missionaries to China. Shanghai, China Medical Missionary Association. China Inland Mission, Shanghai. Health pamphlets: No. 1. General Introduction and the Prevention of Fly-Borne Diseases. No. 2. Eleven Topics, Including Malaria, Plague, Tuberculosis. No. 3. Typhus, Typhoid, Dysentery, and Cholera. Council on Health Education, Shanghai. Health Magazine. Lennox. Dr. W. G. (Peking Union Medical College.) Wasted Lives. Muirhead, W. Practical Tropical Sanitation. London. John Murray, 1921. Barrie-Peter. Famine Fever. Council on Health Education. Peter. The Heavenly Flower. Council on Health Education. PART II CANTON CONSULAR DISTRICT By Consul M. M. Hamilton and Trad© Commissioner Osborn S. Watson LOCATION AND AREA The Canton consular district extends from 18°'to 26° north lati¬ tude, thus corresponding in latitude to the area between the island of Jamaica on the south and the city of New Orleans on the north. Its area is 160,000 square miles, comprising the entire Province of Kwangsi and the portion of Kwangtung Province west of longitude 115°. The average annual rainfall is 80 inches, the average minimum temperature 35° F., and the average maximum temperature 95° F. There are two seasons—the rainy season, from April to July, and the dry season, from August to March. POPULATION The population of the district is estimated by the Chinese Maritime Customs at 30,000,000, without reference to territory included in the Swatow consular district. The average density of population for the whole consular district is 187.5 per square mile, for Kwangtung Province 265 per square mile, and for Kwangsi Province 104 per square mile. CITIES Important cities of the district are: Cities or districts Population (estimated) Euro¬ peans Ameri¬ cans American business firms Kwangtung Province: Canton l . __ _ . __ _ _ 900,000 77, 000 988 790 25 Kongmoon 1 _ - __ _- .. _ -_ 20 15 2 Samshui 1 ____ 7' 400 8 3 0 Kiungchow 1 _ ___ _ _ 59, 000 30 13 1 Pakhoi 1 _ _ . _ 35, 000 1,145, 000 1,988, 000 1, 230, 000 1,039, 000 50, 000 67, 400 20, 000 526, 000 14 0 Heungshan (district). __ ____- . _ 13 0 Namhoi (district _ .. _ __ .__ 1 0 Sunwui (district), _*._ 0 Taileung (district)_. .. _ . __ 0 Kwangsi Province: Wuchow 1 __ ... _ _ _ _ 26 25 1 Nanning 1 _ ... ... _____ 8 17 1 Lungchow l __. _ .. _ _ 10 Kweilin (district). ... . _ .. 10 21 0 Liuchow (district)__ ___ 575, 000 0 1 Treaty ports where foreigners are entitled to reside for trade purposes. Canton is the chief assembling and distributing port for both imports and exports. The main channel of the West River, over which moves practically all trade between Kwangsi Province and the outside world, does not enter Canton directly but runs in a 407 408 COMMERCIAL HANDBOOK OF CHINA general southeasterly course from Kwangsi to the ocean. Conse¬ quently, a certain trade exists between West River ports and Hong¬ kong wherein Canton plays no part. However, Canton remains an outstanding factor in the trade of southern China. The chief place of foreign residence and trade at Canton is the island of Shameen, which was taken over by the British and French in 1859. On it are located most of the foreign banks, residences of foreigners, consu¬ lates, and commission houses. Kongmoon , on the West River, taps the populous Sunning district in the southeastern part of Kwangtung Province. There is a large junk trade and daily steam communication between Hongkong and Kongmoon. • Trading with the interior is facilitated bv a branch of the Sunning Railway that runs into Kongmoon. Samshui , some 30 miles west of Canton, near the junction of the West and North Rivers, is an important port of call for West River vessels and is connected by train with Canton. Kiungchow is on the island of Hainan, for which Hoihow serves as a seaport. The two cities are only 3 miles apart. The commercial possibilities of Hainan are reported to be large, but are practically undeveloped. Pakhoi , a port in the southern end of Kwangtung Province, serves as a distributing center for the important cities of Limchow and Chinchow. Wuchow , in Kwangsi Province, is a natural distributing center for the trade between eastern Yunnan, Kweichow, and Kwangsi, on the one hand, and Canton and Hongkong on the other. Ocean¬ going vessels ply between Wuchow, Hongkong, and Canton. Nanning, in southern central Kwangsi, was opened to foreign trade in 1907. Of recent years the development of the city has been retarded bv unsettled conditions. AGRICULTURE The following table indicates the principal products of the district: Products (in order of im¬ portance) Planting season Harvesting sea¬ son Average produc¬ tion per acre Estimated annual production Use or disposition 1. Silk_ Throughout Throughout Pounds (9 6,000,000 pounds_ Available for ex- 2. Rice_ year; 7 crops. March and Au- year. July and De- 1,800 No data.. port trade. Local consumption. 3. Sugar cane 4. Matting gust; 2 crops. \ pril cember. November . . 810,000 12,000 ... .do___ _do .. Do. Manufacture of November. July-August_ matting and rugs straw. R Cassia Throughout year. January-Feb- May__ 16, 000, 000-20, 000, 000 for export abroad and for local use. Export trade. 6. Tobacco... July-August- 1,100 pounds available for export. 50,000, 000-60, 000,.000 Mainly for export. 7. Tea ruary Throughout year. ..do ... _ June-July_ 0) pounds. 1,000, 000-3,000,000 Local use and ex- 8. Ginger August_ (') pounds exported. 10,000,000 pounds ex- port. Export trade. Q Fruits do T hroughout year. ( 2 ) ported. No data__ Local consump- tion. 1 No data. s Varies. CANTON CONSULAR DISTRICT 409 Silk is the premier export of South China and constitutes in value from 87 to 92 per cent of the total exports of Canton to the United States. The production of rice is insufficient for local de¬ mands. In recent years tobacco has come to the foreground among the exports, while tea has fallen oft'. Hongkong handles a con¬ siderable share of the trade in cassia and ginger, although both are produced in the Canton district. MANUFACTURING AND INDUSTRIAL DEVELOPMENT The figures given below with respect to manufacturing industries are estimates made by representative business men; no responsibility is assumed for their reliability. Industries (in order of importance) Capacity Approxi¬ mate number of em¬ ployees Approxi¬ mate capital in industry Estimated output Disposition United States currency 1. Silk filatures. 8,000,000 pounds. 500,000 $14, 000, 000 6,500,000 pounds. 2. Boat building- No data__ 10,000 150, 000 Junks, 3 per Exported. month; Sam- Local use. pans, 75 per month; motor boats, 6-8 per month. 3. Native piece -Do. goods. 4. Knitting and 200 power machines. 1,000 400, 000 8,000 dozen per Local use and ex- weaving fac- day. port to Chinese tories (hosiery) communities abroad. 5. Marine engines.. 20-30 per month_ 2,000 300,000 20 per month_ Local use. 6. Match factories.. 2,000,000 small boxes 4,000 1, 500, 000 2,000,000 small Do. per day. boxes per day. 7. Rubber-sole fac- 10,000 pairs per day.. 1, 750 625, 000 10,000 paiis per Do. tories. day. 8. Cement works... 187,500 pounds per 0) 0) (>)- Do. day. 9. Tanneries_ 500 pieces per day... 2,000 500, 000 1,500 per day_ Local use and ex- port. 10. Copper mills.. .. 10,000 pounds_ 1, 000, 000 10,000 pounds Local use. per day. 11. Soda-water fac- 11,000 dozen per day. 350 100,000 1,000,000 dozen Do. tories. per year. 12. Brick kilns_ 100,000 per day.. 1, 000 450, 000 100,000 per day.. Canton and Hong- kong consump- tion. 13. Ice-making plants 50.25 short tons per 20 250, 000 32 short tons per Local use. 24 hours. 24 hours. 14. Rice mills.... 700,000 pounds per 1,000 1,000,000 650,000 pounds Do. day. per day. 15. Mint.. 1,700,000 silver 20- 1,000 750, 000 750,000 silver 20- Local use and ex- cent pieces per cent pieces ports to China day. per day. ports. i Closed. HOME INDUSTRIES The above are industries that have shown a tendency to modernize their methods and equipment. No mention has been made of the decentralized native industries which are carried on by hand in the homes of the workers. Among such industries are those for which Canton has long been noted—the carving of jade and ivory; the mother-of-pearl industry; the manafacture of brass ware, silver¬ ware, rattan ware, blackwood ware, fans (palm leaf and other), embroideries, leather goods. The painting of porcelains and china- 410 COMMERCIAL HANDBOOK OF CHINA ware is another important activity at Canton, as is the turning out of native shoes and clothing. The preparation and exportation of essential and other oils from the district calls for special mention. Among the oils which are found in the district are the following: Bean, groundnut, sesamum seed, tea, aniseed, camphor, cardamon, cassia leaf, cinnamon, clove, ginger, gum benjamin, lucraban seed, peppermint, rose, sandalwood, and wood. MANUFACTURE OF MATCHES Canton has made commendable efforts to supply its own matches during the last few years. Not long ago there was a large importa¬ tion of foreign manufactured matches, chiefly of Japanese origin. With the establishment of match factories at Canton, foreign impor¬ tations naturallv fell oil' and the city became a center from which matches were shipped to the interior districts and to other parts of China. Practically all of the machinery used in the match-making industry has been imported from Japan, but one factory, the largest in the district, is equipped with American machinery. Chemicals and other materials utilized in the industry are supplied chiefly by Japan, although there have been several shipments of wood from the United States. RUBBER-SOLE FACTORIES Another innovation in Canton has been the development of rubber- sole factories. Shoes with rubber soles have long been popular among the Cantonese, and many of the shoes were turned out locally by hand labor, the soles being imported from Singapore. The present trend of the industry is to import the rubber in bulk and to manufacture the soles at Canton. About 20 small factories have sprung up. Simple types of machinery are used, supplied by Japan, Germany, and Great Britain. New installations contain some Can¬ ton-made machinery. •/ TANNERIES Of the 45 tanneries in the district, 15 are in Canton. With one ex¬ ception, these tanneries turn out their products by crude, hand meth¬ ods. All the old-style tanneries had a bad year during 1923, due in part to general business stagnation and in part to the inability of such factories to compete with the machine-made product. However, a Chinese concern equipped entirely with American machinery re¬ ported an average monthly net profit of $600 United States currency. This company imports all its chemicals from the United States. A new plant was in process of erection during 1923 and was ready for occupancy by the middle of 1924. COPPER MILLS Fifteen copper mills operate within the Canton district, all of which are owned and managed by Chinese. The only mill which uses machinery has a reported capital of $100,000 United States currency, while the average capital of the more primitive mills is estimated at $75,000 each. The raw materials consist largely of scrap copper, oh- CANTON CONSULAR DISTRICT 411 tained at Canton and from importations originating in Yunnan Province. The native method of manufacturing is to employ a bam¬ boo mold and subject the copper to hammering by hand. It some¬ times requires more than 10 days to finish one sheet. BRICK KILNS Of the 200 brick kilns in the Canton district, only one is modern— reported to be the only one of its kind in China. The plant is equipped with machines of German make, and is now producing 60,000 bricks per day. The bricks find a ready market and the fac¬ tory operated on a profitable basis during 1923, the gross sales amounting to about $240,000 United States currency. CEMENT PLANT The cement plant at Canton is owned by the provincial govern¬ ment and was not in operation in 1922. Its operation in the latter part of 1923 was spasmodic and uncertain. Because of constant changes in the administrative staff of the plant, no definite and relia¬ ble information as to its output has been ascertainable. Cement is turned out at present in cloth bags, with a net weight of 250 pounds, and sells for $2 United States currency per bag. The output is re¬ ported to be of inferior grade, unsuitable for reinforcing purposes and used only for brick mortar and mass foundation work. MARINE ENGINES During the World War the building of marine engines assumed considerable proportions at Canton. Unsettled conditions in the Canton delta harmed the industry in 1923 and little activity was apparent. A few steam, oil, and gasoline engines were turned out, the former finding the biggest demand. Until the middle of 1923 the Chinese-made engine undersold any' imported engines on the market. As first price is the prime consideration in most purchases, higher costs of operation and the comparatively rapid deteriora¬ tion of the Chinese engine did not seriously hinder sales. But about July 1, 1923, German engines appeared on the market at a retail price of approximately $70 United States currency per horsepower. They competed favorably with the Canton makes on the basis of price as well as quality, and hence the building of marine engines at Canton declined during 1923. ICE-MAKING PLANTS There are two ice-making plants in Canton. The oldest, a Chi¬ nese concern, has a paid-in capitalization of about $50,000 United States currency. Both refrigerating-plant and power engines were • imported from the United States. The other plant is a British con¬ cern with a paid-in capital of about $200,000 United States currency. This plant is also equipped with American machinery. The knitting and weaving industry is just beginning at Canton. The output is reported to be of fairly good quality and enjoys a favorable market. Daily production of the hosiery factories is estimated at 8,700 dozen pairs, 97 per cent being of cotton and 3 per 412 COMMERCIAL HANDBOOK OF CHINA cent silk. The majority of the factories are equipped with Chinese- made hand machines, but power machines from America and hand machines from England and Japan are increasingly popular. The cheaper cottons used come from Japan, while the better qualities are imported from the United States and England. MINERALS AND MINING The following table indicates the character of the mineral re¬ sources in the Canton consular district: Minerals 1. Tungsten. 2. Coal. 3. Gold. 4. Silver_ 5. Antimony. 6. Tin_ 7. Lead. 8. Copper_ 9. Manganese. 10. Molybdenum. 11. Bismuth. 12. Iron. Nature of ore Wolframite- Anthracite.. Bituminous. Lignite. Stibnite, valentinite. Alluvial cassiterite... Braunite, pyrolusite, psilomelane. Molybdenite.. Bisnite; a little native bismuth hand sorted and washed to 50 per cent. Hematite... Annual production No data. 100,000 tons. Negligible. .do.. Variable, no data. Maximum of 400 tons pig tin. Negligible__ .do.. Estimated at 5,000 tons. Small.... No data. Negligible. Extent of resources Unknown; a great number of small pockets. Estimated at 200,000,- 000 tons. Estimated at 600,000,- 000 tons. Unknown. No data. _do. Unknown; many small deposits. Unknown, but exten¬ sive and important. No data. _do. Unknown, but im¬ portant. No data.. Unknown; occurs with ores of tin and tung¬ sten. No data. Export in 1923 Pounds 3,120,047 None. None. None. None. None. 77,805 21,945 None. None. None. 133 26, 999 None. Most of the tungsten exported from the Canton consular district comes from Kiangsi Province, where the best deposits are found. Coal is found in both Kwangtung and Kwangsi. In Kwangtung mines are located southeast of Lotingchow, northeast of Yeungkong, southwest and northeast of Shiuchow, and north of Shiuhing. The best coal is from the vicinity of Shiuchow on the North River. Kwangtung coal may be classed as semianthracite. In Kwangsi Prov¬ ince coal-producing regions are reported southeast of Chenan, north¬ west of Pinglo, in the Hohsien district, and on the Kwangtung- Kwangsi border. Kwangsi appears to contain large reserves of high- grade bituminous coking coal. Small deposits of gold are reported near Kweihsien in Kwangsi Province. A mine has been operated in the vicinity of Chaoyang, Kwangtung Province, while some gold is washed from the sand of the Linchow River. A little alluvial gold mining is done in the Pakhoi district, and scattered deposits are stated to exist in the Haikin district. Of silver the only known deposits in the consular district are in the Province of Kwangsi. The Kweihsien neighborhood contains the chief veins. An antimony zone has been revealed by geological surveys as extending from the Chukiang district of northern Kwang¬ tung through the Province of Kwangsi to the Wenshan and Ami districts of eastern Yunnan. Antimony is obtained in the stibnite form from the districts of Fengyi and Penchow in Kwangsi. While CANTON CONSULAR DISTRICT • 413 there are some small smelting plants in Kwangtung, they are not large enough to be of much commercial importance. Deposits are found along the southern border of the Province and in the district north of Shiuchow. Tin is said to exist in the Province of Kwangtung at Waichow and in the Taan district of Hainan Island. Tin has been mined for many years in the Fuchwan and Hohsien districts of Kwangsi. Small deposits of lead are reported to exist near Kweihsien in Kwangsi, and other small deposits occur in the Kwangtung districts of Koyao and Sunon. The chief copper region in Kwangsi is near Kweihsien, though additional deposits are said to occur in Hainan Island. The most important manganese mines are in the Pakhoi, Chingchow, and Fangcheng districts of Kwangtung. Deposits are also found in Kwangsi. Molybdenum is found in both Kwangtung and Kwangsi. Some discoveries have been reported along the coast of Kwangtung, but there has been no active mining. The sulphide form was formerly mined in the Tungyuen district of Kwangtung, but the work is now abandoned. Bismuth is widely scattered throughout the district, being gen¬ erally found with tungsten. Kwangtung is reported to be rich in iron deposits, but its resources have not been developed to any extent. The richest deposits occur north of Waichow on the East River, hematite being the principal ore. Deposits occur also near Shiuhing. Some iron ore is produced and smelted in the Sunwui district and in the coast region farther south, the Pakhoi region containing some ore. The mines which are in operation in the Canton consular district employ primitive, native methods. The output is largely for local consumption. The most serious obstacles in the way of rapid de¬ velopment of the mining possibilities of the district are the lack of adequate transportation facilities, the imposition of various taxes at the producing centers and along the transporation routes, and the absence of sufficient capital to install modern equipment. The table below gives data concerning the principal mines, which are grouped here according to products: Names of mines Mineral Capital paid up Nationality of company Tung Fong Siao Ta Tze Kow Gold Mining Co. (Ltd.). 1 Mo Fung Shan Gold Mining Co. Sancha Mountain Silver mines. 2 Tienping Mountain silver mines. 3 Pao-hua Co.... Gold.. U. S. currency $20,000 No data. No data. 1,000,000 Chinese_ .do_ Silver_ .do_ _do_ .do_ Antimony... _do_ Yuching Co.. ____ Manganese.. _do. No data. No data. No data. Chinese . Hoyeh Co_ _ _do_ VuYam Manganese Mining Co. _do_ -do- Head office Siao Ta Tze Kow, Chaoyang, Kwangtung. Tsengshing district, Kwang¬ tung. Near Kweihsien, Kwangsi. Do. Mengtsz, Yunnan. Chingchow district. No data. Fangchew district, Kwang¬ tung. 1 Established 1904; capital, 40,000 taels. 2 Worked during past 20 years by several Chinese companies. Some modern machinery installed. Reported to be operated at a loss. 3 No working reports available. Surface mining carried on by Chinese syndicate. Survey shows existence of 20 veins of silver. 414 COMMERCIAL HANDBOOK OF CHINA LABOR CONDITIONS W a^es have been increasing steadily during the last few years, and there has been a growing tendency on the part of the laborers to use the strike to gain advances. Local labor, under proper train¬ ing and supervision, is able to turn out good work. Indeed, in cer¬ tain specialized hand labor calling for patience and infinite atten¬ tion to detail, the Cantonese workman has no superior. The following table summarizes certain aspects of labor condi¬ tions in the Canton district: Industry Wages (in U. S. currency) Board and lodging considerations Hours of work Estimated capacity per person Stocking and sock Female; $0.55 per Lodging supplied 8 a. m. to 10 p. m. 1)4-2 dozen pairs knitters. dozen pair. without meals. per day. Weavers.. Female; $0.04-$0.06 per 10 Chinese feet of cloth. Male; $0.50-$0. 70 _do_ 9 a. m. to 6 p. m._ 10 a. m. to 6 p. m.. 50 Chinese feet per day. 250 cubic feet per Painters__ Lodging and meals Towel knitters _ per day. Female; $0.18 per supplied. Lodging supplied 9 a. m. to 6 p. m.. day. 2 dozen per day. Tobacco “godown” dozen. Male; $6-$8 per without meals. Lodging and meals 8 a. m. to 6 p. m.. coolies. Tobacco “godown” sorters. Tobacco-packing month. Female; $0.30 per picul (133)4 pounds). Male; $0.40 per picul supplied. _ do_ .do 1 X A piculs per day. Packing materials 9 a. m. to 6 p. m.. coolies. China ware porters. Male; $0.:;0-$0.50 per supplied by pack¬ ers. Lodging and meals Varies... China ware decora- day. Male and female; supplied. - do.. 9 a. m. to 6 p. m._ tors. Wharf coolies_ $0.50-$0.75 per day. Male and female; $0.25 per day. Male and female; $0.50 per day. Female; $0.15-$0.20 Meals supplied_ 8 hours per day_ _do_ 9 a. m. to 5 p. m.. Matting weavers... Waste-silk selectors -do_ Meals and lodging 22 square yards per day. 30-35 pounds per General coolie labor per day. Male and female; not supplied. _ do_ 8 hours per day.. _ day. Mechanics and $0.25-$0.35 per day. Male; $0.50-$l per _do. .. .. _ 10 hours per day. _ skilled workmen. Emroidery work- day. Female; $0.15 per Lodging and meals _do.. ers.i Silk filatures... day. Female; $0.30-$0.75 supplied. Lodging and meals 11 hours per day.- Y^-XVi pounds per per day, depend¬ ing on degree of skill. not supplied. day, depending on size of silk. 1 Many embroidery workers are employed by the piece, performing the work in their homes. The pay varies according to the design. TRANSPORTATION AND COMMUNICATION WATERWAYS The following table gives certain significant facts regarding the principal waterways is the Canton consular district: Distance navigable— Name of waterway For 15-foot-draft steamers For 6-foot-draft steamers For motor launches West River . _ 230 miles in flood season 230 miles in low water_ 700 miles. North River (above Sanshui). 60 miles during 2 months of 60 miles during 7 months of 93 miles. East River (above Whampoa) year. year. 68 miles during 2)4 months of year. 124 miles. Kwai or Fu River __ 200 miles. Pearl River and West River.. 87 miles . ____ CANTON CONSULAR DISTRICT 415 As a result of unsettled conditions, there is little traffic by rail between Canton and Hongkong. Junk service has lessened also. Consequently the river steamers operating between the two ports carry the bulk of the trade. Freight rates between Hongkong and Canton are specific ones, varying with different commodities. The rate on silk shipped from Canton to Hongkong is about $0.80 United States currency per bale of 106% pounds; on human hair, $0.34 per case; on wolfram, $0.12 per 133% pounds (1 picul) ; and on gen¬ eral cargo, $0.80 per ton of 40 cubic feet net. Representative import rates are as follows: Cement, $0.24 United States currency per cask; cigarettes, $0.70 per case; coal, $1.30 per ton; cotton yarn, $0.37 per bale; flour, $3.80 per 100 sacks, with a 20 per cent rebate; paper, $0.29 per bale; piece goods, $0.95 per package. The round-trip fare for first-class passengers is about $6.50 United States currency; one-way tickets cost about $3.50. Most of the trade in the district is carried by water. As cargo gets farther away from Canton the tax barriers become more numer¬ ous and hinder free communication. Shipments destined for Wu- chow and other points in Kwangsi, as well as for that section of the Canton delta drained by the West River, should be transshipped from Hongkong direct to destination, rather than being forwarded first to Canton. In the import trade, Canton serves as a distributing center for the East and North River territory. 416 COMMERCIAL HANDBOOK OF CHINA RAILWAYS The railways in the Canton consular district are shown in the following table: Railways Head office M ileage Transportation rates, per Eng¬ lish mile Classes Freight per ton Passen¬ ger fares U. S. U. S. C anton- Kowloon: currency currency Chinese section.... Canton. 88. 78 First $0 0124 $0 0324 Second_ .0121 .0162 Third_ .0081 .0081 Fourth_ .0054 British section___ Kowloon (via Hong- 22. 50 First . 0124 0324 kong). Second_ .0121 .0162 Third_ .0081 .0081 Fourth_ .0054 Canton-Hankow. .. .. Canton____ 140. 00 First . 0900 . 0240 Second_ .0600 .0160 Third_ .0300 .0125 Fourth i.. . 1350 C anton-Samshui... _do.... 31. 00 First_ . 0290 . 0125 Second_ .0240 .0090 Third_ .0160 .0065 Sunning Railway.. Sunning (Kwangtung).. 83. 30 First. _ . 0100 . 0250 Second_ .0050 .0150 Third_ .0025 .0075 1 Dangerous goods. As of additional interest, the special reduced basic fares between Canton and Hongkong via the Canton-Kowloon Railway by the express trains are as follows (one way) : First class, $3 United States currency; second class, $1.50; third class, $0.60. During the past few years unsettled conditions have interfered seriously with the operation of railways. No regular schedules have been maintained. Surcharges, often amounting to as much as 25 per cent, have been imposed by the authorities. Through trains have not operated on the Canton-Kowloon Rail¬ way for so long that practically all traffic has been deflected to water routes. The Samshui Railway is important chiefly for its passenger service, which yields a good revenue. Tobacco and the mineral prod¬ ucts of the North River region are conveyed to Canton over the Yueh- Han line. Imports reach their destination over the same road. The Sunning Railway has maintained a fairly consistent schedule and plays an important part in the economic life of probably the wealth¬ iest section of the consular district. Piece goods, cigarettes, flour, metals and minerals, and other items of important trade are carried on this road. In general, however, conditions on the railways are unsatisfactory from the standpoint of both foreign and domestic trade. Of the four railway lines in the Canton district, the Canton- Samshui and the Canton-Kowloon (Chinese section) are more or less under government ownership and control. The Canton-Hankow (Kwangtung section) was originally under the control of an Amer¬ ican syndicate, which later disposed of its interests to a Chinese joint-stock company known as the Kwangtung Mercantile Adminis¬ tration of the Yueh-Han Railway. The Sunning Railway enjoys CANTON CONSULAR DISTRICT 417 the distinction of having been built as a private Chinese enterprise and is owned and operated exclusively by a Chinese company. These railways are all of standard gauge, 4 feet 8 y 2 inches, and their roll¬ ing stock is partly of American and partly of British manufacture and design. The completion of the Canton-Hankow Railway is considered the most necessary step in obtaining railway facilities adequate to the proper development of the trade and commerce of the district. The advantages to trade of a trunk line extending from North to South China are obvious. None of the railways in the district is connected with others. It would facilitate the transfer of freight and passen¬ gers if a loop line should be built at Canton connecting the Canton- Hankow and the Canton-Kowloon lines. This would insure through shipment of cargo from the northern terminus of the Canton-Han¬ kow line to Hongkong. ROADS Concerning the roads in the consular district, it may be said that in Canton and vicinity there are 25 miles of roads suitable for motor transportation. The estimated number of motor cars in operation at that place is 212. For passenger transportation of this class the rate is $2 to $3 United States currenc}^ per hour; for freight the charge is $2.25 per hour per ton. Lungchow and Nanning each has about 40 miles of motor roads. The motor roads at Canton have been constructed during the last few years and are maintained by the municipality. There are no fees or tolls. Definite plans for the extension of these roads have been adopted, but work is hindered by the unsettled conditions pre¬ vailing in the city. The roads at Nanning and Lungchow are used largely by the military, although there is a certain amount of civil traffic. The roads have deteriorated because of the lack of proper supervision and repair. The number of motor cars operating on the highways outside of Canton is small. SUMMARY OF METHODS OF TRANSPORTATION Transportation within the Canton consular district is chiefly by water. Cargo is transported by means of steamboats, launches, and junks, but it is impossible to estimate the average mileage per day or the cost per ton-mile. Likewise, no data are available relative to transportation by motor cars other than the fact that the load per car rarely exceeds V/ 2 tons. Carts are used only in the vicinity of Pakhoi. Wheelbarrows are utilized to convey cargo in the Pakhoi district, but are not found elsewhere. Donkeys and mules serve as pack animals in western central Kwangsi near Poseh. Coolie car¬ riers are very numerous. A coolie carries an average load of 70 pounds and travels some 12 miles per day for a wage of about $0.60 United States currency. TELEGRAPHS, CABLES, AND WIRELESS SERVICE The Chinese Telegraph Administration has 106 stations in Kwangtung Province and 71 in Kwangsi. The rate to Shanghai 100020°—26-28 418 COMMERCIAL HANDBOOK OF CHINA is $0.27 Hongkong currency per word (one Hongkong dollar equals about $0.50 United States currency), while to New York the rate is $2.10 per word. The Canton Wireless Service, installed by the admiralty of the local government, has three stations in Kwangtung and one in Kwangsi. The rates are the same as those just men¬ tioned for the Chinese Telegraph Administration. Business firms on Shameen Island have used the wireless service regularly for urgent business during the time when the Chinese Telegraph Administration’s line to Hongkong has not been in opera¬ tion. During the last year telegrams to and from Canton and the outside world have usually been carried between Canton and Hong¬ kong by post, as the telegraph service between the two ports has been interrupted. Radio messages are transmitted to any point of the world at pre¬ vailing rates. It takes an average of 17 hours to get a message through to New York. Rates to Hongkong are $0.20 for each plain word and $0.30 for each code word. On messages received from Hongkong prepaid, an extra charge of $0.20 per message is col¬ lected for the carrying coolie. Messages for transmission from Canton are received from 11.30 a. m. to 12 m. and from 2 to 5 p. m. Firms making regular use of this radio service report that it is regular and satisfactory for Hongkong and oversea messages. TELEPHONES There are four telephone services in the Canton district, the largest of which, operated by the Canton provincial government, has 3,000 subscribers. It is operated by the manual system, and the equipment is Swedish, Japanese, and American. Rates vary from $3.50 to $5.50 per month. Plans are being formed for extension and improvement of the telephone service in the Canton district, but it is not likely that anything will be accomplished until condi¬ tions are more nearly normal. POSTAL FACILITIES The post-office system in the Canton district is a part of the general Chinese Post Office, the administration of which is centered in the Directorate General of Posts in the Ministry of Communica¬ tions at Peking. The rates applicable to the district are the same as those prevailing in other sections of China, being 3 cents for domestic postage and 10 cents for foreign postage. The rate to Hongkong is 4 cents. (All rates are given in Mexican currency, one dollar of which equals approximately $0.50 United States currency.) Canton has a special system of postal zones, which, however, has no bearing on postal rates between points in the district and other pails of China or points abroad. SHIPPING AND WAREHOUSING FACILITIES The harbor facilities at Canton are indicated in the following table; CANTON CONSULAR DISTRICT 419 Name of landing or anchorage Depth of water at tides Dock accommo¬ dations High Low Front-reach wharves for river steamers... Feet 12 Ft. in. 6 6 None__ Butterfield & Swire back-reach landing.. 12 6 6 Private wharves. _ Jardine & Matheson back-reach landing.. 12 6 6 _do_ China Merchants Steam Navigation Co.. 12 6 6 _do_ Nippon Kissen Kaisha___ 12 6 6 _do. ... _ Method of transference of cargo from ship’s tackle to port Cargo boats, lighters. Coolie labor and ship’s tackle. Cargo boats and/or light¬ ers in midstream. Do. Do. The Chinese Maritime Customs returns show that the amount of tonnage entered and cleared at the port of Canton during 1923 amounted to 6,569,457 tons, exclusive of junks. Situated in the heart of a delta formed bv the confluence of the East, West, North, and Pearl Rivers, Canton enjoys excellent water communication with the interior districts. These waterways directly and indirectly tap practically every buying and producing section of the consular dis¬ trict. The railways also play their part in the dissemination of cargo. CARGO-HANDLING FACILITIES There are five private landing wharves or anchorages at docks belonging to the front-reach wharves for river steamers and three British and one Japanese steamship line. These have no facilities for.handling heavy cargoes except such gear as is carried by the ship. Discharge of cargo is effected wholly by coolie labor using bamboo poles and baskets. The cost of transferring cargo from ship’s tackle to the port varies according to distance or destination. In view of the fact that all cargo is moved by hand, the ordinary packing for export and marketing is generally sufficient provision against damage or loss. WAREHOUSE AND STORAGE FACILITIES There are no public warehouses, but the steamship companies and large private import firms have their own private warehouse facili¬ ties. There are eight of these altogether, and none of them accepts goods for storage. Company cargo is usually stored 14 days free of charge, after which the rates are nominal. In the case of two Chinese companies, their warehouses may be rented outright at the rate of $350 United States currency per month. All these warehouses are of brick and steel construction, varying in details, and are of extended capacity. Transfer of goods from landing to warehouse is entirely by coolie labor. It should be emphasized that outside cargo is not accepted for storage by Canton firms having warehouses. Transfer of goods from the warehouses to the dealers is effected by coolie labor, light¬ ers, or cargo boats. Shipment to the interior is effected by cargo junks, by river steamers, and by rail. 420 COMMERCIAL HANDBOOK OF CHINA PUBLIC WORKS AND UTILITIES ELECTRIC LIGHT PLANTS By far the most important electric-light plant in the Canton dis¬ trict is the Kwangtung Electric Supply Co. (Ltd.), of Canton. It has a capacity of 10,000 kilowatts in steam turbines and 1,875 kilo¬ watts in Diesel engines. Turbine equipment is entirely of Ameri¬ can origin, and plans for extension include the purchase of an addi¬ tional 5,000 or 10,000 kilowatt turbine. Expansion of this plant is hampered by unsettled conditions, as is the case with all others in the district. There are at least six other electric-lighting plants in the district, notably at Fatshan, Kongmoon, and Wuchow. They are all under Chinese operation and are equipped for the most part with English gas and oil engines. WATERWORKS The Kwangtung Water Supply Co. at Canton has a capacity of 9,000 gallons per minute, and supplies water at a rate of of 38 cents (gold) per 1,000 gallons. The equipment is British, consisting of three steam reciprocating pumps and steam turbine driven pump. Additional and improved water-supply equipment is greatly needed, but can not be undertaken during present conditions. A separate waterworks is maintained on Shameen, the British concession; its somewhat antiquated equipment is of British manufacture. TRAMWAYS • The Kwangtung Tramway Co. (Ltd.), of Canton, is a Chinese concern with some British capital invested. It has the franchise to operate on all Canton streets, inside the city, within a 10-mile radius. Because of disturbed conditions it has not operated since June, 1923. CONSERVANCY AND RECLAMATION WORKS The Conservancy Board in Kwangtung was created during the latter part of 1914 by presidential mandate of the Peking Govern¬ ment. From 1914 until 1919 the work of the Conservancy Board was carried on with provincial funds, but since 1919 it has been maintained chiefly with funds granted out of the surplus of the Maritime Customs. At the beginning of 1924 the board was faced by such a shortage of money that the suspension of all operations was threatened. To meet this situation and to prevent the dissolu¬ tion of the board, two proposals are being worked out. The first contemplates the imposition of a direct surtax on Canton Maritime and Native Customs revenue, the surtax to be used for harbor im¬ provement. The second proposes to obtain a Government grant. Conservancy work is extremely important in the district. Several steamers have grounded recently in consequence of the silting which is taking place in the Canton Harbor and its approaches. The dis¬ astrous effects and economic loss which result yearly from floods could be minimized if there were sufficient funds to carry out the plans of the Conservancy Board. CANTON CONSULAR DISTRICT 421 IMPORT AND EXPORT TRADE According to the annual report of Consul General Douglas Jen¬ kins for 1924, Canton’s trade in 1924 fell considerably below that of 1923, the Chinese Maritime Customs returns showing the total value of imports and exports as $168,629,388 United States currency in 1924, as compared with $184,373,183 in the previous year. The shrinkage in imports from foreign countries was the most striking feature of the year’s trade, foreign imports for 1924 amounting to only $42,807,066 United States currency, as compared with $58,757,- 435 in 1923. Exports to foreign countries also declined, while ex¬ ports to Chinese ports were about the same as in the preceding year, and imports from Chinese ports substantially increased. De¬ clared shipments to the United States amounted to $19,859,883. The following table shows the value of the foreign trade of the various ports in the Canton consular district during the years 1903, 1913, 1923, and 1924: Forts 1903 1913 1923 1924 i Exports from— United States currency United States currency United States currency United States currency Canton _ $31,168, 330 $43, 875, 367 $81, 397, 992 $74, 312, 677 Kiungchow_ ... _ 1, 270, 699 1, 874, 406 3, 661, 358 2, 238, 723 3, 087, 042 Kongmoon... _ ( 2 ) 1, 307, 267 3, 762,184 1,444, 611 Lappa _ 7,186, 578 3,115, 077 4, 054, 688 Lungchow . _ 11,004 ( 2 ) 7,317 114, 521 142, 517 Nanning... . . _ 2, 398, 290 661, 026 1, 662, 916 1, 899, 340 1, 652,717 Pakhoi_ _ 956,126 1, 473, 543 Samshui_ 740, 582 1, 299, 997 1, 060, 441 887,405 Wuchow_ 1,681, 658 2, 672, 884 4, 664, 956 5,147,179 Imports to 3 — Canton _ 40, 043, 668 38, 256, 493 102, 975, 203 42, 807, 066 Kiungchow__ 1, 629, 533 2,893, 109 3, 402, 910 3, 700,868 Kongmoon__ ( 2 ) 4,925, 631 12, 444, 001 10, 952, 282 17,727,800 Lappa. ... _ 3, 537, 722 9, 211,141 15,173, 025 Lungchow. . _ 736, 141 71, 465 110, 372 85,204 Nanning...__ _ ( 2 ) 3, 079, 497 3, 069, 605 2, 234,423 Pakhoi.__ 1, 240, 405 1, 335,107 2, 929, 634 2, 345,191 Samshui... _ _ ... 1, 097, 236 4, 201, 245 7, 708, 892 6, 622,148 Wuchow___ 3, 613, 880 8, 949, 304 9, 727, 400 4, 584, 400 J 1924 figures converted at the ratio 1 tael=$0.81. 2 No statistics available. 3 Foreign imports only included in 1924. IMPORT TRADE The following table shows the principal imports at the port of Canton during the years 1913, 1923, and 1924: [Quantities are stated in thousands of units given; values in thousands of United States dollars] Principal articles 1913 1923 1924 Quantity Value Quantity Value Quantity Value Cotton manufactures___ _ _ 3,461 12 99 70 116 36 338 108 88 3 • 6, 224 88 1,009 829 260 88 752 124 677 1,490 4,719 125 903 999 472 58 1,309 105 454 156 Silk piece goods_ ___ ... Woolen and cotton mixtures _ Woolen goods..... ... Brass and yellow metals...__pounds.. Copper ingots and slabs_ _do_ Iron and steel products.__ _ 773 236 1,264 507 1,625 375 Lead pigs and bars. __pounds. Ammonia sulphate. __do_ Bran....do— 3,239 2, 709 17, 379 2, 446 15, 669 136, 586 2,666 11,200 14,133 422 COMMERCIAL HANDBOOK OF CHINA Principal articles 1913 1923 1924 Quantity Value Quantity Value Quantity Value Macaroni ___- . --.pounds.. 2,179 97 1,622 170 800 85 Rice and paddy_ __ _-do_ 48,893 839 999, 924 24, 299 365, 300 10,171 Cigarettes ---- - . .number.. 132, 585 278 111,737 332 323, 000 820 Clnthine 297 184 379 Dyes . - _ -- - -- _ . _ _ 144 488 772 Electrical supplies .. __ _ __ 72 102 443 Fish and fish products _ 891 1,834 996 Flo .r - - ..pounds 56, 962 1, 228 60, 472 1,537 66, 300 1, 648 Fruits, dried and preserved _ _ do _ 421 9 2, 521 140 800 69 Ginseng ___ - do _ 27 55 20 68 48 95 Glass and glassware __ 121 201 134 India rubber and manufactures 9 74 301 .Tade stones __ pounds . 397 106 475 196 184 leather and leather eoods 116 380 405 Petroleum products: Fuel oil. . . . . . _tons.. 1 17 5 80 6 104 Kerosene _American gallons.- 14, 797 1,587 11,846 2,603 6, 738 1, 505 Lubricating oil_ _ _ do _ 43 1 265 100 376 115 Paraffin wax pounds 2,823 116 6,203 312 Machinery ... .. ___ 147 449 218 Paner 871 941 1, 463 Saltpeter _.pounds 90 3 1,330 90 ' 131 Soap _ - . _ . 68 25 55 Sugar _ . .. . .. .pounds.. 62, 902 1, 974 54, 474 3,430 60,133 4, 577 Tea... --- --. . do _ 687 139 1,460 283 2,000 277 Canton's import trade had more than doubled in value during the 20-year period between 1903 and 1923, but the figures for 1924 show a falling off of more than 50 per cent as compared with the preceding year. On the whole the trade in cotton goods has been good. A particu¬ larly noteworthy feature of the trade was the advent of Japanese competition. In 1903 Japan shipped practically no cotton goods to the Canton market. By 1923 the Japanese had obtained a good share of the trade, particularly in gray shirtings, jeans, and yarns. The United States has never been an important factor in the market. Woolen and cotton goods (mixed) and woolen goods have main¬ tained a most satisfactory growth and now form a relatively import¬ ant item in the import trade—principally from Great Britain, Japan, and Germany. Melton cloth and suitings deserve special mention. In metals and minerals satisfactory advances have been recorded in brass sheets and plates, iron and mill-steel bars, and wire nails. A fairly static condition has been maintained in lead pigs and bars (the importation of which has averaged more than $100,000 United States currency per year) and in tin plates. Marked activity has been apparent in the ammonia sulphate market. From no importations in 1903, shipments advanced to a value of $88,402 United States currency in 1913 and to $676,987 in 1923. In 1924 the value was $454,000. The United States supplies some, although Great Britain rather dominates the market. The Cantonese have become relatively large consumers of con¬ densed milk in the last 20 years. The United States has a fair share of this trade. Imports of cement also have shown remarkable growth, due to increased demand for construction purposes. Kice and rice paddy form together the largest item in the import tables. Imports originate largely in Siam and French Indo-China, CANTON CONSULAR DISTRICT 423 The value of 1923 shipments amounted to over $24,000,000, while in 1924 there was a sharp decline, to $10,171,000. Imports of cigarettes have advanced steadily. The 1924 imports represent more than 15 times those of 1903 and nearly 2y 2 times the amount brought in during 1913. Coal imports into Canton have increased steadily, the chief sources of supply being North China, Formosa, and French Indo-China. Electrical materials did not appear in any quantity in the import tables until 1923, when shipments amounted to more than $200,000 gold. The United States lias always been a strong competitor in this line. Another commodity in which American participation has been marked and satisfactory is wheat flour. The quantity shipped into Canton from all sources rose from 30,642,801 pounds in 1903 to 56,961,866 pounds in 1913, to 60,472,440 pounds in 1923, and to 66,- 300,000 in 1924. Canada and Australia are the chief competitors that the United States faces in this field. Imports of machinery have been of particular interest to the American trade. It seems probable that the Canton market will continue to deserve attention, particularly if conditions revert to a more normal basis. Because of the growth of the match industry at Canton, there has been increasing activity in the importation of match-making materials. These include chlorate of potash, wood splints, and par¬ affin wax. Japan has been the largest source of supply. Imports of kerosene advanced from $1,587,000 United States currency in 1913 and to $2,603,000 in 1923. In 1924 there was a decrease to $1,505,000. The United States, Sumatra, and Borneo con¬ tribute the supply. Paper is an important item in the trade of Canton. Imports in 1923 amounted to $941,000 United States curerncy, of which the largest items were common printing paper and “ machine-glazed cap.” In 1924 there was a notable increase to $1,463,000. Sweden, Norway, Denmark, and Japan have supplied the bulk of the demand. The 1924 imports of sugar were valued at $4,577,000, as compared with $3,430,000 in 1923 and $1,974,000 in 1913. Most of the supply comes from the Netherlands East Indies. EXPORT TRADE Export statistics are presented in the table below (reexports being included in these figures) : [Quantities are stated in thousands of units given; values in thousands of United States dollars] Principal articles 1913 1 1923 1924 Quantity Value Quantity Value Quantity Value Cotton manufactures_ 254 1,194 254 71 447 110 187 160 69 3,808 104 408 443 125 313 198 28 Wolfram ore_pounds-- 3,120 1, 226 1,600 6,418 Bags-number.. Bamboo and bamboo ware_ _ 1,532 72 51 83 1.54 115 26 Bean curd, dried___ _ pounds. Books, printed_ do 2,193 1,781 1,821 Brassware __ ... .. do Bristles _ do - 424 121 465 138 618 37 424 COMMERCIAL HANDBOOK OF CHINA Principal articles 1913 1923 1924 Quantity Value Quantity Value Quantity Value Buttons..... _ ... .. ... 172 25 60 Cassia_ .. _ _ . .. .pounds.. 20,172 1,279 16, 339 612 24,100 1,014 China ware_ . _ 234 245 291 Cement - - - _pounds.. 27,309 128 1,938 36 1,200 8 Eggs, fresh_ _. .number.. 33, 431 200 7, 768 93 7,343 80 Fans - -- _do_ 107, 323 88 11,470 194 54,376 7.54 Feathers... - - _pounds.. 42 5 2,099 164 1,240 64 Firecrackers and fireworks_ . _do_ 8,638 1,110 8, 769 1,238 9, 466 1,419 Fruits, fresh, dried, etc _ _do_ 13, 487 117 8,093 111 27,866 1,879 Furniture __ ... _ _ 66 59 114 Garlic _ . ... _ _pounds. 11,016 170 3,964 88 3, 733 72 Ginger, fresh. _ _do_ 7,231 121 9, 658 194 9,600 258 Glass, all kinds. . _ 135 167 240 Grass cloth ____ _pounds.. 37 74 26 51 38 59 Groundnuts (peanuts), in shell _do_ 9, 789 245 20 1 Hair, human.’ ____ 1,590 356 507 168 533 158 Hides, cow and buffalo _ _do_ 893 144 173 18 296 72 Ivory ware___ 13 56 76 Joss sticks and powder, etc.. . ... _pounds.. 3,023 89 4, 210 176 5, 733 198 Leather and leatherware _ .. 1, 829 89 1, 525 Litchis, dried.. _ _ . _pounds.. 827 ' 155 867 184 1,733 '330 Matches eross 2,999 994 2,093 680 Mats and mattinv ... 1,552 2. 356 1,210 Meats, dried and preserved..._ .. .pounds.. 809 ' 178 34, 284 1, 390 500 '236 Medicines_ .. __ _do_ 4,519 293 4,290 313 4,933 288 Oil, vegetable___ 138 48 172 Paper. ...___ .. .pounds.. 1,320 139 5,241 454 5, 467 561 Rattan and rattan ware __ _do_ 2, 213 77 58, 762 284 48,000 210 Samshu _ _ _do_ 2, 532 109 2, 254 125 Seeds_ _do_ 877 74 1,139 123 1,333 149 Shoes and boots... _ _pairs.. 130 66 531 308 559 274 Silk, raw. ... . _ . pounds.. 6, 354 20,886 5, 805 44,242 6, 216 37, 651 Silk waste___ _ _do_ 5,284 1,979 5,442 3, 526 7,866 3,803 Silk piece goods_ _ _do_ 1,240 6,103 867 6, 762 900 6,811 Silk and cotton mixtures_ ... _do_ 252 232 76 223 75 194 Silk embroidries_ ... _do_ 84 556 83 743 128 1,271 Silk floss, Canton_ ... _do_ 10 29 29 51 15 62 Silk thread. _ _ _do_ 30 97 44 80 17 71 Silverware _ _ . 165 326 383 Sugar___ . ... pounds.. 5,280 133 2,804 89 367 20 Tea, black_ _do_ 1,836 319 3,284 717 2,533 536 Tobacco, all kinds. . _ . . _do_ 7, 919 660 11,368 1, 765 12,933 1,912 Umbrellas _ _ 33 95 297 Vegetables, dried, fresh, etc . ___ 132 280 247 Woodware___ _ . _ 76 271 207 Examination of the export figures reveals some interesting facts. A remarkable growth has occurred in the value of the trade of Can¬ ton. Shipments for 1903 amounted roughly to $31,000,000 United States currency and advanced to $43,000,000 in 1913 and to $81,000,- 000 in 1923. In 1924 there was a slight recession, to $74,000,000. 1 As regards cotton goods, the figures for 1923 and 1924 indicate that Canton is becoming a manufacturer and exported of this commodity. The output goes mainly to Chinese communities abroad. In metals and minerals the only item of importance is wolfram or tungsten ore. Xo exportation occurred during 1913, but by 1923 shipments had assumed considerable proportions. The demand for this commodity was particularly keen during the World War. Bamboo baskets and bamboo ware have acquired popularity in recent years. The chief buying center has been the United States. Bristles have remained a fairly staple item in the export trade. The demand has remained steady. Cassia is an export commodity of good proportions. The 1924 export figures are particularly high. 1 In these discussions the values of exports and imports are stated in United States currency. CANTON CONSULAR DISTRICT 425 During the period under review shipments of china ware, espe¬ cially fine chinaware, have increased. The United States has been a good buyer of this commodity. In general a big forward movement has been evidenced in exports of feathers, duck and fowl, though 1924 registered a decrease from the figures for 1923. The demand has come from Europe as well as from the United States. Firecrackers are another commodity showing a rapid advance in the export trade. Exports jumped from $368,193 in 1903 to more than $1,100,000 in 1913, with this figure slightly bettered in 1923. In 1924 there was a further increase to $1,419,000. The United States is a consistent purchaser. Fresh ginger has shown satisfactory increases in both the value and the quantity of shipments abroad. Human-hair exports for 1913 were unusually large. The figures dropped to $168,451 in 1923 and $158,000 in 1924, which, however, represents a substantial advance over 1903. The foreign demand for ivory ware has not been con¬ sistent, but the trade has been fairly brisk during the past few years; in 1924 there was a substantial advance over the preceding year. During the period under discussion Canton has become an exporter instead of an importer of matches. The 1913 figures show no expor¬ tation of this commodity; exports for 1923 amounted to $994,218. Exportation of mats has shown a steady increase. The foreign demand for Canton mats and matting is quite universal, these com¬ modities being particularly popular in the American market. Canton has long been a center for the exportation of medicines. The export figures show a general forward movement, the cargo being destined principally for other Chinese communities. The foreign demand for rattan and rattan ware revealed a tre¬ mendous and steady growth up to 1923. The exports for 1913 were valued at $77,189, while those for 1923 totaled $283,808. In 1924 there was a decrease to $210,000. Raw silk has shown considerably more fluctuation in value than in quantity. In 1903 there were exported from Canton 4,431,033 pounds. This figure rose to 6,057,200 pounds in 1913, dropped to 5,739,349 in 1923, and rose again to 6,216,000 pounds in 1924. The value of exports advanced from $13,976,627 in 1903 to $20,094,785 in 1913 and to $43,819,948 in 1923. In 1924 the value declined to $37,651,000. It is this commodity that makes Canton important as an export center for shipments to the United States. Exports of waste silk reveal some increase in quantity. Values advanced from $1,979,193 in 1913 to $3,526,662 in 1923 and $3,803,000 in 1924. Silk piece goods form a large item in the export trade, but are not of particular interest to America, as shipments go principally to India and Chinese communities abroad. Silk embroideries are entering more and more into the foreign trade of the poit. Shipments amounted in value to more than $550,000 in 1913 and more than $700,000 in 1923, while in 1924 there was a striking increase to $1,271,000. A phenomenal growth lias been witnessed in tobacco leaf. Canton tobacco leaf has become important as a filler in the manufacture of cheap cigarettes. 426 COMMERCIAL HANDBOOK OF CHINA Prepared tobacco has revealed a forward movement so far as the value of shipments abroad are concerned. The quantity of exports, however, remains fairly uniform. It should be noted that exports from Canton are listed in the customs returns as exports to Hongkong and as exports to other parts of China. Under the heading “exports to Hongkong” are listed practically all of the exports from Canton to Great Britain, Ger¬ many, France, the United States, and Japan. From the invoices which have passed through the consulate at Canton it is possible to ascertain the percentage of Canton exports that go to the United States. With other countries, however, there is no way to determine the ultimate destination of Canton exports, which go first to Hong¬ kong and are transshipped from that port to various points abroad. Cargo shipped by direct steamer from Canton to foreign countries is listed as “ exports to foreign countries,” provided the steamer does not call at Hongkong. With the exception of a few Japanese vessels, however, there are no ocean-going ships operating directly from Canton to foreign ports exclusive of Hongkong. Thus the quantity taken by Hongkong includes not only cargo whose ultimate destina¬ tion is the United States but also cargo which is bound for Japan, France, Great Britain, and other foreign countries, as well as the majority of the exports to other Chinese ports. BANKING FACILITIES The following table shows the leading banks in the Canton con¬ sular district that handle foreign exchange and bills: Name Nationality Head office Capital International Banking Corporation-_ American_ New York_ Capital and surplus, $10,- 000,000 United States cur¬ rency. Hongkong & Shanghai Banking Cor¬ poration. British_ Hongkong_ Authorized, $50,000,000 Hong¬ kong currency; issued and fully paid up, $20,000,000. Chartered Bank of India, Australia & China. .. ..do.. ... London_ Paid up, £3,000,000. Peninsular & Oriental Banking Cor¬ poration. _do_ _do_ Authorized, £5,000,000; paid up, £2,594,160. Banque de l’lndo-Chine _ French... . ... . Paris.. 10,000,000 francs. Deutsche Asiatic Bank. German.. .. . Berlin.. _ Bank of Taiwan (Ltd.)__ Japanese__ Taipei,Taiwan. 52,500,000 yen, paid up. Yokohama Specie Bank (Ltd.) _do_ Yokohama_ 100,000,000 yen. Bank of Canton (Ltd.)_ Chinese (British registered). Hongkong- Authorized, £1,200,000; paid up, £1,078,530. Bank of East Asia (Ltd.). _do. .do. _ Authorized, $10,000,000 Hong¬ kong currency; paid up, $5,000,000. Banque Franco-Chinoise. - _ French.. Paris.. 10,000,000 francs. LOCAL CURRENCY SITUATION a Foreign trade is conducted as a rule in Hongkong silver dollars. The silver 20-cent pieces are usually at a discount as compared with the Hongkong dollar, the highest discount for 1923 being 1.25 and the lowest discount being 1.14. Hongkong currency notes of various denominations are issued by the British foreign-exchange banks at Hongkong and circulate freely in most of the treaty ports. Remit- 2 See special chapter oil “ Currency, exchange, and banking.” CANTON CONSULAR DISTRICT 427 lance charges to Shanghai in dollars range approximately from 4 per cent premium to 4 per cent discount. The only factor which differentiates the Canton situation from that obtaining in some other parts of China is the relation between Hongkong currency and Canton silver currency. The tendency of the latter to depreciate has an adverse effect upon foreign trade. When the Hongkong dollar is high with respect to gold, import trade is augmented and export trade retarded. Conversely, when Hongkong dollars are cheap the tendency is to restrict imports, while exports are stimulated. ADVERTISING AND MERCHANDISING 3 Advertising in the Chinese vernacular newspapers is considered a fairly effective method of augmenting sales. Advertising through the medium of moving pictures is coming into more general use throughout the district. Before the performance begins and be¬ tween films or during intermissions this matter is flashed upon the screens. This is of great value in familiarizing the populace with some special brand or “ chop.” The printed matter, of course, is in Chinese, always with a likeness of the particular commodity. Posters and billboard advertising is common in Canton and is regulated by a department of the municipality which promulgated a definite system of rules during 1923. The municipality is divided into 12 advertising districts, in which the city has planned to set up 1,600 public billboards, the number to be increased when condi¬ tions warrant it. All advertising spaces are uniform in area and the charges are as follows per 100 copies of bills posted: Class A, per day, $0.15 United States currency; class B, per day, $0.10; class C, per day, $0.08. The posting of bills and advertising matter on immovable prop¬ erty, such as buildings, as well as on movable property, such as cars or steamers, is subject to the approval of the bureau. The tax levied on such advertising is given below (tax per month per 10 square feet) : Class A district, $2.50 United States currency; class B district, $1.50; class C district, $0.75. Since the promulgation of the rules affecting the use of posters and billboards there has been a decided dropping off in the space utilized for advertising. The general opinion seems to be that the taxes and rates are somewhat higher than business houses can afford to pay. Non-Chinese concerns at present make no extensive use of the municipal advertising spaces. TRAVEL FACILITIES The majority of commercial travelers and tourists stop at the Vic¬ toria Hotel, under British management, which is the only non- Chinese hotel in Canton. The traveler has his choice of American or European plan, rates by the American plan varying from $5 to $14 gold per day. Monthly rates are computed as 24 full days. The accommodations of the hotel are limited, and it is frequently difficult to obtain rooms. 3 See special chapter on this subject. 428 COMMERCIAL HANDBOOK OF CHINA For the past two years there has been a project on foot to build a new and larger hotel on the Shameen foreign concession, but, although ground has been broken, the construction is very slow. Under present conditions it is advisable for travelers to come to Canton from Hongkong by river steamer rather than by rail. Train service between the two ports is not only unreliable but is often unsafe. From Canton the interior districts may be visited by water or by rail; all the necessary traveling arrangements may be effected at Canton. However, visitors to the West River territory usually find it more practicable to take a steamer direct from Hongkong. Every commercial traveler who visits the district should have in his possession powers of attorney and other credentials. Legitimate Fig. 1(5.—American consulate general. Canton. The United States has had a consular representative at Canton since 1784 business is often blocked by the failure to have such documents. Specific letters of introduction are useful. The commercial language of the port is English so far as foreign trade is concerned, and com¬ petent guides and interpreters may be obtained at the hotels for reasonable rates. The traveler making an initial visit to the district should call at the American consulate general. TRADE ORGANIZATIONS The following are the principal trade organizations at Canton : General Chamber of Commerce, Chinese; address, “General delivery.” British Chamber of Commerce; address, “ Shameen.” French Chamber of Commerce; address, “ Shameen.” German Chamber of Commerce; address, “ Tungshan.” CANTON CONSULAR DISTRICT 429 The most important function of the Chinese General Chamber of Commerce is to bring the grievances of individual firms to the at¬ tention of the officials of the Government. The trade organizations maintained by the British, French, and Germans are of a somewhat informal nature. Inquiries addressed to the various organizations are circularized among the firms of the nationals in question. The only American organization in the dis¬ trict is the American Association of South China, which has for its object the furtherance of general American interests, but is not equipped to carry on correspondence with business men in the United States. PROPERTY VALUES AND RENTS The following statement shows the general situation with regard to property values and rents in Canton: 1 All values are in United States currency] Location Purchase price per unit Rent (per month) Office space Warehouse space Residential purposes Bund_ - Varies from $350 to $1,750 per 100 square feet. $50 for 625 square feet. $75 to $100 for 8-room unfurnished house without water or light. $2 to $5 for 3 rooms, used by poorer class Chinese; $15 to $50 for 5-room house, used by middle-class Chinese. $150 to $200 for suite of rooms, unfurnished. Tungshan... .. Chinese city... Shameen__ Varies from $150 to $600 per 100 square feet. $1,700 per square foot with old 3- story brick build¬ ing. $20 for 625 square feet. $300 for 3-story build¬ ing, first floor used as office and upper floors as residence. $350 per month for warehouse 280 by 80 by 18 feet. Land values and rents are high at Canton and are believed to be increasing. The most attractive values are in some sections of the Chinese city, although real estate prices along the wide streets ap¬ pear excessive. The residential district for Americans and Euro¬ peans is expanding and there is a tendency to move to suburbs, especially Tungshan, rather than to settle on Shameen, which is rather crowded. Several firms, including practically all of the Ger¬ man ones, have opened offices in the ctiy. There seems little doubt that the business of the future will take place more and more within the native city and not on the foreign concession. TAXES AND OTHER ASSESSMENTS The generally unsettled situation which prevails in the Canton district makes it difficult to state what taxes and assessments would amount to under peaceful conditions. In the effort to raise funds to defray the expenses of each incoming government, extraordinary levies and taxes are imposed. These taxes take the form of collect¬ ing rents in advance and placing a surcharge thereon, of additional 430 COMMERCIAL HANDBOOK OP CHINA taxes on public utilities, of increased police charges, of higher rates on the registration of lands, of compelling the registration of prop- erty' with an attendant tax, and of various other measures. As a rule, however, foreigners enjoying extraterritorial rights are not required to pay these assessments, although most of them do pay certain taxes which are considered reasonable and nondiscrimina- tory. As in other parts of China, foreigners belonging to nations which have extraterritorial privileges may hold land for business pur¬ poses only in the treaty ports, and that only in the form of perpetual leases. Such arrangements for acquiring the right to land should be conducted through the consular officers in the district. There is no particular obstacle in the way of business men renting offices and residences in the treaty ports. In case any difficulty arises in regard to rentals, reference to the nearest consular official will often clear up the matter. LIVING COSTS The statement below indicates the ordinary living expenses at Canton. Boarding-house costs are not shown, because such accom¬ modations are not available. Hotel board and room, per month Board Rent Esti¬ mated necessary living expenses, per month Single man_ _ _ _ .. _ .. $100 $50 $75 $125-$200 Single woman. . __ _ ____ 100 50 75 150- 200 Married couple.—. .. . _ . . _ . . .. 190-200 100 100 200- 250 Married couple and two children . ______ 300-400 300- 400 Note.—C hildren under 2, one-fourth rate; under 8, one-half rate; over 8, full rate. Living expenses in the Canton districts are believed to be high in comparison with most other sections of China. Residents of Shameen pay considerably more than those foreigners who dwell in the outlying suburbs. The disadvantages of suburban life are serious because of the relatively expensive and unsatisfactory methods of transportation and principally because at times it is not considered safe to pass through the native city. The majority of the American and European residents of the Shameen concession belong to the Canton Club, an international organization maintaining a club building on the island. There are a number of excellent mission schools in the district, but no good facilities for the education of American children, de¬ spite the fact that separate foreign schools are maintained at Paak- hoktung and at the Canton Christian College. The engagement of tutors is general, as is the practice of sending children to other parts of China for their secondary education. CHANGES IN TRADE CONDITIONS IN RECENT YEARS Certain characteristics of the Canton trade are worthy of special attention. The Chinese exhibit increasing eagerness to buy all kinds CANTON CONSULAR DISTRICT 431 of western commodities, and American manufacturers and dealers have secured a fair share of the trade. Several factors, however, tend to make the importation of many articles only temporary. Among such articles may be mentioned foreign-style shoes, hats and caps, umbrellas, wearing apparel of all kinds, watches, safes, small gaso¬ line and oil engines, and the simpler types of industrial machinery. As a rule, the cost of the imported commodity is too high to fall within the purchasing power of the average Chinese. Foreign-made articles thus belong to the luxury class. When the indications of a widespread demand become manifest, the Cantonese use the im¬ ported goods as models and imitate them, placing native-made articles on the market at prices below those quoted on the imported goods. The native-made goods are altered to conform to Chinese tastes and requirements. In many cases the raw materials and the machinery are purchased from abroad. Hand labor and more or less primitive machines are employed at present, rather than intricate and highly specialized equipment. In view of these conditions, American en¬ deavor should not divert too much attention to the sale of certain classes of merchandise. Initial sales in these lines offer opportunities for the disposal of American surplus production, but do not consti¬ tute fields in which substantial and permanent business may be built up. American efforts should rather be concentrated on supplying raw materials and machinery. The introduction of modern industrial plants is beginning to pre¬ sent attractive openings for American trade. Electrical appliances and equipment of all sorts are in demand. When conditions become quiet in this section of China, there will arise a market for industrial machinery such as is used in weaving and knitting factories, in match-making concerns, in the production of bricks and cement, in tanneries, and in rubber sole, paper, and ice factories. At the present time such enterprises are in an inchoate state. The Cantonese possess the necessary capital and necessary resources to engage in industrial activity along western lines; the only element lacking is a stable situation under which legitimate undertakings may be fostered. American exporters have already obtained a good position in the Canton market in many lines, among which may be mentioned oil, cigarettes, sewing machines, flour, and general metals and minerals. Favorable activity has been apparent in American importation of railway materials, of construction equipment, such as reinforcing steel, cement, elevators, locks, and padlocks, and of plumbing acces¬ sories. Canned goods, such as condensed milk and milk substitutes, fruits, meats, and preserves, find a growing sale. Other commodi¬ ties in the importation of which American participation is marked are chinaware, dental instruments, pumps and fittings, needles, tele¬ phone materials, hand tools, the better grades of paper, toilet articles and preparations, phonographs, automobiles, and photographic sup¬ plies. Competition is severe and can be met only by high-grade produc¬ tion at prices which compare favorably with similar commodities from other foreign countries. HANKOW CONSULAR DISTRICT By Consul General P. S. Heintzleman LOCATION AND AREA The Hankow consular district includes the Provinces of Hupeh, Kiangsi, Honan south of the Yellow River, Shensi, Kansu, the Kokonor region, and Sinkiang (Turkestan), all in the central and northwestern portion of China, the aggregate area being roughly 1,000,000 square miles. The city of Hankow is situated on the Yangtze River at its confluence with the Han River, in latitude 39%° N. (about the same as New Orleans) and longitude llU/^ 0 E. The climate is somewhat similar to that of the southern part of the United States, ranging in temperature from 20° to 102° F. There is a heavy rainfall during the summer, and there is a short rainy season in the late winter and early spring. The average annual rainfall is about 44 inches. In area the Hankow consular district is the largest in China, comprising more than 25 per cent of the total territory of the Re¬ public. From the southern point of Kiangsi Province to the north¬ western point of Kansu the distance exceeds 1,600 miles; because of the extremely primitive methods of transportation (largely by chair, cart, and wheelbarrow) it would require more than one month to make such a trip. POPULATION No accurate census of the population has ever been taken, but the estimate made by the board of the interior in 1910 is generally ac¬ cepted as the most reliable and is used in this report. The estimated area and population of the Provinces comprising the district are: Provinces Area Population Provinces Area Population Hupeh .. 71,428 69,498 60,000 75, 290 24, 900, 000 14, 500, 000 24, 000, 000 8,800, 000 Kansu_ _ 125,483 0) 550, 579 5,000,000 (') 2, 491, 000 Kiangsi... Kokonor region___ Honan south of Yellow River____ Sinkiang (Turkestan)_ Total.. 952, 278 79,691, 000 Shensi_ 1 Not known, even approximately. About 80 per cent of this population is rural. Agriculture is of a very primitive character, and industries are, with some exceptions, still of the primitive household sorts. Density of population is greatest in Honan along the Yellow River, where it is 376 persons per square mile, and least in Sinkiang, where it is 4% per square mile. The average density of population for the district is 182 per square mile. 432 HANKOW CONSULAR DISTRICT 433 CITIES The treaty ports in the consular district, in the order of their commercial importance, are: Hankow, population 1,000,000, opened to trade in 1862; Kiukiang, population 36,000, opened in 1862; Ichang, population 55,000, opened in 1877; and Shasi, population 95,000, opened in 1896. There are a number of other cities of local and trade importance, and a few ports of call for passengers and cargo on the Yangtze River, such as Hukow, Wusueh, Lukikow, Hwangshihkang, and Hwangchow. These places were opened as ports of call by the Chefoo Agreement of September 13, 1876, and the Yangtze Regula¬ tions of 1898. American firms and residents in the treaty ports are as follows: Hankow, 18 firms and 248 residents; Kiukiang, 1 firm and 76 resi¬ dents; Ichang, 3 firms and 32 residents; Shasi, 1 firm and 9 residents. In addition to the 365 Americans living in the treaty ports there are 922 resident in various interior cities, making a total of 1,287 Amer¬ icans resident in the district. At least 75 per cent are engaged in missionary work. In Hankow (which, except Kiukiang, is the only city in the dis¬ trict that has foreign concessions) there are about 4,400 foreign resi¬ dents. Great Britain, France, and Japan have concessions here, as had Germany and Russia formerly, these now being administered by the Chinese Government as special administrative districts. Great Britain has the only concession in Kiukiang. PHYSICAL FEATURES Honan Province is shaped like an irreg'ular triangle. It comprises three river basins—the l T ellow River in the north, the Hwai River in the south, and the Han River in the southeast. The Peh and Tan Rivers flow into the Han River. Along the Yellow River, Honan is level, fertile, and populous; the southern portion is mountainous. Haifeng, the capital, is situated about 3 miles from the southern bank of the Yellow River, the bed of which is here elevated above the adjacent country. The Yangtze River flows through the southern part of Hupeh Province, while the Honan River drains nearly the whole Province joining the Yangtze at Hankow. The most important centers in Hupeh are the Wuhan cities (Hankow, Hanyang, and Wuchang), at the confluence of the two rivers. Hankow is the largest industrial and shipping city in central China. Other important ports are Shasi and Ichang. The former has a canal which discharges into the Han River 40 miles away. Ichang was formerly the head of navi¬ gation for light-draft vessels on the Yangtze, until the introduction in 1900 of the steamers that navigate the rapids and gorges. Above Ichang are the Wushan, Milan, and Lukan gorges, famous for their picturesque scenery. The Great Wall of China forms a part of the northern boundary of Kansu Province. The Province is virtually divided into two sections by the mountains running nearly north and south and separating the Wei and Yellow River Basins. The Wei Basin is 100020°—26-29 434 COMMERCIAL HANDBOOK OF CHINA fertile like the plains of central Shansi, but the rivers are of little use for navigation. The principal cities are Lanchow, the capital, on the Yellow River; Pingliang on the King River; Kungcliang on the Wei River; Min- chow, in the southern part, on a branch of the Yellow River; and Sining. Iviangsi Province lies south of Anhwei and Hupeh, between Chekiang and Fukien on the east and Hunan on the west, reaching from the Yangtze to Kwangtung Province on the south. The im¬ portant centers are Iviukiang, on the Yangtze River; Nanchang, the provincial capital, on the Kan River; Nankangfu, near the mouth of the Poyang Lake; Jaochow and Kingtehchen in the northeastern part, the latter famous for its porcelain industry; Pingsiang near the Hunan border, where there are extensive collieries; Kianfu, in the south-central part, on the Ivan; and Ivanchow, in the extreme southern part, likewise on the Kan. Shensi is bounded on the north by the Ordos country (inner Mon¬ golia), from which it is dhdded by the Great Wall, on the east by Shansi and Honan, on the southeast by Hupeh, on the south by Hupeh and Szechwan, and on the west by Kansu. This Province has three separate geographical divisions—the fertile loess table¬ lands in the north; the plain in the center drained by the Wei River and its tributaries; and the mountains in the south. The northern section has a good soil, but, on account of the uncertainty of the rains, agriculture is rendered precarious. The beds of the many small streams are cut deep into the prevailing loess formation, and consequently the roads across them are few. Yulinfu in the extreme north and Yenanfu in the north-central part are the principal cities. The most populous section is central Shensi, in the fertile Wei River valley. AGRICULTURE The Chinese are primarily agriculturalists, and most of the terri¬ tory in the district, except the mountainous sections, is under cul¬ tivation. The soil is fertile and has great agricultural potentiali¬ ties, although the wooden plow, the wooden-wheel cart, and the primitive hoe—all of which have come down from very ancient times—do not make the most of them. The following facts relate to the principal crops of the district, the first seven being given in the order of their monetary importance as articles of export. Cotton .—Produced in Ilupeli and Honan (planted in May, harvested in Sep¬ tember and October) ; yield per acre, 100 to 275 pounds. Sesame .—Produced in Hui)eh and Honan (planted in June, harvested in August, September, or October) ; yield per acre, 12 bushels. Tea .—Produced in Hupeh and Kiangsi (harvested in March and April). Beans .—Produced in Hupeh (planted in May, harvested in September), Honan (planted in June, harvested in October), and Kansu; yield per acre, 125 to 200 pounds. Tobacco .—Produced in Hupeh, Honan, Kansu, Kiangsi, and Shensi. Wheat .—Produced in Hupeh (planted in September, harvested in May), Honan (planted in October, harvested in June), Kansu, Kiangsi, and Shensi; yield per acre, 8 bushels and up. Peanuts .—Produced in Hupeh (planted in March, harvested in September), Honan, and Kiangsi; yield per acre, 500 pounds. Barley .—Produced in Honan (planted in September, harvested in June), Hupeh (planted in October, harvested in May), Kansu, and Shansi; yield per acre, 5 to 25 bushels. HANKOW CONSULAR DISTRICT 435 Corn. —Produced in Hupeh (planted in March, harvested in July), Kansu (planted in April, harvested in September), and Shansi (planted in June, harvested in August) ; yield per acre, 15, 16, 35 bushels. Hemp. —Produced in Hupeh and Honan (planted in February or March, harvested in June). Millet. —Produced in Hupeh (planted in June, harvested in October), Honan (planted in May, harvested in September), Kansu (planted in April, harvested in August), and Shansi (planted in March, harvested in July or August) ; yield per acre, 20 to 30 bushels. Peas. —Produced in Hupeh, Honan, Kiangsi, Kansu, and Shensi; yield per acre, 125 to 200 pounds. Potatoes. —Produced in Hupeh (planted in February, harvested in June). Rice. —Produced in Hupeh (planted in June, harvested in September), Honan (planted in April, harvested in August), Kiangsi, Shensi, and Kansu; yield per acre, 1.000 pounds and up. Silk. —Produced in Honan. Sweet potatoes. —Produced in Honan and Hupeh (planted in May or June, harvested in August, September, October, or November) ; yield per acre, 40 bushels and up. Other agricultural products are rye in Kansu, buckwheat in Hupeh and Shansi, indigo in Honan and Shensi, and alfalfa in Shensi. Truck farming and gardening are extensively carried on throughout the territory. The entire production of rice is consumed by the inhabitants of the district ; the total does not meet the full demand of the people. Cotton has become one of the principal articles of trade, and for the past several years ranked first in the exports of Hankow. The silk industry in Honan Province is not so important an indus¬ try as it is in Shantung and other Provinces in the north, but it is worth mentioning. Tea is one of the most important articles of export from Hankow. It is produced mainly in Kiangsi and Hupeh, which send their produce to Hankow for sale, making this port their chief black-tea market in China. Tobacco is a mercantile crop in Hupeh, Kiangsi, Kansu, and east¬ ern Honan and is grown intermittently for local consumption in Shensi. A few years ago there was a considerable stimulus to to¬ bacco production, created by the establishment in Hankow of a cigarette plant which undertook to use Chinese tobacco. The most important producing sections of the district are Chunchow and Laohokow in Hupeh, the Poyang Lake region in Kiangsi, Lancliow in Kansu, and Siangcheng and Chenchow in Honan. There are no statistics of production available, but it is estimated that Hupeh produces annually about 20,000,000 pounds, of which 15,000,000 pounds are sold on the Hankow market. Kiangsi produces 6,000,000 to 8,000,000 pounds, of which about two-tliirds is sold on the market for export, while Honan produces about 7,000,000 pounds, of which 6,000,000 are forwarded to Hankow for sale. There is no reliable estimate of the production in Shansi or Kansu. Recent years have witnessed a wonderful development in the qual¬ ity and exportation of sesame seed, which is grown very extensively in Honan and Hupeh; it has become one of the chief articles of the export trade of Hankow. The beasts of burden are the horse, bullock, mule, donkey, ass, and ■water buffalo. In the preparation of the land for planting, mules and water buffalos are used for plowing. The livestock found throughout the district includes pigs, chickens, and ducks. Every 436 COMMERCIAL HANDBOOK OF CHINA farm has a pig, and every family, urban or rural, has chickens. Cows and goats in limited numbers are to be found in practically all of the district. Yo manufactured fertilizer, unless bean cake is so considered, is used by the farmer; sesame cake is also prominent in some sections; and an extremely limited amount of carbonate and hydrate of lime is found in the western part of Hupeh. It may be stated that animal manure, bean cake, and ashes are the only fertilizers in general use. MINERALS AND MINING In the consular district there are known deposits of gold, silver, lead, zinc, copper, antimony, iron, coal, fire clay, pottery clay, g} 7 p- sum, salt, and limestone suitable for cement making. Some of these metals and minerals have been extensively worked in former times, and some are worked to a small extent at present. In Hupeh the main mineral belt is adjacent to the Yangtze be¬ tween Wuchang and the eastern boundary of the Province, and it • continues into Kiangsi. In northern, western, and southwestern Hupeh are some mineral occurrences of various sorts. Coal is found in a great number of places in the west, obtainable over the valleys of the Han and the Yangtze with their tributaries, but the best bituminous coal found in China is said to come from near Tayeh. Iron ore is obtainable in a number of places, but in Tayeh it has been operated to a considerable extent and is being mined for the account of the Tayeh and Hanyang iron and steel works. Most of the best ore in that region is being exported to Japan. At present foreign capital can not be invested under favorable conditions and controlled by foreigners. The main difficulty is the want of adequate provision under existing laws to protect foreigners against the heavy expenses during the developing stage. It is not thought that there are any mines operated entirely under foreign control or management. Local methods of mining endeavor to get out the available ore in the easiest possible manner, with no provision for future develop¬ ment, and when one hole is exhausted, for any reason, another is started. It is stated on reliable authority that less than 1 per cent of the mines in operation in this consular district use modern meth¬ ods or foreign machinery. While no statistics are available concerning the annual production of the various mines in the district, it is estimated that the annual output of the coal mines is 6,000,000 tons and of the iron-ore mines 600,000 tons. The output of the Pingsiang coal mine is reported to have been 863,756 tons in 1923, and of the Tayeh iron-ore mines for the same year 580,000 tons. The following statistics from the returns of the Hankow Maritime Customs show the exports of certain metals in 1923, to all countries: Antimony, 4,682 long tons, valued at $475,089; brass and copper ingots, 19 tons, valued at $3,934; iron ore, 341,333 tons, valued at $613,573; pig iron, 275,085 tons, valued at $3,803,894; scrap tin, 72 tons, valued at $43,580. All of the articles just named are taken by Japan, except small shipments of antimony to America and Europe. HANKOW CONSULAR DISTRICT 437 The following leading mines are in active operation: Tayeli Iron Mines, Tayeh, Hupeh; output about 70,000 tons per month; property of the Han-Yeh-Ping Iron & Coal Co., Shanghai. Pingsiang Colliery, Kiagnsi; daily output of 30,000 tons; property of the Han-Yeh-Ping Iron & Coal Co., Shanghai. Ching Hua Mining Co., Nanchang, Hupeh. Kweichow Mines, Siangki, Hupeh. Liuhokou Coal Mining Co., Honan, branch office, Hankow; amount produced annually about 180,000 tons. Fu Chung Corporation, Chiaotso, Honan (British-Chinese) ; coal mining. Hsiang Pei Shan Iron Mines, Hwangshihkang, Hupeh; the property has an estimated deposit of 20,000,000 tons of ore. Possibilities for the sale of mining machinery will depend en¬ tirely upon the development of the mineral resources. As this progresses, there will be demands for the usual mining machinery and transportation equipment. Until satisfactory methods are de¬ vised for the development of these resources under foreign or native control, the demand for machinery will be insignificant and such as would be required by primitive methods for surface and near-sur¬ face mining. MANUFACTURING AND INDUSTRIAL DEVELOPMENT The past few years has seen an advance in the number of flour and cotton mills established in the district. Six new cotton mills have recently been built in Wuchang, Hankow, and Chengchow. A large flour mill has recently been established at Kaifeng, Honan, known as the Yung Feng Flour Mill. The egg industry still main¬ tains an important place among the successful enterprises of the district. Both the Yangtze Engineering Works and the Hanyang Iron & Steel Works, formerly of great importance as industries, have not been successful recently, and the Yangtze Engineering Works has been compelled to close. The Tayeh Mines & Iron Works, the property of the Han-Yeh- Ping Iron & Coal Co., is one of the chief industries of the district. The concern is largely controlled by Japanese, and large quantities of the ore are exported to Japan. Other important plants are the Hankow Iron & Engine Works, the Government arsenals at Planyang, Kaifeng, Honanfu, Sianfu, and Lanchowfu, the Government powder factory at Hanyang, the Government mint at Wuchang, 2 paper mills, 9 cotton mills, 4 oil mills, 2 cigarette factories, 13 plants manufacturing egg products, 8 brick and tile plants, 3 modern aerated-water works, 10 electric light plants, 2 match factories, 1 nail and needle factory, 10 flour mills, 1 tannery, and 1 meat-packing establishment. ’ The foregoing plants use more or less modern machinery, and some of them are under foreign management and have foreign capital invested. (A list of the principal manufacturing plants in the Hankow consular district is on file in the Bureau of Foreign and Domestic Commerce and may be obtained by interested persons upon applica¬ tion.) Besides the industries above named there are a vast number of small works employing antiquated methods for the manufacture of 438 COMMERCIAL HANDBOOK OF CHINA cotton thread and cloth, and of cloth by hand looms from grass, bam¬ boo, and goat hair. Also, timber is sawn by manual labor, matches are turned out from small plants, flax is spun, rope is made, and vari¬ ous other domestic articles are produced by methods that are primi¬ tive but are useful in the economic industries of the country. To these might be added a number of other metal-working plants, such as those producing white brass, silversmiths’ work, and other articles of small importance. LABOR CONDITIONS The following table gives the average daily wage paid the work¬ man in various industries during 1923 (approximately 2,500 “cash ” equal $1 Mex. or $0.50 United States currency) : Carpenter, per day_cash_ 800 with food. Mason, per day_do_ 700 with food. Stonecutter, per day_do_ 700 with food. Blacksmith, per day_do_ 900 with food. Cotton spinner, per day_do_ 400 without food. Personal servant (“amah”), per month_do_ 5,000 with food. Ordinary coolie, per day_do_ 1, 700 without food. Ricksha coolie, per day_do_ 2, 000 without food. There has been some increase in the prices of all commodities during the past four years; the figures below show present prices of the seven necessaries of life for the Chinese: Rice, per picul (133% pounds) Salt, per picul_ Vegetable oil, per picul_ Coal briquets, per picul_ Firewood, per picul_ Sauce, per catty (1% pounds) Tea, per catty_ Price Mexican dollars_10.50 _do_11.20 _do_19.20 _do_ 1.20 _do_ .50 _cash_ 400 _do_ 640 Labor conditions during 1924 show a general improvement over those of the preceding two years. The winter of 1922-23 saw con¬ siderable unrest among the factory workers and the laborers, and there were numerous strikes. As a result the owners of the industries affected finally conceded some of the workers’ demands, which were chiefly for higher wages and shorter hours. The average wages during 1923 and 1924 have generally kept pace with the food prices—which may be another reason for the recent absence of serious labor unrest. TRANSPORTATION AND COMMUNICATION WATERWAYS The chief waterways forming an important factor in the commerce of the district are the Yangtze River (Yangtze Kiang) and the Han River (Han Ho). The Yangtze enters Hupeh from Szechwan and is navigable for steamers throughout the year from Chungking to its mouth. Dan¬ gerous rapids exist above Ichang, which is the western port in the Hankow consular district. This river is navigable for ocean-going steamers to Hankow (595 miles) for seven months each year, and during all seasons excellent river steamship services are maintained HANKOW CONSULAR DISTRICT 439 to and from Shanghai. Above Hankow steamship services of small vessels are maintained for about nine months of the year to Changsha and the entire year to Ichang. The Yangtze is the most important artery of communication in Central China. The Hwang Ho, or Yellow River, describes the northern limits of the Hankow consular district, and while it is of considerable im¬ portance to commerce, it is of more particular interest to the Tientsin district. The chief trading centers situated on the Yangtze are Hankow, Kiuldang, Shasi, Ichang, Wusueh, Wuchang, Hanyang, and Hsinti, the first four of these being open to foreigners. The principal trad¬ ing centers on the Han (none of which are “ open ” to foreign busi¬ ness men, however) are Tsaitien, Yokiakow, Shayang, Anlu, Ichang, Siangyang, Fancheng, Laohokow, Yunyang, Hingan, and Han- chung. There are no mechanical appliances on the wharves for handling cargo. If such equipment is required the vessel must provide it, but the useful coolie is capable of handling surprisingly heavy weights. It is not an uncommon thing to see heavy pieces of ma¬ chinery, boilers, etc., being discharged by coolies. The port charges upon vessels, such as harbor dues, etc., are included in the tonnage dues, which are payable once every four months, entitling a vessel to call at any port in China without payment of further dues. The tonnage dues on vessels up to 160 tons are 1 mace per ton and, if over this, 4 mace per ton. The Yangtze River is the only stream upon which foreign vessels are used for commercial purposes; 13,255 vessels, with a tonnage of 7,453,701, entered and cleared from Hankow in 1923, as compared with 12,802 vessels, with a tonnage of 7,408,838, in 1922. There are six important lines of river steamers running between Shanghai and Hankow. Freight rates vary for different com¬ modities from 39 tael cents per picul of 133^ pounds for beans and peas to 8.47 taels per 40 cubic feet for tea leaf, and they change from time to time. During the winter or low-water season freight rates increase by 10 to 15 per cent. Four of the six shipping companies operating between Hankow and Shanghai maintain excellent passenger service (70 hours), and every night one or more steamers sail. The usual fare is $50 Mex., while the round trip costs $75 Mex. Passage can be secured on Japanese and Chinese steamers for $40 Mex. for one way and $60 for the round trip. RAILWAYS PEKING-HANKOW RAILWAY The Peking-Hankow Railway, begun in 1898, was opened to traffic in 1905. Exclusive of branches it has a length of 754 miles. The line was built as a Franco-Belgian concession but came under Chi¬ nese control in 1909. As a result of civil dissensions, in which the rolling stock of the railway has been used by the various factions, and because of the unsubstantial type of bridge structures on the line, the Peking-Hankow Railway is rapidly assuming a state of general deterioration. The line was constructed with Belgian material and 440 COMMERCIAL HANDBOOK OF CHINA the original rolling stock was Belgian, but in a number of instances this has been replaced by American locomotives and cars. CANTON-HAXKOW RAILWAY The Hupeli-Hunan section of the Canton-Hankow Railway extends from Wuchang to Changsha, a distance of 286 miles. Under the Hukuang loan agreement the engineer in chief is a British subject, as are also the subordinates, except where Chinese are employed. The material and rolling stock are of American and Chinese origin, and at the present time are in relatively bad condition. About 250 miles remain to be constructed to complete the through line. NAN-HSTJN RAILWAY The Xan-Hsun Railway, a provincial line from Kiukiang to Xan- changfu, 8T miles, was completed in 1915. The line was constructed by Japanese engineers from the proceeds of two loans made with the Bank of Taiwan, and it is operated by the* Chinese under Japanese management. The material used, including the rolling stock, is largely American. The head office is at Xanchang, Kiangsi Province. TAYEH IRON MINES RAILWAY A light railway for use in conveying ore from the Tayeli mines to the Yangtze River runs between Tiehshanfu and Hwangshihkang, a distance of IT miles. It is owned by the Han-Yeh-Ping Iron & Coal Co., Shanghai. The material and rolling stock come mostly from Japan. ICWANGYINGTANG-SHENCHOW SECTION (LUNG HAI RAILWAY) This section was opened to traffic on May 1, 1924. Passenger trains run daily between Kwangyingtang and Shenchow, making connec¬ tions with the Pienlo Railway at Honanfu, and by the latter with the Peking-Hankow Railway at Chengchow, Honan. The Pienlo (Kaifeng-Honanfu) Railway, with head offices in Pe¬ king and Chengchow, is 115 miles in length. SZECIIWAN-HANKOW RAILWAY This projected line is divided into two sections—the Han-I section extending from Hankow to Ichang (with a branch line from Yang- kishung to Laohokow) and the I-Kwei section from Ichang to Kwei¬ chow, with possible extensions to Chungking and Chengtu. The surveys have been completed, but only a few miles of the line out of Hankow and out of Ichang have been laid; active work has not been carried on during the past nine years. A nominal force, consisting of 1 American engineer in chief, 4 student engineers, and 105 work¬ men, is maintained for the protection of the property. CHOWKISKOW-SIANGYANGFU RAILWAY This railway is only contracted for; surveys, however, have already been made. HANKOW CONSULAR DISTRICT 441 ROADS There are only a few modern roads outside of the foreign conces¬ sions in Hankow. There are paths all over the district; these are better in some localities than in others, and in parts of Honan they are in places broad enough to accommodate carriages, but in the main the paths are only sufficient to accommodate wheelbarrows. Some of the old imperial roads ran through this district en route to the south and west, but it is understood that none of them is sufficiently in repair to permit of their use by motor cars for an extended dis¬ tance. These paths are in some districts extremely good for single¬ wheeled vehicles, and along the line of the imperial roads in Shensi and Honan and in the vicinity of the large cities in each of these Provinces and in Kiangsi there are a few miles of reasonably good carriage roads without any extensive macadamizing. In Hankow there are not more than 25 miles of good roads (in¬ cluding cross streets), 15 miles of which are located within the for¬ eign concessions. There is marked activity in the development of motor roads and bus lines in that part of Hupeh Province of which Siangyang, on the Han River, is the center. The Hupeh provincial authorities have recently completed the construction of a highway from Siangyang to Shasi, a distance of approximately 200 miles; an extension from Siangyang to Tsaoyang has been completed, and this road is being extended through to Huayuan on the Peking-Hankow Raihvay, a total distance of 170 miles. Another road is in operation from Siangyang to Laohokow, a distance of 53 miles. Also a branch of the Siangyang-Shasi road to run from Kingmen to Ichang, a distance of 80 miles, is projected. A highway is being planned between Siangyang and Loyang via Laohokow and Nanyangfu. Its alignment will be through a region which heretofore has had very poor communications with the out¬ side world. It is believed that the construction of highways between Hankow and the other large cities of this district, connected with the main roadways in other Provinces, would increase foreign trade more than would a similar expenditure in the construction of railways. Such highways would bring great benefit to the country in the way of increased trade in new and old lines. ,AVERAGE COSTS OF TRANSPORT Below are given the average costs for transportation in Hupeh Province and supply points. Methods of transportation > Average load Average mileage per day Average cost per ton-mile. Maxi¬ mum haul Railways. 30-ton car.____ 300-400 Mex. $0. 053 . 014 Miles 500 Steamboats. ___... ... 25-2, 500 tons..... . 50-250 357 Junks. 10-50 tons_ 10-15 . 015 381 Motor cars _ 1 ton 200 . 50 (0 500 Carts_ 1,600 pounds 30 . 16 Camels_ 600 pounds 15 25 .44 500 Other pack animals_ .. . .. .. 2-300 pounds... ___ .35- 40 500 Wheelbarrows. . 300 pounds.. . 17 . 50 2-300 Coolie carriers_ 100 pounds 20-25 .80 2-300 t 1 Limited by roads now in existence to 300 or 400 miles between specific points; no cross-country work. 442 COMMERCIAL HANDBOOK OF CHINA TELEGRAPHS The telegraph service is efficient and extends to practically all the larger towns in the district. There are 51 stations in Hupeh, 47 in Honan, 42 in Kiangsi, 18 in Shensi, 21 in Kansu, and 20 in Sinkiang. The rate for transmission is the established rate for all China—including cable rates to New York and other foreign ports. There are no commercial wireless stations in the district, though there is a Government wireless station in Wuchang exclusively for official purposes. TELEPHONES The telephone system in Hankow connects the “Wuhan cities”— Hankow, Wuchang, and Hanyang. Equipment consists of 5,219 telephone instruments (10,000 ultimate capacity), 3 centrals, and 138 miles of wire. It was installed by a Japanese concern with Japanese and a small amount of American equipment. The plant is modern in every particular. Rates per month for an unlimited service are: Business telephone_$21. 00 Private telephone_ 19. 00 Extension telephone under same roof_each 6. 00 Table instrument_do_ 2. 50 The telephone administration of Hankow is one of the best in China and compares favorably with those in western countries. There is a telephone system at Kiukiang, with Ruling connection, but the number of telephones is small. POSTAL SERVICE Chinese post offices cover the district, and the service is both prompt and dependable. The business at the Hankow post office during 1923 comprised 473,641,716 items, including 448,009,938 ordi¬ nary articles, 20,427,176 registered articles, 5,171,677 “express let¬ ters,” and 32,925 insured letters. Money orders issued totaled $95,- 993,800, and money orders cashed $96,021,200. During 1916 parcel post was established between China and the United States, and, Hankow being served by steam navigation or by rail, parcels are delivered from Hankow to the United States, or vice versa, without' extra charge. The time required for first- class mail matter to be delivered from New York is approximately 30 days. SHIPPING AND WAREHOUSING FACILITIES HARBOR FACILITIES All ships anchor in midstream or at pontoons in front of the town; berths in front of the consulates are reserved for the use of men-of- war. There are no special regulations relating to anchoring. For¬ eign shipping in the harbor is under the control of the Chinese Maritime Customs. Pilots are generally engaged at Shanghai for the trip up river, the usual fee for Chinese pilots being $100 Mex. Ocean-going ships drawing 30 feet of water can reach Hankow dur¬ ing the high-water season, which lasts from May until October. Ships in the stream load and unload by lighters and junks. There HANKOW CONSULAR DISTRICT 443 is one floating dock at the plant of the Yangtze Engineering Works which will admit vessels 200 % feet long and of 30-foot beam. The cost of transferring cargo from ship’s tackle to port, whether the vessel is in the stream or at a dock, is 1.50 taels per ton. WAREHOUSING AND STORAGE FACILITIES There is only one public warehouse in this district, located at Hanyang. The foreign firms all maintain private warehouses for storage purposes. Practically all transportation of goods from land¬ ing to warehouses is done by coolies, though motor trucks have in recent years come into use for this purpose. PUBLIC UTILITIES ELECTRIC LIGHT PLANTS * The electric light plants in the district are: HUPEH PROVINCE Hankow. — (1) The Hankow Light & Power Co. (British) is located in the Russian concession. The executive staff is British, and the company’s head office is in London. The plant supplies current to the British, Russian, and French concessions, and has British machinery throughout. Current: Direct, 440-volt for power and 220-volt for light and domestic purposes. Capacity: Installed, 700 kilowatts; now being installed, an additional 1,000-kilowatt, direct-current, 440-volt and 220-volt engine-driven generator. Service : Twenty- four hours each day. Special rate for heating and cooking is 0.06 tael per unit, and the rate for light is 0.10 tael per unit. Current is sold through meters. (2) Hanhow Waterworks & Electric Light Co. (Chinese) ; supplies light and power to the native city of Hankow. Present installation: Two 1,500- kilowatt turbo-generators. A third 1,500-kilowatt turbo-generator has been ordered; also a 2,500-kilowatt motor generator set to be used as reserve in connection with old power plant which is direct-current 440-volt. Plant mod¬ ern in every way, new design, American make. System distribution: 2,300-volt, three-phase, 60-cycle, alternating current. Lighting system: 220-volt. Power system: 220/440-volt and 2,300-volt. Service continuous. Meters used. Plant successfully managed and operated by Chinese. (3) Special Administrative District Electrical Works (formerly Melchers & Co.) own a small plant supplying currept to the Special Administrative District, formerly the German concession. Capacity : 262^ kilowatts. System : Direct-current 3-wire 220/440-volts. Machinery: German. Plant operated and controlled by Chinese. Service continuous. Meters used. (4) Taisho Electric Light Works (Japanese) supplies light to the Japanese concession. Capacity: 220 kilowatts. System: 220/440 volts, direct current. Machinery: Japanese. Operated and controlled by Japanese. Wuchang. —Wuchang Electric Light & Power Co. (Chinese). Installation: 650-kilowatt alternating-current 50-cycle three-phase generator. Distribution system: 3,000 volts. Lighting system: 220-volt. No power system. Plant runs eight hours a day. Some meters used. Machinery: German. Plant managed by Japanese and Chinese. Capital: Japanese. Arnhold Bros. & Co. (British) have obtained a franchise for a new electric light and power plant in Wuchang. The capacity will be 300 kilowatts. Hanyang. —The Hanyang Iron & Steel Works has a 1,500-kilowatt plant. Most of the power is used for lighting the plant, but light is also supplied to Hanyang city to some extent. Machinery: American and British. Plant operated and managed by Chinese. System: 220/440 volts, direct current and alternating current, 3-phase, 50 cycles. Number of lamps operated: About 5.000. Shasi .—Pu Chao Electric Light Co. has a 75-kilowatt 220-volt, direct-current plant. Machinery: German, Installation was completed in 1916. Plant operated by Chinese, 444 COMMERCIAL HANDBOOK OF CHINA Ichang. —Kwang Ming Electric Light Co. has a 120-kilowatt plant. Distri¬ bution system: Three-wire 440-volt 220-volt. Plant is cheap secondhand Ger¬ man machinery. Controlled by Chinese. Installation was completed in 1914. Wusueh. —Wusueh Electric Light Co. has a steam plant of about 60-kilowatt capacity. Machinery: American. Plant has been in operation a short time. Sientaochen. —Sien-Han Electric Light Co. at Sientaochen has a small plant at 17V> kilowatt capacity; 220-volt crude-oil-engine drive. Machinery: Ameri¬ can. Installation was completed in 1922. HONAN PROVINCE Kaifeng. —Kaifengfu Electric Light Co. has two 120-kilowatt, three-phase, 50-cycle, alternating-current, 2,300-volt, engine-driven generators. Engine and generators: German. Boiler: American. Plant operated by Chinese, and financed by Japanese capital. Distribution system: 2,300-volt. Lighting sys¬ tem : 220-volt. Some meters used. Plant operated nights only. Chengchow. —Chengchow Electric Light Co. Present installation : 60-kilowatt, three-phase, alternating-current, 50-cycle, 2,300-volt, engine-driven generating plant. Machinery: British. The company has recently installed a new plant of American make, of a capacity of 144 kilowatts. System: 60-cycle, 2,300- volt distribution; consumers’ supply, 220 volts. Plant operated by Chinese and financed by Japanese capital. Service nights only. Some meters used. Honanfu. —Honanfu Electric Light Co. The plant, modern in every respect, was installed in 1922; it is of 75-kilowatt capacity. Alternating current, 2,300- volt, 50 cycles, engine driven, supplying 220 volts to consumers. Machinery: American. Plant financed and controlled by Chinese. Sinyangchotc. —Sinyangchow Electric Light Co. has a 60-kilowatt plant. All machinery secondhand. KIANGSI PROVINCE Kiukiang. —Iviukiang Electric Light Co. has two 45-kilowatt, alternating- current, 60 cycles, 2,300-volt, oil-engine-driven generators; consumers’ supply, 100 volts. Machinery: American. Plant owned and operated by Chinese; commenced operation in 1919. Nanehang .—Nanchang Electric Light Co. has a 300-kilowatt, direct-current, 220—440-volt plant. Machinery: American, supplied by a Japanese firm. Ping-Hang. —Pingsiang Colliery has a large power plant for mining and light¬ ing purposes. Most of the power is used for power purposes. Current is 250- volt direct. Machinery: German. WATERWORKS Waterworks are established in Hankow and Hanyang in the Province of Hupeh, and at Kaifeng in the Province of Honan. \[The Hankow waterworks are owned by the Hankow Waterworks & Elec¬ tric Light Co. and supply the Chinese city and the foreign conces¬ sions. Xo reliable information is available concerning the water¬ works at Kaifeng and Hanyang, although they are considered in¬ ferior, in equipment, service, and purity of water, to the Hankow plant, which is probably the most modern and best in China. It was planned by a British engineer in 1908, and the machinery is British. The capacity is 5,000,000 gallons of filtered water per day. TRAMWAYS There are no street cars within the district. Lot holders in the foreign concessions object to the introduction of a tramway therein, and it is not thought that during the existence of the independent concessions any proposal could induce the concessions to admit street cars. However, Chinese capitalists believe that a line built behind the concessions could be made to pay, and they have recently applied to the provincial authorities for permission to construct a tram- HANKOW CONSULAR DISTRICT 445 way to extend from Chiaokow, on the Han River, to Seven Mile Creek, on the Yangtze, a distance of 10 miles. It is reported that the enterprise is viewed with favor by the Chinese officials. CONSERVANCY AND RECLAMATION WORKS There are no conservancy and reclamation works under construc¬ tion or projected at this time in the district. However, the question of improving the navigability of the Yangtze River from Hankow to its mouth has recently been considered by the Chinese Government, which established in 1923 a Commission for the Discussion of the Improvement of the Yangtze. It is composed of representatives of the Ministries of the Interior, Navy, Communications, the National Conservancy Board, etc. A technical committee was subsequently appointed, and the latter in turn organized a survey department to collect data and carry out a system of levels between Hankow and Woosung. Under the supervision of the committee comprehensive surveys were made on the Yangtze, cross sections were taken at selected con¬ trolling points, and considerable information, including customs sur¬ veys, was gathered. In a comprehensive report on the question of Yangtze conservancy works, a prominent British engineer stated that the cost would be out of proportion to the benefits obtained and “ utterly unremunerative and financially impossible.” IMPORT AND EXPORT TRADE The following table gives the gross and net values of the trade of the port of Hankow alone for 1923 and 1924: Imports and exports 1923 1924 Imports of foreign goods: From foreign countries and Hongkong_____ TJ. S. currency $31, 731,908 30, 021, 042 U. S. currency $49, 159, 739 32, 825, 626 From Chinese ports_ ... _ Total foreign imports... ... 61, 752, 950 81,985, 365 Reexports of foreign goods: To foreign countries and Hongkong._. __.._ .. _ . 106, 878 13, 862, 890 19. 736 15, 322,948 To Chinese ports (chiefly to Changsha. Ichang, and Shasi)_ Total foreign reexports,______ __ 13,969, 768 15, 342, 684 Net total foreign imports..... . 47, 783,182 66, 642, 681 Imports of Chinese products (chiefly from Ichang, Kiukiang, Shanghai, and Swatow)___ _ ............ 64, 030, 665 69, 381, 652 Reexports of Chinese products: To foreign countries and Hongkong..... .... 3, 746, 494 24, 075, 426 4,123, 259 27,180, 636 To Chinese ports__... ..... . Total Chinese reexports.. . . 27, 821, 920 31, 303, 895 Net total Chinese imports..... 36, 208, 745 38, 077, 757 Exports of Chinese products of local origin: To foreign countries and Hongkong_____ 9, 652, 089 103, 690, 465 11,948, 478 112, 031, 169 To Chinese ports_ _ Total exports of local origin_ . _ 113, 342, 554 123, 979, 647 Gross value of the trade of the port...... 239,126,169 275, 346, 664 Net value of the trade of the port___ . . 197, 334, 481 228, 700, 085 446 COMMERCIAL HANDBOOK OF CHINA Exports (including reexports) from Hankow in 1903 were $45,- 766,877; in 1913, $68,886,689; and in 1923, $141,164,474. Exclud¬ ing reexports, the table below indicates the import and export trade of the principal ports of the Hankow district for the three years just mentioned and also for 1924: Ports 1903 1913 1923 1924 EXPORTS Hankow..... U. S. currency $35, 652, 152 U. S. currency $61,174, 000 U. S. currency $113, 342, 554 U. S. currency $111, 538, 637 Ichang_ . ... . _ . . 876, 682 2, 246, 955 2,283, 400 1, 952,822 Shasi... . . ___ 438, 646 662, 352 8, 187, 312 10, 368, 397 Kiukiang.... 7, 483, 969 11,480, 726 25, 221, 748 28, 364,808 IMPORTS Hankow....... 35, 229,130 39, 109, 309 47, 783, 182 66, 667, 372 Ichang. . .. .. _... ... . .. _ . ... 1, 070, 840 1, 364, 055 1, 341, 645 3,104, 572 Shasi___ 1, 039, 402 2, 356, 039 3, 047, 503 3, 266, 873 Kiukiang.. .... 6, 635,137 8,976, 877 11, 268, 188 11, 455, 289 TOTALS Hankow....... 70, 881, 282 100, 283, 309 161,125, 736 178, 206, 009 Ichang______ 1, 947, 522 3,611,010 3, 018, 391 3, 625, 045 5, 057, 394 Shasi.... .. 1, 478, 048 11, 234,815 13, 635, 270 Kiukiang.. .. . .. 14, 119,106 20, 457, 603 36, 489, 936 39, 820, 097 The following table furnishes a comparative statement of the principal exports (including reexports) from Hankow to all coun¬ tries for the years 1903, 1913, 1923, and 1924: [Quantities are stated in thousands of units given; values in thousands of United States dollars] Articles 1903 1913 1923 1924 Quantity Value Quantity Value Quantity Value Quantity Value Antimony.. .pounds.. 6,762 343 18,137 395 11,134 414 18, 441 1,002 Beans_ _do_ 258, 202 2,472 235,181 2,846 144, 846 2, 743 234, 354 6,087 Bean cake .. _ _do_ 77, 746 340 308,667 3,118 91,051 1, 557 213, 374 3,694 Bones_ _do_ 3, 821 11 14, 543 101 30, 146 261 24, 502 213 Bran. _ _do_ 1,244 6 28, 684 208 23, 811 247 38, 682 395 Bristles_ _do_ 2, 627 470 1,856 742 2, 680 1,675 2, 551 2, 142 Chestnuts. _ _do_ 2, 329 23 750 9 1,488 42 549 18 Chickens, frozen.. .number 816 79 625 48 407 46 Cigarettes. .. .pounds.. 4, 206 972 9,881 5, 412 9, 758 5, 681 Coke ... ".-.tons.. 2 10 18; 939 59 1 11 2 16 Cotton, raw__ .pounds. 44, 653 3, 856 29, 917 3, 885 149, 477 35, 634 174, 671 44, 494 Eggs: Fresh. _ .number.. 28, 467 55 26, 888 111 74, 923 485 60, 717 412 Frozen, dried, etc., pounds. 5,427 194 21, 405 3,800 23, 321 4,982 30, 570 6,152 Flour_ .. _do_ 42, 478 912 11, 443 339 23, 342 694 Gallnuts.. _do_ 5, 256 501 5, 939 649 9, 423 975 8, 044 738 Groundnuts_ _do_ 13, 832 384 18, 634 726 13, 350 472 Hair, human _ _do_ ' 300 76 879 159 573 152 Hemp... ... _do_ 21,618 1,076 71 6 14, 127 1, 252 19, 522 1,703 Hides, buffalo and cow.do_ 18, 596 2, 304 34, 534 6, 700 13, 613 4, 571 19, 264 3, 374 Intestines do 411 91 1, 219 637 1, 441 776 Iron and steel. . long tons 1 18 14 684 11 464 3 98 Iron ore do . . 51 66 270 451 341 614 381 752 Iron, pig _ _do .. 4 72 1,100 275 3, 804 201 4, 956 Lily flowers._ .pounds.. 328 13 1,795 87 1,385 136 1,887 ' 155 Oils, vegetable: Bean_ _do_ 1,151 35 990 51 441 32 1,311 45 Sesame seed_ _do_ 2,428 83 288 15 1,513 119 1,005 70 Wood and nut. _do_ 47, 353 2,193 99, 810 4, 678 134, 672 18, 614 149, 131 17,916 Tea..... _do . . 2,830 97 896 55 1,977 151 1, 295 93 Quicksilver_ . .do_ 29 13 43 32 22 47 30 Ramie__ _do_ 25,103 2, 041 20, 625 2,182 18, 253 1, 788 Seeds, sesame_ _do_ 68, 615 1,196 185; 392 6,080 13L 474 5,243 23, 876 482 Seed cake do 26, 450 156 29, 529 275 43, 036 452 Silk cocoons, refuse, and waste. .pounds . 335 416 657 119 3,090 1,421 2,738 912 HANKOW CONSULAR DISTRICT 447 Articles 1903 1913 1923 1924 Quan¬ tity Value Quan¬ tity Value Quan¬ tity Value Quan¬ tity Value Silk: Honan pongee. .pounds.. 138 186 544 1,038 491 1,301 442 1,244 Raw yellow— _do_ 1,380 1,892 916 999 960 2,736 765 2, 271 Silk products not otherwise rlassified .pounds.. 317 487 299 110 290 79 272 Skins: Kid and goat . .pieces.. 2,300 711 2, 058 1,039 2,282 1, 783 1,548 1,141 Sheep . do.. . 2, 256 136 100 56 34 23 12 6 Tallow: Animal. .. .. .pounds.. 5, 723 268 7,180 452 1,660 137 1,457 115 Vegetable.. .. do 26, 492 1,306 33, 216 1,915 23, 181 1,659 28, 078 1,949 Tea_ do. 134, 969 7,888 117, 762 11,977 40, 219 4, 533 36, 462 4,717 Tin... .. _ .. do 36 6 211 32 161 44 138 35 Tobacco, leaf_ _do_ 19, 538 888 23, 048 2, 898 36, 957 2,449 30, 989 2,101 Walnuts._ .. .do. . 1,061 35 874 34 1,855 148 2, 069 150 Wheat... __ .. do . 19, 238 159 28, 228 419 3, 844 89 129, 428 2, 743 Wool, sheep’s_ _do_ 3, 307 197 268 15 191 21 168 19 All other articles 15,813 7, 054 30, 704 32,511 Total 45, 767 68, 887 141,164 155, 284 The values of the declared exports from Hankow to the United States totaled $725,691 in 1903, $5,151,798 in 1913, and $20,619,630 in 1923. The net total import trade in 1903 was $23,570,844; in 1913, $39,- 109,308 ; in 1923, $47,783,182; and in 1924, $66,642,681. The increase in imports is due to internal development in com¬ munications and industries rather than to any considerable change in the demands of the people. Progress has been made in the methods of distribution, with the result that there is a very great increase in the market for petroleum, dyes, cigarettes, sewing ma¬ chines, and many articles of Japanese make, Japan having pushed its agencies farther inland than any other nation. Nearly all imports destined for the interior are covered by transit passes. Articles universally used, like kerosene and cigarettes, are delivered by agents and are covered by transit pass to the consumer. The inland tax, known as likin, is a very great obstacle to the devel¬ opment of trade; the importer can not determine beforehand the total cost of an article delivered to a remote point, as it must pass numerous tax stations. The following table shows the net quantity and value of the prin¬ cipal imports into Hankow for 1903, 1913, 1923, and 1924: [Quantities are stated in thousands of units given; values in thousands of United States dollars] Articles 1903 1913 1923 1924 Quan¬ tity Value Quan¬ tity r Value Quan¬ tity Value Quan¬ tity Value Automobiles and accessories 74 62 Bags, all kinds.. . . .pieces 5,940 278 2,971 278 3, 798 272 799 67 Beltine. machine 19 43 90 124 Buildins materials 94 70 131 .101 Buttons.. _ ..gross.. 322 96 218 69 183 30 185 52 Clocks and watches. 31 38 61 93 Coal .. .. ... . tons.. 83 418 144 513 6 28 65 336 Confectionery_ 98 147 300 25 448 COMMERCIAL HANDBOOK OF CHINA Articles 1903 1913 1923 1924 Quan¬ tity Value Quan¬ tity Value Quan¬ tity Value Quan¬ tity Value Cotton manufactures, total .. 13,453 13,514 12, 004 14, 745 Piece goods— American. 933 259 33 29 Dutch 24 145 28 6 English .__ _ 2,893 3, 954 2, 940 2 337 J apanese _ 36 853 1,738 3 530 Yarn___ .. .pounds. _ 45,426 7,065 38,032 5,329 4, 016 5, 329 4,417 1,906 Crucibles . __ 151 114 Drugs and chemicals. 508 332 858 685 Dyes, paints, and varnishes, total 217 1, 768 2, 936 4, 848 Aniline dyes 211 ' 503 883 1, 286 Indigo, artificial pounds 7,336 1, 166 6, 709 1,847 3, 262 Electrical materials 24 173 389 362 Flour, wheat pounds . 1, 218 25 . 525 14 11, 555 315 130 Fruit, canned and dried.do... '191 10 331 38 694 90 976 115 Ginseng 89 93 114 197 Glass and glassware 109 238 279 265 Lamps and lampware _ 26 126 150 86 Leather... . . ..pounds. 16 58 288 125 Lumber, all kinds 154 834 389 404 Machinery, all kinds.. 145 424 1,840 1, 210 Matches___ gross.. 98 16 1,317 265 38 8 159 36 Metals and minerals, manu- factures, total 1, 357 5, 736 6, 308 11, 556 Brass and yellow metals . _pounds .. 409 51 198 31 427 69 670 118 Copper ingots and slabs _ _pounds.. 5,413 581 14,129 2,396 21, 977 3, 362 51,198 7, 300 Copper manufactures _pounds.. 251 29 204 34 119 31 274 60 Iron and steel, new, total __ . ..pounds.. 14, 800 443 67, 397 1,762 60, 620 2,289 102,121 3, 724 Bamboo steel..do_ 369 7 1,721 35 2, 748 99 2, 291 67 Bars_do_ 1, 566 28 5, 213 87 12,186 330 26, 803 523 Cobbles, bar ends, etc_ ..pounds.. 1,316 13 6,872 93 2, 064 183 9, 375 603 Hoops_do_ 516 8 3, 647 80 5, 253 183 5, 781 159 Nails_do_ 4, 738 96 8, 403 190 5,131 208 16, 790 611 Pipes and tubes _ . pounds.. 15 3 247 9 1,874 94 1, 127 56 Plate cuttings.do_ 294 2 4, 050 50 2,891 42 10, 182 165 Rails... . do .. 16, 688 282 4, 773 125 Sheets and plates __ pounds.. 1,781 46 7,004 201 5, 436 208 3, 878 102 Tinned plates„do_ 2,181 81 1,924 445 12,123 690 16, 974 942 Wire and wire rope _pounds. 1,360 40 5, 051 99 6, 382 182 3, 148 140 Iron and steel, old..do_ 2, 867 23 2,613 29 3, 245 40 1,838 24 Hardware, tools, etc 31 280 272 113 Lead, all kinds..pounds. _ 2,817 85 751 30 2, 709 149 2,530 151 Nickel_do_ 87 30 83 30 246 80 125 33 Tin slabs__do_ 245 54 290 44 89 38 419 63 Tin and lead foil...do_ 38 6 54 25 2,453 334 3, 473 452 Milk, canned _ 9 32 92 87 Oil, mineral, total_ 1,839 2, 505 4, 424 6, 601 Fuel oil___ 8 ' 135 224 Kerosene— American.._ _Amer. galls. 3,506 471 14, 482 1,200 15, 022 2, 641 25, 482 5, 569 Borneo..._do.. . 7,822 868 163 28 520 160 Russian_ .do_ 3, 695 468 ' 300 27 Sumatra_..do.. 7, 807 883 2,903 322 5, 536 1, 430 Lubricating . _ _do. 15 570 177 Paper and stationery_ 90 312 869 1,372 Piece goods, miscellaneous _. 82 119 438 561 Railroad cars_ .. 310 10 726 Sandalwood_pounds.. 2,209 142 1,443 78 1,539 115 1,564 144 Soap . _ 37 184 181 197 Spices..pounds 1,679 177 1,911 199 3,686 344 1,977 215 Sugar.. . ... ..do. .. 27, 524 625 100, 538 2,764 72, 528 5, 670 172,125 6, 602 Tobacco, total__ '45 915 2, 488 3, 841 Cigars and cigarettes .... . . .number.. 45 845 188, 016 558 161,975 498 Leaf_ _pounds 405 70 5, 034 1,930 10,919 3, 346 Umbrellas, cotton..number.. 303 95 501 143 203 97 48 23 Wearing apparel_ 36 376 636 517 Wines... ...... 45 182 400 191 Woolen goods .. .. ___ 619 310 666 925 Woolen and cotton mixtures 63 272 440 420 All other articles.. 2,435 5, 568 2,857 8,370 Total. .... 23, 571 39,109 47, 783 66, 643 HANKOW CONSULAR DISTRICT 449 MONEY, BANKING, AND CREDIT The chief banks handling foreign exchange and bills in Hankow are: Banque de lTndo-Chine (French). Banque Beige pour TEtranger (Belgian). Banque Franco-Chinoise (successors to Banque Industrielle de Chine). Chartered Bank of India, Australia, and China (British). Chinese-American Bank of Commerce (American-Chinese). Credit Foncier d’Extreme-Orient (Belgian). Deutsch-Asiatische Bank (German). Hongkong and Shanghai Banking Corporation (British). International Banking Corporation (American). Russo-Asiatic Bank (Russian). Sumitomo Bank (Japanese). Bank of Taiwan (Japanese). Yokohama Specie Bank (Japanese). These banks transact exchange business and finance exports and imports, chiefly the former. Some of them afford special facilities to reliable exporters by providing credit, retaining a lien on the property when purchased. The currency in circulation in Hankow consists chiefly of Hupeh and Yuan dollars, which have practically supplanted the Mexican dollar. The Hankow tael is usually employed in commercial trans¬ actions of large character. The principal Chinese banks are the Bank of China, Bank of Com¬ munications, Bank of Agriculture and Commerce, and Bank of Canton; there are 17 others, but the four mentioned are the principal ones. These banks do little foreign-exchange business. Note.— For details of currency, credits, and credit methods obtaining, see the special chapters in this handbook dealing with these subjects. ADVERTISING 1 Only 5 per cent of the Chinese in this district are able to read. Posters and handbills in bright colors and simple designs attract the curiosity and interest of people who can not read or afford news¬ papers. Electric signs are being used by several local merchants, foreign and Chinese, and it is believed that this is one of the most successful types of advertising for Hankow. All advertisements should be in both English and Chinese, as English is the language most commonly used by the foreign-educated Chinese as well as the more than 2,000 foreigners in Hankow. There are no taxes on poster advertisements or handbills in the native city, but the French municipal authorities levy a small tax on handbills distributed in the French concession. TRAVEL FACILITIES Travel on the steamers of the Yangtze is comfortable and ade¬ quate. The railways and motor roads—where they exist—furnish fair accommodations; but generally throughout the district chairs ' must be used. The following is a list of European hotels in the dis- 1 For details under this heading, see special chapter on “Advertising and merchan dising.” 100020°—26 - 30 450 COMMERCIAL HANDBOOK OF CHINA trict, and, except as noted, the only other accommodations are native hotels and inns: Names of hotels Location European or American plan Nationality Num¬ ber of rooms Rate per day Wagon-lits Terminus Hotel .._ Hankow . _ Both _ French.. GO Mex. $9.00 Hankow Hotel ... .do . . .. _. .do... _ Russian. . . 14 5. 00 International Hotel - _do_... . .do_ _do_ 6 4. 00 Hotel de France. ___ _do_ _ __do. _ Greek... ... . 6 4.00 International Hotel. .. _ Ichang. . . . . . .do_ Italian .. . _ 10 2.50 Duff Hotel __ _... . Kiukiang . .do _ British . ... 4.00 Fairy Glen . .. . __ Kuling.. .. . _do__ .. .do. 6. 00 Kuling Hotel__ ..._ _ _.do_ .. ..do. . ..do__ 6. 00 Four lines of steamers maintain a regular river service between Hankow and Shanghai. The time is 70 hours, and practically every night one or more steamers sail. The down-river fare is $50 Mex. and the round trip $75. Throughout the year small steamers ply weekly from Hankow to Ichang (90 hours), the fare being $45 Mex. During high water, approximately nine months of the year, steamer service to Changsha (48 hours), is maintained; fare, $30 Mex. There is a daily railway service to Peking, first-class fare, including sleeper, being $54 Mex. The best time to visit Hankow is spring or autumn, to avoid ex¬ tremes of temperature. A business trip may be in order at any time except from June to September. TRADE ORGANIZATIONS The following trade organizations exist in the Wuhan cities : American Chamber of Commerce. Hankow. British Chamber of Commerce, Hankow. French Chamber of Commerce. Hankow. Japanese Chamber of Commerce, Hankow. Hankow Committee of Foreign Chambers of Commerce. Hankow Chinese Chamber of Commerce. Wuchang Chinese Chamber of Commerce, Wuchang. Chinese General Chamber of Commerce for the Wuhan cities (Hankow, Hanyang, and Wuchang),' Hankow. In addition to the above-named organizations, practically every recognized center of trade throughout the district has a chamber of commerce, and practically every native industry and activity in the district has its trade guild. The Chinese and foreign chambers of commerce cooperate in meas¬ ures for the common good and for the improvement of trade meth¬ ods, both native and foreign. PROPERTY VALUES AND RENTS The most desirable office or residence location for foreigners is within the former German and Russian concessions of Hankow, now special districts under Chinese administration. The purchase prices of lots in these areas range from 3 to 4 taels per square foot. Land may be freely purchased in any of the concessions except the British and Japanese. In the former, one alien may sell to an- 451 HANKOW CONSULAR DISTRICT other, but no land transfer is permitted from a British subject to an alien. The Japanese concession is reserved exclusively for Jap¬ anese. Residence rents range from 125 to 400 taels per month; office rents, from 200 to 400 taels; warehouse rates average 7 taels per square foot. Because of Hankow’s rapid expansion and the large influx of foreigners, the housing problem at present is a serious one. TAXES AND OTHER ASSESSMENTS Each concession has its municipal council, which establishes rates and taxes within its boundary. Rates and taxes in the British con¬ cession for 1923—substantially the same as in the others—were as follows: Land taxes at the rate of 1 per cent on assessed value; 7 per cent property tax on the rental value of houses in foreign occupation; full concession lots in the original concession assessed for property tax upon a minimum of 3,000 taels; divided lots pay pro rata on a mini¬ mum basis of 3,000 taels assessed value per 234 fong (1 fongi= 10 square feet) ; in the concession extension the minimum basis is 2,000 taels per 234 fong, and bund frontage at 8 taels per foot per year. As a rule the landlord pays the taxes and the tenant pays the water rates. The methods of leasing land in the treaty ports of this consular district depend upon the regulations of the various ports and, in cer¬ tain instances, of the different concessions therein. Lands belong¬ ing to American citizens, firms, or associations in the foreign con¬ cessions of Hankow are registered in the consulate of the nation holding the concession and sometimes by special request also in the American consulate general. The position taken by the Ameri¬ can office is that registration in the concession-holding consulate is sufficient and an additional recording in this office is superfluous, but all parties are told that their deeds will be recorded if desired. When the land is located in the concession extensions where the Chinese authorities continue to issue the title deeds and in the Chinese special administrative districts (the former German and Russian conces¬ sions), the deed is sent to the commissioner of foreign affairs for verification. LIVING COSTS The following table gives, in Mexican currency, estimates of living costs for one month: Hotel, board and room Boarding house, board and room Board Rent Esti¬ mated necessary living expenses Single man....... $200 $150 $150 $50 $300 Single woman .. ... . 200 150 150 50 300 Married couple --- ___ __ 350 300 300 100 500 Married couple and 2 children.... 500 400 400 100 600 Recreation for foreigners is confined principally to those supplied by the various local, foreign, and international clubs, such sports as shooting and riding, and a few motion-picture theaters. The 452 COMMERCIAL HANDBOOK OF CHINA British maintain a school in Hankow for foreign children, and there are also French and German primary and intermediate schools. CHANGES IN TRADE CONDITIONS Practically all the trade of West China, with its estimated popu¬ lation of 100,000,000, passes through Hankow, including the merchandise coming from and destined to Changsha, Chungking, Ichang, and Shasi. Approximately 11 per cent of China’s total import and export trade is handled through this port. idle increase in exports has been remarkable. Notwithstanding the unsettled conditions which have existed during recent years, the value of shipments in 192-1 reached $155,283,542, as compared with $141,164,474 in 1923, $110,247,077 in 1922, and $68,886,688 in 1913. The value of imports increased from the average of $30,000,000 per annum in pre-war years to $53,065,406 in 1922, $47,783,182 in 1923, and $66,642,681 in 1924. A certain amount of this advance has been due to the rise in values and appreciation of exchange, but the greater part is the result of a natural expansion of trade. HONGKONG CONSULAR DISTRICT By Consul A. E. Carleton LOCATION, AREA, AND POPULATION The Hongkong consular district comprises the island of Hong¬ kong, Kowloon, and the New Territory, a total area of 390 square miles. Hongkong lies just south of the Tropic of Cancer and is therefore in the latitude of Cuba. Its average rainfall is 84.79 inches, average minimum temperature 68.2° F., and average maxi¬ mum temperature 76.4° F. The rainy season is from April to September. The population of Hongkong, including Kowloon, is estimated at 081,800. The Europeans number 14,963, Americans 537, and Amer¬ ican business firms 30. MANUFACTURING INTERESTS There is practically no agricultural industry or mining of any importance in the Hongkong district. The manufacturing interests, in the order of their importance, are as follows (all values in Hong¬ kong dollars) : Shipbuilding. —Hongkong & Whampoa Dock Co. (Ltd.), the capital of which is $3,000,000, with a reserve fund of $4,081,698. Taikoo Dockyard & Engineering Co. (Ltd.) ; private concern. No statistics available. Sugar refining. —Taikoo Sugar Refinery; private concern. No statistics available. China Sugar Refining Co. (Ltd.), the capital of which is $2,000,000, with a reserve fund of $1,800,000. Cement manufacturing. —Green Island Cement Co. (Ltd.), the capital of which is $6,000,000, with a reserve of $1,050,000. This company has two issues of shares, old and new. of $7.50 each. Rope manufacturing. —Hongkong Rope Manufacturing Co. (Ltd.), the capi¬ tal of which is $2,000,000, with a reserve of $218,700. This concern has two issues of shares, old and new, of $5 each. Cigarette manufacturing. —Nanyang Bros. Tobacco Co. (Ltd.), the capital of which is $15,000,000, with a large reserve fund. Wine manufacturing. —There are 134 distilleries in the colony manufac¬ turing Chinese wines of all kinds. These are all small concerns, and it is impossible to obtain any statistics regarding their output or number of employees. Biscuit and confect toner g manufacturing. —M. Y. San & Co. (Ltd.) ; capital, $3,000,000. Aerated-water manufacturing. —A. S. Watson & Co. (Ltd.). The capital this concern is $1,200,000, with a reserve of $450,000. This concern also does a large business in drugs and druggists’ supplies. Paper manufacturing. —There are four concerns manufacturing paper in the colony—one large factory at Aberdeen (on the opposite side of the island from Hongkong) named the Aberdeen Paper Mills, and three small concerns in Yaumati. Gold and silver ware manufacturing. —There are 131 firms in the colony man¬ ufacturing gold and silver ware. Glass manufacturing. —There are 19 glass factories in the colony. The goods manufactured by most of these concerns are of a very inferior quality, but some of the larger concerns are improving the quality of their output. 453 454 COMMERCIAL HANDBOOK OF CHINA Rattan-furniture and bamboo-ware 'manufacturing. —There are 236 concerns manufacturing rattan and seagrass furniture. One of these is equipped with some up-to-date machinery, but the other concerns are small and most of the furniture manufactured by them is handmade. Knitted-goods and hosiery manufacturing. —There are 52 small knitting fac¬ tories, manufacturing a cheap grade of hosiery, singlets, etc. Soap manufacturing .—There are 17 soap factories in the colony. Four of these concerns are fairly large, but the remainder are small. Soy manufacturing. —There are 45 small Chinese concerns manufacturing soy. Ginger and fruits, preserved. —There are 35 small concerns making a spe¬ cialty of preserving and canning ginger, fruits, etc. Lard manufacturing. —There are 15 lard factories in the colony, all under government supervision, which manufacture lard for export. Jinrickisha manufacturing. —There are 26 small Chinese concerns in the col¬ ony manufacturing jinrickishas for use in the colony. LABOR CONDITIONS The following table indicates certain of the conditions with respect to labor: Industries Wages per day Hours of Male F emale work Shipbuilding __. __ ___ _ Hongkong currency $1. 50-$2. 00 Hongkong currency 9 Cigarette manufacturing. _ . __ ..... _ __ . .. 0. 80- 1. 20 $0. 40-$0. 65 10 Rattan-furniture manufacturing___ 1. 50- 2. 00 0. 40- 0. 60 10 Electric Tramway Co . __ 1. 00- 1. 20 8 Contractors, engineers, builders, etc. 1 . . _ 1. 00- 1. 40 10 1 Beard and lodging furnished. Although 20 strikes occurred during 1923, difficulties in reaching settlements were, on the whole, much less than in 1922. The colony is not free from the activities of the professional agitator, but a spirit of reasonableness seems to be increasingly in evidence. Hongkong government ordinances prohibit the employment of children under 10 years in any factory, the employment of children under 12 years in carrying coal or similar heavy tasks, and the em¬ ployment of children under 15 years of age in the making of glass, fireworks, or in similar dangerous trades. Every factory in which children are employed must keep a record in English or Chinese of all the facts with reference to each child in its employ. The or¬ dinances require one day’s rest in seven and relaxation intervals of not less than five hours, and they limit employment to daylight hours. TRANSPORTATION AND COMMUNICATION RAILWAYS The British section of the Canton-Kowloon Railway, the only line in the district, runs from Kowloon to Shumchun, a distance of 22% miles, and was opened for traffic in 1910. The Chinese section, which was opened for traffic a year later, runs from Shumchun to Canton, 89% miles. The British section is financed by the Hongkong gov¬ ernment. Because of disturbed political conditions in and around HONGKONG CONSULAR DISTRICT 455 Canton in recent years, operation of railways has failed to show a profit. In 1923 the deficit amounted to about $49,000 gold. In 1924 express service ceased from April 16 to the end of the year, and at the end of October all through traffic to Canton was suppressed. The total expenditure on the line up to December 31, 1923, by the Hongkong government amounted to nearly $17,000,000, and the number of local passengers carried in a normal year (1923) is in excess of 1,000,000. Fares and rates are: Freight rates per ton per English mile: First class—2.67 cents Hongkong currency. Second class—2.23 cents. Third class—1.78 cents. Fourth class—1.34 cents. Fares from Kowloon to Canton (about 112 miles) : First class—$5 Hongkong currency, single; $8 return. Second class—$2.50 single; $4 return. Third class—$1.10 single; $1.80 return. ROADS There are 227 miles of roads and streets in the Hongkong consular district, of which 138 miles are adaptable to motor transportation. Large sums are annually expended on the maintenance of roads and streets. Expenditure in 1923 amounted to more than $1,500,000 gold. A similar sum is to be spent during the coming year for improving roads and bridges. Traffic consists of motor trucks fitted with pneumatic tires, motor trucks fitted with solid tires, automobiles, motor busses, taxicabs, rickshas, sedan chairs, electrm street cars, and a few modern two¬ wheeled carts drawn by mules or coolies and owned by the military and sanitary authorities. Trucks fitted with pneumatic tires are limited to a load not exceeding 12 tons in the city and 5 tons in the suburbs, while trucks fitted with solid tires are limited to a load of 7 tons in the city and 5 tons in the suburbs. No fees or tolls are collected in Hongkong. TELEGRAPHS, CABLES, AND WIRELESS SERVICE The cable service out of Hongkong depends directly or indirectly upon three companies—the Great Northern Telegraph Co., a Danish corporation, which in normal times connects with Europe by way of Siberia; the Eastern Extension Telegraph Co., a British corpora¬ tion, which connects with Europe by way of Suez; and the Pacific Commercial Co., an American corporation, which has no direct con¬ nection at Hongkong but transmits messages to the United States by way of Manila. There is also the Chinese Government’s land serv¬ ice, which transmits messages not only over China and to India but to other countries by connecting cables at Shanghai or elsewhere. There is a commercial wireless station at Cape D’Aguilar, called VPS, owned by the government; wave length, 600; radius, 350-800 miles. The British Navy has a wireless station at Stonecutters Island, Marconi system; call letters are BXY; time signal on 2,000 meters at 1256 and 0156 Greenwich mean time. Visiting men-of- war get radio schedule. Weather reports are broadcast on 600 meters at 0500 and 0900 Greenwich mean time. The time ball is dropped 456 COMMERCIAL HANDBOOK OF CHINA on Kowloon signal hill at 10 a. m. and 4 p. m., the time for the ball being obtained from Hongkong Observatory. VPS broadcasts weather reports on 600 meters at 0500 and 0900 Greenwich mean time. Storm warnings are broadcast each even hour until midnight. No press news is sent from Hongkong. TELEPHONES The China & Japan Telephone Electric Co. (Ltd.), a private company incorporated in the United Kingdom, operates three ex¬ changes in Hongkong with a total of 6,500 subscribers. The equip¬ ment is of magneto type, of Swedish manufacture. This company owns the following cables, etc., in Hongkong: Miles Telephone routes, aerial_ 27. 38 Underground armored cables_ 38. 70 Underground cables in ducts_ 11. 45 Underground ducts_ 15. 86 Cables crossing the harbor_ 1. 99 Conductors: Aerial, single line_ 1, 553. 69 Submarine, Single line_ 104. 55 Underground, single line_13, 821. 90 Telephone rates vary from £10 per annum for telephones installed within a mile of the city to £25 for telephones in the Peak and Kowloon districts. There-is also a charge of £3 to £10 for every extension. • POSTAL FACILITIES The annual report of the Postmaster General of Hongkong for 1923 show s a steady increase in the postal business with the United States, particularly in remittances from Chinese in the United States to relatives and firms in the Hongkong trade district. A report of the Chinese branch of the Hongkong Post Office shows that Chinese registered articles delivered by the branch during the year 1923 amounted to 274,076, of which Chinese registered letters from the United States and from Canada accounted for 171,572. The regis¬ tered articles w^ere almost exclusively remittances of money from the LTiited States to this district. Previous to the w 7 ar these remittances amounted to something, over $40,000,000 gold. A Hongkong banker estimates that they amounted to more than $50,000,000 gold in 1923, which is probably correct, since the registered articles received dur¬ ing 1923 show an increase of 20 per cent over those received during the tw r o years previous to the war. Owning to the closing of the British postal agencies in China there were decreases in the number of mail receptacles dispatched from Hongkong and in transit receptacles handled as compared with 1922. A total of 5,298 steamers carrying mails arrived in 1923, and 8,364 left—an increase of 701 and 2,000, respectively, over the previous year’s figures. The total revenue from the postal service in 1923 amounted to $714,340, against $662,862 in 1922—an increase of $51,478. The balance of revenue over expenditures amounted to $622,700. HONGKONG CONSULAR DISTRICT 457 SHIPPING AND WAREHOUSING FACILITIES HARBOR FACILITIES Nearly all of the large passenger and freight vessels entering this port berth alongside the wharves of the Hongkong & Kowloon Wharf & Godown Co. (Ltd.), in Kowloon. Smaller-sized vessels are usually moored to buoys in the eastern and western portions of the harbor (all of these buoys being owned and controlled by the gov¬ ernment), while vessels belonging to large steamship companies, such as the Blue Funnel Line; Standard Oil Co.; Jardine, Matheson & Co.; Osaka Shosen Kaisha; and Douglas Steamship Co., berth alongside their own wharves on the Hongkong and Kowloon sides of the harbor. The average depth of water at high tide is 34 feet and at low tide about 23 feet. Tides rise at ordinary springs 9 feet and at ordinary neaps 6 feet. < Cargo is transferred from ship’s tackle to port of steamers lying alongside the wharves by means of trucks on light railways, steam cranes for hoisting, and coolie labor. But in transferring cargo from ship’s tackle to port of ships moored to buoys in the harbor, lighters, junks, and coolie labor are employed, the lighters and junks being towed by steam launches. The total tonnage entered and cleared during the year 1923 amounted to 53,402,239, as compared with 46,566,764 tons in 1922 and 43,420,970 in 1921. DOCK ACCOMMODATIONS In Hongkong there are two large shipyards with large modern dry dock and slipway conveniences; a third of considerable facilities for handling larger business; a fourth yard with an old dock which formerly served the port as its sole dry dock; a fifth concern with slipway facilities; and 21 boat-building establishments. The latter are Chinese concerns in which boats of foreign model are manufac¬ tured almost entirely by hand. Their annual output of small boats of all kinds is a considerable feature of the port’s industry. The Taikoo Dockyard & Engineering Co. (Ltd.) covers an area of 55 acres and is situated on the island of Hongkong just inside the northern and deeper entrance to the harbor. The works are equipped for modern ship and marine-engine construction and repairs and for overhauling all types of vessels, including warships, both in dry dock and on slipw r ay. During 1923 the firm constructed five ocean-going vessels of 4,711 gross tons and of 3,120 indicated horsepower, as compared with seven vessels constructed in 1922 of 11,087 gross tons and of 8,550 indicated horsepower. The largest dock possessed by this company is 787 feet extreme length; 750 feet on entrance at top; 120 feet wide at coping; 77 feet 6 inches at bottom; 88 feet width of entrance at top; 82 feet width of entrance at bottom; 34 feet 6 inches depth over center of sill at high-w^ater spring tides; 31 feet depth over side of sill at low- water spring tides. It can be filled in 45 minutes and pumped out in 2 hours and 40 minutes. The Hongkong & Whampoa Dock Co. (Ltd.) was established in 1863, and represents a development from an establishment of mud docks at Whampoa, on the Pearl or Canton Kiver, in the earliest days 458 COMMERCIAL HANDBOOK OF CHINA of the steamship business in the Far East. They are at present dock- proprietors, shipbuilders, boilermakers, marine and brass founders, forge masters, electricians, iron and brass founders, forge masters, electricians, and engage extensively in the manufacture of railway equipment for Chinese railways and local tramways. The principal works of this firm are at Hunghom on the Kowloon side of Hongkong Harbor, about 2 miles distant from the city of Victoria. The shipbuilding yard has a frontage of 570 feet and will admit of ships 500 feet in length being laid down. The com¬ pany also possesses a twin-screw salvage steamer fully equipped with a complete plant of powerful salvage gear and tools. During the year 1923 the Hongkong & Whampoa Dock Co. (Ltd.) constructed five vessels of 9,577 gross tons and 7,680 indicated horse¬ power, as compared with six vessels of 11,842 gross tons and 7,300 indicated horsepower in 1922. The No. 1 dock of this company is 700 feet in length, 86 feet in breadth at entrance at top and 70 feet at bottom, and 30 feet depth of water over sill at ordinary spring¬ tides. CARGO-HANDLING FACILITIES The Hongkong & Kowloon Wharf & Godown Co., in Kowloon, operates five large piers, capable of berthing the largest vessels entering the Hongkong port. The piers are equipped with 10 locomotive cranes of 5-ton capacity, 1 of 15-ton lifting capacity, and 1 of 25-ton capacity. From 20 to 25 tons of general cargo can be discharged per hour per hatch. Most cargo arriving in the larger freight and passenger vessels is discharged alongside the wharves of the above-mentioned com¬ pany and stored in its warehouses (godowns). Cargo from smaller vessels and coasting vessels, which are moored to buoys in the harbor, is discharged into junks or lighters, and usually transferred to godowns in the Avestern part of Victoria (the European city of Hongkong). The minimum depth of the water at the wharves of the Hongkong & Kowloon Wharf & Godown Co. is 29 feet at dead low water at lowest spring tides, which at ordinary low tide represents a depth of 31 to 32 feet. WAREHOUSING AND STORAGE FACILITIES Warehouses are on the water front and are connected with wharves by light railways. They are built of reinforced concrete, of brick and stone, with tiled roofs, and have a capacity of 300,000 tons of 40 cubic feet. The charge for warehouse space on ordinary goods is $0.70 Mexican per ton of 40 cubic feet, or $1 Mexican per ton of 2,240 pounds. Cargo transit through all its phases from ships’ side to storage may be effected by the use of cranes and light rail¬ ways, or wholly by coolie labor. Iron, timber in the log, and dangerous acids in jars are the princi¬ pal goods stored in the open. Because of dampness, iron is stored in the open only when there is no available covered space. The chief danger to cargo in storage is from white ants, which attack and breed in softwood packing cases and packing which absorbs moisture. To guard against these pests, cargo is stored, where pos¬ sible, on granite blocks, with air passages under the packages. HONGKONG CONSULAR DISTRICT 459 Consignees and dealers employ their own labor when taking delivery of cargo. PUBLIC UTILITIES ELECTRIC-LIGHT COMPANIES The Hongkong Electric Co. (Ltd.) supplies light and power on the island of Hongkong, and the China Light & Power Co. (Ltd.) supplies Kowloon. Both are British. The lighting load of the first named is 5,000 kilowatts of connected load, and the power load is 2,800 kilowatts. The lighting and power load of the China Light & Power Co. is 4,000 kilowatts. Both companies have recently made extensive alterations and ad¬ ditions to their plants, estimated to satisfy the needs of the colony for many years. Nearly all the equipment is British, but certain parts were purchased from the Westinghouse people in the United States during the war. The capital of the Hongkong Electric Co. is $3,000,000 Hongkong currency, all paid up, and that of the China Light & Power Co. is $3,000,000 Hongkong currency, of which $2,200,000 has been paid up. WATERWORKS All waterworks in the colony of Hongkong are owned and oper¬ ated by the government. There are five reservoirs on the island of Hongkong and one in Kowloon—the largest, Tytam Tak, having a capacity of 1,419,000,000 gallons. The total capacity of the six reservoirs is 2,539,000,000 gallons. Water is supplied to residents through meters at 50 cents Hongkong currency per 1,0000 gallons; water to ships in the harbor at 50 cents Hongkong currency per ton. All equipment in the pumping plants, the workshops, the hydraulic dam and distribution system, engine house, etc., is British. Various large schemes for the purpose of increasing the water supply of the colony are still in hand and, when completed, will provide Hongkong and Kowloon with an abundant supply of water all the year round. These schemes involve an expenditure of about $2,000,000. More than half of this amount is to be expended on the construction of two tunnels (or water flumes) in Kowloon, 2,160 feet and 4,680 feet in length, respectively, and an open conduit 2,000 feet in length, connecting the two tunnels and other contingent works. The work is expected to be completed in about 18 months, and will add about 17,000,000 gallons to the colony’s daily water supply. The contract for this latter scheme lias been let to a British company. TRAMWAYS There are two tramways in Hongkong, the Peak Tramway Co. (Ltd.) and the Hongkong Tramways Co. (Ltd.). Both are British companies. The former line is a cable tramway constructed in 1888 and running from Garden Road, near St. John’s Cathedral, to the Peak. Its capital is $300,000 Hongkong currency, and it pays an annual dividend of about 15 per cent. No extensions are con¬ templated at present, but it is understood that if a new line is to be laid electric trams will take the place of the old ones. The Hongkong Electric Tramway Co. runs through the city of Victoria from Belchers Bay to East Point and Happy Valley, and 460 COMMERCIAL HANDBOOK OF CHINA thence on to the village of Shaukiwan, a total length of about 10 miles. This concern has a paid-up capital of $1,625,000 and pays an annual dividend of about 30 per cent. The passengers carried per month number approximately 2,000,000, and no extensions are at present contemplated. RECLAMATION PROJECTS Progress is being made in connection with the reclaiming of about 90 acres of the Praya East foreshore with materials obtained from cutting down and removing Morrison Hill. The foreshore to be thus improved is a densely populated district within easy reach of the business section of the city of Victoria, and the improvement will make it susceptible of considerable commercial development. There will be mooring rings for junks on the shore front and several public piers. A part of the area made available by the removal of Morrison Hill will be set aside for recreation grounds, and about d 1 /^ acres will be made available for building purposes. Other reclamation schemes in hand at Hongkong include the fill¬ ing in of a portion of the foreshore at North Point, at which will be erected warehouses with provisions for berthing accommodations in front of certain lots by reinforced concrete wharves; the filling in of a tidal flat and the reduction of a hill between Taikoktsui and Fuktsunhoung on the mainland; the reclamation of areas at Kowloon Bay Vest and at Samsliuipo (a popular Chinese residential part of the mainland), and a further reclamation of about 20 acres at Kowloon Bay East to provide more permanent accommodations for the formation of junk building and repair yards. All these reclama¬ tion schemes are under government direction, but are being carried out chiefly by private enterprises. IMPORT AND EXPORT TRADE According to the American consulate general at Hongkong, the grand total of imports and exports of merchandise at Hongkong for 1924 was £145,727,077, the imports being £75,055,085 and the exports £70,671,992. This represents an increase over 1923 of £10,- 329,499. Excluding treasure in 1924, the actual trade reached the sum of £135,830,272, or greater than in 1923 by £12,503,443. In tabulated form the trade may be stated as follows: m Item Merchandise (excluding treasure) Treasure Total 1923: Imports__ ____... £61, 954, 498 £2, 798, 360 £64, 752, 858 Exports ... ___ ___ 61,372,331 9, 272, 389 70, 644, 720 Excess of imports_ ... . . _ __ 582,167 Excess of exports. __ __ 6,474, 029 5, 891,862 1924: Imports. __ .. .. .. . .. _ 72,155, 478 2,899, 607 75, 055, 085 Exports________ 63, 674, 794 6,997,198 70, 671, 992 Excess of imports_ _ . . . __ 8, 480, 684 4, 383, 093 Excess of exports__ . . . __ 4, 097, 591 HONGKONG CONSULAR DISTRICT 461 The excess of imports over exports in 1924, amounting to more than £8,000,000, represents generally goods in warehouses incurring cost by storage and interest charges. In normal years the import balance averages about £1,000,000, according to official returns—this disparity indicating the extent to which trade has been hindered by troubles in South China. A noteworthy feature is the diversion of traffic from Canton as a result, of the increasing political unrest there. Cargo to the value of about £2,000,000 has been shipped from Hongkong directly to districts that were formerly served from Canton. Ship¬ ments by the Canton-Kowloon Railway to Canton fell in 1924 to £26,143; in 1923 they had been £800,000. The table below shows the destination and origin of merchandise handled at the port of Hongkong during the year 1923: Regions Exports Imports Total United Kingdom . _ __ _ _ _ „ _____ £797, 778 7,164, 860 44, 814, 416 3, 592, 627 14, 275, 039 £6, 974, 513 6, 357, 912 9, 780, 816 6, 674, 896 34, 964, 721 £7, 772, 291 13, 522, 772 54, 595, 232 10, 267, 523 ' 49,239,760 British dominions and possessions . . . China. _ _ .... .. __ . _ _ Japan, Korea, and Formosa .. . .. .. Other foreign countries_ _ As regards exports, the following table shows, for the five princi¬ pal items, the estimated percentages in the year 1923 for the destina¬ tions listed: Articles To other Chinese ports To Japan To United Kingdom To United States Rice (white)__ _ . . .... Per cent 88 Per cent 2 Per cent Per cent 3 Sugar (refined). _ . ... .... 9 40 20 1 Yarn (cotton). __ ... .. .... __ 52 Rice (broken). .. _. .. .. .. 78 22 Kerosene_ . ... _ ... . _ 91 8 Rice is the principal item of export, being followed closely by sugar. The bulk of the rice shipments consists of imported stock from Indo-China. Sugar supplies are secured principally from the Dutch East Indies. Kerosene, which is imported from the United States and the East Indies, ranks third in importance. Cotton yarn is another important export. Practically all the yarns shipped are the manufactures of North China, Japan, and the United States. Rice, sugar, cotton yarn, and kerosene are the leading articles of import, forming also (as just indicated) the principal items of ex¬ port from the colony. CHANGES IN TRADE OF HONGKONG DURING PAST DECADE Before the war the value of exports handled by Hongkong aver¬ aged about £28,000,000 per annum. Notwithstanding unsettled con¬ ditions from a military and political standpoint throughout China, the total value of the export in 1924 was £63,674,794. The imports increased from an average value of £27,000,000 per annum in pre-war years to £72,155,478 in 1924. These increases 462 COMMERCIAL HANDBOOK OF CHINA have been remarkable, the larger proportion being due to the natural expansion of trade. The total trade of Hongkong in the years 1913, 1921, 1922, 1923, and 1924, including treasure, was as follows: Years Total value Imports Exports 1913 ___ £55, 000, 000 135, 834, 936 122,191,827 123, 326, 829 135, 830, 272 £28, 000, 000 68,143, 059 61,213, 363 61, 954,498 72,155, 478 £27,000, 000 67, 691, 877 60, 978, 464 61, 372, 331 63, 674, 794 1921___ 1922 ___ 1923- _ 1924_ _ The following table gives the vessels which entered and cleared from the port of Hongkong during the different years mentioned: Years Number of vessels (including junks and steam launches) Net tonnage 1913_ 489, 734 672, 681 708, 244 778, 222 764, 492 37, 742, 982 43, 420, 970 46, 566, 764 53, 402, 239 56, 731, 077 1921___ 1922___ 1923 _ 1924___ The American tonnage in the port of Hongkong in 1913 was 290,967; in 1923 this had increased to 1,421,962, while in 1924 the American tonnage was 1,423,490. MONEY, BANKING, AND CREDIT BANKS The following is a list of the principal Hongkong banks: Banks Nationality Head office Capital American branches, agencies, or corre¬ spondents P. & O. Banking Corpo¬ ration. British . London_ £5,000,000 authorized; £2,594,160 paid up. National Bank of Com¬ merce, New York (agent). Hongkong & Shanghai Banking Corporation. -do_ Hongkong.. $.50,000,000 Hongkong currency authorized; paid up to $20,000,000. New York branch. Chartered Bank of In¬ dia, Australia, China. . ..do_ London.. .. £3,000,000 paid up_ Do. Bank of Taiwan. Japanese... Taipeh. . . 60,000,000 yen sub¬ scribed; paid up to 52,488,425 yen. Do. Mercantile Bank of India (Ltd.). British .. . London. .. £3,000,000 authorized; £1,050,000 paid up. Do. Banque de L’lndo- Chine. French_ Paris.. 72,000,000 francs sub¬ scribed; 68,400,000 francs paid up. J. P. Morgan & Co., French American Banking Corporation, Guaranty Trust Co. (New York agents). Bank of East Asia_ Hongkong Chinese. Hongkong.. $10,000,000 Hongkong currency authorized; $5,000,000 paid up. New York agent: Ameri¬ can Express Co. Yokohama Specie Bank. Japanese—. 1 Yokahama.. 100,000,000 yen author¬ ized and paid up. New York branch. HONGKONG CONSULAR DISTRICT 463 Banks Nationality Head office Capital American branches, agencies, or c o r r e - spondents Nederlandsche Handel Maatschappij (Neth¬ erlands Trading So- Dutch _ Amsterdam. 150,000,000 guilders au¬ thorized; 80,000,000 guilders paid up. Irving Bank, Columbia Trust Co., New York (agents). ciety). New York bankers: Ir¬ ving Bank, Columbia Trust Co., Equitable Trust Co. Bank of China__ Chinese_ Peking_ $60,000,000 authorized; $18,278,600 paid up. Russo-Asiatic Bank_ Russian_ Paris__ 55,000,000 rubles paid up; capital subscribed, Chinese Government, 3,500,000 taels. National City Bank of New York, Union Trust Co. of San Fran¬ cisco (agent). Industrial & Commer¬ cial Bank (Ltd.). Hongkong Chinese. Hongkong $5,000,000 authorized; $795,795 paid up. American Express Co., Harriman National Bank, New York agents. Nederlandsch Indische Handels Bank. Dutch Amsterdam. 60,000,000 guilders au¬ thorized; 55,000,000 guilders paid up. Bankers: San Francisco, — Crocher National Bank, Bank of Italy, Anglo and London, Paris National Bank; New York, Farmers Loan & Trust Co., Goldman Sachs & Co., Chase National Bank. International Banking American -. New York.. $5,000,000 fully paid_ San Francisco branch. Corporation. $6,000,000, fully paid_ American Express Co. _do_ _do_ (Inc.). New York branch; Can¬ ton Bank, San Fran¬ cisco, agent. Bank of Canton__ Hongkong Chinese. Hongkong .. £1,200,000 authorized; £1,066,520 paid up. Ho Hong Bank (Ltd.)__ _do_ Singapore... $20,000,000 authorized; $4,000,000 paid up. Agents: New York, Farmers Loan & Trust Co. National Commercial & Saving Bank (Ltd.). _do_ Hongkong .. $5,000,000 authorized; $2,400,000 paid up. No New York agent. Oriental Commercial Bank (Ltd.). 1 _do_ _do_ $5,000,000 authorized; $1,500,000 paid up. New York agents, Na¬ tional City Bank of New York; San Fran¬ cisco, Union Trust Co. Banque Franco-Chin- oise. French. Paris.. 10,000,000 francs author¬ ized; 2,500,000 francs paid up. Irving Bank, Columbia Trust Co., New York agents. Equitable Eastern Banking Corporation. American. _ * New York.. $2,000,000, fully paid up. Subsidiary of Equitable Trust Co. i Went into liquidation June 15, 1926. FINANCING OF EXPORTS FROM UNITED STATES TO HONGKONG Exports from the United States to Hongkong are financed by letters of credit or by bills of exchange. In the former case the Hongkong buyer opens a' credit at his local bank which contains a complete statement of the conditions on which it may be drawn against. Drafts drawn by the American exporter against such a let¬ ter of credit must usually be accompanied by the bill of lading and insurance policy, and may be negotiated through any local bank in America, which of course must be careful that all the conditions specified in the letter of credit have been complied with. The usance generally varies from eight to four months. The other principal form of payment is by bill of exchange. In such cases the American exporter sends the draft, bills of lading, and insurance policy direct or through the mediation of his local banker to a Hongkong bank. If the transaction is D/A (documents on acceptance) the Hongkong bank delivers the documents to the Hongkong importer on his acceptance of the bill of exchange. If the transaction is D/P (documents on payment) the Hongkong bank delivers the documents on payment of the bill of exchange. 464 COMMERCIAL HANDBOOK OF CHINA It is the consensus of opinion among local bankers that letter of credit in the usual cases is superior to the bill of exchange as a method of financing imports and exports. General bills of exchange should be used when one is confident concerning the financial stand¬ ing and the reliability of the local purchaser. The weakness of the bill of exchange is that the drawee, if he is not responsible, will refuse acceptance if the market has gone against him. If shipment has been made against confirmed letters of credit this contingency does not arise. On the other hand, an importer will not open a letter of credit unless he feels assured as to the integrity of the seller, since by doing so he is subject to the risk of paying for goods which do not meet specifications. Generally, it is good policy for the American exporter or manufacturer dealing with the Hongkong market to re¬ quire confirmed letters of credit. If the local business is in a good financial position it should experience no difficulty in opening the required credits through its local bankers. POWERS OF ATTORNEY All functions must be expressed in a power of attorney. None are implied under the laws of Hongkong, except such as are ob¬ viously ancillary to the powers expressed. No translation of a power of attorney is called for in Hongkong. English is the lan¬ guage of the colony. There is no registration of powers of attorney in Hongkong. They are private documents, as between the grantor, the attorney, and the party with whom the attorney deals. In case of cancellation, if the grantor of a power of attorney can not rely on the attorney’s acting on his cancellation he should communicate with his consul or some one else in Hongkong requesting him to notify the attorney and to advertise the cancellation. There is no official method by which a power of attorney can be canceled. A power of attorney prepared in accordance with usage in the United States is valid without regard to form, provided it was duly authen¬ ticated, but it would be subject always to the necessity of proving that the form was in accordance with such usage. CURRENCY AND COINAGE The principal coins current in the colony of Hongkong are the Hongkong silver dollar, the Mexican dollar, and the “ British dol¬ lar,” all of approximately equal value. The dollar contains 100 cents. Subsidiary coins include 50-cent, 20-cent, 10-cent, and 5-cent pieces, all of silver, and a copper 1-cent piece. The mint par value of the Hongkong dollar in United States currency is 47.77 cents (on the basis of the average value of silver in 1913). The exchange rate quoted at the end of June, 1926, wase 55.16 cents. The silver dollar is legal tender to any amount, subsidiary silver coin up to $2, and copper cents up to $1. No estimate can be given as to the number of silver dollars in circulation. Of subsidiary coin there is more than $17,814,000. The colonial government has no paper money in circulation, but that put out by private banks may be estimated at nearly $59,000,000. HONGKONG CONSULAR DISTRICT 465 ADVERTISING AND MERCHANDISING 1 * The newspaper, the illustrated poster, and the cinema are all val¬ uable mediums for introducing foreign-made goods to the Chinese public, and all three are now being employed with success by firms in Hongkong and South China. If the object is to reach the Chi¬ nese masses directly, advertising by illustrated posters is preferable on account of the prevailing illiteracy. Another form of advertising adopted by some firms is the dis¬ tribution gratis of novelties, such as fans, pictures, small mirrors, paper flags, aeroplanes, etc., containing advertising matter. These are eagerly sought after and prized by the Chinese population. Chinese calendars are also distributed by the larger firms in Hong¬ kong about Chinese New Year. They are very artistic, generally being in 10 colors, size 20 inches by 30 inches, and are lithographed on chrome paper, with brassed top and bottom. The calendars cost about 18 cents Hongkong currency per copy for an order of not less than 10,000 copies, and are eagerly sought by the Chinese. Local firms are of the opinion that advertising pays if conducted in proper lines, but that it will not pay unless there is a close follow up. The mere publication of advertisements is a waste of time and money. Circulars and pamphlets sent by mail are of little use ex¬ cept for articles that find a market among Europeans, and even then the “ personal touch, 5 ’ through a local representative, would be more likely to bring results. The following is a list of the local newspapers of importance, to¬ gether with their advertising rates, in United States currency: The Hongkong Telegraph. —Established in 1871; formerly American-owned, but now controlled by local British interests. It is printed in English and is published daily except Sunday. It has a circulation of about 3,000. The average number of pages is 12; each page is 15 by 22 inches, with columns 2% inches wide and 20 inches in length. The monthly quotations per column inch, in United States currency, are: Daily insertion, $3.50; alternate days, $2.20; twice weekly, $1.75; once weekly, $0.90 ; once monthly, $0.60. The usual discount of 20 per cent is allowed ad¬ vertising agencies. The South China Morning Post. —One of the leading newspapers in South China. Established in 1903 and controlled by the proprietors of the Hongkong Telegraph; printed in English, published daily except Sunday. Circulation estimated to be about 4,000. Subscription, $36 Hongkong currency per year. Average number of pages 14, with seven columns, 2^4 inches in width and 20 inches in depth, per page. Contract advertising rates per single column inch per month are: Daily, $3.12 United States currency; alternate days, $1.87; twice weekly, $1.56; once weekly, $0.94. The following discounts are allowed for prepayment of whole amount: For three or six months, 5 per cent; for 12 months, 10 per cent. The rate for a full page is $72.80 per insertion; half page, $36.40 per insertion; quarter page, $18.20 per insertion. The Hongkong Daily Press. —Established in 1847; one of the oldest news¬ papers in the colony. Printed in English and published daily except Sunday. Circulation estimated at about 3,000. Subscription, $36 Hongkong currency per annum. The average number of pages is 10; size of page 17'A by 22y 2 inches; number of columns, 6; width of column, 2 5/6 inches; length of column, 20 inches. Special inducements are offered foreign advertisers by special flat rates, which are a matter of arrangement. 1 See special chapter on this subject. 100020°—26-31 466 COMMERCIAL HANDBOOK OF CHINA The China Mail .—Published in English. Established in 1845 and the oldest newspaper in the colony. Annual subscription, $36 Hongkong currency per annum. Estimated circulation, 2,500. Advertising rates, about $3.12 United States currency per inch per month. The circulation of English newspapers in Hongkong is based on a foreign population of about 30,000 people, about 23,000 in Hongkong and its garrisons and the rest among the foreign resi¬ dents of Canton, Swatow, Amoy, Foochow, Wuchow, and other treaty ports. The native newspaper circulations are based upon a population of about 600,000. TRADE ORGANIZATIONS Trade organizations include the Hongkong General Chamber of Commerce, the Chinese Chamber of Commerce, and the Association of Exporters and Dealers of Hongkong. The nature of the services rendered by the Hongkong General Chamber of Commerce may be summarized as follows: (1) Arbitra¬ tion; (2) metal and sundries; (3) insurance; (4) trade-marks; (5) piece goods; (6) inland trade; (7) language school. PROPERTY VALUES AND RENTS Property values have fluctuated recently and are more or less inflated because of the influx of rich Chinese from Canton. The value of land in the business center of the colony at present is from $65 to $80 per square foot; in the European reservation on the Peak, $1 per square foot; in Kowloon, from $4 to $8 per square foot; and in the outlying districts, from $2 to $4 per square foot. The rent for office space varies considerably, depending on the age and construction of the building, the facilities for entering it, and the conveniences attached thereto. For instance, office space covering 2,800 square feet in a new up-to-date reinforced concrete building, w T ith all modern conveniences, was recently offered at an annual rental of $8,160 Hongkong currency. A similar amount of office space in an older building could probably be obtained for $5,000 Hongkong currency per annum. TAXES AND ASSESSMENTS Taxes are charged by the government at the rate of 13 per cent on the rental of all houses and offices, etc., and are payable to the government quarterly, in advance. Crown rent is also payable to the government in respect of all land owned by individuals and corporations, and amounts to ap¬ proximately $300 per acre. In some locations it may be a little more. During the period 1914 to 1923 the assessments of the whole colony rose from $14,410,103 to $21,059,700, an increase in ratable value of $6,649,597. HONGKONG CONSULAR DISTRICT 467 LIVING COSTS The following table indicates ordinary living costs in Hongkong hotels and boarding houses: • Board and room, per month Hotel Boarding house Single man.......__ . Hongkong currency $450 450 800 1, 000 Hongkong currency $275 275 450 550 Single woman.._ ___ _ .. __ _ Married couple.. ... ... . ___ .. _ Married couple and 2 children .... ......._..._ ...._ The managers of the large commercial firms, heads of the various branches of the local government, and other principal residents nearly all reside on the Peak. At present, however, suitable houses are difficult to obtain, and, when they are obtainable, it is usually only for a few months while the owner is away on leave. The annual rent of a suitable furnished house on the Peak is about $3,600 Hongkong currency. The annual cost of light is about $250 Hong¬ kong currency, and coal for fireplaces costs $240 Hongkong currency. The cost of transportation to and from the Peak per annum by the Peak Tramway would be $144 Hongkong currency for a man, $108 for a woman, and half rates for children. Transportation in the colony is by ricksha, chair, or automobile. The roads.are excellent for motoring, and there are about 1,230 automobiles in the colony, nearly all American. There are no car¬ riages or other horse-drawn vehicles in Hongkong. Motor-car hire in Hongkong costs $4 Hongkong currency per hour for a small car and $6 for a large car. Half rates are charged for waiting. European and American children are usually sent home to be educated. The principal clubs are the Hongkong Club, the Royal Hongkong Golf Club, and the Peak Club. The chief forms of sport in the winter are golf and tennis. In summer the principal recreation is swimming. MUKDEN CONSULAR DISTRICT By Vice Consul W. F. Nason LOCATION AND AREA The Mukden consular district comprises most of Shengking, or Fengtien (the southernmost of the three eastern, or Manchurian, Provinces), and the southern portion of Kirin Province. Lying between 40° and 44° N., it corresponds in latitude to Pennsylvania, New York, and the New England States. The total area of the consular district is about 108,000 square miles, or, roughly, twice the size of the State of Illinois. The average annual rainfall is 23.41 inches, the average minimum temperature (January) 8° F., and the average maximum tempera¬ ture (August) 73° F. The rainy season is July and August, the dry season from October to May, inclusive. On the whole the weather in South Manchuria is clear, dry, and bracing—the winter being without heavy snowfall, but occasionally subject to extreme cold. POPULATION The population, according to Chinese post-office statistics, is es¬ timated at 14,000,000, with an average density for the whole dis¬ trict of 130 per square mile. Not more than a tenth of the popula¬ tion is descended from the original Manchu stock, the great bulk being immigrants from Shantung and Chihli and their descendants. CITIES Mukden, the capital and seat of Government of Shengking Prov¬ ince, is in about the same latitude as Boston. The other important cities of the district are: Cities Location Population of district (estimated) Number of Euro¬ peans Number of Ameri¬ cans Number of American business firms Mukden l .. .... Shengking. 773,846 194, 520 220 72 9 Newchwang 1 .. .. .. . .. . do. .. _ . 70 7 1 Liaoyang L.. ..... . .. ..do_ _ 149, 662 578, 574 430, 097 468, 313 370, 329 357, 160 622, 783 526, 333 20 None. None. Haicheng. ... _ .. ... . .. ...do__ None. None. None. Changtu... .. __ ..do_ None. None. None. Hsinmin 1 __ ... .... __ .. ..do. _ ... . .. None. None. None. Tiehling 1 _ ___ . . . __ _do_ ... . .. None. None. None. Chinchow. ..... ... ... .do_ None. None. None. Kirin 1 _ ....._ Kirin___ 20 3 None. Changchun 1 . . ___ .. . do__ .. 8 3 None. 1 Treaty port where foreigners may reside for trade purposes. The population of the cities as given above does not mean the urban population alone, but includes the population of the surrounding rural districts which are tributary to them. Mukden is an important 468 MUKDEN CONSULAR DISTRICT 469 interior distributing center, being connected by the South Manchuria Railway with Dairen, Antung, Newchwang, Changchun, and Kirin; by the Chinese Eastern Railway (which meets the South Manchuria at Changchun) with Harbin and points in North Manchuria and Siberia; by the Peking-Mukden Railway with Taonanfu, Tientsin, and Peking. Newchwang is the only seaport of importance in the district. The bulk of the import and export trade of South Man¬ churia, passing through Dairen, is included in the figures of the Dairen consular district. In addition to the trade centers listed, where foreigners may reside for trade purposes, the following places in the district are also open to foreign trade: Tatungkow, Fenghwangcheng, Tungkiangtze, Fa- kumen, Taonan, Hulutao, and Liaoyuan, all in Sliengking (Fengtien) Province, and Chutzechieh, Towtaokow, Potsaokou, Hunchun, and Lungchingtsun in Kirin Province. At Mukden and Newchwang certain areas, municipally adminis¬ tered by the Chinese authorities, hold most of the residences and business houses of Europeans and Americans, as well as the foreign consulates. In these cities Americans may hold perpetual leases on land, and may rent or purchase houses or other buildings. At Muk¬ den there is also a settlement leased and administered by the South Manchuria Railway (Japanese) in which Americaps and Europeans are permitted to reside and conduct business. The same is also true of the leased zone of the South Manchuria Railway which runs from Dairen to Changchun. AGRICULTURAL AND ANIMAL PRODUCTS The cultivation of soy beans and the manufacture of bean prod¬ ucts constitute the greatest industry in the district. Bean cake is the leading export. Wheat, the local consumption of which is rapidly increasing, is also important. Kaoliang, maize, and millet are staple foods of the natives, and considerable quantities are exported to other parts of China. Tobacco is grown and utilized by native and foreign firms which manufacture locally, blending imported leaf with the native product. Vegetable seeds are cultivated, and the cul¬ tivation of sugar beets, cotton, and paddy rice is being undertaken on a considerable scale within recent years. Methods of tillage are very crude, although American tractors are being introduced among some of the larger farmers. One American firm keeps an American representative in the field for the purpose of extending distribution through education of the farmers in modern agricultural methods. The livestock of South Manchuria and eastern Mongolia is esti¬ mated as follows: Horses, 3,120,000; mules, 630,000; donkeys, 600,- 000; pigs, 6,700,000; cattle, 2,000,000; sheep, 2,500,000. It is esti¬ mated that over 5,000,000 pounds of wool are produced annually in the district, the greater part being used locally. Large quantities of bristles and horsehair are produced and exported to the L T nited States, Japan, and Europe. Furs and skins are also an important addition to the trade of the district. A considerable part of the fur products from Siberia pass through Mukden, and there are numerous American and European fur buyers in the city during the winter fur season. Mukden has always been a center for the tanning of furs and skins, a great variety of such products being offered. Exports 470 COMMERCIAL HANDBOOK OF CHINA of furs and skins to the United States reach a large volume annually. The agricultural office of the South Manchuria Railway Co. esti¬ mates the total annual A T alue of agricultural products in Manchuria and eastern Mongolia to be approximately $500,000,000 United States currency. The principal agricultural products of the district, the planting and harvesting seasons, the average production per acre, the esti¬ mated annual production, and the final disposition thereof, are shown in the following table: Product Planting season Harvesting season Average produc¬ tion per acre Estimated annual production Use or disposition Bushels Bushels Sov beans_ Apr. 20-30_ Sept. 25-30 . 27 66, 000, 000 Chiefly expoit. Kaoliang ( Sorghum vulgare). Apr. 20-May 10... Sept. 20-25.. 30. 6 73, 000, 000 Local and export. Millet ( Panicum italicum ) _ .. _.do_ . .. . Sept. 20. 29.9 74, 000, 000 Do. Millet ( Panicum cuscorci) _ May 1-20 _ Sebt. 10... 30.6 4, 225, 000 Local. Millet ( Panicum miliaceum _do.. _do_ 27. 1 4, 500, 000 Local and export. glutinous). Maize__ Apr. 10-15... Sept. 20_ 32.4 29, 000. 000 Do. Wheat..._ Apr. 5-10..... July 15-20... 23 10. 000, 000 Local. Barley. _ Apr. l-5_.. July 10-15... 25 31. 500. 000 Local and export. Upland rice . _ Apr. 15_ Sept. 20_ 33. 8 7, 000, 000 Do. Paddy rice _ May 1_ Sept. 20-30.. 33.2 5, 700, 000 Do. Red bean.. _ May 15-20. .. Sept. 24-30.. 23 7, 500, 000 Do. Pounds Tons Tobacco _ May 7 __ Sept. 10_ 816 25, 000 Local. Hemp and jute_ Apr. 15_ Aug 20-30.. 100 20, 000 Local and export. Sugar beets.. May__ September.. 12,000 45, 000 Local. Castor seeds, sesamum seeds, and cotton are also cultivated on a large scale. The first two are planted during the first 15 days in April and harvested in the middle of October. The production per acre is 11 and 10 bushels, respectively. These seeds are largely ex¬ ported, a considerable quantity going to the United States. The cultivation of cotton is considered to be of great importance in the district. The acreage is constant^ increasing, and owing to the development of the cotton-weaving industry in Manchuria during recent years, every effort is being made by both Chinese and Jap¬ anese to develop a local supply of raw material. It is estimated that Manchuria produces annually approximately 20,000,000 pounds of cotton with a ginned cotton yield of 6,700,000 pounds or 13,400 bales of 500 pounds. However, as the annual demand is believed to be about 350,000 bales of cotton yarn and cloth, Manchuria will remain a cotton-importing section for the immediate future. MINERALS AND MINING The most important minerals in South Manchuria are coal, iron, copper, gold, silver, lead, asbestos, magnesite, talc, fluorite, and feld¬ spar. Manganese is also mined. Gold is largely found in placer de¬ posits and is mined only on a small scale. There are wide deposits of iron ore at Anshan and in the vicinity of Penhsihu which are worked on a large scale with modern mining machinery. The principal coal mines are at Fushun, Penhsihu, Yentai, Patachao, Peipiao, and Tayaokow. Coal strata of narrow aqueous rock formation appear on the surface near Liaoyang, Penhsihu, the upper stream of the Taitze River, and south of Wafangtien. Along the Taitze River a stratum runs east and west, being exposed at four places. This stratum con- MUKDEN CONSULAR DISTRICT 471 sists of light green peat, black shale, a variety of gray coal, etc. In addition to the stratum which appears near the surface at the Yentai Colliery near Liaoyang, there are apparently smaller strata at vari¬ ous points between Mukden and Kaiyuan. The Penhsihu coal field is under the jurisdiction of the Penhsihu district, Shengking (Fengtien) Province. The field extends to the southwest from the northeast border of the city of Penhsihu and crosses the South Manchuria Railway line. It covers an area of 10,900 acres. The rock formation belongs to the Paleozoic period and is composed of a single seam running east and west, the western fault line being formed by the Hsintungkao Valley. The Fushun coal field is located 20 miles east of the city of Muk¬ den on the bank of the Hun River. The total area is approximately 15,000 acres, running west for about 10 miles parallel with the river. The thickness of the seam shows a minimum of 78 feet and a maximum of 420 feet, with an average of 130 feet. The Yentai coal mine is situated about 10 miles northeast of Yentai Station on the Mukden-Dairen line of the South Manchuria Railway. The coal field runs for about 3y 2 miles north and south with a breadth of 1 mile. These three mines are operated on a large scale, with modern ma¬ chinery. There are 12 iron deposits connected wdth the Penhsihu Iron Min¬ ing Co. (Sino-Japanese), which maintains a pig-iron smelting plant at Penhsihu. The iron-mining rights at Anshan are held by the Chenhsing Ivungsu, a Sino-Japanese corporation. The South Manchuria Rail¬ way, under an agreement with this firm, whereby the total output of the mines is supplied to the railway, has established a large modern steel works at the Anshan Station of the South Manchuria Railway. The ore deposits consist of red hematite and, rarely, of brown hema¬ tite. The thickness of the ore strata ranges from 300 feet to 500 feet, with interlying seams of siliceous rocks. The following list shows the more important coal mines in the dis¬ trict : Name Location Output Nationality Peipiao Coal Mining Co_ Peipiao, Chaoyang, and district. Tons 500, 000 Chinese. Ta Yao Kow Coal Mining Co. 30 miles northwest of Chinchow. 100, 000 Do. Pataoho coal mine_ Pataoho, Heishanhsien _ 70, 000 18, 000 10, 000 4, 900, 000 Do. Lientun coal mine.. Kangpinghsien_ _ Do. Hsincheng coal mine.._ Hsincheng.. _ _ Do. Fushun coal mine.. _ Fushun, 15 miles east of Mukden Japanese. Penhsihu coal mines_ Penhsihu, Shengking Province.. 450, 000 Sino-Japanese. Yentai coal mine__ Yentai, Shengking Province_ 110, 000 (9 (') (9 60, 000 Japanese. Sino-Japanese. Not operated. Chinese. Niu Hsin Tai mines 10 miles east of Penhsihu ... Hsiao Shih mine... ... 40 miles up Taitze River__ Tien Shih Fukow mine_ 53 miles east of Penhsihu_ Ta Ko Ta mine.. _ \li miles north of Hsianhsien_ Chinese (6 companies). T’ao Lu mines. .. 8 to 15 miles north of Hsifeng- 10, 000 Chinese (4 companies). T’ien Ho Tun mine. _ Huo Shih Ling mine..... hsien. 8 miles southwest of Kuanya.... 3 miles north of Yingchengtze 0) 10, 000 Chinese. K’uan Ch’en Tze mines. station on Kirin-Changchun Railroad. Shihpeiling, 1H miles east of 0) Japanese; South Manchuria Lao T’u Kow mine_ Changchun; Taochiatun, 2 miles southeast of Changchun. 2 miles west of Chientao, Chu- 0 ) Mining Co. Sino-Japanese. tzechieh. i Fairly large deposits. 472 COMMERCIAL HANDBOOK OF CHINA The Pei Piao Coal Co., producing bituminous coal, is operated with a capital of $5,000,000 silver, the head office being at Tientsin. The Pataoho, Lientun, and Hsintun mines are Avorked under the super¬ vision of the Fengtien (Shengking) Mining Bureau at Mukden. The Fushun and Yentai mines are subsidiary companies of the South Manchuria Railway. The principal iron mines are: Name 0 Location Ore Output of pig iron, 1923 Capital Nationality Anshan iron mine... Anshan... Hematite, limonite_ Magnatite, hematite.. Tons 90, COO 24, 000 Operated by South Manchuria Ry. Co. (Japanese). Sino-Japanese. Penhsihu iron mine. Penhsihu.. $7, 000. 000 In addition there are the Kungchangling Iron mine, between Liao- yang and Penhsihu, which has both magnetite and hematite de¬ posits and is operated by a Sino-Japanese company; the Miao Erh Kow iron mine, 2 miles east of Nan fen on the Mukden-An tung line, also composed of magnetite and hematite, and operated by the Penhsihu Iron Mining Co.; the Ta Li Tze Ivoav iron mine, 16 miles southwest of Maotzeshan, Avhich supplies hematite ore to nati\ T e smelters; the Chi Tao Kow iron mine, 8 miles southeast of Tung- hwahsien, and the Pao Chu iron mine, situated 33 miles southeast of Hailung, Shengking (Fengtien) Province. Other principal mines, of various metals and minerals, are shown in the table beloAv: Name Location Ore Nationality COPPER Pan Ling copper mine_ 22 miles northeast of Tsao- hokou on the Mukden- Antung line. Copper pyrites.... Sino-Jnpanese mining com¬ pany has applied for con¬ cession (Chuniclii Min¬ ing Co.). Ma Lu Kow copper mine... 25 miles east of Penhsihu station. Malachite.. Okura & Co., Japanese. Su Tze Huo Ho copper mine. 38 miles from Tiehling up Chai River. Copper pyrites_ Sino-Japanese. T’ien Pao Shan copper and silver mine. 10 miles southwest of Lao Tu Kow coal mines at Chientao. Argentite.. Sino-Japanese, Souih Man¬ churia Ry. and Taiko Co. Panshih Mining Co_ Shihtsuitze, near Pan¬ shih, Kirin. Pyrites and mala¬ chite. Chinese. GOLD Maoerhshan gold mine_ 2M miles north of Maoerh¬ shan. Placer mining . .. British company interested in district. Ta Miao Kow gold mine_ 6 miles south of Tunghwa. Ore... ... _ Do. Pao Ma Chuan gold mine.. 37 miles south of Tunghwa. Placer and ore_ Hoachan Co., Chinese. Hsiang Lu AVan Tze gold mine. 14 miles southeast of Pei- shan-chentze. _do ... Shukao Co., Chinese. Chai Ho Pu gold mine_ 24 miles east of Tiehling... Placer mining_ Chinese and Japanese arc interested. LEAD Ch’ing Ch’en Tze lead mine 32 miles west of Tung- yuan-pu station. Galena. Sino-Japanese, Chunichi Co. MUKDEN CONSULAR DISTRICT 473 Name Location Ore Nationality MAGNESITE Cliuan Shan Tze mine- 2 miles north of Shakang Annual production Considerable Shinko Co., Chinese, con- on South Manchuria quantity. nected with South Man- Pingehrfang magnesite mine Pai Hu Shan mine - Ry. line. Tashihkiao_ ------ 3 miles south ofTashihkiao 1,000 tons_ Considerable churia Ry. Co. Chinese. Shinko Co., Chinese, con- station on South Man- quantity. nected with South Man- Tv imn TVTfl. Shan mine churia Ry. 3 miles east of Tashihkiao _do____ churia Ry. Co. Chinese company, con¬ nected with South Man- station on South Man- Ta T/ing mine _ churia Ry. 5 miles northeast of Ta- _do.. . churia Ry. Co. Tenko Co. TTnn Shih Tying mine shihkiao station on South Manchuria Ry. 9-15 miles southeast of .. . do__ Chinese company, con¬ nected with South Man¬ churia Ry.Co. Do. Ph’in Mr Yn mine Haicheng. 12-15 miles southeast of _do.... Haicheng. ASBESTOS T,i Vnng Co (Lt.d ) Chinchow, Fengtien; mines at Sungchiachang- tse, 10 miles south of Chaoyang. Chinese. TALC Sungchiaputze mine_ - 10 miles south of Haicheng. Considerable Chinese company, con¬ nected with South Man¬ churia Ry. Co. Chinese. Talin talc mine __ Tashihkiao _ quantity. 6,000 tons. __ FLUORITE Luchiatun mine _ 5 miles southeast of Lu- Small quantity_ Chinese. Tsui Cilia Tun _ _____ chiatun station, Kai- pinghsien. 2 miles south of Tungchia- tun station, Kaiping- hsien. . . do _ __ Chinese. FELDSPAR Shih Ta Shan mine.._ 7 miles south of Haicheng- Considerable Chinese company, con- hsien. quantity. nected with South Man- churia Ry. Co. SODA Fishery and soda company. Chengchiatun_ . . .. (Liao River soda Chinese. Tien Hui Soda Co.. 12 miles from Tapusu, fields.) (Lake Tapusu Chinese; Yu Chien Co ... Kirin. Wentu, Chengkiatun, soda fields.) Crystal soda, 2,300,000 pounds. 2,000 tons __ Chinese. MANGANESE Hsincheng manganese mine _ Shengking. Hsincheng . _ . Chinese. MANUFACTURING AND INDUSTRIAL DEVELOPMENT It is estimated that there are 121 bean mills in the district, along the South Manchuria Railway, producing annually 10,500,000 pieces of bean cake and 437,000 piculs of bean oil. There are also 700 or 800 smaller mills scattered throughout the interior which bring the total production to about 15,000,000 pieces of bean cake and 600,000 piculs of bean oil a year. Bean products are chiefly ex¬ ported, being shipped to ports via the Liao River and the South Manchuria Railway. Investments in oil mills are estimated to be $9,000,000 United States currency. The manufacture of cotton cloth and yarn is second in impor¬ tance to the bean industry. The Manchuria Spinning Mill at Liao- 474 COMMERCIAL HANDBOOK OF CHINA yang (Japanese) and the Mukden Spinning & Weaving Works at Mukden (Chinese) both produce cotton yarn, the first having 30,000 and the second 20,000 spindles. The total production of cotton yarn of the two mills is estimated at 28,000 bales (of 400 pounds each) per year. About $3,250,000 United States currency is invested. The Mukden Spinning & Weaving Works also operates 200 looms with an estimated daily production of 30 bales or 600 rolls of cotton cloth, the annual production being 210,000 rolls. The only other large cotton-weaving mill under operation is at Tiehling—the Manchuria Cotton Weaving Co., which has an estimated production of 243,000 rolls a year. In addition, there are approximately 3,000 looms in smaller factories in Mukden, Liaoyang, and Newell wang, producing cotton cloth, ankle tape, bandages, sheetings, etc., with an estimated output of one roll per loom a day. In the aggregate, about 2,500,000 rolls or 100,000,000 yards of cotton manufactures are produced, with a probable investment of $6,600,000 United States currency. Amer¬ ican textile machinery is used in the Mukden Spinning & Weaving Works. Beet sugar is manufactured at Mukden and Tiehling by the South Manchuria Sugar Refining Co. Local beets and crude Java sugar are utilized, with an annual output of 8,300 tons of refined sugar, chiefly for local consumption. Capital to the amount of $5,000,000 United States currency is employed. The center of the flour industry is at Changchun in Kirin Prov¬ ince. The estimated daily production during the milling season is 26,000 bags per day, produced with a capital of $2,900,000 United States currency. This flour is consumed locally. There are 22 iron works in the district, all being small with the exception of the Penhsihu and the Anshan Iron Works. Pig iron to the amount of 102,000 tons a year is manufactured, chiefly for export to Japan. Other iron products are cast iron, 500 tons; iron pipes, 1,428 tons; machinery, wrought iron, construction materials, etc., 72,000 tons per year, for local use. Investments in iron works are estimated at $26,000,000 United States currency. Other manufacturing industries, and their estimated annual out¬ puts, are: Matches, 276,000 cases; gunny sacks, 537,000 pieces; gas, 28,000,000 cubic feet; bricks, 20,000,000 pieces; earthern pipe, 24,- 000 pieces; tiles, 34,000 pieces; medicine bottles, 429,000 pieces; lamps, chimneys, etc., 212,000 dozen; candles, 10,000 cases; cement, 4.700 barrels; quick lime, 2,000 tons; potassium chlorate, 28,450 pounds; sulphate of ammonia, 6,600 tons; magnesia, 830 tons; ice, 1.700 tons; coal tar, 1,000 tons; talc, 1,000 tons; lead, 300 tons. Cig¬ arettes, alcohol, woolen products, paper, manufactured skins, dog mats, etc., are manufactured in some quantity. There is as yet not a sufficient production of most products to meet local demands, with the exception of pig iron, skins, and sulphate of ammonia, of which the greater part is exported, MUKDEN CONSULAR DISTRICT 475 LABOR CONDITIONS The following table gives an indication of the wages prevailing at Mukden: [Figures given in local currency; $1 equals approximately $0.35 United States currency] Classes High Low Average Laborer_ - - ___ - -_ - - - -- $1. 70 $1. 30 $1.50 Fireman __ _ .. . -- ____. . . . 1.60 1.20 1.40 Mason ___ -- . -- - _ . _ _ -_ 1.85 1.30 1.50 Cement worker_ _ . . . - -- _ ___ 2.00 1.50 1.70 Blacksmith ... _ .. _______ ___ 2.00 1.40 1.70 Plasterer.. ..._...__ .. . . . . .. __ 1.50 .90 1.30 Painter __ .. ... . . _ .. . __ ... 2.40 1.90 2.10 Carpenter ____ . . . . _ 1.70 1.20 1.40 Cabinetmaker . . _ ____ __ _ _ 1.80 1.20 1.40 Tinsmith _ _ . . ___ __ . ___ 1.90 1.40 1.60 Teamster: One horse . . __ . . ..._ ... 1.80 1.10 1.50 Two horses. ___ _ . ._ _ __ 2.00 1.30 1.70 The above figures are indicative of wages paid by Chinese to native laborers. Labor charges incurred by foreigners in the em¬ ployment of Chinese are usually considerably higher. Foreigners employed in the district by foreign companies—engi¬ neers, accountants, factory superintendents, stenographers, etc.— receive about 25 per cent more than is paid for similar work in the United States. Native labor has not reached a high grade of efficiency in modern industrial methods, although favorable results are obtained from factory hands when well trained. Up to the present time there have been no serious labor disturbances. TRANSPORTATION AND COMMUNICATION WATERWAYS The highest tide ever registered on the bar at the mouth of the Liao River was 22.7 feet, which makes it impossible for vessels draw¬ ing 25 feet to enter. The average spring tide across the bar is 19 feet, hence boats drawing 20 feet can only very rarely cross the bar. In summer 20 and 21 feet are occasionally registered, but vessels rarely load over 19 feet when entering the port of Newchwang, and gener¬ ally only 18 feet. Boats drawing 15 feet can cross the bar at high water and can navigate up river to Swan Island, or lO 1 /^ miles above Newchwang. At low tide steamers of 15-foot draft can proceed only to a point 3y 2 miles above Newchwang, crossing the bar at high tide. Steamers drawing 6 feet can cross the bar at any time and can navi¬ gate upstream to a point 62 miles north of Newchwang, as far as Sanchiaho, which is the junction of the Taitze, Hun, and Liao Rivers. The river above this point is shallow, and only launches and junks can navigate in ordinary times. Launches (draft, 2 y 2 feet) can navigate on occasions as far as the Mukden-Shanhaikwan Railway crossing, 150 miles above Newchwang, and small native junks proceed as far as Tungkiangtze. 476 COMMERCIAL HANDBOOK OF CHINA During 1923, 16,627 vessels crossed the bar at Newchwang and entered the Liao River, with a total tonnage of 14,669,917. In the same period 160,485 tons of beans and bean products were shipped down the river from interior points. While the upriver cargo is also considerable, there are no statistics available in regard to the volume of this transportation. Transportation charges, taking coal as a basis of calculation, are estimated to be $1.20 United States currency per ton for 100 miles. These figures are for upstream transportation charges, which are somewhat higher than rates for downstream shipments. Carload cargo over the South Manchuria Railway line ranges from $2.60 United States currency for first class to $1.05 for fourth-class cargo per 100 miles (figuring 1 yen as equal to $0.42). Despite favorable freight rates, the Liao River is chiefly valuable to foreign trade as a means of transportation of raw products from the interior, since, owing to lack of modern facilities such as warehouses, terminals, etc., convenient means of distributing foreign imported products are not afforded. RAILWAYS The following table shows mileage on the South Manchuria Rail¬ way : Miles Dairen to Changchun- 437. 6 Dairen to Port Arthur_ 31. 6 Antung to Mukden_161. 7 Tashikiao to Newchwang_ 13. 9 Fushun branch line_ 32.9 Ilushutai to Hunho_ 2. 5 Total_ 680.2 The following table shows the freight rates per ton per mile (carload) : First class Second class Third class Fourth class Up to 100 miles . .. _ __ Yen 0.0625 Yen 0.05 Yen 0.0375 Yen 0.025 101 to 200 miles..- _ .06 .048 .036 .024 201 to 400 miles..__ . 0575 .046 .0345 .023 Over 400 miles.. _ . _ .055 .044 .033 .022 Charges based on a rate per kin (1 kin equals approximately 1 y 3 pounds) are 10 per cent of the carload rate per 100 kins. Also, terminal charges of 0.05 yen per 100 kins are levied on kin-rate goods and 0.50 per ton on carload goods. Terminal charges and freight rates are collected together. There is no rebate system in force, but when consignees are found unable to bear the freight charges, and it is necessary to assist them, special freight rates are provided. There are certain specific freight rates on goods carried to and from Dairen and Antung. The first class is applicable to kerosene and kindred oils, matches, quicklime, and carbide only and is both on a kin and carload basis. The second class is in effect on MUKDEN CONSULAR DISTRICT 477 kerosene shipped from Dairen only. The third class applies to victuals and building materials. On rice, soy, salt (table and refined only), vegetables, fresh fish, salted and dried fish, as well as on firewood and charcoal, a 30 per cent reduction from the ordinary rates, or the specific rates to and from Dairen and Antung, may be applied. On building materials, timber (fourth class only), stone (fourth class only), cement, pozzuolana, lime, brick (glazed brick excluded), tiles, mats and mattresses, and household furnishings, a 25 per cent reduction from the ordinary rates, or the specific rates to and from Dairen and Antung, may be obtained. Minimum carload weights range from 15 to 30 tons. A reduction of 30 per cent on 11 kinds of through freight, includ¬ ing cotton piece goods and yarn, carried from the terminal points Dairen, Newchwang, and Antung has been allowed by the company. Passenger fares per mile on the South Manchuria Railway are as follows (1 } T en equals, under normal exchange, $0.4984 United States) : First class, 0.07 yen; second class, 0.045 yen; third class, 0.025 yen. The mileage of the Changchun-Kirin Railway is 79.4. Its freight rates per ton per mile (carload) are as follows: First class, $0.0981 Yuan; second class, $0.0818; third class, $0.0654; fourth class, $0.0491; fifth class, $0.0327; sixth class, $0.0245 Yuan. Its freight rates per kori (1 kori equals 0.35791 mile) are: First class, $0,046 Yuan; second class, $0,032; third class, $0,018. ($1 Yuan equals approximately $0.50 United States.) The mileage of the Ssupingkai-Taonan Railway is 264.1. Its freight rates per ton per mile (carload) are: First class, $0.1063 Yuan; second class, $0.09; third class, $0.0736; fourth class, $0.0573; fifth class, $0.0491; sixth class, $0.0409. Passenger fares per kori are: First class, $0.05 Yuan; second class, $0.03; third class, $0.02. That section of the Peking-Mukden Railway which lies within the Mukden consular district extends from Mukden to Shanhaikwan, a distance of 420.78 kilometers. The freight rates per 50 kilos per kilometer are shown in the table below (1 kilo=2.2046 pounds; 1 kilometer=0.62 mile) : Kilometers Classes 1 2 3 4 5 6 1 to 20___ Yuan $0.092 . 184 Yuan $2. 078 . 156 Yuan $0. 064 . 128 Yuan $0.050 . 100 Yuan $0. 036 .072 Yuan $0.034 .068 40_ _ GO_ . 276 .234 . 192 . 150 . 108 . 102 80_ . 368 . 312 . 256 . 200 . 144 . 136 100_ .460 . 390 .320 . 250 . 180 . 168 200_ _ . 8?8 . 744 . 610 . 477 .343 .324 300_ _ 1. 280 1. 085 .890 . 695 . 500 .478 400_ 1. 659 1. 407 1. 154 .901 . 649 .618 500_ _ 2. 032 1. 723 1. 413 1. 104 .795 .754 708_ 2. 699 2. 289 1.877 1.468 1. 056 1.002 While the above figures give the general rates according to dis¬ tances, there is an increasing scale for each kilometer over which 478 COMMERCIAL HANDBOOK OF CHINA goods are transported. The last distance given, 708 kilometers, is the distance between Mukden and Tientsin and shows charges on goods imported into the district through that port. The following tables give metric-ton rates: FREIGHT RATES PER METRIC TON (MINIMUM CHARGE 1 TON) Kilometers Classes 1 2 3 4 5 6 1 to 20___ Yuan $1. 380 2. 760 Yuan $1.170 2. 340 Yuan $0. 960 Yuan $0. 750 Yuan $0. 540 1. 080 Yuan $0. 440 . 880 40_ 1.920 1. 500 60__ 4.140 3. 510 2.880 2. 250 1. 620 1. 320 80___ 5. 520 4. 680 3. 840 3. 000 2. 160 1. 760 100_ 6. 900 5. 850 4. 800 3. 750 2. 700 2. 200 200 _ 13. 455 11. 408 9. 360 7. 313 5. 265 4. 290 300 _ 19. 665 16. 673 13. 680 10. 688 7. 695 6. 270 400 ___ 25. 177 21. 350 17. 484 13. 667 9. 850 8. 033 500 ____ 30. 629 25. S72 21. 270 16. 621 11. 972 9. 758 708 _ 40. 448 34. 298 28.149 22. 000 15. 851 12. 922 CARLOAD RATE PER METRIC TON 1 to 20__ Yuan $0. 920 Yuan $0. 780 Yuan $0. 640 Yuan $0. 500 Yuan $0. 360 Yuan $0. 220 40 ____- 1.840 1. 560 1. 280 1.000 .720 .440 60 -___ 2. 760 2. 340 1.920 1. 500 1.080 . 660 80 ___ 3. 680 3. 120 2. 560 2. 000 1. 440 .880 £66 _ 4. 600 3. 900 3. 200 2. 500 1. 800 1. 100 200 _ 8.782 7. 445 6. 108 4. 771 3. 435 2. 098 300_ 12. 800 10. 855 8. 906 6. 957 5. 009 3. 060 400 ____ 16. 598 14. 077 11. 547 9. 018 6. 499 3. 980 500 _ 20. 322 17. 230 14. 136 11.047 7. 955 4. 863 708 ... 26. 997 22. 898 18. 779 14. 680 10. 561 6. 461 Freight rates per metric ton and carload rates per metric ton are also on an increasing scale for each kilometer covered. The above charges are given in silver Yuan dollars, which under normal ex¬ change equal approximately $0.50 United States currency. Storage charges for ordinary goods (owner’s risk) are as follows: “ 50-kilo ” rate goods, for every 24 hours or part thereof, 5 cents per 50 kilos; “ ton ” rate goods, for every 24 hours or part thereof, 25 cents per ton. (Charges figured in silver dollars.) Open storage may be arranged for, the charge being $10 per “ space ” of 15 square feet per month for “goods” and $5 for “minerals.” (Charges in silver.) Valuable goods, goods likely to cause danger to other goods, and goods of a perishable nature are not accepted for storage. ROADS With the exception of various parts of the city of Mukden, there are no roads in the district constructed for motor transportation. The roads in general are cart paths, nearly impassable during the rainy months of the year. The lack of stone deposits hinders the improvement of roads. During the winter months when the country is icebound, the use of motor vehicles is practicable, it being con¬ sidered that a small type of tractor, whereby produce could be trans¬ ported to the markets in trailers, would be especially suitable. A MUKDEN CONSULAR DISTRICT 479 small number of tractors have been introduced for general farming purposes. Roads around large trade centers such as Mukden, Changchun, Tiehling, Kirin, and Newchwang are adaptable to motor transporta¬ tion for short hauls during the winter months, and there is a ten¬ dency to appreciate the value of such transportation. Motor ve¬ hicles in the district are distributed as follows: Electric automo¬ biles—Mukden, 1. Gasoline automobiles—Mukden, 97; Anshan, 4; Changchun, 30; Fushun, 5; Newchwang, 2; Kirin, 7; Tiehling, 1. Motor trucks—Mukden, 15; Changchun, 11; Fushun, 3; Liaoyang, 1; Ssupingkai, 3; Tiehling, 1. There are 21 trailers in use in the vicinity of Changchun. There are no road fees or tolls which affect the transportation of foreign products. Foreign merchandise usually moves under a transit pass which exempts it from further taxation. TELEGRAPHS, CABLES, AND WIRELESS SERVICE Telegraphic communication is under the jurisdiction of the Tele¬ graph Administration of the three eastern Provinces. The total length of lines in Manchuria is 7,600 miles, with 140 telegraph offices. Commercial telegrams are divided into the following classes: Fourth class, ordinary messages, $0.06 Yuan per word ($1 Yuan equals approximately $0.50 United States) or $0.09 Yuan per word for cipher and foreign-language messages; third class, urgent messages, $0.18 Yuan per word or $0.27 Yuan for cipher and foreign-language messages. For telegrams sent to other Provinces in China the rate is double. Japanese telegraph stations are maintained in connection with the post offices at stations along the South Manchuria Railway. Cable connections with the United States are via Shanghai by the Chinese lines and via Japan and the Bonin Islands by the Japanese lines. The cable rate for a private or commercial telegram from Mukden to New York by Chinese connections is $1.90 Yuan per word, and urgent messages carry a triple rate. By Japanese connections the charge is 2.70 yen per word (1 yen equals approxi¬ mately $0.42 United States) via the Bonin Islands, and 1.74 yen per word by wireless from Japan. Wireless stations in Manchuria have been operated for military purposes only, but it is planned to throw open some of them to commercial 'use in the near future, probably at Mukden, Harbin, Changchun, and Taonanfu. There are no pri¬ vate or commercial broadcasting or receiving stations in the district. TELEPHONES Two telephone services operate in Mukden, one Chinese and the other Japanese. The Chinese system operates 1,375 telephones on about 1,538 miles of wire. The Japanese service operates 1,693 instruments. As most of the cities are in the South Manchuria Railway zone, Japanese systems are maintained in them as separate services. The Chinese telephone administration at Mukden has pur¬ chased considerable American equipment, although the greater part of the installation supplies for both the Chinese and Japanese serv¬ ices was obtained from the Nippon Electric Co., Tokyo, Japan. 480 COMMERCIAL HANDBOOK OF CHINA The number of subscribers at the various places is shown below: Cities Mukden_ Tiehling_ Kaiyuan_ Changtu_ Ssupingkai.. Kungchuling Fenckiatun.. Chinese service Japanese service Cities Chinese service Japanese service 1, 375 220 1,693 305 Changchun.._ _ _ Newchwang . .... 200 2 1,200 140 1,308 138 434 Fushun __ ... . 276 50 0) Fenghwangcheng.. . 43 0) 201 255 Kirin_ _ 480 0) 60 226 Wafangtien __ .... 58 80 30 121 Kaiping. _ . 85 0) 1 No service. 2 Sino-Japanese service. POSTAL FACILITIES Chinese postal affairs in the Province of Fengtien are in the hands of a postal commissioner residing in Mukden. Post offices, of which there are 148, with 315 agencies, are established in all important cities and towns. Japanese post offices are maintained at all towns in the South Manchuria Railway zone, and these offices furnish parcel-post and money-order facilities with the United States. The rates and regulations are the same as those in Japan with respect to mails to the United States, all being operated under the provisions of the International Postal Union. The time for transmission of letters to or from New York via the Pacific is 28 days. Letters to Peking and Tientsin reach their destination in one day. SHIPPING AND WAREHOUSING FACILITIES HARBOR FACILITIES Newchwang, which is located on the Gulf of Liaotung at the mouth of the Liao River, is the only port of importance in the Muk¬ den consular district. There are no docks or special anchorages, but if advance notice of arrival is given, the pilot will have instructions for berthing. The wharfage at Newchwang is limited to the Chi¬ nese Government Railway wharf on the north side of the river and several wharves on the south shore above the customhouse. Ships at Newchwang generally do not have difficulty in finding a wharf where cargo may be discharged. If no such facilities are available, cargo may be discharged by lighters. There are about 190 lighters in the port, about 100 being available for hire. The cost is approximately $45 to $50 Mex. per day, in¬ cluding the wages of men handling cargo. The following statistics give the number of vessels entered and cleared at the Maritime Customs at Newchwang during 1923: Nationality Number Tonnage Nationality Number Tonnage American .. _ . _ 4 20, 200 394, 092 6, 850 9, 096 18, 572 259, 488 Norwegian. . .. 30 26,500 16, 516 526,146 British 312 Russian_ . _ 12 Danish . . ... 2 Chinese ... 794 Dutch 4 French __ _ 6 Total.. 1,488 1, 277, 460 Japanese... 324 MUKDEN CONSULAR DISTRICT 481 A branch line connects the port with the South Manchuria Rail¬ way, whereby goods may be distributed to all large trade centers in South Manchuria. The Liao River also forms an excellent means of distribution in eastern Shengking (Fengtien) Province. In 1923, 160,485 tons of beans and bean products were brought from the upper Liao River district to Newchwang by native junks, the amount of such transportation over the route having increased considerably during recent years. WAREHOUSE AND STORAGE FACILITIES Warehouses are established along the South Manchuria Railway at Mukden, Liaoyang, Changchun, Ssupingkai, Kungchuling, New¬ chwang, Fushun, Tiehling, Ivaiyuan, Changtu, Yentai, Suchiatun, Hsintaitzu, Fenchiatun, Shwangmiaotze, and Kuochiatien. The warehouses in the Kwangtung leased territory, at Dairen, serve as a central depot for goods transported to and from Manchuria via that port. Storage charges at warehouses maintained by the South Manchuria Railway are 2 sen per 100 kin (133 pounds) or 20 sen per ton on carload goods for every 24 hours or less (1 sen equals, under normal exchange, $0.0048 United States). A mixed storage system for beans packed in gunny bags is oper¬ ated at these places. Warehouse receipts are issued for goods in storage which may be used as commercial paper in financing ex¬ ports and imports. Goods in storage are subject to a compulsory fire-insurance regulation, such insurance being effected by the rail¬ way company. The Chinese agents of foreign firms usually dis¬ tribute goods for sale at interior points, the foreign traders supply¬ ing the necessary quantities from the central warehouses. PUBLIC UTILITIES ELECTRIC LIGHT PLANTS The establishment of electric light and power plants throughout Manchuria has been an important line of endeavor of American, European, and Japanese firms in China. Manchuria has tried and recognizes the value of such public utilities, the oil lamp and candle having to a considerable extent been supplanted by the electric light in many urban centers. The establishment of American ma¬ chinery, which in many cases has included entire plants, has in par¬ ticular opened up the market to further sales of American equip¬ ment for extensions and repair supplies, familiarity having en¬ gendered confidence in American electrical manufactures. It is expected that electrical development will continue, and the further installation of plants will depend, as usual, on the supporting ca¬ pacity of a given locality, which in its turn is based on commercial or agricultural development. It is important to keep this point in mind while selling equipment, as in many cases notes must be taken for future payment, the only guaranty thereof being the future revenue of the utility. An estimate as to the countries of origin of electrical goods imported directly into Manchuria at the present time may be obtained from the section in this handbook on “ Imports.*’ 100020°—26-32 482 COMMERCIAL HANDBOOK OF CHINA The electric light and power plants now operated in this consular district are as follows: Changchun Electric Light Plant, Changchun, Kirin, China. Chinchow Electric Light Co. (Ltd.), Chinchow, Shengking (Fengtien), China. Fukiatun Electric Light Co., Fukiatun, Shengking, China. Fushun Collieries Electric Plant, Fushun, Shengking, China. Hua Hsin Electric Light Co., Liaoyuan, Shengking, China. Kiaotow Electric Light Plant, Kiaotow, Shengking, China. Kungchuling Electric Light Plant, Kungchuling, Shengking, China. Liaoyang Electric Light Plant, Si Kwan, Liaoyang, China. Manchurian Electric Light Co., Kaiyuan, Shengking, China. Ming Sing Electric Light Co., Kaiping, Shengking, China. Mukden Electric Plant, Mukden, Shengking, China. Mukden Government Electric Light Works, Mukden, China. Penki Electric Light Plant, Penki, Shengking, China. Pukwang Electric Light Co., Changtu, Shengking, China. Sian Electric Light Co., Sian, Shengking, China. Sifeng Electric Light Co., Sifeng, Shengking, China. Ssupingkai Electric Light Co., Ssupingkai, Shengking, China. Sukiatun Electric Light Plant, Sukiatunkai, Shengking, China. Tashikiiao Electric Light Co., Tashikiao, Shengking, China. Three Eastern Provinces Cotton Mill Electrical Plant, Mukden, China. Tiehling Electric Light & Power Co., Tiehling, Shengking, China. Tsienkinchai Electrical Plant, Tsienkinchai, China. Tungliaochen Electric Light Co., Tungliaochen, Shengking, China. Wafangtien Electric Light Co., Wafangtien, Shengking, China. WATERWORKS • With the exception of a small waterworks and sewerage system maintained by the South Manchuria Railway Co. in its settlement in the city, there is no water supply or sewerage system in Mukden. Artesian wells are used extensively. The Yinkow Waterworks & Electricity Co., a Sino-Japanese concern, operate a water-supply system at Newchwang. There is also a small waterworks at the Fushun Colliery operated by the South Manchuria Railway Co. TRAMWAYS There are no electric tramways in the district. One short horse- car line is in the city of Mukden, and it is expected that this will be replaced in the near future by an electric line using modern German equipment which has already been received by the municipal authorities. At the Fushun coal mines, a subsidiary enterprise of the South Manchuria Railway Co., 84 miles of electric railway is operated for carrying coal, sand, and passengers; 29 electric locomo¬ tives, 5 passenger cars, 11 trailers, 329 sand cars, and 29 other cars are used. CONSERVANCY AND RECLAMATION WORKS The conservancy of the Liao River, in southeastern Shengking Province, is under the supervision of a board composed of a Chinese official, the foreign consuls at Newchwang, the commissioner of cus¬ toms, and representatives of Chinese and Japanese chambers of com¬ merce at Newchwang. Two engineers have charge of operations, which are financed by a customs surtax levied on goods exported and imported, and by a tonnage tax on vessels calling at Newchwang, MUKDEN CONSULAR DISTRICT 483 which is at the mouth of the river. The board plans to increase these taxes in the future for the purpose of dredging the bar at the mouth of the river. If these plans are successful it is expected that ships of deeper draft will be able to call at Newchwang, and that the future expansion of the port will be stimulated. An American engineering company recently secured a large contract for dredging work planned by the conservancy board. IMPORT AND EXPORT TRADE According to the annual report of the consulate general at Muk¬ den for 1924, the table below gives the value of the total foreign trade of Manchuria, by ports, for the years 1913, 1922, 1923, and 1924: Ports 1913 1922 1923 1924 Aigun_____ U. S. currency $1,100, 291 30,099, 069 616, 968 617, 225 7, 281,143 42, 889, 608 13, 819, 825 U. S. currency $1,089,186 41, 343, 502 1, 209, 789 2, 754,140 44, 508,983 132,064,711 11,350,027 U. S. currency $168,155 35, 473, 086 1, 261, 355 4,136, 427 56, 566, 603 150,070,164 13, 044, 662 TJ. S. currency $37, 580 44, 323, 840 1, 275, 089 3, 764,190 45,540, 211 164, 255, 831 12,030, 562 Harbin district_ Hunchun - . .... __ Lungchingtsun ___ __ . . .. Antung __ __ . -- Dairen . _ . . ___ . . Newchwang . _ .. . . . . Total.__ __ ___ 96, 424,129 234, 320, 338 260, 720, 452 271, 227, 303 The following table indicates the advance in value of Manchu¬ ria’s foreign trade, showing imports and exports separately (more detailed figures for the trade of 1924 are not yet available) : Years Imports Exports 1913_ U. S. currency $47, 069, 915 99, 363, 743 TJ. S. currency $49, 354, 214 134, 956, 595 1922 _ Years Imports Exports 1923_ TJ. S. currency $99, 383, 487 102,423, 386 TJ. S. currency $161, 336, 965 168, 803, 917 1924_ While Dairen and Antung are not in the Mukden consular dis¬ trict, the greater part of the merchandise imported and exported through those ports finds a market or originates in Shengking (Fengtien) and Kirin Provinces. It is therefore necessary to ana¬ lyze figures for those ports in making a commercial survey of the district. The total trade of South Manchuria has increased sharply during recent years. Exports from the three ports in 1923 amounted to $184,591,630, United States currency, and imports amounted to $135,861,999. The trade of Newchwang did not show a normal ex¬ pansion in comparison with the newer ports of Dairen and Antung, which have direct communication with the South Manchuria Rail¬ way. The trade of Newchwang has gradually increased, however, because of its favorable situation at the month of the Liao River, the great natural means of transportation in South Manchuria, and further development of the port is expected. The table below shows exports during 1913 and 1923 through the three ports of Newchwang, Dairen, and Antung. The figures for 484 COMMERCIAL HANDBOOK OF CHINA 1904 are for Newchwang only, because, at that time, Dairen and Antung were not developed as commercial ports : [Value in haikwan taels; exchange value of tael: 1904, $0,698 United States currency; 1913, $0.7295; 1923, $0.8231] Products Bean cake. Beans___ Bristles_ Coal_ Horsehair__ Iron, pig---- Oil, bean...... Oils, vegetable_ Seeds, hemp, sesame, etc.... Silk, raw, and silk products. Skins, furs, and hides. lvalue . f piculs \value - lvalue - f piculs. lvalue. I I ' * — X value - /piculs. 1904 1913 1923 1,986,172 13, 243, 222 25, 770, 523 3, 726, 485 28, 702, 280 61, 378, 656 1, 827, 369 3, 944, 833 14, 563, 338 4, 461, 044 10, 844, 960 44, 949, 243 208 3, 296 5,516 11, 885 273, 075 1, 451,178 6, 530, 590 2,242 418, 674 2, 638, 316 17, 498, 371 3,886 128 64, 899 140,823 1, 475, 743 2,945,193 1, 952,844 74,104 695,108 582, 459 5,186, 768 15, 295 127, 240 437, 526 15, 795,932 31, 725 269, 206 997, 571 20,160 155, 839 1, 427, 427 4, 839, 684 12, 806 199, 514 118, 755 2,008, 310 5,994,150 19, 673,042 -- 36, 714 350, 201 619, 230 Exports of soy beans, bean cake, and bean oil have shown the greatest increases. Iron and coal have been mined with modern machinery during recent years—this fact accounting for their sudden appearance on the export list. The great increase in value of silk is a noteworthy feature. The exports of Manchurian raw products have in general shown a remarkable increase, due, in part, to the foreign traders who are gradually extending their activities in the district. The following table shows, for 1923, the estimated percentages of the three principal exports going to the destinations indicated: Articles Japan Great Britain Hong¬ kong Germany Dutch East Indies United States Bean cake__ Per cent 81.00 .31 58. 00 Per cent 0.05 30. 30 2. 80 Per cent Per cent Per cent Per cent 0.5 18.3 .07 Bean oil_ _ 0.7 2.0 4. 40 .66 Beans_ 9.2 Except for bean products, there are no customs statistics showing the ultimate foreign disposition of exports from the district. It is estimated that 98 per cent of the pig iron goes to iron works in Japan. Coal is exported to Japan, Korea, French Indo-China, the Straits Settlements, the Philippine Islands, and ports in North and South China. A large percentage of the bristles and horsehair finds a market in the United States through direct shipment via England. Shipments of vegetable oils to the United States are also large. The following “ declared export ” figures show the MUKDEN CONSULAR DISTRICT 485 products appearing on invoices certified in the Mukden district for shipment to the United States during 1922 and 1923: Articles 1922 1923 Quantity Value Quantity Value Furs, undressed: Fox____-.pieces.. Kid ..... ...do. .. 7,538 16, 378 U. S. currency $28, 749 7,070 4, 626 U. S. currency $55,465 Lynx .. __. .. . _ _do_ 105 8, 748 3, 982 238 669 1, 200 20, 400 82,023 335 85, 731 129, 782 19 5,897 197, 720 366, 813 1,919 7,054 1,334 1,490 53, 918 997 23, 638 204, 299 2,099 211,294 257, 402 360 4, 733 158, 419 525, 423 657 Marmot.. . . _ __ . _do ... Rabbit. _ . . __ _ _ ..do_ Raccoon.._ _ . _..._ .... do_ Sable... _ . .. __ _ ..... do_ Sheep (dry) ... ... _do . 1, 668 115 1,284 403 416 27 6, 809 29,928 Squirrel..'._ _ . .... _ _ ... do_ Weasel (kolinsky) . ...... _ _ do_ Wolf_____do.... Furs, dressed: Dog mats_do_ Moufflon (goat).....do_ Sable.. . .. .. . __do 181, 418 146,047 315 112,185 65, 352 198, 439 299, 300 2, 212 173,375 105, 474 Wool and hair: Goat hair___ ..pounds. Horsehair_ . . ... ....!. do_ Bristles__ ... ... . . do_ Miscellaneous _____ _ . ____ 169, 671 525,120 119, 772 754, 376 445 Total___ _ __ _ 1, 726, 392 1, 510, 501 Exports from the district to the United States may be better under¬ stood by taking into consideration the following figures. The total declared exports to the United States from the whole of Manchuria amounted to $12,004,477 United States currency during 1923. Of this amount, exports from the three southern ports of Mukden, Dairen, and Antung amounted to $5,792,843. Considering only im¬ portant products, the figures for Dairen show the following declared exports to the United States for the same period: Soy-bean oil, 44,713,226 pounds, valued at $2,967,986; soy-bean cake, 26,008,790 pounds, or $457,977; raw silk, 78,040 pounds, or $265,716; perilla oil, 2,052,195 pounds, or $249,386; peanut oil, 1,632,015 pounds, or $139,635; millet, 2,843,152 pounds, or $58,244; hempseed 1,758,- 338 pounds, or $41,008. The figures for Dairen taken in conjunc¬ tion with the above declared exports from Mukden give an ap¬ proximate estimate of shipments to the United States, as the bulk of these goods originated in the Mukden district, although these figures should be modified somewhat because of shipments from the Harbin district through Dairen. Large volumes of furs and •skins from the Harbin district make up a part of the Manchurian •exports to the United States. There is, however, a considerable indirect export trade to the United States which passes through ports of transshipment such as Kobe and Shanghai, which does not appear on the declared-exports returns of consulates in Manchuria, and which is not included in the above estimates. The table following shows the principal imports from foreign countries—the figures for 1904 applying to Newchwang only, while those for 1913 and 1923 include Dairen, Antung, and Newchwang. 486 COMMERCIAL HANDBOOK OF CHINA [Values in haikwan taels] Products Bags, all kinds... Cotton piece goods: Shirtings, gray, plain. Sheetings, gray, plain.... Shirtings, white, plain-- Shirtings, white, figured-- Drills... Jeans.......— T cloths. Cambrics, lawns, and muslins, white, dyed, and printed...... Lenos and balzarines, white, dyed, and printed.. Plain cotton prints and chintzes__ Fancy muslins...... Art muslins and cretonnes, unenumerated. Printed drills, furnitures, and twills... Printed crPpe.. Printed sateens, reps, etc. Turkey red cottons and dyed T cloths. Dyed cottons, plain, fast black, colored, and fig¬ ured— Italians, Venetians, poplins, lastings, and crfipe... 1904 1913 1923 pieces.. .value.. 2,997, 700 288, 871 12, 215, 465 1, 484, 582 23, 629,142 4, 259, 567 (pieces-- lvalue-- pieces.. value.. pieces.. value._ pieces .. value. . pieces. . value. . pieces.. value. _ pieces., value.. (pieces.. /value ._ 150, 742 453,246 1,148, 884 3,969, 326 77, 790 306,031 60 330 454,711 1,743, 334 139, 480 391, 773 4,125 6,110 2,182 1,930 363, 958 1,132, 855 2, 262, 763 5, 655, 275 345, 555 1, 469, 738 3, 488 16, 987 458, 702 1, 749, 522 496, 800 1, 496, 667 38, 244 69, 559 29, 517 33,563 751 1,313 6,172 19,078 848, 278 5, 588, 230 221,139 1, 245, 625 293, 461 2,036, 924 11, 613 96, 764 180,895 1,020,974 1,094, 320 5, 215,410 49, 556 197, 663 74, 765 169,129 1,166 7, 930 83, 269 769,192 3,163 1,017 250,840 50,427 1, 671 11,954 640 3, 621 2, 697 24, 249 170,157 633, 763 /pieces. /value. (pieces, lvalue. (pieces. lvalue. (pieces. lvalue., (pieces, /value - (pieces- /value. ! pieces, value . pieces, value.. 7,881 28,030 . 555 1,082 6, 649 15, 774 1,441 2, 782 528 1,728 30, 422 66, 832 pieces.. value. . 106,805 194, 579 547,651 1,044, 631 973, 338 6,261, 445 Shirtings, dyed, plain..... Shirtings, Hongkong-dyed, plain, and shirtings, dyed, figured, brocaded, and spotted. Flannelettes... Fancy woven cottons..... Japanese cotton cloth.... Velvets and velveteens.. Crimps and crfpons.. Japanese cotton crfipe... Cotton blankets.... Cotton handkerchiefs. Cotton towels. Cotton goods, unenumerated... Do. (pieces.. lvalue.. (pieces.. lvalue. . /pieces.. Ivalue.. (yards.. '/value., (yards., '/value., /yards.. Ivalue.. /yards.. ' lvalue .. (yards.. '/value.. (pieces., lvalue._ /dozens. /value., (dozens. '\value.. (yards.. 'lvalue., (piculs., /value.. 3,752 14,445 2,042 8,018 45, 848 168, 830 11,184 1, 358 209,171 58, 868 202, 435 117, 622 33,184 14, 825 172, 750 73, 809 10, 649 6, 808 27, 643 480 1,373 54,102 181, 726 321, 709 26, 664 9,158, 554 525,197 571,813 164,157 460, 637 207,133 96, 621 25,850 394, 546 168, 991 58, 428, 716 3,025, 399 Cotton yarn.. Cotton yarn, gassed, dyed, or mercerized /piculs.. lvalue .. piculs. . value. . 156,320 3,946,074 133, 302 3, 465, 544 Cotton thread, balls and spools.. Dyes, paints, and colors_.. Electrical material and fittings... _ (piculs., /value __ ..value.. _do_ 25, 444 66, 000 144, 597 Flour, wheat. ... ... .. Iron and steel manufactures.. Kerosene and lubricating oil... Locomotives and tenders_ . _ (piculs.. / value __ (tons... lvalue., /gallons., /value_ 77, 969 292, 380 2,845 430,465 4, 762, 640 937, 542 Machinery and tools... . _ . . Medicines and chemical products__ _do. _ 5,952 Paper and cardboard_*..... 103, 741 266, 830 1, 388, 775 333, 342 768, 055 3, 018, 616 34, 290 1, 821,976 18,190, 220 2,388, 419 64, 984 647, 301 467, 376 675, 575 44,817 168, 570 87, 807 565, 435 40, 790, 714 3, 410, 781 720, 731 416, 884 97, 525 31,422 313, 775 38,112 113,167 112,240 119, 934 69, 757 46, 679 51, 781 1,848, 612 343,801 1,088 61,173 115, 635 5, 581, 380 10, 499 703,752 243, 385 376, 727 2, 732, 226 1,923,975 1, 212, 662 5, 763,113 87,498; 6, 725, 542 16,033, 281 5, 490, 472 658, 818 4,028,966 1, 216, 307 2, 330, 658 MUKDEN CONSULAR DISTRICT 487 [Value in hailtwan taels] Products 1904 1913 1923 Railway materials not otherwise classified_ _value.. 1, 250, 597 432, 677 511, 298 4,019, 962 7,035, 354 133, 478 6,276 126, 299 10,098 102,996 1, 856,171 Railway cars_ _ _do_ 116, 698 365, 739 1,852, 731 1,198, 210 9, 851 Sugar... Tobacco, cigars, and cigarettes.. ... . .. Vehicles: Automobiles_ __ [piculs.. .[value __ _value.. __do_ 233, 469 1,093, 232 497, 225 Motor cycles...... . .. .do.. . Bicycles, velocipedes, etc _ __ _ do.. 46,152 Traction and road engines. . __do Other vehieles do 106,511 386, 797 Woolen goods, blankets and rugs, broadcloth, suitings, flan¬ nel, etc....... .value.. 205, 379 The above figures are for important products imported from foreign countries. The total foreign imports through the three ports during 1923 amounted to 119,381,893 haikwan taels, or $98,263,- 236, United States currency. Imports from Chinese ports were valued at 45,679,460 taels, making a grand total of 165,065,353 taels. During 1923 Chinese cotton products, chiefly sheeting and yarn, imported through Dairen from Chinese ports and forwarded to the interior by railway amounted to 3,343,421 haikwan taels. Similar imports through Newellwang and Antung had a value of 12,734,365 and 184,403 taels, respectively, giving a total of 16,262,- 209 haikwan taels, or approximately 31 per cent of cotton imports into the district through the southern ports of Manchuria. Points of origin of cotton products imported are estimated to be as follows: Chinese manufactures from other parts of China, 31 per cent; English and Indian manufactures, 4 per cent; Japanese manufac¬ tures, 64 per cent; from the United States, 1 per cent. The most noteworthy feature in connection with cotton imports is the steadily increasing volume of Chinese manufactures, which are in part supplanting cotton goods from adjacent countries. Other important Chinese manufactures imported during 1923 were soap, beer, paper, matches, biscuits, cement, and candles. As regards foreign products, 5,201,897 gallons of American kerosene were imported through Newchwang during 1923, and 8,393,363 gallons were imported into the interior through Dairen. Adding 722,330 gallons from Antung, one finds that imports of kerosene from the United States formed approximately 89 per cent of the total imports of that commodity through the three ports. It is estimated that more than 90 per cent of the flour originated in the United States and Canada, and the bulk of the tobacco came from the United States. A large percentage of the imported railway materials, electrical equipment, iron and steel products, and machinery came from the United States, Great Britain, Germany, and Japan. Imports of woolen goods from the United States were small. Practically all bags (chiefly gunny sacks for beans) were imported from British India and Japan. Through careful cultivation, American dealers in kerosene, electri¬ cal machinery, plumbing supplies, railway materials, agricultural machinery, roofing, construction materials, etc., have built* up a substantial trade in this market. Persistence and the ability to appreciate the increasing demand in China for foreign products 488 COMMERCIAL HANDBOOK OF CHINA were the reasons behind this success. Competition is keen in nearly all lines. European manufacturers are making a strong attempt to extend sales in the district through exceptionally long credits— often from three to four months—and through intensive sales pro¬ grams. In cotton and woolen textiles, the low scale of living of the natives demands products of rather cheap grade. As large quantities of such articles are produced in adjacent countries, American manu¬ facturers should cultivate the market with this point in mind. It is believed that manufacturers should send representatives to go over the field, establish personal connections, determine the suitability of their products, and convince themselves that American products may be sold in Manchuria. INTERNAL TAXES * Foreign goods which have paid import duty at the port of entry and are intended for transshipment to ports open to foreign trade in Manchuria are entitled to an exemption certificate which pro¬ tects them from further taxation en route or at the point of desti¬ nation. If the goods are intended for transshipment to the inte¬ rior—that is, to places not a treaty mart—the owner has the option of paying the inland taxes or u likin ” en route, or of paying half the import duty additional, not exceeding a nominal 2 y 2 per cent ad valorem, and obtaining a “ transit pass.” This certificate exempts the goods from all further inland charges and is widely used by foreign companies. Goods imported into Manchuria from or through Chosen (Korea), by rail via Antung, and exported from Manchuria to or through Chosen by rail via Antung, are entitled to one-third duty reduction. The transit dues on goods coming under the one-third duty reduction privilege and conveyed to the interior of Manchuria are one-third the customs duty—that is, one-half of the import duty paid. MONEY, BANKING, AND CREDIT BANKS Following is a list of the leading banks in the Mukden consular district that handle foreign exchange and bills: Name of bank Na¬ tionality Capital 4 Head office Branches Yokohama Specie Bank. Japanese.. 100,000,000 yen_ Yokohama. Mukden, Newchwang, Chang¬ chun, Kaiyuan. Bank of China. Chinese... $60,000,000 silver... Peking ... Mukden, Changchun, Kirin, Newchwang, Taonan, Tung- huag, Liaoyuan, Kungchu- ling, Kaiyuan. Bank of Chosen .._ Japanese.. 80,000,000 yen... Seoul_ Mukden, Newchwang, Chang¬ chun, Liaoyang, Lungching- tsun, Kirin, Tiehling, Cheng- chiatun Ssupingkai, Fuchia- tun. Russo-Asiatic Bank. ... 35,000,000 rubles... Paris_ Newchwang, Changchun. MUKDEN CONSULAR DISTRICT 489 LOCAL CURRENCY The local currency consists of Yuan silver dollars, Bank of Chosen gold notes, Yokohama Specie Bank silver notes, Fengtien paper currency (Kung Tsi Bank notes), Bank of Communications notes, Bank oi China notes, and notes of the Bank of Manchuria. The Yuan dollar normally exchanges for about $0.50 United States currency. Bank of Chosen gold notes are redeemable in Japanese gold yen or notes of the Bank of Japan and usually follow the exchange value of Japanese gold yen. The Yokohama Specie Bank silver notes are payable in Japanese silver yen. In addition, there are subsidiary copper and silver coins. Fengtien paper notes form the medium of exchange for nearly all native business transactions and are issued at Mukden by the Kung Tsi Bank (a subsidiary of the Bank of Manchuria), being guaranteed by the local authorities. They have a normal exchange value of approximately $0.35 United States currency. The notes are issued in denominations of 100, 50, 20, and 10 coppers, being on a copper basis. They are known as* “feng p’iao,” having replaced to a great extent the former feng p’iao silver notes. Notes issued by the other Chinese banks mentioned are referred to as “ big money currency ” and have a fixed value with the Kung Tsi Bank notes, $1 being converted at 1.20 feng p’iao. These notes are also in general criculation. Bank of Chosen gold yen notes are legal tender in the South Manchuria Railway zone. The amount of these notes in circula¬ tion throughout Manchuria is very large, a total of 110,000,000 yen being issued by the bank for circulation in Korea and Manchuria. CREDITS Local credit conditions, as related to direct trade with the United States, do not differ greatly from American business procedure. Imports are usually handled through one of the local exchange banks, goods being shipped for delivery against payment, or accept¬ ance of drafts drawn for payment at sight, or in 30, 60, or 90 days, quoting prices c. i. f. Dairen, Newchwang, or Mukden. The customary period of credit is from 60 to 90 days after acceptance of draft, making the terms comparatively long. Very long terms are generally demanded by native buyers from the local traders, necessitating in many cases a slight extension of terms by the manufacturer or jobber in the United States. It is suggested that payment within a period of 30 days should not be insisted upon when the standing of the firm is believed to be beyond question. Exports are usually made against a letter of credit handled through one of the local foreign-exchange banks, a draft being drawn when documents are handed to the bank. It is believed that American firms should not demand confirmed bankers’ credits. There is a sentiment in Manchuria against this form of financing, and, in addition, the Japanese banks, with which many firms deal, do not open such credits. Until such time as there are American or Eu¬ ropean banks in Mukden and Newchwang, whereby financial transac¬ tions with the United States may be facilitated, great care should be taken to arrange terms which local importers and exporters find it convenient to meet, 490 COMMERCIAL, HANDBOOK OF CHINA TRADE ORGANIZATIONS Trade organizations and addresses in the district are as follows (in correspondence streets and numbers are not necessary) : American Association of Mukden, China (although not strictly commer¬ cial, trade matters are facilitated). Newchwang Chamber of Commerce, Newcliwang, China (international). British Chambers of Commerce, Mukden and Newchwang. Japanese Chambers of Commerce, Mukden, Newchwang, Tiehling, and Newchwang. Chinese chambers of commerce, Mukden (as there are several Chinese chambers at Mukden it is advisable to address correspondence to the Mukden General Chamber of Commerce, South of Bell Tower, Mukden), Tiehling, Liaoyang, Fakumen, Hsinmin, Liaoyuan, and Taonan, China. In addition to the organiaztions given above, which are at points where foreigners may reside for purposes of trade, there are 65 Chinese chambers of commerce at cities and towns in Shengking (Fengtien) Province and several others in Kirin Province within the Mukden consular (Jistrict, a list of which may be obtained from the Mukden consulate general. The Chinese chambers exert con¬ siderable influence over the commercial and political affairs of their districts. PROPERTY VALUES AND RENTS Within the section set aside for the use of foreigners in Mukden and Newchwang there are no office buildings built especially for the purpose. Foreign firms in these sections either rent dwelling houses which are adaptable as offices or construct suitable buildings on per¬ petual-lease property. Rents for medium-size, eight-room, foreign- style houses in Mukden range from $75 to $100 gold per month. Small compounds containing three or four small Chinese-style houses usually rent for about $75 gold per month. Warehouse space in Chinese buildings costs approximately $4 gold per chien (1 chien equals about 150 square feet) for one month. If a firm desiring to establish a branch in Mukden finds such facilities impracticable, or if a larger building is desired on a rental basis, it should be able to arrange for the construction of quarters which would be suitable for offices. If a long lease is taken, the office might be planned according to the special requirements of the firm. A building built on this plan with about 2,500 square feet floor space, about an acre of ground, and suitable warehouse space, would rent for approximately $200 gold per month. Large Chinese-style houses are also occasionally available at the same figure. Perpetual-lease property in Mukden varies in price from $1,200 to $1,500 gold per mow (one-sixth of an acre). The taxes on such property are nominal, amounting to $1 gold per mow a year. There are no other Chinese property taxes to which foreign firms are subject. Firms may secure from the consulate general at Mukden the names of real estate and property owners, with whom preliminary dealings may be had. It is desirable, however, to have a representative of the firm make local investigations before property is rented or purchased. MUKDEN CONSULAR DISTRICT 491 LIVING COSTS The following statement indicates ordinary living costs in this consular district: [Figures in United States currency] Hotel board and room per month Boarding houses (“pen¬ sions”) House rent Estimated necessary living expenses Single man_ ____ $138 $88 $75 $100 to $250 Single woman.... . ... 138 88 75 100 to 250 Married couple_ _ 226 160 85 250 to 350 The above hotel rates are based on the charges of the South Manchuria Railway hotel at Mukden, figuring the yen at $0.42 United States. Under normal exchange ($0.49 United States) rates would be somewhat higher. Transportation is usually by rickshaw or carriage. Rickshaw hire is about $0.20 United States currency per hour and carriage hire about three times this amount. Motor hire is approximately $3 per hour. Most established commercial units have “ messes ” for single men whereby rent, food, servant costs, coal, light, etc., are minimized and living is made more economical than in hotels or boarding houses. It is estimated that a “ mess ” composed of a group of five persons should not cost each individual more than $80 United States currency per month. There are foreign-style houses, avail¬ able for married couples with children, which should cost not more than $250 United States currency per month for rent and subsis¬ tence, and many houses may be maintained on a less expensive basis. The above-figures are exclusive of entertainment expenses. Lack of educational facilities in the district necessitates home in¬ struction or the services of a governess, although it is possible that an international school for foreign children may be established. The plan is now under consideration by the members of the foreign community. There is an international club in Mukden which provides recre¬ ational facilities. The initiation fee is $25 United States currency, with monthly dues of $6. There are no serious difficulties in con¬ nection with living conditions in Mukden which would prohibit the carrying on of business under favorable circumstances. SHANGHAI CONSULAR DISTRICT By Consul General Edwin S. Cunningham LOCATION AND AREA The Shanghai consular district comprises all of Chekiang Province and that part of Kiangsu Province south of the Yangtze River, except two prefectures and the island of Tsungming. It lies between 118° and 122° east longitude and between 27° and 31° north latitude—corresponding roughly to the position of southern Louisiana. The total area of the district is approximately 49,537 square miles, a little more than that of New York. The average temperature throughout the district is around 62° F., with a variation of from 10° to 15° in winter and with the ther¬ mometer ascending as high as 105° F. in summer. Seasonal changes are very abrupt, there being but little spring and autumn. The rainfall averages 51 inches per annum and is fairly evenly dis¬ tributed. In general, the climate is humid but healthful. POPULATION The Chinese Maritime Customs estimates the population of the Shanghai consular district at about 25,000,000, in which are included about 30,000 Japanese and 15,000 foreigners of other nationalities. The estimated number of Americans is 3,718, of whom 522 are at outports or in the interior. There are 164 American firms registered with the consulate general at Shanghai and probably 20 more not registered. In the outports the only American firms are the large tobacco and oil companies, whose branches and agencies are to be found throughout China, and the agents of certain large export houses. CITIES The population of Shanghai is 1,500,000. Four other treaty ports in the district, in which foreigners reside and carry on trade, are Hangchow, population 600,000; Soochow, 500,000; Ningpo, 465,000; and Wenchow, 100,000. There are several cities of considerable importance not yet opened to foreign trade, among these being Wusih and Nansiang, both in the same district. Hangchow and Soochow are important silk centers and of con¬ siderable value in the tea trade. Ningpo exports a great deal of tea and is an important market for fish. Hangchow and Ningpo divide between them practically all the foreign imports which reach Chekiang Province, except a small amount which passes through Wenchow, a port once well known in the green-tea trade, but which in recent years has lost its importance. 492 SHANGHAI CONSULAR DISTRICT 493 AGRICULTURE AND FISHING With the exception of the city of Shanghai itself, agriculture is the principal interest of the people of the district. The dense popula¬ tion—about 450 persons to the square mile—compels intense cultiva¬ tion of every foot of the ground. In order of their importance the principal crops are rice, beans, cotton, seeds, wheat, tea, silk, and vegetables (of which cabbage is the one principally cultivated). There are no figures by which to estimate the annual agricultural production of the district, but it is very nearly sufficient to support the immense population. There is also a large animal industry, which produces pork, poultry, and a certain amount of water-buffalo beef. Foreign cattle have been introduced but not extensively raised. Fishing is a universal industry. The coast line is intensively worked, deep-sea fishing employs thousands, and the rivers and canals which cover the district like a network produce immense quantities of food fish. MINERALS AND MINING There are minerals in the district, but the deposits discovered so far have been in the nature of placer “ pockets,” of no commercial importance. MANUFACTURING 1 Shanghai, because of its central location and position as China’s premier shipping port, has drawn to itself a great deal of capital invested in manufacturing industries, and it is believed that this represents the largest concentration of capital anywhere in China. Undoubtedly Shanghai and the district immediately surrounding it form the principal industrial center of the country. Manufactur¬ ing and production statistics, however, are almost completely lacking. While the Shanghai consular district is in a more advantageous position with respect to data regarding certain groups of manufac¬ tures, such as cotton and flour, it really forms no exception to this general rule. The vast amount of manufactured products for purely native purposes, from industries carried on throughout practically the whole district, as in other parts of China, falls almost entirely outside the range of accurate statistics or even of reliable estimates. In view of this situation it would be unwise and misleading to attempt to guess the actual amount of capital invested in manu¬ factures, great and small, in this district. The following remarks undertake, therefore, to enumerate only such facts as are known, with such deductions as may be reasonably drawn from them. COTTON MANUFACTURE The most important manufacturing industry in the Shanghai con¬ sular district is that of cotton manufacture. Approximately 67.5 per cent of all the cotton spindles in China are concentrated in this district. On June 30, 1924, the total number of spindles in China, either completed or under construction, was 3,691,000; Shanghai’s 1 The data under the heading “ Manufacturing ” are the contribution of Trade Commis¬ sioner George C. Howard, Shanghai. 494 COMMERCIAL HANDBOOK OF CHINA Fig. 17.—Grocery department of a Shanghai department store SHANGHAI CONSULAR DISTRICT 495 share at that date was 1,715,000 spindles in operation and 316,000 under construction. The average output of yarn in China’s mills is 1 pound per day per spindle. On this basis the producing capacity of the mills in this district may be estimated at 1,715,000 pounds per day. Weaving has also made rapid strides in Shanghai, and on June 30, 1924, there were 11,200 power looms in operation and 4,160 under construction. Theoretically these looms are capable of weaving annually 233,328,000 yards of cloth of 50 picks per inch, but the actual output can not be definitely ascertained. In addition to spinning and weaving, there are 14 cotton-ginning mills with 831 machines; 6 thread factories; 34 weaving and dyeing plants not included in the above; and 16 knitting mills and hosiery and under¬ wear factories. Numerous other small factories exist, but exact statistics con¬ cerning them are not obtainable. SILK MANUFACTURE Next to the cotton industry is that of silk manufacture. Shanghai has 73 silk filatures and Wusih 23 additional. There are also some 25 silk-weaving mills of considerable importance and an indefinite number of smaller shops where silk is woven into various fabrics. In 1923 Shanghai exported 25,823 piculs of raw silk, 17,690 piculs of silk piece goods, 78,120 piculs of waste silk and cocoons, and sundry silk manufactures to the value of 17,064 haikwan taels. FLOUR MILLING Of the flour-milling capacity of China (65,525 barrels per day), 45 per cent is concentrated in the Shanghai consular district. Shanghai mills have a daily capacity of 25,100 barrels and Wusih mills a capacity of 4,600. SHIPBUILDING AND ENGINEERING WORKS Shanghai possesses 29 concerns within this category of sufficient size to be considered important. Engineering works produce a wide range of machinery, including everything from textile machinery and tools to steam and oil engines, modern boilers, and similar heavy equipment:. Shipyards are capable of turning out vessels of every size, from small tugs to 10,000-ton ocean-going ships. In¬ numerable small builders, unrecorded, build Chinese water craft of many kinds. CIGARETTES Cigarette manufacture has assumed important proportions in this district during the past decade, but statistics of actual output are indeterminate. China’s total cigarette manufacture is estimated at 40,000,000,000 per year, of which probably 75 per cent is turned out by the seven large and several small factories operating in Shanghai. OIL MILLS About 30 oil mills in the Shanghai district extract oil from cotton¬ seed, rapeseed, groundnuts, etc. No statistics are available as to 496 COMMERCIAL HANDBOOK OF CHINA their capacity or output. Vegetable-oil exports through the port of Shanghai during the year 1923 were as follows: riculs Bean oil_ 1, 237 Camphor oil_ 1,135 Castor oil_ 372 Cottonseed oil_ 14, 820 Groundnut oil_ 232, 934 l’iculs Linseed oil_ 2, G59 Rapeseed oil_ 0 Sesamum-seed oil_ 211 Total_ 253,374 ELECTRIC LIGHT AND POWER PLANTS The number of electric light and power plants in the Shanghai district has grown rapidly in common with the rapid spread of electric-power use all over China. There are about 95 electric light and/or power plants in the district, with a rated total capacity close to 150,000 kilowatts, this constituting about 25 per cent of the number of plants in China and approximately 40 per cent of their total generating capacity. The largest plant is operated by the Shanghai Municipal Council, which had an installed plant capacity in 1923 of 121,000 kilowatts. MATCH FACTORIES The match industry has also grown rapidly in recent years. The estimated output of the 20 good-sized factories operating in the district is 350 cases of 7,200 packages each per day. CEMENT AND BRICK WORKS The growing use of concrete and steel construction is building up an important manufacture of cement. Three principal factories have a daily output of 3,200 barrels of Portland cement, and smaller concerns probably increase the total to 3,500 barrels. Bricks, said to be equal to the average brick made in western countries, are manufactured for both Chinese and foreign construction in the native kilns located throughout the district. EGG PRODUCTS There are about 20 important factories in the district turning out dried, liquid, and frozen egg products to the amount of 15,000 tons per annum. The following figures show the gross exports of egg products through the port of Shanghai for 1924: Egg albumen, dried and moist, 84,944 piculs, and egg yolk, dried and moist, 247,- 540 piculs, the value of these two items being 12,521,308 haikwan taels; eggs, fresh and preserved, 254,527,000, 2,702,735 haikwan taels; eggs, frozen, 112,768 piculs, 2,480,896 haikwan taels. TANNERIES There are about 20 tanneries in the district, the majority operated by Chinese, using antiquated methods for producing leathers em¬ ployed in the manufacture of native shoes, suitcases, trunks, and harness. One of the largest tanneries, however, is under foreign operation, with modern methods, and has a production capacity of 100,000 pounds of good-grade sole leather per month. SHANGHAI CONSULAR DISTRICT 497 IRON AND STEEL Shanghai has one modern plant, operated jointly by Chinese and foreign capital, with a capacity of 50 tons per day. Its entire output is sold to the local market. In addition, one of the large dockyards operates a iy 2 -ton two-carbon electric furnace, products of which are used for their own manufacturing purposes. AERATED WATER There are three large aerated-water factories in Shanghai, with a combined yearly output of 3,500,000 bottles, besides distilled water widely used for drinking purposes. ELECTRICAL EQUIPMENT The largest single item of electrical equipment in this district is electric lamps. These are made in both tip and tipless types, vacuum and gas filled. The next largest item is probably batteries—dry, wet, and storage—the total capacity of Shanghai plants being in the neighborhood of 10,000 per month. A limited number of electric motors are manufactured by one or two plants, and it is possible to buy a 5 to 50 horsepower squirrel- cage type of motor at approximately 50 per cent of the price of a similar size in America. Some manufacturing of transformers, precision instruments, switchboards, electric wires, motors, etc., electric-light fixtures, glass shades, and bowls for lighting is also done. A full line of wiring devices is made locally, as is also a consider¬ able quantity of porcelain insulators. This industry has not reached a point where it can supply more than a very small portion of the demand, and the majority of elec¬ tric equipment is imported. YEAST A plant for the manufacture of yeast was completed in Shanghai in 1923. This plant is completely self-contained and has a capacity of 1,500 kilos of compressed yeast per day. This plant supplies yeast for local requirements and likewise exports to near-by points. BREWERIES The annual consumption of beer in the international settlement of Shanghai has been estimated as amounting to nearly 4,000,000 bottles. A large part of this is imported, but there is one brewery with a yearly output of some 4,500,000 bottles, supplying the local market and also shipping to various parts of China. [A list of the principal factories in and around Shanghai accompanies this report, and may be obtained from the Bureau of Foreign and Domestic Com¬ merce on application.] LABOR CONDITIONS Chinese labor is in a transitional stage, groping for something better and not sure of its goal. In some of the larger industries 100020°—26-33 498 COMMERCIAL HANDBOOK OF CHINA workers have been organized into labor unions, as yet in the experi¬ mental stage. Wages are low in comparison with the United States, but extremely high compared with rates prevailing in other cities in China. The higher cost of living in Shanghai for the Chinese population is largely responsible for this condition. Child labor is common, although the Shanghai municipal council prohibits the employment of children under 14 years of age. Foreign- owned factories have attempted improvements in the conditions of their employees, and in many cases the Chinese employers are follow¬ ing their example. Outside the international settlements, where the old apprentice system is in full operation, the labor conditions are as might be expected. Estimates as to the relative efficiency of Chinese labor vary greatly. In general, it seems to be agreed that the Chinese laborer has an efficiency rating of about 25 per cent compared with that of an American laborer in the same class. In certain industries Chinese labor is considered equal to that in the United States, but such in¬ stances are exceptional. TRANSPORTATION AND COMMUNICATION WATERWAYS A marvelous system of waterways, which provides both local and through transportation to the interior of central and western China, is the chief reason for Shanghai’s preeminence as a port. Local territories are reached by an intricate system of canals, of an average depth of 4 feet, over which lighters and steam launches transport the cargo produced by and necessary for a population of 25,000,000 people. In the neighborhood of Shanghai are the following water¬ ways : Whangpoo River. —30-foot draft from Yangtze month to Shanghai. Provides steam-launch service to Soochow through its upper reaches and connected canals. Yangtze River. —25-foot draft to Hankow in high-water season; 10-foot draft all year. Steamer traffic 1,800 miles into heart of west China. Connects through rivers and canals with central China districts both north and south of the river. Soochoiv Creek. —4-foot channel to Soochow and Hangchow via Grand Canal. Grand Canal connections to Chinkiang. Grand Canal connection Chinkiang to Tientsin under favorable conditions. Local canals .—Estimated 3,500 miles of navigable waterways, average draft 4 feet. Different levels not locked but connected by chutes or “ haulovers.” Coastwise routes link Shanghai with the entire coastal area. Reg¬ ular services are conducted by both foreign and Chinese companies, which provide steamship and sailing-vessel communication with treaty and nontreaty ports. Shanghai is the transshipping point for coast ports as far north as Weihaiwei and to southern Fukien in the other direction. Schedules of passenger and freight tariffs in force over these routes and on the Yangtze appear below. SHANGHAI CONSULAR DISTRICT 499 Local Steamship Passenger Fares Shanghai to— One way Round trip Shanghai to— One way Round trip Amny _. Mex. $65 Mex. $95 Kiukiang_ _ Mex. $45 Mex. $65 Antiinp 50 75 Nanking.__ _ 18 28 Canton _. _ . 85 130 Newchwang_ _ 65 100 Chnnkkin? _ . . 230 345 Ningpo_ _ 7 10 Chefnn __- 55 85 Swatow... __ ... 65 95 Changsha, _ _ _ 80 120 Shasi__ __ . ... . . 90 140 Chinwangtao_ __- - - 60 90 Tientsin_ _ _ 90 140 Chinkiang_-__ -- 16 24 Tsingtao.. ... 35 56 Dairen _ _ -- - 50 80 Wuhu._.... 25 35 Foochow __ - _ 30 48 Wanhsien.... . 240 365 Hankow ____ 50 75 Wenchow____ 40 70 Ichang-... 135 200 Local Steamship Freight Rates—General Cargo [P er ton of 40 cubic feet, or 2,000 pounds] Shanghai to— Shanghai taels Shanghai to— Shanghai taels Shanghai to— Shanghai taels Chinkiang__ _ 2.20 Tsingtao. . . 3. 85 Ningpo 3 30 Nanking.. 3. 00 Chefoo_ __ .. 3. 85 Swatow 5 00 Kiukiang. 3.85 Weihaiwei.. ___ 3. 50 Amoy 5. 00 Wuhu_ . __ 3.00 or . • /summer . 4. 40 Hongkong 5. 50 Changsha.. 7. 65 Tientsin... Winter. 6. 60 Canton_ 6. 60 Hankow_... _ 3. 85 New f summer 4. 00 Singapore .. 7. 00 Ichang_ ... 12.10 chwang ./winter. .. 6.00 Manila... 5. 00 Shasi."_ 12.10 -nciror. ~ /summer.. 4.00 Wanhsien. _ » 42. 10 Dairen .Winter.. 6.00 Chungking_ i 52.10 Antung_ .. . 5.50 i Normal. RAILWAYS Shanghai is deficient in railway transportation facilities, there being a total of only 421 miles of railway in the consular district, as follows: Miles Slianghai-Xanking Railway_ 193 Shanghai-Hangcliow-Ningpo Railway: Shangliai-Zahkou_ 159 Xingpo-Paikuan_ 48 Shanghai-Woosung_ 11 Shanghai-Belt Line_ 10 An excellent passenger service between Shanghai and Peking is maintained over the Shanghai-Xanking Railway, which connects at Nanking with the Tientsin-Pukow Railway, the southern ter¬ minus of which is reached by ferry across the Yangtze River. Both freight and passengers are at present transferred, because of the lack of car ferries, but this condition is expected to be remedied in the near future. h reight rates on the Shanghai-Xanking Railway and Shanghai- Hangchow-Xingpo Railway are: Per metric ton of 1,000 kilos at “owner’s risk,” average per kilometer, $0.04 Mex.; carload rates (15 to 40 metric tons), average per kilometer per carload, $0.45 Mex. These rates are averaged as to classification and size of carloads. There are six classifications, with special tariffs for “ high values,” “ dangerous,” “ vehicles,” and “ livestock.” 500 COMMERCIAL HANDBOOK OF CHINA Passenger tariffs of these railways are shown below. Shanghai to— First class Second class Third class Soochow ... -- . - ..-.. Mex. $3,00 9. 00 4. 90 2.05 Mex. $1.50 4. 50 2. 95 1.25 Mex. $0. 75 2. 25 1. 75 .75 Nanking _ ____ - .. - ... Hangchow .. _ - __ Ningpo-Paikuan _ _- . __ _ _ .__ ROADS Within the boundaries of what might well be called Greater Shang¬ hai, including both the French and international settlements and certain sections of the adjoining Chinese territory, there are in all about 260 miles of modern highways. In addition, there are four roads connecting Shanghai with near-by towns; these are the fore¬ runners of an extensive road system which the increasing use of motor transport is demanding and which will be built before many years have passed. The Yangtzepoo-Point-Woosung Road parallels the Whangpoo River from Shanghai to Woosung at its mouth, a distance of 14 miles. Liuho, about 27 miles to the northwest of Shanghai, is reached by a very good cinder road, constructed by a Chinese firm which operates a bus line over it. A dirt road, 15 miles in length, leads out to Minghong, a city located nearly due south from Shanghai on the Whangpoo. The road is destined to become the first section of a projected line between Shanghai and Hangchow, the capital of Che¬ kiang Province. From the Pootung side of the Yangtze River, reached from Shang¬ hai by the Tunkadoo Ferry, a road runs southeast to Chowpu, a market town some 20 miles from Shanghai. METHODS OF TRANSPORTATION IN SHANGHAI Despite the advent of the motor car the rickshaw continues to be the most popular of all methods of personal transport. It has been predicted time and again that its days are numbered in this com¬ munity, but this does not appear to be confirmed by actual condi¬ tions. Rickshaw transportation, however, is not cheap, and the crowded conditions of the streets do not make it especially safe. Cargo is transported about Shanghai by hand carts, wheelbarrows., and bv carriers. It is estimated that an army of 40,000 carriers is constantly employed in the “ godowns ” (warehouses) and along the water front of the port. Mechanical handling is in its infancy, prac¬ tically all cargo being handled by manual labor once it leaves the ship’s tackles. The increasing cost of labor, however, due to the higher prices of food and other necessities, is bringing closer the time when machinery must be installed to relieve present conditions. AVERAGE COSTS OF TRANSPORT The following table indicates the costs of transport in the Shang¬ hai district per ton-mile: SHANGHAI CONSULAR DISTRICT 501 Methods of transport Long haul Short haul Methods of transport Long haul Short haul fronts U. S. cur¬ rency $0.0073 .44 . 1687 .0773 U. S. cur¬ rency $0. 0293 1. 21 . 1687 .0773 Trucks alone... U. S. cur¬ rency U. S. cur¬ rency $0.20 .1010 .0564 .0197 Carry coolies- .. Wheelbarrows . _- Hand carts . _ - Trucks and trailers_ Steam wagons_ _ . Rail transport 1 _ $0. 0788 .0422 .0057 1 In arriving at the average cost per ton-mile for long and short hauls the freight tariffs of the Shanghai- Nanking and Shanghai-Hangchow-Ningpo Railways have been treated as follows: First, the six classi¬ fications have been averaged for a 30-metric-ton carload for a distance of 350 kilometers for a long haul and 20 kilometers for a short haul. These average costs per 30-ton carload have been reduced to the cost per metric-ton kilometer. Then, considering a metric ton to be 2,204.6 English pounds and a kilometer to be 0.621 mile, these average costs have been converted to costs per English ton-miles in “ Mexican” currency, which have in turn been converted to United States currency at the rate of $0.5365. TELEGRAPHS, CABLES, AND WIRELESS SERVICE The telegraphs are controlled by the Chinese Board of Commu¬ nications in Peking through the Department of Telegraphs, in which there are several experienced foreign officers. In the Shang¬ hai consular district there are stated to be 69 telegraph offices with approximately 2,136 miles of overland wires. Rates are as follows: Intraprovincial messages, per word: Chinese_ English_ Interprovincial messages, per word: Chinese_ English_ Mex. $ 0 . 06 .09 .12 .18 Adequate cable service to all parts of the world is provided by the following companies: Great Northern Telegraph Co.; Com¬ mercial Pacific Cable Co.; Imperial Japanese Telegraph Office; Eastern Extension, Australasia & China Telegraph Co. (Ltd.) Rates to New York, San Francisco, and London are: To New York, per word, $0.95 LTnited States currency; to San Francisco, $0.85; to London, $0,725. Radio communication has been delayed in this country because of certain semipolitical considerations which have yet to be over¬ come. At present there are the following stations in Shanghai: French station at Siccawei, accepting commercial messages up to 1,000 miles; Chinese station at Woosung; Chinese station in Shang¬ hai, for Government purposes only. TELEPHONES In the Shanghai consular district there are telephone systems in the following places: Shanghai, Hangchow, Soochow, Ningpo, Wen¬ chow, Kunshan, Kashing, Shaohing, Wusih, and Changchow. Shanghai is served in the foreign settlements by the Shanghai Mutual Telephone Co. (Ltd.), a British concern, whose rates are 65 taels per annum. The Chinese Government Department of Communications main¬ tains a telephone service in the areas adjoining the foreign settle¬ ments and is connected up with the village of Liuho, about 26 miles to the northwest of the city, and with a military post a few miles to the southwest. The rates for this service are $36 Mex. per annum. Unfortunately there is no connection between the two services. 502 COMMERCIAL HANDBOOK OP CHINA POSTAL FACILITIES Foreign post offices, in accordance with the agreement reached at the Washington Conference, were technically withdrawn on Janu¬ ary 1, 1923. The American post office ceased to function as soon thereafter as the accounts and returns could be completed. Since that date American mail has been handled by the Chinese post office with considerable efficiency. Between Shanghai and the United States a steamship service is maintained by an American line of steamers. Other lines maintain regular service requiring several days’ greater length of time in transit between Shanghai and the Pacific coast. International postal rates for American mail are maintained. An efficient Chinese coastal service is maintained with great fre¬ quency. To the interior the service is through the Shanghai-Nan- king Railway, and to the south, as far as Hangchow, through the Shanghai-Ningpo-Hangchow Railway. SHIPPING AND WAREHOUSING FACILITIES OCEAN STEAMSHIP SERVICES Regular steamship services connect Shanghai with all the impor¬ tant ports of the world by direct sailings. The following lists show freight and passenger tariffs to the more important points. Freights are handled by passenger liners and also by tramp-steamer services, the volume of traffic of the latter depending upon cargo offering and being, in consequence, seasonal. Ocean Steamship Passenger Fares Shanghai to— First class Second class Aden.. U. S. cur¬ rency $243. 00 324. 00 207. 00 257. 00 450. 00 189. 00 396. 00 405. 00 36. 00 243. 00 49. 00 477. 00 99. 00 73. 00 441.00 279. 00 27. 00 U. S. cur¬ rency $180. 00 Brindisi___ Bombay.... 117. 00 166. 00 Brisbane . _ Cape Town.... Colombo.. __ Durban.... Gibraltar__ Hongkong .. Honolulu..... Kobe... London..... Malacca. _ Manila_ Marseille.__ Melbourne__ Noji__ Shanghai to— First class Second class Nagasaki_ U. S. cur¬ rency $22. 50 621. 00 U. S. cur¬ rency $13. 50 New York_ Port Darwin__ 253. 00 Portland__ 346. 00 Port Said.. . .. 465. 00 Penang__ 99. 00 Saigon__ 77. 00 San Francisco. 346. 00 176. 00 Seattle.... 346. 00 176.00 Singapore__ 130. 00 Sydney____ 274. 00 Tacoma_ 346. 00 176. 00 Tangier___ 427. 00 Vancouver.. . 346. 00 176. 00 Victoria... 346. 00 176.00 Vladivostok_ .. ... .. 54. 00 Yokohama.. . . .. 45. 00 22. 50 Ocean Steamship Freight Rates : General Cargo [Per ton of 40 cubic feet, or 2,000 pounds] Shanghai to— U. S. cur¬ rency Shanghai to— U. S. cur¬ rency New York via Panama_ $16 Vancouver.... $15 New York via Suez . 15 Portland_ _____ 15 San Francisco.... 15 London. . _____ 16 Seattle___ 15 Marseille.. ... . _ .. 15 Los Angees.. ..... 15 Rotterdam.. ... 15 SHANGHAI CONSULAR DISTRICT 503 HARBOR CONTROL The Shanghai Harbor consists of the channel of the Whangpoo from the arsenal downstream to Tungkow Creek. It has a length of 54,000 feet, with a 24-foot channel of an average width of 700 feet and an area between normal lines of about 1,000 acres. The administration of the port of Shanghai is under the jurisdic¬ tion of the Chinese Maritime Customs, which maintains a river police force. A health service is maintained, with stations at Woo- sung and Shanghai, which enforces the sanitary regulations enacted by the port consular authorities. The harbor master, an officer of the Chinese Maritime Customs, is responsible for all mooring berths and berthings. Mooring berths are privately owned, but action has been initiated to make them public property. While it is not com¬ pulsory, pilotage is advisable where the master of an incoming ship is unacquainted with the harbor. PORT ACCOMMODATIONS HEAD-AND-STERN MOORINGS 2 There are 19 head-and-stern mooring berths. Four of these are owned by the China Merchants’ Steam Navigation Co. and one by the China Navigation Co., and these five berths are used exclu¬ sively by the coasting and river steamers belonging to these com¬ panies. The remaining 14 berths are privately owned, but are available to outside shipowners by special arrangements with the owners. Nine of these berths have a length of 600 feet and the remainder (five) a length of 700 feet, with depths from 24 to 32 feet at low-water springs. Provision has been made for the eventual public ownership of moorings. SWINGING BERTHS There are some 30 swinging berths for vessels from 150 to 450 feet in length, with depths for the larger vessels from 22 to 25 feet. During freshets and extraordinary spring tides, when the current is considerably above average strength, vessels moored in the stream sometimes drag their anchors, especially if these are of the patent type which do not hold well in the somewhat loose mud bottom. DOCKAGE The river frontage, both on the Shanghai and the Pootung sides, is shown in the table below. It shows the opportunity still left for development of the foreshores within the existing harbor limits and the amount of bunding unserved by either pontoons or wharves. There is no unoccupied land available on either side of the river within harbor limits. Pontoons and pile wharves are about equal in number, the latter being more common on the Pootung side of the river because of the direction of the current. 2 Information supplied by the harbor master, Chinese Maritime Customs, Shanghai. 504 COMMERCIAL HANDBOOK OF CHINA Fig. 18.—Robert Dollar Building, Shanghai, in which are located offices of Amer¬ ican commercial attach^ SHANGHAI CONSULAR DISTRICT 505 Classes Shanghai Pootung Total Frontage served by pontoons____ ____ Feet 9,270 4,810 24, 510 13, 720 800 Feet 6,500 11,805 22,633 13, 305 940 Feet 15,770 16,615 47,143 27, 025 1, 740 Pile wharves _. .. .. ... . .. . .... Bunding without pontoons or wharves .... Natural bank....... Creeks. .... Total....... 53,110 55,183 108, 293 PUBLIC FRONTAGE On the frontage of the international settlement above the Soochow Creek there is a public bund 3,500 feet long, of which 500 feet is used for a public garden and 3,000 feet for a quay and promenade and for discharging lighters. Along this quay are 16 pontoons, 2 of which belong to the Customs, 2 are used exclusively for landing passengers from steamers lying at Woosung, and the remainder are for general cargo. This bund and the pontoons are supported by wharfage dues. Along the French river front there are 2,000 feet of public quay, with but five public pontoons and two jetties. There is but one public pontoon and only a few boat jetties on the Pootung side of the river. Only one jetty has proper steps. HARBOR COMMUNICATIONS Both sides of the river are served by the Shanghai Municipal Telephone Co., though beyond the limits of the Settlements this service is expensive and subject to special arrangements. The com¬ pany is prepared to connect instruments to ships lying in dock. Because of the lack of good roads along the water front the various companies owning property on both sides of the river maintain steam tenders which make hourly trips from the Customs Jetty to the various installations. There is no charge for this service. There has recently been established a motor-boat service designed to oust eventually the greater part of a numerous fleet of sampans which at present handle much of the passenger traffic to and from ships. There are several public ferries on the river. Because of the num¬ bers of sampans available for a small fee it is never necessary to put ships’ boats over the side for the purpose of painting or other ship’s work. BONDED WAREHOUSES There are no publicly owned bonded warehouses in Shanghai. Most of the privately owned bonded warehouses are available to shippers. Owners of “ godowns ” which they desire registered as bonded warehouses are required to execute a bond with the Commis¬ sioner of Customs guaranteeing the observance of certain simple regulations which may be amended by him from time to time. The bond provides for an indemnity of 500 haikwan taels for infraction of regulations, as a temporary fine pending adjudication by consular or other authorities. Repacking of import cargo in bonded ware¬ houses is prohibited under penalty of again paying duty, except 506 COMMERCIAL HANDBOOK OF CHINA in case of damaged cargo. Export cargo may be repacked under customs supervision. All goods in such godowns are under the supervision of customs officers appointed to that duty. [Lists of the bonded warehouses in Shanghai are on file in the Bureau of Foreign and Domestic Commerce, and may be obtained upon application.] WHARFAGE AND STORAGE CHARGES The various companies owning and operating wharves and “ go- downs ” in Shanghai publish tariffs which are on about the same scale of prices, as follows: Vessels carrying Chinese and/or Japanese cargo, 0.42 tael per foot ($0.35, United States currency). Vessels under 300 feet, carrying coal only, 90 taels ($74, United States cur¬ rency). Vessels over 300 feet, carrying coal only, 0.42 tael per foot ($0.35). Oversea steamers other than the above, 0.90 tael per foot ($0.74). Lorchas (semiforeign native vessels), 60 taels ($49). Vessels from foreign ports remaining at the wharf for more than five days will incur a demurrage charge of 60 taels ($49, United States) for the first day and 90 taels ($74, United States) for the second and every succeeding day or part thereof. Coasting vessels remaining at the wharf for more than three days will incur an extra charge of 36 taels ($29.63, United States) for the first day and 60 taels ($49) for the second and every succeeding day or part thereof. Cargo landed from ships on pontoons or wharves is stored there at tariff rates and delivered to consignees free of rent charge if removed within 10 days of berthing, the berthing day being counted as one. The cost is about 0.60 tael ($0.66, United States) per ton for the entire service. Cargo is delivered during customs working hours free of extra charge when delivery is effected from the section where landed. These rates, while generally adhered to, are cut in certain instances in favor of valued customers, but not in favor of any certain nationality nor to an extent which has caused unfavor¬ able comment. The wharf and godown companies store cargo at a rate of 1.40 taels ($1.15, United States) per ton for the first month and for each succeeding month they charge 1.20 taels ($0.99, United States) per ton. There are certain godowns adjacent to the harbor where stor¬ age may be had at about two-thirds of the above charges, because they have not the taxes and other charges which have to be met by the big wharf companies. The charges published in the tariff are reduced 15 per cent in all cases on the Pootung side, RAILWAY CONNECTIONS There are but two railway connections, both outside the harbor limits, one at Woosung with the Shanghai-Nanking Railway, where a dock capable of accommodating two ships is maintained, and an¬ other wharf at Lunghua, above the upper limits of the harbor, where the Shanghai-Hangchow-Ningpo Railway has accommoda¬ tions for one ship. In addition the Shanghai-Nanking Railway has a freight station at Jessfield, on the Soochow Creek, where it is SHANGHAI CONSULAR DISTRICT 507 prepared to handle a great volume of lighter-borne cargo. Because of the poor location of both railway docks and the lack of a belt- line railway about the harbor, of car ferries, and of the other appur¬ tenances of an efficiently operated port, practically all cargo des¬ tined to or from the rail is lightered through the Jessfield terminal and the Soochow Creek. PUBLIC WORKS AND UTILITIES ELECTRIC-LIGHT PLANTS Electricity is supplied for lighting purposes oy the Shanghai Mu¬ nicipal Council’s electricity department at 0.13 tael per kilowatt- hour, with discounts up to 30 per cent on large consumption, and in the Chinese city by the Chapei plant at $0.24 Mex. per kilowatt hour. [A complete list of the electric-light plants in the Shanghai consular dis¬ trict, with details of their equipment, is on file in the Bureau of Foreign and Domestic Commerce and may be obtained upon application.] WATERWORKS The Shanghai city group, or, as it might better be called, “ Greater Shanghai,” is served by four waterworks—the international settle¬ ment by the Shanghai Waterworks Co. (Ltd.), the French concession by the Compagnie Francaise de Tramways et d’ Eclairage Electriques de Shanghai, and the native city and Chapei district by Chinese com¬ panies. Outside of Shanghai, Ningpo is the only city in the district with a water system. CONSERVANCY AND RECLAMATION WORKS The Whangpoo Conservancy Board, which is charged with the upkeep and improvement of the Whangpoo Fiver, a part of which forms Shanghai Harbor, is the only conservancy organization of any importance in this consular district. It is an organ of the Chinese Government, formed according to an agreement with the powers, and its personnel is international. In addition to keeping clear the channel and the anchorages in the river, it is doing a considerable amount of reclamation work in the way of pumping mud into tidal basins, thereby creating excellent industrial and agricultural land. Another Chinese Government body, the Yangtze River Commis¬ sion, is charged with the improvement of that waterway. The inland waterways are under the nominal control of a body called the Xiangnan Conservancy Board, which has headquarters at Nanking. TRAMWAYS The Shanghai Electric Construction Co., a British concern cap¬ italized at about 1,500,000 gold dollars, operates the Shanghai Tramways which serves the various parts of the international settle¬ ment. Perhaps the outstanding performance of this company has been the development of a railless tram car which, drawing its cur¬ rent from overhead trolley wires, is being used quite extensively, especially where narrow streets preclude laying rails. Fares over 508 COMMERCIAL HANDBOOK OF CHINA the lines of the Shanghai Tramways are 3 cents per section of about 1 mile, third-class fares being one-half of this charge. First-class monthly tickets may be had for $6 and entitle the holder to trans¬ portation over all lines and as often as desired during the period for which they are issued. Tramways in the French concession and extending some distance out into Chinese territory in the neighborhood of the Kiangnan Arsenal are operated by the Compagnie Francaise cle Tramways et d’Eclairage Electriques de Shanghai, the head office of which is in Paris. The capital of this firm is estimated at about the same figure as that of the company operating in the international settlement, and its fares are about the same. BUS LINES Within the limits of the French and international settlements the China General Omnibus Co., a British company, opened a bus service in September, 1924. Its services are intended to include eventually all sections of Shanghai, and it is anticipated that this means of rapid transit will afford relief to the overcrowded tram¬ ways. MOTOR CARS AND TRUCKS It is anticipated that the motor-car census made at the end of 1924 will show a total of about 4,800 motor vehicles in and about Shanghai. The majority of the cars in service are privately owned, although Shanghai is well provided with hire cars which may be obtained at an average rate of $4, United States currency, per hour. Several firms do a general trucking business about the various sections of Shanghai, but truck transport is slow in establishing itself as a general practice because of the cheapness of coolie labor. IMPORT AND EXPORT TRADE The trade of Shanghai was handicapped by many difficulties dur¬ ing 1924, the most serious of which was the civil war and the requisition by the military authorities of transportation lines for military purposes. Export cargo was laid up through lack of adequate transportation facilities, and import cargo could not be shipped to the interior points for the same reason. According to the annual report for 1924 of the American con¬ sulate general at Shanghai, total foreign imports into Shanghai for 1924 were valued at $395,227,257 United States currency, as compared with $348,152,505 in 1923, an increase of $47,074,752. According to the same authority, total exports of local origin for 1924 were valued at $311,263,660, as compared with $299,675,443 in 1923, an increase of $11,588,217. Thus, the total trade in 1924 increased over 1923 by $58,662,969 United States currency. The following table gives the quantity and value of the principal articles imported and exported at Shanghai during 1924; SHANGHAI CONSULAR DISTRICT 509 Articles IMPORTS Quantity- Value United States Coal....tons.. Cotton textiles_ Cotton, raw_pounds.. Cotton yarn_do- Cigarettes...... Dyes, aniline_ Electrical materials and fittings-- Flour, wheat_pounds.. Gasoline (benzine)_ .American gallons. . Haberdashery_ Indigo, various forms _pounds.. Kerosene, all kinds- .American gallons. . Leather articles, all kinds. Machinery, all kinds- Medicine, all kinds- Metals and minerals_ Motor cars_number.. Paper, all kinds .pounds.. Miscellaneous piece goods. Postal parcels, n. o. c- Rice and paddy.pounds.. Sugar, all kinds-do- Tobacco leaf_do- Wheat_do- Wool and cotton unions.. Wool and woolen goods... Lumber.. 777, 595 135, 662,842 10, 006,165 203, 600,820 4, 016,994 53,110, 586 44, 727, 241 1,067 178, 587, 342 4,137, 499 488, 553, 831 80, 031, 587 625, 035,969 currency $6, 670,041 77, 039, 772 33, 346, 318 4, 671, 569 17, 759, 993 5, 553, 338 3, 258,021 5, 271, 064 1,881, 625 1, 398, 731 16, 251, 975 8, 268, 291 2, 844, 714 8, 052, 630 2, 577, 390 23,144, 367 1, 625, 505 9, 898, 573 5, 431, 327 2, 512,107 113, 701 22, 763, 704 18, 053, 582 12, 966, 622 5, 731, 780 10, 283, 550 8, 442, 537 Articles EXPORTS Antimony, all kinds _pounds.. Carpets, large..number.. Cigarettes_ Cotton, raw_pounds.. Cotton yarn_do- Egg albumen, dried_ _pounds.. Eggs, fresh_thousands.. Flour (wheat)...pounds.. Hides, cow....do- Nankeens_do- Oil, wood_do_ Peanuts (kernels)..do_ Rice...do— Sheetings_pieces.. Skins, goat, untanned _ .pieces.. Seed, sesame_pounds.. Silk piece goods_do- Silk pongees_do_ Silk, raw: Waste...do_ White....do_ Wild_do.— Yellow.do_ Tea: Black..do_ Green.do_ Tobacco.do_ Quantity 17,943, 513 92,083 124,189, 478 271, 770, 707 6, 736, 582 247, 534 781,228, 111 15, 666, 482 13, 508, 755 100, 183, 748 148, 866, 374 584, 898, £38 4,148, 755 3, 895, 853 85, 973, 701 2,143, 464 1, 298, 342 10, 681, 329 5,179, 372 1, 319, 403 2, 497, 375 28, 508, 071 34, 439,121 31, 021, 976 Value United States currency $1,000,767 2, 438,047 72, 649,188 29, 748, 520 85, 126,456 4, 898, 271 2,112, 208 19, 336, 686 2,952,637 5, 521, 369 12, 595, 507 5, 766, 837 12, 328,887 20, 328, 502 2, 610, 410 3,611,745 14, 275, 544 3, 673, 765 3, 502,110 29,949,111 3, 744,680 9, 298, 269 4, 910, 518 6, 651,076 3,144, 055 MONEY, BANKING, AND CREDIT 3 , BANKS Shanghai is well equipped with banks to handle the import and export trade which is the life of the port. The majority of the financial institutions specializing in foreign exchange and trade are foreign banks, but of late years the Chinese bankers have come to realize the importance of this department of finance and are slowly coming into line with their foreign colleagues. From an investment point of view the community is singularly lacking in banking facilities. Commercial banking, as it is understood in the United States, is almost unknown to the foreign banking circles in China. They apparently deem it more profitable to utilize their available resources in exchange operations rather than in fostering commercial undertakings, as is the practice in America. In Chinese commercial circles the native banks, of which there are hundreds in this con¬ sular district, fulfill the functions of a commercial bank, but at exorbitant interest rates, which are caused by the extreme element of chance which they allow to enter into their operations. Security is accepted by them which would not be considered by American banks, and the speculative character of these institutions may be realized from the fact that their interest rates vary anywhere from 10 to 30 per cent per month. Foreign banks undertake the financing of foreign business houses by the means of overdrafts, on which the interest rates are from 7 to 10 per cent per annum. Loans as they are knowrn in the United 3 See special chapter on “ Currency, exchange, and banking.” 510 COMMERCIAL HANDBOOK OF CHINA States are unusual. It has been suggested many times that there is a legitimate field in China for a strong commercial banking house, but so far American investors have not taken up the idea. The following list of banks includes the chief institutions in Shanghai which handle foreign exchange: American Express Co. Inc. American-Oriental Banking Corporation. International Banking Corporation. Equitable Eastern Banking Corporation. International Banking Corporation. Bank of Taiwan. . Banque Beige pour l’Etranger. Banque de lTndo-Chine. Chartered Bank of India, Australia & China. Hongkong & Shanghai Banking Corporation. Mercantile Bank of India. Nederlandsche Handel-Maatschappiji. Russo-Asiatic Bank. Sumitomo Bank. Yokohama Specie Bank. Bank of China. Commercial Bank of China. Nederlandsch Indische Handelsbank. Banque Franco-Chinoise. Bank of Chosen. Russo-Asiatic Bank. Deutsch-Asiatisclie Bank. Mitsubishi Bank. Mitsui Bank. P. & O. Banking Corporation. Shanghai Commercial and Savings Bank. CURRENCY TAEL Commercial transactions are conducted * in Shanghai taels and Mexican dollars. In practice Mexican dollars are on a parity with Yuan and provincial dollars. The Chinese Maritime Customs makes all of its collections in haikwan taels, which have a fixed rela¬ tion to the currency of each port where there is a customhouse. The following list gives the silver content of the various taels in this consular district: Shanghai tael, 545.25 grains. Ningpo tael, 523.6 grains. Wenchow tael, 561.7 grains. Soochow tael, in value 2 per cent less than Shanghai tael. Hangchow treasury tael, in value 1.86 per cent under Shanghai tael. Hangchow market tael, in value 0.28 per cent less than Shanghae tael. DOLLAR According to the National Currency Regulations the dollar is called the Yuan and contains 23.97795048 grams of pure silver. In this consular district there are in circulation the official Yuan dollar, the Mexican dollar,* a great many of the old Spanish, or Carolus, dollars, and dollar coins minted in various places under provincial governments, the majority of which are accepted only at a discount. In Shanghai the Mexican dollar is preferred over all other coins, although the Yuan dollar is accepted without objection. SHANGHAI CONSULAR DISTRICT 511 In southern Chekiang Province there are many old Spanish dollars still in circulation which are about equally in demand with the Mexican dollars, although not nearly so numerous. In Ningpo there is an interesting unit of value, a fictitious cur¬ rency known as the “ transfer dollar.” It is like the tael in that it has no coinage. It simply exists as a credit entry on the books of a native bank in favor of a customer, and its value depends upon the amount of silver coin in actual circulation. When silver is very plentiful the “ transfer dollar ” is cheap and when silver is scarce its value rises, the banks being willing to pay very considerable premi¬ ums for coin at such times. In Ningpo a great deal of the commercial business of the port is transacted in this fictitious currency. A money exchange is conducted in one of the tea shops daily, and a great deal of speculation is carried on because of the existence of this system, which no doubt owes its continuance to that element. BANK NOTES The foreign banks operating in China issue their own notes, which have a wide circulation and greatly facilitate the transaction of ordinary business which requires the use of currency. The larger Chinese banks also issue notes. The Chinese Ministry of Finance issues no treasury notes as we know the term in the United States. BAB SILVER AND GOLD Bank reserves are kept and large native transactions are done in silver ingots, which are known as “ sycee shoes,” and range in weight from y 2 to 100 taels, the weights being only approximations of round sums. Shanghai “ shoes ” weigh about 50 taels, the average fineness being 916.66. These shoes or ingots may be seen daily upon the streets of Shanghai after banking hours when the various banks, foreign as well as Chinese, are settling their balances, there being no central clearing house in the community. The bulk of the metal makes reasonably safe this open carrying of great amounts of treasure. EXCHANGE BROKERS One of the most interesting sights, amusing both to tourists and to old residents in Shanghai, is the fleet of tiny, pony-drawn brokers’ carts which dash madly about the business section during banking hours. They are the conveyances used by the numerous exchange brokers, foreign and Chinese, who, while they serve the purpose of glorified errand boys in the place of a modern ticker system, make enviable incomes by acting as middlemen between the banks and the mercantile houses in foreign and domestic exchange transactions. Their convenience is their sole reason for existence, and it is re¬ ported that the banks have under consideration a less spectacular but more efficient means of disseminating information regarding their rates. CREDITS The foreign-exchange banks provide the machinery for the con¬ duct of the financial side of the import and export trade. The majority of exporters of Chinese produce ship their goods against 512 COMMERCIAL HANDBOOK OF CHINA credits which have been opened in Shanghai banks by their foreign connection. Some companies draw at 90 days on the foreign pur¬ chaser, but this method, other things being equal, causes a loss of several per cent, which in many cases represents the profit on a transaction, and the safe method is the first. Importers in China are in the position of opening cash credits in foreign centers or arranging with the banks to honor drafts against them for goods shipped from abroad. It has never been the practice of foreign exporters to consign cargo to China except in instances where manufacturers maintain their own offices in the country. In China’s domestic trade—that is, the trade in both native and foreign goods within the boundaries of the country, after all customs formalities have been completed—credits play a very important part, more so perhaps than in the domestic trade of the United States. POWERS OF ATTORNEY It is hardly’ possible to lay too much emphasis on the importance of investing representatives of American firms who wish to do busi¬ ness in China with legally complete powers of attorney, suitable to meet every occasion. It should be remembered that the American representative in China may have occasion to do business with banks, commercial houses, and officials not only of China, but possibly of every trade nation represented there, and that his authority should be sufficiently broad and specific to enable him to meet the general requirements of each of them. Powers of attorney which do not answer the requirements of local banks, of the different nationalities, frequently cause embarrassment and the loss of valuable time to representatives of American firms. Where general power is intended, it is not sufficient that it be expressed in merely general terms. In addition to the conventional blanket expression of general power, at least the following specific powers should be expressed: (1) Authority for the principal, with power of substitution, to sign consular invoices. (2) To open and/or operate accounts in the name of the principal. (3) To overdraw such account. (4) To borrow money in the name of the principal. (5) To pledge goods and/or securities. (6) To draw, accept, and/or indorse bills of exchange and related documents. (7) To make forward exchange settlements. (8) To substitute authority. Without going into the question, it may be said generally that powers of attorney issued by an American firm to an American representative or to a representative of foreign, non-Chinese nation¬ ality should differ somewhat in character from powers granted to Chinese representatives. While carefully drawn powers of attorney in accordance with the laws of the United States should be issued in the United States, many competent authorities in China, ac¬ quainted with local conditions, believe it advisable, where possible, to have such authority reinforced by powers of attorney prepared in China by some competent American or other lawyer. SHANGHAI CONSULAR DISTRICT 513 ADVERTISING METHODS AND FACILITIES 4 In the Shanghai consular district advertising is fast assuming the importance which it has in merchandising in the United States. Newspaper advertising is proving itself to be increasingly valuable, and there are billboards both in and out of the cities. Advertising agencies, both Chinese and foreign, have been organized to work along American lines. Certain of the larger corporations maintain their own advertising departments, which have been eminently suc¬ cessful. In short, advertising has been found to be as efficacious in China as it has elsewhere. The more important advertising mediums in the district are: Newspapers: Sin Wan Pao (Chinese), circulation 125,000; China Press (American), circulation 4,500; Shanghai Times (British), circulation 3,000; Evening News (nationality uncertain), circulation 4,000; North China Daily News (British), circulation 4,000. Weekly: Weekly Review of the Far East (American) ; North China Herald (British). Monthly: Far Eastern Review ; Asiatic Motor. Of the foregoing publications, the Sin Wan Pao has the greatest advertising value with respect to the Chinese markets. There are numerous other Chinese dailies, but they are of minor importance when compared with the paper mentioned. The foreign papers reach only the foreign population and the small section of the Chinese who are able to read English. However, it would be unfair to disparage their advertising value, as instances continually come to light where foreign-language advertising has secured Chinese business. Advertising in the Chinese language is a matter which should be approached with the greatest caution. The difficulties of trans¬ lation make it imperative that such work be done only by highly trained specialists. Occasions have arisen where poorly written ad¬ vertisements have caused embarrassment and actual loss to foreign firms which might have been avoided by the employment of compe¬ tent copy writers. TRAVEL FACILITIES Shanghai, as the great entrepot of China, has perhaps better means of reaching all parts of the country than any other port. It is con¬ nected by several lines of comfortable steamers (one or more of which sails almost nightly) with the interior cities that lie along the Yangtze River. It is connected with Peking and the north by the Shanghai-Nanking Railway, which connects at the latter city with the Tientsin-Pukow Railway; it also is connected with Peking by steamer to Hankow and the Peking-Hankow Railway at that point. Steamship lines with regular and frequent sailings also connect Shanghai with Dairen, Tientsin, Chefoo, and Tsingtao, on the north, and with Hongkong and all parts of Europe and the Far East. Within the district Shanghai’s hotels are among the best in the east and afford ample accommodations. In Soochow and Hangchow are hotels conducted by Chinese along foreign lines; but in Ningpo 4 See special chapter on this subject. 100020°—26-34 514 COMMERCIAL HANDBOOK OF CHINA and Wenchow travelers depend upon purely Chinese hostelries or the hospitality of foreign residents. Experienced travelers usually take with them a capable Chinese “ cook boy ” on journeys into the interior. TRADE ORGANIZATIONS The nationals of all the more important countries interested in Shanghai trade are organized into chambers of commerce, a list of which appears below. American Chamber of Commerce of China. British Chamber of Commerce. Chinese Chamber of Commerce. General Chamber of Commerce. Japanese Chamber of Commerce. French Chamber of Commerce. Russian Chamber of Commerce. Norwegian Chamber of Commerce. Belgian Chamber of Commerce. German Chamber of Commerce. Italian Chamber of Commerce. Netherlands Chamber of Commerce. American firms and also individuals should take advantage of the facilities offered by the American Chamber of Commerce, the en¬ trance fee to which is 50 taels, with annual dues of 150 taels for firms, while for individual membership the annual fee is $10 United States currency. The Shanghai General Chamber of Commerce is international in character, all foreigners resident in Shanghai for business purposes being eligible for membership. It is important in that it expresses the collective will of the commercial community as no other organ¬ ization is able to do, and has become a power in this part of the world. American firms should be registered with the American consulate general in order to secure the advantages of consular protection and intervention—a matter which is of great importance in transacting business in China. No fee is charged for registration, which is avail¬ able to all bona fide American houses and individuals. LIVING COSTS Observation and experience have led to the belief that for foreign residents the average cost of living in Shanghai is about the same as for similar living conditions in the cities in the United States, while in the country it is possible to live well for considerably less. Living conditions are changing in China just as business methods are undergoing a gradual revision. The old days of a free and easy Orient are gone. Business is conducted upon lines closely ap¬ proaching American methods. Competition is keen and is reflected in the attitude of the foreign community toward life. The cost of food is now (1924) at the highest mark on record. The shortage of foreign accommodations has forced rents to a high point. Board and room may be obtained for from $120 to $250 per month. Detached houses rent at prices ranging from 110 taels to 200 taels per month ($77.90 to $141.64 United States currency). Apartment houses are coming into favor, in which two to six room SHANGHAI CONSULAR DISTRICT 515 apartments may be rented for from 85 to 150 taels per month, in¬ cluding heat and light. Separate board at hotels and restaurants costs from $45 to $75 per month. The price of clothing, despite the many tales of the cheapness of Chinese tailors, is believed to be about equal to that prevailing in America. Servants, popularly supposed to be very inexpensive, are cheaper than domestic help in America, but wages are steadily in¬ creasing, and this, together with the necessity of maintaining sev¬ eral to do the work of one American servant, makes this item one of importance to the householder. RECREATION Sport has always played an important part in far eastern life, and excellent facilities for the enjoyment of all kinds of outdoor exercise are found in Shanghai. The premier sport is racing, after which come tennis, golf, polo, paper hunting, rowing, baseball, cricket, lawn bowls, rifle and trap shooting, and pistol shooting. Yachting is slowly growing in importance as the advantages of power boats become appreciated. House-boating is popular and fairly cheap. Hunting is still to be found within 100 miles of Shanghai and is not unduly expensive. Motoring is a minor pas¬ time, because of the lack of roads, and can not be expected to assume its rightful proportions as a major sport until China has remodeled its transportation system. Club life plays an important role in the social intercourse of the foreign community. In general it may be stated that clubs are plentiful and quite cheap, considering the excellence of the service provided. The more important clubs in Shanghai are the Shanghai Club, the Shanghai Race Club, the American Club, the Columbia Country Club (American), the Country Club (British), the French Club, and the Union Club (international). The Navy Y. M. C. A. provides clubhouse accommodations for service men of all nationalities and also for a limited number of civilians. It is supported partly by its receipts, the annual deficit being made up by the American business community. Cinema houses abound. A modern theater which is visited by several stock companies each year provides excellent amusement for playgoers. Cabarets and restaurants abound for the entertainment of people fond of good food and dancing. AMERICAN COMMUNITY ORGANIZATIONS IN SHANGHAI 5 It is of interest to note some of the typically American institutions which have been inaugurated by the American community in Shang¬ hai as contributions to its substantial and permanent development. Foremost, perhaps, among these is the school for the education of the children of American parentage. This modern school, erected at a cost of over $500,000, has a present enrollment of more than 400 students in all grades, from kindergarten through the high- school courses. It has also boarding facilities for a number of students from outports. There is an American country club occupy- 5 Contributed, by Commercial Attach^ Julean Arnold. 516 COMMERCIAL HANDBOOK OF CHINA ing 6 acres of land devoted to sports; an American town club, in a modern seven-story building with living accommodations of 51 rooms with private baths, the whole property representing an outlay of $500,000; and an American community church, built at a cost of more than $200,000. In course of erection, opposite the race course and recreation grounds, is a Y. M. C. A., under American-British auspices. This building will provide 200 rooms for young men, with all the modern facilities characteristic of Y. M. C. A. organizations. The Navy Y. M. C. A. at Shanghai, a splendid, modern six-story building, is primarily intended for use of the men from American ships, but is open to other nationalities as well. The Women’s Club of Shanghai has plans in preparation for re¬ building to house the activities of its organization, and plans have been drawn up for a $2,000,000 United States Federal building at Shanghai to house the ^various American Government departments functioning there. At present the United States Government owns its consular buildings at Shanghai and the property occupied by the United States Court for China. In connection with these evidences of the substantial nature of American communities in China, it may not be amiss to observe that in Peking the American community maintains a modern school, which cost $75,000, for the education of children of American parent¬ age, and that in Tientsin the Americans have purchased land and are raising money for the erection of an educational institution for their children there. CHANGES IN TRADE CONDITIONS IN PAST DECADE As has been previously shown by the statistical tables, there have been noticeable changes in the class of cargo brought into China during the past decade, the increase in machinery and the decrease in manufacturfed lines being especially notable; but the most strik¬ ing change during that period is in organization of business. Foreign business men have come to the realization of the extreme value of contact with the Chinese trade. The decade under review has seen this realization crystallized into direct representation by many manufacturers formerly engaged in the China trade through the medium of import houses. Manufacturers of cotton-milling ma¬ chinery have opened their own China branches. Producers of food products and soaps have their Shanghai offices. Several of the largest automobile manufacturers are seriously considering establish¬ ing their own assembly plants in Shanghai to take care of the China market. The general import houses are falling into line by reducing their agency representations to a few lines in which they may be said to be experts and are benefiting thereby. The entire trend of the trade is toward specialization, and it is believed that its result will be of immense benefit to both the foreign manufacturer and the Chinese buyer. It reduces prices through eliminating commissions, and it places the trade in the hands of qualified experts, to the general improvement of its tone. The fact that this is the age of specialists and experts is being emphasized in this market. SHANGHAI CONSULAR DISTRICT 517 LAND PROCEDURE IN SHANGHAI 6 RIGHT OF LAND TENURE The right of Americans and all other foreigners to acquire land in China is governed by treaty stipulations between China and for¬ eign powers. Land so acquired is to be rented or leased in perpetuity and not to be held in fee simple. Missionary societies, as public bodies, are permitted to rent or lease, in perpetuity, land in any part of China, but the right of individual foreigners or foreign firms to so acquire land is limited to the treaty ports. METHOD OF ACQUIRING LAND / The registration of land in the American consular land office may only be effected in the name or names of one or more duly registered citizens of the Lhiited States or of its possessions, or of a corporation chartered under the laws of any State, Territory, or insular posses¬ sion of the United States or of the District of Columbia. Registra¬ tion can not be effected in the name of a partnership as such, but should be in the name of its individual members. Land acquired by any missionary society should be registered in the name of the mis¬ sion and not in the name of some member of the mission. The most common form of title pRper in China is the “ hung chi,” or “ red deed,” so called because of the red official seal stamped upon the face of the document, to which is attached the “ white deed,” or “ bill of sale,” when the land is transferred to another party. In and about Shanghai the most common form of title paper is the “ fangtan,” or “ square certificate,” to which the bill of sale must be attached when the land is sold. These papers bear the seal of the district magistrate, contain the name of the owner, and state the location of the property and its area. All fangtans issued before the Taiping rebellion are held to be null and void. In view of the Chi¬ nese custom of dividing such fangtans when they desire to divide a plot of ground, and also because of the* very thin paper upon which the fangtans are printed, these documents are often so damaged and mutilated that disputes regarding ownership and area easily arise. As it is almost impossible for a foreigner to distinguish between a false and a genuine fangtan, the matter is left entirely in the hands of the Chinese authorities. A small fee is charged by them for the verification of such documents, and such verification is felt to be practically the only safe way to distinguish between the genuine documents and the false. Whenever those permitted to register land at the American con¬ sular land office have purchased land, completed the sale, and re¬ ceived the native documents covering the property, they should apply to the land office for the registration of the land so purchased. The necessary forms for such application will be furnished upon request. The fullest possible information as to the location, area, and bound¬ aries should be stated in this application, and a plan, no matter how rough, should be sent in at the same time. A full and detailed de¬ scription of all title papers should be given in the application and the status of the applicant should be clearly stated. 6 By Consul Howard Bucknell, jr. 518 COMMERCIAL HANDBOOK OF CHINA 'Cpon receiving the application for registration with the necessary documents the land officer, if everything is in order as far as he can determine, will assign a number by which the foreign title deed, if Fig. 19.—Entrance to Robert Dollar Building. Many American concerns occupy offices in this building issued, will be designated, and will give an official receipt for the native documents received by him. Three copies of the foreign title SHANGHAI CONSULAR DISTRICT 519 deed are then prepared, and with all documents of title are for¬ warded to the Chinese land office at Shanghai, with the request that the deeds be stamped and returned as soon as possible. Upon receipt of these documents by the Chinese land office that office will examine them to see if they are in order, and if they are found to be correct a date will be set for the measurement of the property concerned. The measurement of the property then takes place in the presence of representatives of the renter, the municipality, the Chinese land office, and the consulate general. A plan of the property is then prepared, and is forwarded in two copies to the renter through the consular land office. If this plan is found to be correct the renter affixes his signature thereto and retains one, the other copy being forwarded to the consular land office. This copy is placed in the files of the consulate general, and the Chinese land office is notified that the renter has approved the plan and that the deed may now be stamped without further delay. If the plan be found to be incorrect, the consular land office returns it to the Chinese land office for correction, in some instances a remeasurement being held. The deeds are then forwarded to the Commissioner of Foreign Affairs for stamping, and, when this has been done, the Chinese land office retains one copy of the deed for its files and forwards two copies to the consular land office, one for the renter of the property and one for the files of the consulate general. TRANSFERS The transfer of land after the title deed has been issued is a simple one. The transferer and the transferee call at the consular land office and sign a statement stamped upon the face of the docu¬ ment to the effect that the property covered by the deed is thereby transferred to the purchaser, and he in turn signs as accepting the transfer. If the nationality of the transferree is American, the deed is retained in the American registry. If of other nationality, the deed is canceled and turned over to the consulate concerned for registration in that consular land office. LAND VALUES AND DEVELOPMENT IN SHANGHAI There is quoted below an article appearing in the Chinese Eco¬ nomic Monthly magazine, which shows in detail the relative land values as well as the growth of contraction and land improvements in Shanghai. Development of land in Shanghai and the consequent advance in values have gone ahead rapidly since the first international concession was granted in 1843; and Shanghai to-day presents more the appearance of a western than an oriental city. While construction of a foreign city on the banks of the Whangpoo has been in progress for SO years, this development has been especially rapid in the last decade, and values of property both in the concessions and in the Chinese sections belonging to or near the city have risen abnormally. Acquisitions by the public works department of the Shanghai Municipal Council scarcely represent a true index of the rising land values. However, the figures given below show the area and cost of land required for road widening and extension from 1918 to 1923. 520 COMMERCIAL HANDBOOK OF CHINA 1918 1919 1920 1921 1922 1923 Area in mow. ____ 17,187 168,945 75, 578 188, 830 28, 941 142, 478 87, 653 157,189 179, 590 804, 616 130, 857 905, 393 Cost in taels.... The most valuable property in Shanghai and in all China, so far as real estate goes, is on the Bund, a thoroughfare of imposing office and bank buildings facing the Whangpoo River. Nanking Road, running westward from the Bund and containing the most prominent shops in the city, is another street where property values are high. Land in the western districts of the international settlement and French concession is considerably lower in price, and in the eastern district, where there are a number of factories and “ godowns,” prices are lower still. The average assessed value of land on the Bund per mow (one-sixth of an acre) is 138.000 taels; other properties in the central district of the international settlement range from 23,000 to 114,000 taels per mow. These are assessed values, not actual market values, which are perhaps from 33 to 75 per cent higher. In the northern district of the international settlement assessed values range from 10,000 to 34.000 taels per mow, and in the remain¬ ing districts land is, on the whole, somewhat cheaper. In the French con¬ cession, along the Bund and river front, the average assessed value is 60,000 taels per mow; but in the remaining area of the French concession assessed land values range from 3,000 to 7,000 taels. Agricultural land without creek or road frontage and more than a mile from any municipal road of the foreign settlements or Chinese city is obtain¬ able at about 180 taels per mow. Land within the foreign settlements, if below the level of the municipal road, must be raised before being built upon. The average cost of filling 1 foot high with country mud is about 150 taels per mow, but the price varies considerably according to the distance that the mud filling has to be carried. Five or six years ago a mow of land (one-sixth of an acre) in a certain section of the Chapei district, a Chinese section, sold for 500 Shanghai taels. Now this piece is valued at 5,000 taels per mow. Some of the most undesirable pieces of property in Chapei are valued at 2.000 taels. The following figures represent building activity in the international settle¬ ment during the last 5 years. Class 1919 1920 1921 1922 1923 Chinese . ____ 2,336 50 2,470 27 4, 064 66 4, 267 48 5, 634 208 Foreign business buildings ... Foreign residences___... 51 83 235 128 162 Godowns.._____ 52 84 55 28 38 Stables and garages____ 52 44 61 73 59 Work sheds. . ........ 94 101 113 108 76 Mills and factories.... 28 51 41 25 14 Miscellaneous........ 468 683 709 773 1,081 Total..... . 3,131 3, 543 5,344 5,450 7, 272 The value of the houses in the settlement in 1923 was estimated at 13,030,400 taels. The estimate for 1922 was 15,926,600 taels; for 1921. 21,- 058,700 taels; for 1920, 10,872,300 taels; and for 1919, 5,852,600 taels. Construction costs in Shanghai, as in other parts of the world, have increased markedly in the last few years. For instance, in 1912 an ordinary type of Chinese two-story house, called a hong, having one big room, a small court¬ yard, and a kitchen, could be erected for 500 taels. By 1920 the cost of con¬ struction, using the same quality of materials as in 1912, was 800 taels; in 1921, 900 taels; in 1922, 1,000 taels; and in 1923, 1,200 taels, which figures will also cover expenses of building for 1924. These figures indicate the upward trend of construction costs. The usual reasons adduced to account for this are increased cost of materials and labor and a larger net profit on the part of builders. SHANGHAI CONSULAR DISTRICT 521 The cost of constructing foreign houses, estimated at so much per 100 square feet, has increased in the proportion indicated below. To build an ordinary- foreign residence of two stories and an attic, with oak fittings and fairly good appointments, the present building cost is around 750 teals per 100 square feet. The following shows the approximate cost from 1912 to 1924: 1912, 350 taels; 1920, 500 taels; 1921, 550 taels; 1922, 650 taels; 1923, 700 taels; 1924, 750 taels. Labor costs have increased in Shanghai as elsewhere, as the following table Of daily wages paid by contractors in the city indicates (workmen getting these wages also receive food from their employers) : 1912 1920 1921 1922 1923 1924 Carpenters.__ Cash 200 160 Cash 400 360 Cents 1 30 26 Cents 1 40 26 Cents i 40 26 Cents 1 40 26 Masons . ___ i Cents are in big money, 100 cents equaling a dollar. TIENTSIN CONSULAR DISTRICT By Consul General C. E. Gauss LOCATION AND AREA Tientsin consular district lies between latitudes 34° and 40° N., corresponding to the region between Philadelphia, Pa., and Raleigh, N. C. Its area of 140,000 square miles comprises those portions of Chihli and Shansi Provinces south of the Great Wall and the section of Honan Province north of the Yellow River. The climate is dis¬ tinguished by excessive dryness. Severe dust storms occur in early spring and late autumn. The average rainfall is 20 inches, mostly in July and August, the rainy season. Average maximum temperature, 100° F.; average minimum temperature, 0 F. POPULATION The Chinese postal service’s estimate of the population of the dis¬ trict in 1922 was 45,000,000. The density for the whole consular district is estimated at 320 per square mile; for Chihli, 295; for Shansi, 134; for Honan, 454 per square mile. CITIES Tientsin, in Chihli Province, is on the Hai Ho, 42 miles from the sea. It was opened to foreign trade by the treaty of 1860. The estimated population is 838,629. The number of European resi¬ dents, exclusive of military garrisons, is 5,400; the number of Ameri¬ can residents, excluding military, 729, and the number of American business firms, 75. Tientsin is the principal trade port and distributing center of North China, the territory commercially tributary to it including the consular district, portions of Shantung, Honan, Inner Mongolia, cer¬ tain portions of southern Manchuria, Kansu, and Chinese Turkestan. Originally icebound during the winter months, recent improve¬ ments of the Hai River make Tientsin now practically an ice-free port, and large coasting steamers are able to proceed up the river to the city dock. Ocean steamers anchor outside the bar at Taku and are served by lighters. There are five foreign concession areas at Tientsin, administered by Belgium, France, Great Britain, Italy, and Japan. The Austrian and German concessions were taken over by China in 1917, and the relinquishment of their title was confirmed by subsequent treaties. The Russian concession, temporarily taken over by China for ad¬ ministration in 1920, was, by agreement between China and the Rus¬ sian Soviet regime in 1924, definitely restored to China. The for¬ mer Austrian, German, and Russian concessions, now restored to China, have been organized as special Chinese administrative areas 522 TIENTSIN CONSULAR DISTRICT 523 and are administered under the Chinese commissioner of police sepa¬ rately from the administration of the Chinese city. In the British, French, Italian, and Japanese concessions, administration is in the hands principally of municipal councils elected by the taxpayers. There are no restrictions on the right of foreigners to reside in any of the concessions, except the requirement to abide by the municipal regulations and by-laws. Peking is the capital of China, 87 miles by rail from Tientsin. Its estimated population is 1,181,400. The number of American resi¬ dents, exclusive of legation guards, is 822. Peking has never been opened to foreign trade, but a number of foreign firms maintain resident representatives there. Peking is of importance and interest as the seat of the National Government, and holds special interest for foreign travelers. Its four sections are known as the Tartar City, the Imperial City, the Fig. 20. —Portion of campus of Tsing Hua College, Peking. This institution prepares about 100 students for entrance into American colleges each year from Boxer indemnity funds Forbidden City, and the Chinese City. A section known as the Legation Quarter was established under the Boxer protocol of 1901, and is administered by a commission appointed by the diplomatic corps. Foreign residents generally, including government representatives, missionaries, and the representatives of the business firms, reside in the Legation Quarter, so far as its restricted area will permit. Chinwangtao, in Chihli Province, 165 miles from Tientsin by rail, is the winter port for Tientsin and Peking. Opened to foreign trade by imperial decree of 1898, its estimated population is 5,000. Since the improvements made by the Hai Ho Conservancy are rapidly making Tientsin an all-year port, the importance of Chinwangtao is diminishing. It is, however, the premier port east of Suez for the shipment of coal, and its harbor and wharfage facilities have been largely developed. 524 COMMERCIAL HANDBOOK OF CHINA Taiyuanfu, the capital of Shansi Province, has an estimated popu¬ lation of 220,000. AGRICULTURE Fully 80 per cent of the population engage in agricultural pur¬ suits. Farming methods and implements are primitive, and 65 per cent of the land holdings are in tracts of from one-half to 4 acres. The principal crops are millet, maize, kaoliang, wheat, cotton, beans, linseed, rapeseed, groundnuts, and walnuts. North China is essentially a wheat-consuming section, while rice is the principal item of food of South China. The land in the dis¬ trict yields 23 bushels of wheat per acre, but conservative estimates place the average yield at 11 bushels. The flour-milling industry of North China draws a large part of its supply of wheat from this district, but in short-crop years large quantities of foreign flour are imported. Kaoliang, maize, and millet are sown in the late spring, usually following the wheat harvest, and are harvested in the autumn. No estimates are available on yield or production, though all three are important food products and grown extensively. Cotton cultivation has received considerable impetus in recent years owing to the development of the spinning industry in North China and the demand for raw cotton in Japan. As the profit from cotton growing is nearly double that realized from kaoliang or wheat, cotton cultivation has substantially increased and experi¬ mental stations have been established. Estimates place the area under cotton at 4,000,000 mow (666,666 acres) and production at 2,500,000 piculs (833,333 American bales). Walnuts, groundnuts, beans, linseed, and rapeseed enter into the export trade. MINERALS AND MINING Coal is the only mineral worked on an extensive scale. Iron de¬ posits exist; one company has been organized to work them, but has not begun operations. Concessions have been obtained for gold, sil¬ ver, copper, lead, asbestos, and other mineral-bearing properties, but have not been developed. The estimates below, by the Geological Survey of China, 1921, represent the most reliable statistics available on the coal reserve. Chihli Province, including the metropolitan distinct: Anthracite, 762,« 000,000 tons ; bituminous, 1,608,000,000 tons. Shansi: Anthracite, 2,370,000,000 tons; bituminous, 3,460,000,000 tons. Honan : Anthracite, 1,385,000,000 tons; bituminous, 360,000,000 tons. The following table of production in 1922 gives the most reliable data available on output: * Provinces and mines Quality of coal Production, 1922 Chihli: TTailan Mining Adminisfratinn i Bituminous..... Tons 3,710,274 187,996 482, 701 2 35,000 159, 320 18,689 T,if*.hp.ng Mining Administration _do___ .. _ Chinphsin Mining A dminist.ration _do__ Chp.npfpnEr Co _ _ .do__ . T.inlrianP' Co Anthracite_ ___ Chimingshan Mine-..--- - Semibituminous.... i Controlled entirely or partially by foreign capital. 2 Estimated. TIENTSIN CONSULAR DISTRICT 525 Provinces and mines Quality of coal Production, 1922 Chihli—Continued. TVfATitnwlrnw small minps 3 _ _. . _ Anthracite. Tons 2 150,000 576,174 37, 235 51,909 2 650,000 2 400,000 2 260,000 223, 386 2 150,000 Toll" Chnwknwt.ip.n small minp. 3 .. .do . Vpnli Co _ Bituminous___ Chnnphn Co _ _ .do.... Honan: Pplrinp' ffvndinatfi l _ Anthracite_ Chnnpvna.n Co . _ _do... T.inhnkon Co _ .. Bituminous_ Shansi: Paochin Co _ -- Anthracite.. Tatung Minps 3 _ Bituminous.. Total anthracite_ 2,158, 880 4,933,804 Total bituminous_ Combined total_ 7,092, 684 1 Controlled entirely or partially by foreign capital. 2 Estimated. 3 Railway transport. The statistics given below, from a special report of the Geological Survey of China, June, 1921, represent the resources of such known deposits of iron ore in Chihli Province as have already been studied, and can not be taken to be the total existing reserve. District Ore Iron con¬ tained District Ore Iron con¬ tained Langkuan__ Hauanhua.... Husilai- __ Chinghsing_ Lanhsien . Tons 49, 200, 000 20, 000, 000 4, 000, 000 5, 000, 000 11,129, 000 Tons 26, 600,000 9, 600, 000 2, 400, 000 2, 500, 000 3, 339, 000 Linyu.. Chaoyang_ _ Yihsien and other districts. Total.. Tons 350,000 300, 000 1, 500, 000 91, 479, 000 Tons 170, 000 150,000 675,000 45, 434, 000 The Lungyen Mining Administration, mentioned later in this re¬ port, is the only company organized with modern equipment to ex¬ ploit the iron resources of the district. The following notes, extracted principally from Rea’s Far Eastern Manual, pertain to the principal mining companies operating in the consular district. COAL MINES CHIHLI PROVINCE Kailan Mining Administration (British-Chinese). ^ Head office .—Meadows Road, Tientsin. Organization .—The mines of the Chinese Engineering & Mining Co., a British company registered in London, and the Lanchow Mining Co., a Chinese com¬ pany, have under an agreement made in 1912 been placed under the operation and control of the Kailan Mining Administration. The aggregate capital paid up of the two companies amounts to some £2,000,000, with an additional £1,200,000 raised on first-mortgage debentures. Location .—The mines are located in the Kaiping district of Chihli Province and are served by the Peking-Mukden Railway to Tientsin (81 miles) to Tangku (the river port near Tientsin) and to the deep-water port of Chin- wangtao. Output .—The coal is bituminous and coking. The output in 1928 reached 4,495,962 tons. In 1913 the output was approximately 1,700,000 tons. Equipment .—The equipment throughout the mines generally is of the most modern type and will compare favorably with the largest and best-equipped collieries of the United States and Europe. 526 COMMERCIAL HANDBOOK OF CHINA The management of this administration is in British and Chinese hands • the engineering control is largely in the hands of engineers of Belgian na¬ tionality. Lincheng Colliery (Chinese). Head office .—12 Hsiao-Tsao-chang, Peking. Organization. —Established in 1897 and registered in February 1905 The capital is stated as $2,000,000 Yuan. Location,. —The mines are at Lincheng, 11 miles from Yakoing Station on the Peking-Hankow Railway, in Chihli Province. Output .—Bituminous; output in 1922, 187,996 tons ; in 1921, 279,851 tons. Ching Hsing Coal Mines. Head office .—1 Hankow Road, Tientsin. Organization .—Mines opened in 1899 by a German; company registered in 1908 as a Sino-German enterprise. Reorganized in 1922 under Sino-German cooperation. Capital stated as $1,000,000 Yuan. Location. —Chinghsinghsien (Tsingsing), Chihli Province. A light railway connects the mines with the Cheng-Tai Railway, which runs from Chentow (on the Peking-Hankow line) to Taiyuanfu, capital of Shansi. Output. —Bituminous; output in 1922, 482,701 tons; in 1921, 577,991 tons. Liuchang Coal Mining Co. (Chinese). Head office. —154 Sinza Rond, Shanghai. Organization. —Registered 1918. Capital, $1,000,000 Yuan. Locution .—Liu Kang coal field, Linyuhsien, Chihli Province, 13 miles north of the seaport of Chinwangtao. A light railway connects the mines with Chinwangtao. Output .—Anthracite; 1922 output, 159,320 tons. Mentowkow Coal Mines (Sino-British). Head office .—Peking, West City. Organization. —Organized in 1913 as a Sino-Belgian company, with capital of 100,000 taels and in 1915 converted into a Sino-British company. Location, —Mentowkow, in the Western Hills (Hsishan) coal field, 16 miles west of Peking, reached by the Peking-Mentowkow branch railway. Output .—Anthracite; 1922, about 150,000 tons. Chimingshan Colliery (Chinese Government). Head office. —Peking-Suiyuan Railway Administration, Peking. Organization .—Capital. $775,934 Yuan, of which $351,102 was paid by the Ministry of Communications and the balance by the Peking Suiyuan Railway. T T nder the administration of the Peking-Suiyuan Railway. Location ,—Near Siahwayuan Station, on the Peking-Suiyuan Railway, 137 miles from Peking. Output, —Noncoking bituminous: 1922, 18,689 tons. Antzu Mines (Chinese). Tung Yih and Tafeng companies. Location .—Near Fangshan, in the southern part of the Western Hills (Hsishan district), near Peking. Output .—About 250,000 tons of anthracite. Track for light railway has been built by the Tafeng Co. from Chowkoutien Station (the terminus of a branch of the Peking-Hankow line from Liuliho) and is extended to the mining area held by the company at Antzu. An aerial tramway from Toli is monopo¬ lized by the two companies named. HONAN PROVINCE Fu Chung Corporation (British-Chinese Syndicate). Head office. —England, 110 Cannon Street, London; China, Chiaotso, Honan Province. Organization ,—Capital, $1,000,000 Yuan, subscribed in equal shares by the Peking Syndicate (British) and Chung Yuan Co. (Chinese), the latter being a group of native companies in amalgamation. This corporation was organ¬ ized on June 1, 1915, to handle the products of the Peking Syndicate and the Chung Yuan Co. (Ltd.), whose anthracite coal mines are situated in Honan, north of the Yellow River. SHANGHAI CONSULAR DISTRICT 527 Location. —The principal mine is the Jamieson colliery in Huaiching pre¬ fecture. Honan Province, on the Tso-Ching Railway. The Chung Yuan Mines are in the same neighborhood. Output. —Anthracite: 1922, about 1,050,000 tons. Liu-Ho Kou Mining Co. (Ltd.) (Chinese). Head office. —Regine's Building. Peking. Organization. —Capital, $1,000,000 Yuan. Established 1903 and reorganized and registered in 1907. Location. —Anyang district, Honan Province, near Fenglochen on the Peking- Hankow Railway. Output. —Bituminous : 1922, 260,000 tons. SHANSI PROVINCE Pao Chin Coal Mining Co. (Ltd.) (Chinese). Head office. —Yangchuan Station, Pingting. Shansi Province. Organization. —Established, 1906; registered, 1919. Capital, 2,000,000 taels. This company was formed by the Shansi gentry to take over the concession which was repurchased from the Peking Syndicate in 1908. Location. —The company operates mines at Yangchuan, which is midway between Chentow (Shihkiachwang) and Taiyuanfu on the Chengtien-Taiyuan Railway. Output. —Anthracite: 1922, 223,386 tons. Tung Pai Mining Co. (Ltd.) (Chinese). Head office. —Tatung, Shansi. Organization, —Established 1921. Capital, $3,000,000 Yuan, subscribed by Shansi merchants in cooperation with Cantonese merchants. Location .—Paichiawan, Kowchuanchen, Shansi Province. Output. —Bituminous. The output of mines in the Tatung section in 1922 was estimated at 150.000 tons. IRON Lungyen Mining Administration (Chinese). Head office. —Huang Shou Yi Hutung, Peking. Capital .—$5,000,000 Yuan. Location. —Mining rights of the Lung-Kuan iron mines over the area between Hsuanhua and Lungmen. Iron-ore deposits were also discovered in the vicinity of Hsuanhua, and subsequently the two mines were amalgamated into the Lungyen Administration. The principal mines are located at Sanchiatien, some 10 miles west of Peking. An extensive blast-furnace plant of American material was erected and the plant was ready to begin active operations on a large scale, hut financial difficulties have shut down the entire works. MANUFACTURING AND INDUSTRIAL DEVELOPMENT COTTON SPINNING In the consular district there are approximately 327,552 spindles, representing a capital investment of some $22,600,000 Chinese cur¬ rency. In 1922 the estimated number of employees in mills operat¬ ing was 9,457, and the estimated output was 71,211 bales of yarn, which enters almost entirely into domestic consumption. FLOUR MILLS The capacity of the modern flour mills of the district is estimated at 47,000 bags. The estimated capital investment is over $5,000,000 Chinese currency. No statistics on output or number of employees are available. The output enters into domestic consumption. 528 COMMERCIAL HANDBOOK OF CHINA •CEMENT WORKS The one large cement works in the district represents a capital investment of some $7,000,000 Chinese currency; the capacity and output are stated at 1,500,000 casks of 375 pounds net. The output enters into domestic consumption. CARPET INDUSTRY The carpet industry is carried on in some 700 to 800 small Chinese factories around Tientsin and Peking, a factory operating from 3 to 20 looms. It is estimated that 16,000 to 18,000 men are employed in the industry. The output can be estimated only on the basis of the export, about 90 per cent of the output being exported. The export in 1923 reached 4,439,000 square feet. ^ MATCH FACTORIES The estimated output of the four largest match factories in the district is placed at 6,000,000 gross per year. The invested capital in the industry in this district is placed at something over $3,500,000 Chinese currency. GLASS FACTORIES The principal glass factory, at Chinwangtao, has a capacity of 150,000 boxes of 100 square feet of window glass per annum. In addition, there are several smaller factories. The capital investment in the industry is estimated at over $2,500,000 Chinese currency. OTHER INDUSTRIES The cotton-cloth industry of the district is extensive, being repre¬ sented by numerous small establishments operating from 1 or 2 up to 50 or 60 small looms, weaving plain gray varieties of cotton cloth, nankeens, shirtings, drills, cotton canvas, etc. Many of these factories also dye their own cloths. This industry has thrived particularly in the section of Kaoyang and Joayang, near Paotingfu, in Chihli Province. In these two places and numerous villages within 20 miles radius, there are stated to be 15,000 weaving looms in operation, each household possessing from one to five looms. The yarn used for weaving is usually of the finer qualities, principally foreign, and the annual consumption is estimated at 60,000 bales. The product of the looms in this section is estimated at 2,000,000 pieces. These fabrics are of excellent quality, compare favorably ’with foreign machine-made products, and have an extensive sale in the northern Provinces. Other industries include egg-products factories, some with modern machinery and equipment, small soap factories, brick and tile works, several tanneries, iron foundries, and small machine shops, etc., on which no extensive or accurate data are available. LABOR CONDITIONS The wage of male operatives in the cotton-mill industry is ap¬ proximately 40 cents 1 a day; of female operatives, 35 cents a day. 1 All wages are stated in Chinese dollars or fractions thereof, 1 Yuan dollar being about equivalent to $0.50 United States currency. TIENTSIN CONSULAR DISTRICT 529 Foremen receive up to $20 a month. Board and lodging are not included in these wages.* The working day is approximately 12 hours throughout the industry. It is estimated that the average efficiency of the Chinese worker is 20 per cent of the American textile worker. Wages in the flour-mill industry are: Head miller, $125 per month; engineer, $50 per month; second miller, $50' per month; machine operators, $25 per month; coolie hands, $12 per month. The working-day is 12 hours. There are no female workers. The wage level for flour-mill operatives is stated to be slightly higher in Tientsin and vicinity than in other industries, the principal operatives coming from flour-mill areas in the south. In addition to the above wages, a system of bonuses applies in some of the mills. The wages of regular workers in the carpet industry average $9 to $10 a month, board and lodging included. Numerous ap¬ prentices are employed in this industry; a three-year apprentice¬ ship is usually served, during the last two years of which a small yearly allowance of a few dollars is made. Board and lodging are provided. Twelve hours form the workday. Male workers in tanneries, for the first year, receive $2 a month, increasing after each year up to $8 or $10 a month after the third year. Board, clothing, and lodging are supplied; an annual bonus of about $10 is sometimes paid. Principal workers receive from $10 to $20 a month. A 10-hour workday is usually followed. Wages in match factories are on a piecework basis, the pay for male and female workers being substantially the same, Sy 2 cents for 180 boxes. Glass-factory wages run from $11 to $80 a month; the average is $12 a month. Board and lodging are not provided. The workday is 9y 2 hours. Wages in brickworks run from $8 to $35 a month; hours of work per day, 11. Board and lodging are not furnished. Aboveground workers at mines are paid from $9 to $61 a month; this wage scale, of course, includes skilled workers; the average is $35 a month. Food and lodging are not furnished. The hours of work per day are 10. Underground workers have an 8-hour day. Their wages run from $8 to $38 a month. The average is $23 a month. Food and lodging are not furnished. With reference to labor at the mines, it should be stated that a considerable amount of work is done by contract on a lower wage scale (paid by the Chinese contractor) than that indicated above. TRANSPORTATION AND COMMUNICATION WATERWAYS The Hai Ho is navigable by steamers with a draft of 16 feet from the sea to the bund at Tientsin. This river is 'also knowm as the Pei Ho (North River) above Tientsin. Rivers and waterways other than the Hai Ho are navigable only for junks, small native boats, and motor launches. The maximum draft for boats on the inland water¬ ways of the district is about 4 or 5 feet. With the exception of the 100020°—26-35 530 COMMERCIAL HANDBOOK OF CHINA Hai Ho, which is kept open by ice breakers, none of the interior water routes are open from December to the end of March. W ater-borne traffic, however, in the district generally has grad¬ ually decreased with the growth of rail traffic. The various inland waterways converging at Tientsin are small and narrow, and the carriage of goods to and from Tientsin and the hinterland by water has entailed slow and uncertain transit, and frequently numerous transshipments. In 1912 the percentage of value of goods carried between Tientsin and the hinterland by rail was given as 53, and by rivers, 44 per cent; in 1921 (the latest statistics available) the percentage of rail-borne traffic had increased to 70^2 per cent and the river-borne traffic had decreased to 25 y 2 per cent. In the suc¬ ceeding years since 1921 it is understood that the percentage of rail- borne traffic has shown further increase. RAILWAYS Following are the railway lines in operation in the district: Pekin-Hankow Railway (head office, Peking) : Miles Main line_ 755 Branches, total_ 61 Tientsin-Pukow Railway (head office, Tientsin) : Main line_ 627 Branches_ 60 Peking-Mukden Railway (head office, Tientsin) : Main line_ 526 Branches__ 173 Peking-Suiyuan Railway (head office, Peking) : Main line_ 468 Branches_ 16t4 Cheng-Tai (Shansi) Railway (head office, Shihchiachuang, Chihli) : Main line_ 151 Tao-Ching Railway (Taokow-Chinghau) (head office, Chiaotso, Honan) : Main line_ 93 Branches_ 18 The following passenger rates per English mile, based on the published fare tables foy the total distance on each line, show first- class fares only. Second-class fares are two-thirds of the first-class fare, and third-class fares are one-third of the first-class fare. Ad¬ ditional charges are made for express trains and, on occasion, as famine relief surcharges. Fares are stated in Chinese currency. Per English mile Peking-Hankow Railway_ $0. 0619 Tientsin-Pukow Railway_ . 0652 Peking-Mukden Railway_ . 0601 Peking-Suiyuan Railway_1_ • 0747 Cheng-Tai Railway_^- . 0770 With the exception of rates on the Cheng-Tai line, the freight rates on all lines in this district are on a tapering scale, according to distance, and different rates apply for each of six different goods classifications. The table below is intended to be illustrative of rates on the sev¬ eral lines in the district, and it will be observed that the rates on the different lines vary greatly. TIENTSIN CONSULAR DISTRICT 531 Three rates are established for all lines, one on a basis of 50 kilos (110.2 pounds avoirdupois), one on the basis of a metric ton (2,204.62 pounds), and one on metric ton for carload lots. This table is based on the rate per metric ton in carload lots; the rate for metric tons not in carload lots can be ascertained by the percentage scale which is appended to the table. [Rates in Chinese currency] Line and distances Class 1 Class 2 Class 3 Class 4 Peking-Hankow line: 100 miles........ $15. 42 $9. 64 $8. 02 $5. 93 200 miles_____ ___ .. 26. 82 16. 76 13. 96 10. 32 500 miles.. . ___ . ... _ _ 52. 18 32. 60 27. 17 20.10 Tientsin-Pukow line: 100 miles . _____ .. .. 6. 13 5. Ill 3.919 2. 556 100 miles.__ _ . ..... ... 11. 301 9.418 7.22 4. 71 500 miles__ __ __ 20. 631 17.193 13.181 8. 60 Peking-Mukden line: 100 miles _______ 7. 22 6.12 5.02 3. 92 200 miles........ .. 13. 70 11.62 9. 53 7. 45 500 miles___ _ _ 29. 62 25.12 20. 61 16.10 Peking-Suiyuan line: 100 miles._________ 11. 0257 9. 451 8.191 6.614 200 miles_____ __ __ 21. 562 18. 482 16. 018 12. 936 500 miles__ ... _ __ _... 41. 358 35. 452 30. 726 24. 813 Cheng-Tai line: 100 miles_______ _ _ 17. 71 12. 397 9. 713 9. 975 Note.— The “ton rate’' (metric ton) for shipments not in carload lots varies, but may be stated as ap¬ proximately as follows: Peking-Hankow line, ton rate 33M per cent higher than rate for carload lots; Tien- tsin-Pukow line, ton rate 50 percent higher than rate for carload lots; Peking-Mukden line, ton rate 50 per cent higher than rate for carload lots; Peking-Suiyuan line, ton rate 60 per cent higher than rate for carload lots; Cheng-Tai line, ton rate varies from 18 to 22 per cent higher than the ton rate per carload lot, accord¬ ing to the class of goods. Through shipments may be made from points on one line to points on other lines at through rates, which, however, apparently do not vary greatly from the distance rates on each line. From time to time surcharges on freight traffic are imposed for famine relief pur¬ poses, remaining in force for stated periods of time. Freight traffic on the Chinese Government railways is divided into six classifications, of which classes 5 and 6 pertain to such freight as coal, cement, bricks, and tiles. Class 1 covers high-value goods, such as silks, satins, velvets, furs, precious stones, jewelry, ornaments, perfumes, plated ware, etc. The following table is in¬ tended to show the goods classification on important items of imports and exports: Important imports Class Important exports Class Cigarettes_ 2 Bristles 3 Cotton piece goods. . . 3 Carpets .. ... 3 Dyes___ 2 Cotton, raw 4 Electrical materials. ... _ 2 Egg albumen 4 Flour ... _ _ 4 Feathers 3 Iron and steel products. .. 3-4 Furs.. ..... 1 Leather._.. _ . . 4 Hair: Machinery.__ ... .. ... 2 Animal 4 Medicines...__ _ _ 2 Human 2 Oils: Hides, dry.. ... 4 Kerosene.... 2 Skins, goat 3 Lubricating_ __ 3 Straw braid 4 Paper _ ____ 2 Walnuts and groundnuts 4 Timber .. .. 4 Wool: Woolen piece goods... ... 2 Pressed 2 Unpressed_ 3 532 COMMERCIAL HANDBOOK OF CHINA The Peking-Mukden line runs from the Chinese capital to Mukden, the capital of the Manchurian Provinces, making connection at Tientsin with the Tientsin-Pukow line, running south through Shantung to the Yangtze River, and at Fengtai (outside Peking) with the Peking-Hankow line, running south through Honan Province to Hankow on the Yangtze River, and with the Peldng- Suiyuan line extending to the gateways of Mongolia. The Cheng- Tai Railway connects with the Peking-Hankow line at Chentow (Shihkiachwang), and extends to the capital of Shansi Province. These railways have all been operating in this district for the past 10 years or more and provide this section of China with more extensive rail facilities than are enjoyed elsewhere in the country. The railways have extensively supplanted all other means of trans¬ portation, carrying more than 70 per cent of the traffic to and from Tientsin and the hinterland. The extension of the Peking-Suiyuan line, which places the rail¬ head at Paotow, beyond Suiyuan, was completed in 1923. The Peking-Mukden line was double-tracked between Tangshan and Shanhaikwan during 1924. There are at present no lines under construction. The Tsangchow-Chentow (Shihkiachwang) line is projected by the Chinese Government, to connect at its western terminus with the Chang-Tai Railway extending to Taiyuanfu, the capital of Shansi, and, in the east, with the Tientsin-Pukow Railway at Tsangchow. The roadbed for this line, about 224 kilometers (129 miles), was laid in 1921 as a famine relief measure. It is now proposed to resume construction by laying tracks, the engineering staff to be provided from other Government lines and (when the line is completed) the rolling stock and locomotives likewise to be supplied from other railways. ROADS The following are the principal highways for cart and caravan transportation and date back to early times; Peking-Shahaikwan (used by carts and caravans only) ; Peking-Dolonnor (used by carts and caravans only) ; Peking-Kalgan-Urga (used also by motor vehicles from Kalgan) ; Peking-Taiyuanfu (thence Sianfu, Shensi) ; Peking-Tsinanfu. Streets and roads available in Tientsin and the surrounding country total about 90 miles, while in Peking and environs there are approximately 195 miles of streets or roadways. Some of these are merely narrow passages over which automobiles rarely pass. A good-roads movement for China was inaugurated in Shanghai on May 5, 1921, to stimulate and educate the people to the necessity of suitable roads for their economic betterment. In the famine period of 1920-21 the American Red Cross decided to spend its funds for relief by the construction of roads, thus furnishing employ¬ ment and subsistence to famine sufferers and affording improved means of communication. The result was the construction of more than 400 miles of graded dirt highways in Chihli, Shansi, and Shan¬ tung. However, many of these roads have not been kept up and are thus falling into disuse. Among other roads completed in the last year or so are the Taiyuan-Yuncheng Highway in Shansi, a distance TIENTSIN CONSULAR DISTRICT 533 of 233 miles under the road-building program of Gen. Yen Shi-Shan, governor of the Province. Practical hope for modern road construction and upkeep undoubt¬ edly lies in the motor transportation services that have been devel¬ oping in this district, as well as elsewhere in China, in the last few years. COST OF TRANSPORT It is practically impossible to make definite compilations of the transportation cost per ton-mile by the several methods of transpor¬ tation in the district, as so many elements enter into consideration of the rates prevailing. The following table, however, is an attempt to strike a fair average ton rate per mile under each method: Medium Average load Average mileage per day Average cost per ton-mile "R.ailwavs _ _ ..... 0) 2&-35 Chinese currency G) $0. 0275-$0.0425 .Tnnks _ 40 to 100 tons__ Carts _ _ 1 ton.... 25-30 . 12 Park mnlfts 250 to 300 pounds___ 25 .298 Wheel harrows 700 pounds_ . _ . ..... 20 . 151 Coolift carriers _ 180 pounds__ 20 .3125 i See freight table under “Railways.” TELEGRAPHS, CABLES, AND WIRELESS SERVICE The telegraph lines in the district are operated by the Chinese Telegraph Administration, and the rates are the same as those pre¬ vailing in other districts of China. Telegrams in Chinese charac¬ ters are transmitted in the form of numerals which are decoded by reference to a standard code book. Cable connection is from Taku (at the mouth of the Hai River) with Chefoo and Shanghai, by agreement with the Eastern Exten¬ sion and Great Northern Telegraph companies, through the Tele¬ graph Administration office. A Chinese wireless station of limited range and power is estab¬ lished at Peking. A 500-kilowatt station erected by the Japanese at Hsuangchiao, near Peking, has been completed, but has not been opened for commercial purposes. Certain other foreign military and naval wireless stations are operated in the district, but they are not available for commercial purposes. There is as yet no satisfac¬ tory wireless communication for commercial purposes with Tientsin or Peking. TELEPHONES Telephones at Tientsin, Peking, and larger centers are operated on the common battery system. The following table gives data con¬ cerning the telephone service: Location Operated by— Number of sub¬ scribers Tientsin..... Chinese Government 7,410 8,221 64 Peking____ _do_ Tangku........ _do . Paotingfu_ ____ _do __ __ 350 Tangshan. . . ... ... ... .. ____ Kailan Mining Administration 220 Tamingfu, Tsingfeng, Nanlo, and Kaichow__ Private Chinese company__ 50 Note.—T here are no automatic telephones; all are manual. 534 COMMERCIAL HANDBOOK OF CHINA The rates of the Chinese Government Telephone Administration are about $9, United States currency, a quarter and $3 for each extension. Long-distance telephone service is available between Tientsin and Peking and Tientsin and Tangku. The rate between Tientsin and Peking is about 40 cents, United States currency, for every five min¬ utes' conversation. The telephone has proved an important means of communication in the district, and application for new installations exceed the sup¬ ply of available instruments. The equipment is generally American or German, but some Japanese equipment has been introduced in recent years. The adoption of the automatic system is being urged, though it has not been definitely decided upon. POSTAL FACILITIES The Chinese postal service covers the district and, with constant improvements and extensions, has greatly aided the development of trade. Through its international parcel post the Chinese postal serv¬ ice has become in recent years an important adjunct, especially of the fur trade. In 1920, 13,578 parcels for foreign destinations passed through Chinese and foreign posts in Tientsin; in 1923 the total reached 76,930 parcels, of which 80 per cent, it is estimated, repre¬ sented fur shipments. Foreign post offices in China were closed on January 1, 1923. Mail service throughout China is now wholly in the hands of the Chinese postal service, under the Ministry of Communications, and is efficient. SHIPPING AND WAREHOUSING FACILITIES Vessels drawing 16 feet of water come directly into the bund at Tientsin, and, on spring tides, vessels drawing 18 feet can reach the bund. Vessels of greater draft anchor outside the bar at Taku. There are no docks at Tientsin, but ships tie up alongside the bunds of the foreign concessions. Docking space is under the con¬ trol of the several municipal governing bodies. At Taku cargo is transferred from the ship's tackle to lighters; at Tientsin cargo is transferred directly from the ship’s tackle to the bund. At Taku Bar 400 measurement tons per 24-hour day are discharged; at Tientsin Bund, 300 tons. A 30-ton shears operates on the bund of the British concession. On general cargo from Taku Bar to Tientsin a rate of 1.10 Tientsin taels per ton is quoted, rates varying ordinarily with the nature and handling of cargoes. Rates for coolie hire in handling cargo at Tientsin Bund are: On heavy cargo, 50 tael cents per ton; on ordinary case cargo, 1 y 2 tael cents per package. The following table shows the number, nationality, and tonnage of vessels entered and cleared at Tientsin (including Taku Bar) during 1923: Flag Number Tons Flag Number Tons American._ 93 759 10 17 48 390, 396 1,220,741 37, 034 59, 257 207, 844 Japanese... 1,118 10 845 1,202,565 21, 568 714, 427 British___ Norwegian_ Dutch. Chinese_ French___ Total .. . _ 2,900 3, 853,832 German___ TIENTSIN CONSULAR DISTRICT 535 Warehouses or godowns are maintained by private shipping and import and export firms. Delivery of cargo arriving at Tientsin may be effected from the bund, or transferred to the 'shipping company’s godown or to that of the company’s agent. Cargo is also sometimes loaded directly from steamers to cars by means of spur- track facilities. Space on the bund is usually allowed to cargo for seven days without charges. After that a charge is made at a daily rate equal to the established monthly godown (warehouse) rate for the same class of cargo. Godowns of modern construction are located immediately on or near the bund, so that facilities for storage are convenient and adequate. Cold-storage facilities are also available. Two tael cents per cubic foot per month is the usual warehouse charge on ordinary cargo, 5 tael cents on machinery. PUBLIC WORKS ELECTRIC-LIGHT PLANTS The following list includes the principal electric-light plants: Location National¬ ity Kilowatt lighting load Rates Character and nationality of equip¬ ment CHIHLI PROVINCE Tientsin.. British_ 2,000 20 cents per kilo- 2 100-kilowatt generators; 1 2,000- Belgian_ 9,000 watt-hour. 25 cents. kilovolt-ampere turbine, alternat¬ ing current, 5,000 volts, 50 cycles, 3 phase; 220/440 volt direct current and 220/380 alternating current; British equipment. Belgian and Swiss equipment; also French_ 4,000 15 to 28 cents. supplies tramways; alternating current, 5,000 volts, 50 cycles, 3 phase; 220 volts for lights. French equipment; 220 volts, 50 Peking... British_ 200 50 cents per month cycles, 3 phase, alternating current. Supplies Legation Quarter; British Chinese... 2,900 per light. 24 cents per unit.. and German equipment; 220 volts, direct current. 3 phase, 50 cycles, 3,000 volts, alter- Paotingfu__ __do_ 475 nating current, 220 volts for lights. Alternating current, 2,300 volts, 50 cycles, 3 phase. American; 2,300 volts; 60 cycles; 3 phase, alternating current; light voltage 220. Chentow_ ... ..... . .. do_ 2,000 SHANSI PROVINCE Taiyuanfu_ _do. 300 $1 per month, 16 candlepower. 300-kilowatt turbo-generator; 3 phase, 60 cycles; 2,300 volts; American. The above list covers the principal plants only. Some towns in the district are supplied with electricity from small portable plants, and some are supplied in part with light from railway shops, cot¬ ton and flour mills, etc. The British municipal plant at Tientsin supplies electric current to the British concession areas and to the former German concession area. The French plant supplies the French and Japanese conces¬ sions. The Belgian company, besides operating the tramways, lights the Italian and Belgian concessions, the former Russian and Japanese concessions, and the native city. 536 COMMERCIAL HANDBOOK OF CHINA At Chinwangtao, the Kailan Mining Administration’s plant sup¬ plies a current of 200 volts, 50 cycles, alternating. At Shanhaikwan light is supplied from the workshops of the Peking-Mukden Rail¬ way, the current being 200 volts direct. Tangshan is lighted in part by the Peking-Mukden Railway shops, and part by the plant of the Kailan Mining Administration, which has erected a large electric plant at Linhsi, said to be one of the best in China. WATERWORKS The Tientsin waterworks of the British Municipal Council sup¬ plies the British and ex-German concessions, and the Native City Waterworks Co., a British limited company, supplies the Chinese city as well as the French, Italian, Japanese, and the ex-Russian and ex-Austrian concessions with water. The British system has a maximum capacity of 1,000,000 gallons daily, with a reserve storage tank of 500,000 gallons capacity. The Native City system has a maximum daily capacity of 4,500,000 gallons and a normal output of 3,000,000 gallons. The charges under the British municipal system are $1 Yuan per 1,000 gallons, and under the Native City Co. 70 cents, local currency, per 1,000 gallons. The Peking Waterworks Co. (Ltd.) is organized under Chinese management, but employs foreign engineers. It has a number of stations throughout Peking and a daily pumping capacity of about 3,000,000 gallons. TRAMWAYS The tramway at Tientsin is operated by the Compagnie de Tram¬ ways at d’Eclairage de Tientsin, a Belgian concern. The length is 8.2 English miles, double-tracked. The power-plant capacity is 9,000 kilowatts, 3-phase, 50 cycles, 5,000 volts, alternating current, high tension; 550 volts direct current for tramway motors. This plant also supplies electric light for the native city and certain of the concessions. This tramway was established in 1906. It hauls approximately 4,000,000 passengers per month, in 114 cars. The track is of meter gauge, the rails are 92.8 pounds per yard, and the rolling stock of Belgian manufacture. Like all tramways in the Far East, it is patronized almost exclusively by the natives, in this instance • Chinese. In the capital the Peking Tramcar Co. (Sino-French) has four lines, planned to attain a total length of 12.8 miles. This system began operating in December, 1924. CONSERVANCY WORKS Conservancy work on the Hai River, connecting Tientsin with the sea, was necessitated by the rapid deterioration of the river to the point where for periods even lighters could not come up to Tientsin. The commission established in 1898 ended with the Boxer troubles of 1900, but a new international commission was established in 1901 and has since functioned with marked success. The Hai Ho is the common mouth of nearly all the rivers running through Chihli TIENTSIN CONSULAR DISTRICT 537 Province, and is too small to discharge them in time of simultaneous spate. The problems were to straighten the river, thus promoting tidal influence and shortening the distance to the sea; to keep out silt, discharge storm water, and deepen the water over the bar at the mouth of the river. Three of the largest canals drawing water from the Hai Ho have been controlled by locks, and bends in the river have been cut off, saving 12 miles or more of distance, and increasing the tidal range. Whereas in 1898 the river was not navigable, in 1919 a steamer drawing 15 feet could proceed to Tientsin on an ordinary tide. The bar at the entrance has been dredged and deepened from 10 feet in 1908 to 16 feet ordinary high water in 1922. The conservancy work is maintained from funds derived from river dues equal to 4 per cent of customs duties on all cargo, and shipping taxes on registered tonnage. IMPORT AND EXPORT TRADE In spite of floods, famine, and civil war, which occurred during 1924 throughout the Tientsin consular district, Tientsin’s total trade for the year exceeded that of the previous year by 581,009 haikwan taels, or about $465,000. Tientsin exports for 1924, according to the Chinese Maritime Customs, were valued at 88,607,319 haikwan taels, as compared with 86,420,212 taels for 1923, an increase of 2,187,107 taels. Imports, on the other hand, showed a slight falling off, from 104,866,551 haikwan taels for 1923 to 103,260,453 taels for 1924, a decrease of 1,606,098 taels. Following is a summary (with figures converted to United States currency) of the trade of the ports of Tientsin and Chinwangtao during the years 1903, 1913, 1923, and 1924: Ports, and character of trade 1903 1913 1923 1924 Tientsin: Exports.... .. U. S. cur¬ rency $8, 489, 253 U. S. cur¬ rency $28, 226,411 U. S. cur¬ rency $71, 603, 564 XJ. S. cur¬ rency $71, 771, 928 % Imports— Foreign goods_____ 23, 976, 846 12, 765, 408 51, 756, 269 18, 052, 376 84, 237,156 40, 863, 941 83, 640, 967 49, 303, 410 Chinese goods.. Total imports.. .. 36, 742, 254 69, 808, 645 125,101, 097 132, 944, 377 Total exports and imports . 45, 231, 507 98, 035, 056 196, 704, 661 204, 716, 305 Chinwangtao: Exports..... 1, 521, 070 3,121, 264 12, 497, 078 8, 586, 868 Imports— Foreign goods .. 3, 241, 388 429, 047 3, 529, 464 1, 249, 032 2, 614, 469 1, 735, 639 3, 042, 907 2, 677, 783 Chinese goods. Total imports... 3, 670, 435 4, 778, 496 4, 350,108 5, 720, 690 Total exports and imports... 5,191, 505 7, 899, 760 16, 847,186 14, 307, 558 IMPORTS The table following gives details of the imports at the port of Tientsin: 538 COMMERCIAL HANDBOOK OF CHINA [Quantities are in thousands of units given; values in thousands of United States dollars] Articles 1903 1913 1923 1924 Quan¬ tity Value Quan¬ tity Value Quan¬ tity Value Quan¬ tity Value Textiles: Cotton manufactures _ 12, 230 26,021 20,200 17,820 Woolen and woolen goods _ 182 214 1, 706 1,471 Miscellaneous piece goods, can- vas, cotton duck, and Hessian cloth_... _ ..yards 185 12 1, 261 166 210 300 Metals and minerals: Iron and steel, all kinds.pounds.. 20, 276 446 69, 921 1, 373 92,390 3,029 144, 943 4, 788 Copper products, slabs, sheets, tubes, wire, etc... .pounds.. 1, 028 142 1,802 301 2,812 498 6,795 1,010 Bags, cotton, gunny, hemp, straw, and grass, new and old__ 14 159 301 273 Belting, machine 11 94 84 Bicho do mar, black_pounds.. 345 115 366 78 489 243 593 293 Building materials_ 53 33 145 269 Butter. _ pounds.. 24 256 63 243 106 315 109 Buttons, brass and fancy. ... gross.. 241 121 167 55 201 46 424 38 Candles . __ __ 28 54 65 1 Candle-making materials. . 4 112 18 Cereals: Rice ... .pounds.. 275 6 41,184 970 141, 339 5, 221 59,186 2, 076 Wheat do 3 47, 290 1,099 13, 000 316 Chemical products 17 32 142 124 China ware 24 35 138 176 C igarettes_thousands 327 1, 072 1, 539 1, 239 3,065 932 2, 666 Cigars__do. . 27 6 50 4 108 3 92 Clocks and watches 80 83 140 222 Clothing 69 41 113 64 Confectionery.. .... 6 19 28 32 Cotton, raw pounds 1 6, 111 1, 448 299 76 Dyes, colors, and paints: Aniline 200 869 1,308 1,348 All other 180 926 2,274 3,193 Electrical materials 80 211 695 ' 713 Enameled ware 11 114 134 261 Flour, wheat .. ..pounds.. 1,925 39 18, 565 385 192, 715 5, 559 179, 843 4,911 Glass and glassware 155 186 453 5, 667 Haberdashery and millinery 36 347 684 555 Hardware 47 146 430 272 Hats and caps.number 307 66 392 137 310 133 India-rubber tires 36 88 India-rubber manufactures, other 2 123 254 Leather, all kinds 38 556 514 59 Machinery, miscellaneous 256 349 2,209 2,064 Matches. _ __ _ _ 448 458 4 . 7 Match-making material . pounds.. 5, 271 141 16, 097 527 15, 671 790 Medicines _ 69 200 314 484 Milk, condensed, in tins pounds 21 80 1,049 170 775 146 Needles.__...thousands.. 659 124 775 113 916 256 1,634 415 Petroleum products: Engine oil .. American gallons. 8 256 70 1, 276 368 1,151 395 Gasoline . ..do_ 61 9 1,004 455 ' 659 259 Kerosene— American....do_ 2,294 366 12, 210 1,001 27, 337 6, 013 29,198 6,091 Russian . do 6, 436 821 Sumatra.....do... 1,119 141 15,190 1,667 357 79 1,041 487 Paper and stationery . 235 906 2,327 2,409 Perfumery 10 23 127 208 Photographic material. 35 52 110 139 Railway materials ... 2,004 1, 789 1,491 1,517 Seaweed . ...pounds . 5,593 68 8, 067 120 11,711 324 8, 632 260 Silk, artificial..... 751 496 446 Soap. _ 70 192 319 355 Soda .. ... _ . . . ...pounds. 2,539 40 13, 894 180 24,113 421 26, 613 468 Sugar, all kinds 1,133 3,158 4, 726 6,285 Timber, all kinds____ . ' 525 1,250 665 1,020 Toilet requisites_ . . . __ 19 165 170 95 Tobacco, leaf.... . 5 584 1,107 Vehicles: Bicycles and parts 12 25 212 475 Motor cars and parts.. 71 530 702 Tramway materials__ _ 120 779 326 Wines, beers, whiskies _ 259 348 562 533 Wireless apparatus 95 30 All other articles _ 2,602 3, 407 9, 300 6, 356 Net total imports. .. __ 23, 977 51, 757 84,237 83, 641 TIENTSIN CONSULAR DISTRICT 539 Industrial developments during and following the war period have led to an increased demand for machinery for factories, mills, and mines, in the fulfillment of which America has played a lead¬ ing part. During 1923, however, imports of machinery dropped off by 2,250,000 taels, primarily because of unsettled conditions. Amer¬ ica supplied 39 per cent, Great Britain 27 per cent, Germany 13 per cent, and Japan 10 per cent, the remainder being distributed among various European countries. In piece goods, for the four years 1919 to 1922, Japan contributed 65 per cent, Great Britain 27 per cent, and the United States 8 per cent. With the exception of imports from Great Britain, the pur¬ chases during 1923 showed a decided falling off. Japan’s share was 64 per cent, Great Britain’s 33 per cent, and the United States, 3 per cent. Importations of wheat and flour experience seasonal fluctuations, varying with comparative crop conditions and price levels as between China and other countries, notably the United States and Canada. There have been large increases in the importation of for¬ eign flour and foreign wheat. During the four years ending 1922 imports of flour amounted to 52,196,666 pounds, while imports for 1923 totaled 192,715,200 pounds, and for 1924 179,843,200 pounds. The increase in the importation of foreign wheat during the four years ending 1922 was not so great, averaging about 45,333,000 pounds per year, as compared with 47,290,133 pounds for 1923. In 1924 there was a sharp decrease to 13,000,000 pounds. Tientsin is the distributing center for approximately 20 per cent of all colors and dyes imported into China. There is a steadily increasing tendency on the part of the Chinese to substitute foreign- manufactured synthetic dyes for vegetable dyes of native origin. In recent years German manufacturers have been making strenuous efforts to recapture the trade in dyes and chemicals that they lost during the war. At present Germany can be credited with about 75 per cent of the trade in dyes, 15 per cent come from America, and the remainder, in small amounts, are supplied by Swiss, French, British, and Japanese manufacturers. Imports of illuminating oils continue to show considerable in¬ creases, the United States dominating the trade. Other articles for which there is a demand are paper, glass, chemical products, aniline dyes, stoves and grates, worsted and other woolen goods, leather and leather goods, soap and toilet articles, medicines, hard¬ ware, metals, galvanized iron, roofing and flat sheets, enameled ware, ironware, and tobacco. In this category also belong machine tools for engineering, carpentry, iron forges, bicycle and motor¬ car works, as well as hand machines for sewing, printing, knitting, hat making, grain cleaning, washing, and pumping. There is also an appreciable demand for motor cars, bicycles, typewriters, fur¬ niture, industrial machinery, knitting machines, mining and smelt¬ ing apparatus, and other articles that usually find markets in a region of vast potentialities newly opened to modern development and foreign exploitation. Among articles for which there is a constant demand are watches and clocks, jewelry, phonographs and accessories, photographic materials, mirrors, candles, lamps and lamp ware, clothing, hats, hosiery, boots, and shoes. The United States already 540 COMMERCIAL HANDBOOK OF CHINA participates to a considerable extent in supplying these lines, which offer a favorable field for extension. The chief competitors of the United States in this market are Japan and various European coun¬ tries. In many of these lines Japan and the European countries are ahead of the United States. The leading lines in which Japan has to a great extent replaced American and European goods in this market are piece goods, chemical products, electrical materials, paper, and indigo dyes. EXPORTS A detailed statement of exports from Tientsin during the years 1903, 1913, 1923, and 1924 is given below: [Quantities are in thousands of units given; values in thousands of United States dollars] Articles 1903 Quan¬ tity Cotton goods, all kinds....-. Metals and minerals: Brass, iron, metal dross, etc.. Almonds_ pounds.. Animals, living: Cattle-number.. Beans, total__pounds.. Bones, refuse...-do- Bran....-do- Bristles_ do- Candles-- do- Carpets_square feet.. Cement-- pounds. . Chestnuts.. do- Cigarettes.. do- Coal....tons.. Coke. do- Cotton, raw..pounds.. Curiosities..-.. Dates. pounds.. Egg albumen and yolk, dried and moist_pounds.. Egg, fresh__...thousands.. Fibers, hemp and jute..pounds.. Firecrackers-do- Groundnut cake and pulp-do- Groundnuts. do- Hair: Animal--- Human_pounds.. Hides: Ass and horse-do- Buffalo and cow-do- Horns, deer, young.....pairs.. Intestines: Pigs’..---. Sheep’s--- Licorice---pounds.. Matches.__gross.. Mats, straw and rush- Medicines-- Mushrooms_pounds- Oil: Castor_ do- Groundnut_do- Pears, fresh- do- Salt__do- Samshu_do_ Seeds: Apricots, bitter and sweet .. pounds.. Cotton_do_ Linseed.....do_ Melon.. do_ Mustard. do_ Rape.. do_ 1,147 9,044 2, 047 1,044 27 32 12, 252 13, 299 Value 8 137 1,312 5 1,543 58 6, 701 3, 259 453 106 26 618 8 1 10 113 2 104 258 171 116 1 14 131 102 1 3 75 1913 Quan¬ tity 4,459 2 35,310 42, 626 19 2, 434 4 7,217 3, 621 119 114 1 44,851 16, 435 702 75 11,169 49 3,184 61,216 568 1,075 3,591 3 48 277 28 36 117 40 2, 283 107 4 375 6, 933 79, 486 14, 427 18, 191 27, 265 7, 756 30,878 Value 172 68 487 79 465 237 1,410 1 60 33 100 62 343 5 5,916 388 731 34 410 474 3 66 1,217 301 54 136 679 77 94 6 203 512 498 90 16 64 235 524 127 436 325 470 1923 Quan tity (9 15 96, 353 47, 475 42, 379 3, 372 2, 305 4, 439 142,164 6, 504 1,111 284 8 75, 347 31, 839 5, 603 385 3, 466 1,328 7, 731 52, 368 699 2, 002 349 3 6, 464 599 193 795 5,014 14, 619 53, 324 10, 627 2,592 36, 221 17,133 5,291 9, 375 2,074 Value 428 82 (') 595 2, 201 615 588 2, 751 341 3,440 660 289 651 1, 508 81 15, 698 343 1,170 1,404 2,854 156 189 106 1,856 325 113 387 74 208 863 431 795 106 397 439 215 59 340 203 1,317 426 301 421 415 298 179 39 See “Seeds, apricot.’ 1924 Quan¬ tity Value 80 78 (') 0) 39 1,058 70, 716 1,640 36, 437 519 48, 419 673 2,529 2, 741 1,334 194 5, 514 4, 464 92, 888 418 7,089 308 1,239 715 238 1,222 5 57 55, 405 12,197 292 28,078 1,233 8,433 2,122 365 2,660 2,190 157 650 94 1,519 21 43,041 1, 527 426 660 90 907 205 398 83 2 137 848 703 4, 598 503 195 43 316 634 125 137 1,867 136 6,746 471 22,071 354 58, 969 1,612 4, 916 269 3, 952 422 17, 880 208 12,143 322 2,240 133 5, 621 116 874 IS TIENTSIN CONSULAR DISTRICT 541 [Quantities are in thousands of units given ; values in thousands of United States dollars] Articles 1903 1913 1923 1924 Quan¬ tity Value Quan¬ tity Value Quan¬ tity Value Quan¬ tity Value SlririQ anH fnrs total 1,965 5 813 1 1 52 24 122 45 1,209 1,846 3,177 20 339 147 196 142 548 260 4, 398 1, 391 5, 791 119 2, 832 46 1, 748 311 635 1,759 397 7, 751 3, 858 6,100 51 2, 678 42 1,612 331 1,080 1,654 1,006 10, 627 3,935 RnHa nrnrinp.ts Straw braid.. ... .pounds.. Tallow, animal_do- Tobacco, prepared. ... . .. -do- Vegetables, dried and salted—do- Walnuts.. _ do- Wool: Camels’_ .. -do- Goats’_do- Sheep’s_ _do- All nt.hfir artinlfis 4,447 49 9 1, 371 957 1, 714 332 15, 774 1,017 2, 448 2 4,000 6,341 3, 724 1,421 29, 558 7, 523 523 8, 712 5, 584 7, 377 6, 853 1,700 42, 564 6, 988 484 8, 168 6, 066 12, 716 5, 043 3, 213 58, 332 Total 8, 489 28, 226 71, 604 71, 772 The total value of exports of cotton from Tientsin nearly doubled during the 10-year period 1913-1923. The development of the cot¬ ton-mill industry in North China has served to stimulate cotton growing, and the export of raw cotton has kept pace with its in¬ creased cultivation in the adjacent hinterland. At present Tientsin exports about 25 per cent of China’s cotton. Exports of wool have also shown very large increases. Of China’s total wool clip, 85 or 90 per cent passes through the port of Tientsin, though some contributing areas are so distant that a year’s time is required to get their product to Tientsin. Wool from Outer Mon¬ golia, Chinese Turkestan, and distant Kansu find their outlet at this port. The manufacture of Chinese rugs for export is a development of recent years, and rugs may now be said to constitute one of the principal exports of manufactured products. Eighty-nine per cent of China’s rug exports passed through Tientsin in 1923. Sausage casings form one of the principal exports. Contributing territory includes Shantung, Chihli, Honan, Shansi, Shensi, Kansu, Sinkiang (Chinese Turkestan), Mongolia, Manchuria, and Siberia. The export of casings has witnessed a steady growth since the period following the Great War, and may be regarded as capable of still further development. Tientsin had 40 per cent of China’s export trade in casings for 1923. Of egg albumen and yolk during 1923, Tientsin contributed about 13 per cent to China’s export trade, the leading ports being Shang¬ hai and Hankow. Of eggs, fresh and preserved, however, Tientsin contributed 30 per cent of China’s total as port of origin, the two other leading ports being Tsingtao and Shanghai. The disruption of trade in Russia during the past few years has resulted in diverting through the port of Tientsin furs and skins that formerly were sent through Moscow and Liepzig. Foreign buyers have also discovered that China, Manchuria, and Mongolia represent a cheaper source of supply than other exporting countries. As a result, exports of furs have increased year by year. This situa¬ tion will undoubtedly obtain until such time as a return to former established trade channels is effected in Russia. Furs shipped through Tientsin include squirrel, rabbit, fox, sable, kolinsky, 542 COMMERCIAL HANDBOOK OF CHINA weasel, and marmot. Lamb, goat, and kid skins, as well as dog mats and horsehides, form the bulk of the hide and skin exports. The manufacture of straw braid is a widely distributed industry throughout North China, and Tientsin is an important exporting center for this commodity. During 1923, 63 per cent of China’s total export of straw braid passed through the port of Tientsin, chiefly to the United States. Walnuts, peanuts, beans, horsehair, licorice, oilseeds, and ground¬ nut cake and pulp are other exports, Tientsin leading all China ports in exports of walnuts, groundnuts in shell, licorice, and cotton¬ seed. It is of interest to note that in 1903, of the total export of Chinese produce of North China origin, only 10 per cent was shipped directly to foreign countries and Hongkong. In 1913, 20 per cent went to foreign countries and Hongkong; while in 1923, 60 per cent was shipped directly to such foreign destinations, and only 40 per cent to Chinese ports. Since 1903 foreign export houses have found it desirable, instead of attempting to handle North China products through Shanghai, to establish houses nearer the source of supply and export directly from Tientsin to foreign markets. The im¬ provement of the Hai River has brought about the result that Brit¬ ish, Japanese, German, and American ocean-going freighters now carry a heavy percentage of the exports of Tientsin directly to foreign ports without the necessity of transshipping from coasting steamers at Shanghai or Japan ports. There is still a considerable volume of shipments by coasting steamer to Shanghai for trans¬ shipment abroad, but the business is handled at Tientsin and the cargo routed via Shanghai instead of entering into the market there. The increased volume of trade and the extension of trading facili¬ ties in the form of foreign import houses, banks, etc., have resulted in the past 20 years in detaching Tientsin very largely from its for¬ mer position of substantial dependence upon Shanghai. CHINWANGTAO TRADE Chinwangtao for many years served as the winter port or “ jetty ” for Tientsin trade during the winter months, but with the improve¬ ment of the Hai Ho and shipping facilities at Tientsin, where the river is kept open in winter by ice breakers, the port of Chinwangtao assumes less importance in the trade of the district as a whole. The principal items of foreign imports are machinery and equip¬ ment for the Kailan mines and the Tangshan cement works and rolling stock and equipment for the Peking-Mukden Railways Kero¬ sene is another important item of import. With respect to these items especially, which form the bulk of the import trade, Chinwang¬ tao may be said to have a trade of its own of quite respectable proportions. The export trade is made up principally of exports of coal, cement, fire brick, and fire clay. The development of the Kailan coal fields has resulted in an increase in the coal exports from Chinwangtao from approximately 100,000 tons in 1903 to 746,486 tons in 1913 and 2,075,715 tons in 1923, exclusive of supplies for steamers’ bunkers. TIENTSIN CONSULAR DISTRICT 543 MONEY, BANKING, AND CREDIT BANKS The table below shows the leading banks handling foreign ex¬ change and bills in the Tientsin consular district: Name Nationality Head office Capital International Banking Corporation.. American__ New York, i $10,000,000. American Oriental Banking Corpo¬ ration. Hongkong & Shanghai Banking Corporation. Chartered Bank of India, Australia & China. Banque de L’lndo-Chine.. .do_ N. Y. Shanghai... .. 3 $428,949_ 3 $20,000,000 . £3,000,000... 68,400,000 francs. 10,000,000 francs. 55,000,000 rubles. 100,000,000 yen. 80,000,000 yen. 75,000,000 francs. $1,000,000 gold. 3 $7,500,000.. British.. _ do... Hongkong_ London.. French_ Paris_ .. Banque Franco-Chinoise ___ do_ .do_ Russo-Asiatic Bank..... Russo-French. . .do_. Yokohama Specie Bank.. . Japanese_ Yokohama... Bank of Chosen..... .do_ . Seoul, Chosen. Brussels. Shanghai_ Banque Beige pour l’Etranger.. The Italian Bank for China.. Belgian .. Italian.... Chinese-American Bank of Commerce. Chinese_ . Peking.... Branches in cities in district Tientsin and Pe¬ king. Tientsin. Tientsin and Pe¬ king. Do. Do. Do. Do. Do. Do. Do. Tientsin. Tientsin and Pe¬ king. 1 Capital and surplus, in United States currency. 3 Chinese currency. 1 United States currency. CREDITS Local export firms purchase export cargo in the open market or, as is often the case, make their purchases on a forward-contract basis from interior dealers. Upon acceptance by the foreign buyer of the Tientsin firm’s offer, the usual procedure is for the buyer to open a credit in favor of the Tientsin exporter. If the credit is opened, the exporter generally requests and is usually granted ad¬ vances in the form of packing credits from the bank in which the credit has been opened. If no credit has been opened, the exporter generally has recourse to his own bank for packing credits in the form of overdrafts. When a foreign bank grants a packing credit to a Tientsin firm it allows the firm to draw on the bank up to prac¬ tically the full value of the goods to be shipped, and the bank gen¬ erally expects, and sometimes insists, that an equivalent amount of exchange be settled with them before the credit is granted. In re¬ turn the firm gives a letter of guaranty in which it undertakes to hold the cargo at the disposal of the bank fully insured against all risk. The interest charged is from 7 to 8 per cent. The goods in question may be stored in the firm’s own godown (warehouse) or in a godown designated by the bank. The arrangement continues for a period long enough to allow the firm to purchase the goods, pack, and ship them. The extension of packing credits by the banks is entirely optional on their part unless the export credit opened specifically provides for packing credits. 544 COMMERCIAL HANDBOOK OF CHINA Credit extensions made to local importers vary considerably, de¬ pending on the reputation of the concern, the nature of the goods, the volume of sales, the state of competition, and other considera¬ tions. The usual practice is for the local importer to arrange with his local bank for the opening of a credit with a foreign correspond¬ ent bank in favor of the exporter abroad; against this credit the local bank may or may not require the deposit of security or collat¬ eral, the amount in any case depending upon the reputation of the firm and the nature of the goods. As there is no local acceptances market, drafts are drawn on the local importer instead of the local bank, the acceptance of the former being considered in the light of an undisputed instrument of liability. Upon receipt of the documents and the acceptance of the draft, the cargo remaining under custody of the bank, deliveries may be effected to Chinese dealers during the term of the draft in the fol¬ lowing manner: Chinese dealers are usually allowed to take de¬ livery of import goods by installments, paying against installments usually by native orders. The native order is due in from 5 to 10 days and is generally regarded as the equivalent of cash. The Chi¬ nese dealer is usually given two months in which to clear cargo, but the term varies, according to the nature of the goods. The native order, in effect, is nothing more nor less than a post¬ dated check by the Chinese dealer on his Chinese bank. Native orders in the form of cashiers’ checks of native banks do not circu¬ late to any great extent in Tientsin. It was at one time the practice of native banks to certify the checks or native orders of dealers, and they then became the obligation of the native bank, but this practice has now largely ceased. Native orders, in the sense of post¬ dated checks by Chinese dealers on native banks, are, however, quite common. They usually cover a 5 or 10 days’ period and are con¬ sidered as no more reliable than the credit of the drawer, since of course no responsibility is assumed by the native bank unless the check is “ certified ” by the bank. Business transactions and credits between the foreign firms and the Chinese buyer are generally arranged through the medium of the Toreign firm’s comprador, the comprador system applying in Tientsin as elsewhere in China. No standard practice with reference to credit extensions can be said to exist in the district. Import merchants require such terms of credit from American exporters as will permit their meeting the competition of European products offered on a basis of liberal credit extensions. Competition in this field is keen, and American manu¬ facturers who anticipate entering this market must be prepared to offer terms in line with those of competing manufacturers of other countries. Local banks are in a position to know what credit extensions can be made to local firms of foreign nationality. From the head offices of American banks having branches in this district, credit reports can be obtained on any local firm of foreign nationality. Not many Chinese firms are sufficiently familiar with foreign business procedure to deal directly with foreign countries; in con¬ sequence, import transactions are usually negotiated through the medium of a local firm of foreign nationality. American exporters TIENTSIN CONSULAR DISTRICT 545 should not fail to investigate requests for credit extensions on the part of Chinese concerns prior to granting such extensions. LOCAL CURRENCY SITUATION The currency situation is as complicated in this district as it is elsewhere in China. Prior to the revolution of 1911-12 the Peiyang dollar was in general use, and many are still in circulation. The Yuan dollar, the new dollar currency of the Republic, has, however, supplanted " the Peiyang and provincial dollars formerly in use. Exchange fluc¬ tuations have a marked effect on both import and export trade; the silver currency of China fluctuates daily and hourly in comparison with gold. High silver militates against exports and favors imports. In January, 1920, the Chinese silver dollar was worth $1.08 United States currency; in March, 1921, only $0.31. In June, 1922, the silver dollar at Tientsin had a value of $0.57 United States cur¬ rency, and at the end of 1924, $0,547. ADVERTISING There are approximately 300 newspapers published in the con¬ sular district—10 in English, 2 in French, and the remainder in Chinese. Most of these papers are published in Tientsin and Peking. The following is a list of the principal ones: Name Publication Language Ownership (nationality) Estab¬ lished Esti¬ mated circula¬ tion TIENTSIN North China Star__ .. Daily__ English__ American_ 1918 3, 000 Peking and Tientsin Times.. _do .. _.do. __ British 1894 1, 600 North China Daily Mail_ _do.... _do . ... _ _do__ 300 China Advertiser., j_ Weekly_ _do _ . . Japanese 200 Echo de Tientsin _ . Daily__ _ French... French . 300 China Illustrated Review ... Weekly edition of English__ British... . 600 Peking and Tientsin Times. T’ai Wu Shih Pao... Daily. _ Chinese.. .. Chinese. 1917 9, 600 I Shih Pao___ _do.. _do.. .do_ 1915 37,000 Ta Chung Hua Shang Pao._ _do_ _do__ _do_ 1920 10,000 Ho Pei Erh Pao.. _do... _do _ _rzc_ _do_ 1919 7,900 PEEING North China Standard ... . ...do_. _ English.. Japanese_ Journal de Peking__ .. _do... French... . French Far Eastern Times__ _do__ . English and Chinese. Chinese 1923 4,500 Peking Leader. .. _do. ... English_ . ... . . .do _ 1918 Peking Daily News _ .do- .. _do .do 1908 Shun T’ien Shih Pao.... _do _ Chinese_ . . . _do_ I Shih Pao._... _do__ .. . ...do.. . .. do. _ 1916 Ching Pao ... _do_ . _do .. _do 1918 Ch’en Pao. _do. .. _do__ .do 1918 Quotations on advertising rates are, in general, meaningless; they will vary with the inquirer and from day to day. Much the same adver¬ tising methods successful in the United States are employed in North China, with necessary modifications and allowances for the differ¬ ences in the degree of literacy and the psychology of the potential 100020°—26-36 546 COMMERCIAL HANDBOOK OF CHINA buyer. The newspaper, the billboard, handbills, calendars, motion pictures in the larger cities, placards in trolley cars, all are employed as advertising mediums. Electric signs are used both in Peking and Tientsin, but so far to a limited extent. MERCHANDISING METHODS As there are few Chinese firms in the Tientsin district equipped for direct foreign trade, most of the foreign trade is carried on through American, European, and Japanese import and export houses, acting on their own account or as agents for foreign prin¬ cipals. A number of such houses have branches or connections in the L nited States. In establishing China agencies it is preferable that American agencies be placed with American firms, if possible. T\ here the market in particular lines offers promise of business of sufficient volume, the American exporter might be well advised, after an intensive study of the field by his trained representative, to estab¬ lish his own branch office, but this measure is recommended only for lines in which there is a permanent and extensive demand. In other cases it is frequently found that representatives of the American manufacturers—expert technicians or salesmen—can effectively be employed on the staffs of the China houses acting as agents, thus insuring to the American exporter not only the facilities, experience, and prestige of the established China house (a matter of outstanding - importance) but the opportunity for direct representation of fairly reasonable cost for the purpose of detailed study of the market and active promotion work. Representatives should always be very carefully selected and be men of good reputation and bearing. It should be understood that nothing of permanent value can be accom¬ plished in China by “ rush ” and impatience. TRAVEL FACILITIES The following table shows the principal hotels at Peking and Tientsin, with rates, cable addresses, etc.: Rates, including meals 1 Name of hotel Nation¬ ality of ownership Cable address Single, room with bath Single, room without bath Two per¬ sons, room with bath Single, per month Two per¬ sons, per month PEKING Grand Hotel de Pekin 2 ... French.. Pekinotel_ $10-$15 $18-$25 $175-$300 $300-$500 Grand Hotel des Wagon British_ Wagonlits... 9 $8 18 150- 175 300- 350 Lits. 2 Ambassador Hotel 3 _ Chinese... Ambassador 8 6-7 13 120- 140 220 TIENTSIN Astor House 2 ._.. British_ Astor. * 10 * 8 * 18 200 * 250 Court Hotel 2 . . _do. _ Court.. 12 10 18-19 200- 250 300- 350 Imperial Hotel 2 . ...do_ Hotelimp... 9 7-8 16 140- 160 300 1 Chinese currency, Yuan dollars. 2 American plan. 3 American or European plan. 4 Minimum rate. TIENTSIN CONSULAR DISTRICT 547 While not always necessary, it is advisable to telegraph a few days prior to arrival at Tientsin or Peking to obtain accommodations at the hotels. A knowledge of Chinese is not essential for travel on the main routes; hotel clerks and railway conductors speak English. A valid passport is indispensable for identification purposes as well as travel. TRADE ORGANIZATIONS Following is a list of important trade organizations in the Tien¬ tsin consular district: American Chamber of Commerce, Tientsin. American Chamber of Commerce, Peking. British Chamber of Commerce, Tientsin. British Chamber of Commerce, Peking. Tientsin General Chamber of Commerce; international. French Chamber of Commerce, Tientsin. German Chamber of Commerce, Tientsin. Tientsin Chamber of Commerce; Chinese. Peking Chamber of Commerce: Chinese. Japanese Chamber of Commerce, Tientsin. Japanese Chamber of Commerce, Peking. Italian Chamber of Commerce, Peking. Tientsin Rotary Club; international. Peking Rotary Club; international. Chinese Bankers’ Association, Tientsin. Chinese Bankers’ Association, Peking. Foreign Exchange Bankers’ Association, Tientsin; international. Foreign Exchange Bankers’ Association, Peking; international. The chambers of commerce and Rotary clubs listed above function in about the same way as similar organizations in the United States, but their organization is usually limited by comparatively small membership. PROPERTY VALUES AND RENTS Property values in different sections of the concessions and the native city of Tientsin vary so greatly that it is not possible to make definite statements of value. In general the value of land in all sections is steadily rising. In the business sections of the con¬ cessions values range from 10,000 taels ($8,000 United States cur¬ rency) per mow (one-sixth of an acre) to 50,000 taels ($40,000 United States) per mow, depending on location. Practically all of the land in the present business section of the foreign concessions is built on, and the above values necessarily include valuations on the structures as well; many buildings are old, however, and of limited value^ The prices for land in the residential areas vary from 2,000 taels ($1,600 United States) per mow to 7,000 taels ($5,600 United States) per mow. In certain of the business blocks in the British concession land tenure is on a 99-year Crown lease from the British Government, almost two-thirds of which lease has expired. Certain terms for indefinite extensions have been proposed, but the matter is not settled. This feature of the situation enters into land values in the business section of the British concession, one of the most important sections of the port. 548 COMMERCIAL HANDBOOK OF CHINA Office rentals vary according to the location of the offices and the condition of the building. For steam-heated, electrically lighted offices in the business sections of the British and French conces¬ sions the monthly rentals range from 4 taels ($3.20 United States) to 16.50 taels ($13.20 United States) per 100 square feet of floor space. Many of the office buildings are old, but there are a few that have been recently erected, are well lighted and airy, and have built-in vaults and strong rooms and other improvements. Rentals for residential purposes vary from $100 Yuan (say, $57 United States), to $140 Yuan (say, $80 United States) a month for a four-room house. For larger residences the prices will range upward at about $25 local currency (say, $14 United States) a month for each extra room. These rentals are for residences in the more desir¬ able sections, where practically all foreigners live, and for houses with indirect heating systems and sanitary plumbing installations. Godown (warehouse) storage charges vary considerably with the articles and also with the location and condition of the warehouse. A nominal charge for the storage of native cotton or wool is 10 tael cents per native bale per month; on piece goods the charge is about 15 tael cents per month per case. Godown space can also be had by the cubic foot; a charge of 2 tael cents per month per cubic foot may be considered normal. One or more rooms, or a floor, of a godown will bring a rental on the basis of about 25 tael cents per square foot of floor space. An entire godown may be rented for less; the lowest estimate obtained is 10 tael cents per square foot. These rates will, of course, vary greatly with the demand for storage space, terms of rental, nature of the goods, and season through which the rental extends. TAXES AND OTHER ASSESSMENTS Taxes and assessments at Tientsin are collected from the owner of the property; these items naturally are taken into consideration by the owner in fixing rentals. Their character is indicated below: British concession. —Land tax, 1 per cent of the assessed value of all land except marshland or undeveloped land, which is taxed at the rate of 1 tael per mow a year; tax on rentals, 11 per cent of the assessed rental value of the property. French concession —Land tax, 1 per cent of the assessed value; tax on ren¬ tals, 8 per cent of the assessed rental value. Ex-German concession {knovm as "First special administrative area ").— Land tax, 1 per cent of the assessed value; rental tax, 5 per cent of the assessed rental value of the property. Ex-Russian concession ("Third special administrative area"). —Land tax, seven-eighths of 1 per cent of the assessed value; rental tax, 6 per cent of the assessed rental value. Italian concession. —Land tax, three-fourths of 1 per cent of the assessed value; rental tax, 5 per cent of the rental value. Undeveloped land is taxed at 20 taels per mow. LOCATION OF BUSINESS ESTABLISHMENTS Foreign business offices are located principally in the British and French concessions; warehouses are located principally in these con¬ cessions and in the ex-Russian and ex-German concessions. The British, ex-German, and French concessions are also the principal residential sections, with the Italian concession a less expensive but TIENTSIN CONSULAR DISTRICT 549 quite attractive section. The ex-Russian concession is the principal area yet to be developed for business and residence purposes. The Belgian concession is undeveloped so far, except for one industrial plant. The development in that concession is expected to be along factory lines. The Japanese concession is occupied principally by Japanese and Chinese business interests. The ex-Austrian conces¬ sion is small; with the exception of certain streets devoted to less expensive foreign-style dwellings, the property is largely under Chinese occupation. The ex-Russian, ex-Austrian, Italian, and Bel¬ gian concessions lie on one side of the Hai Ho and the Japa¬ nese, French, British, and ex-German concessions on the opposite side of the river. Berthing space for steamers has been developed on the side of the river where the British, French, and ex-German concessions lie, but the railroad yards are on the opposite side. The advantages of the ex-Russian concession for future business develop¬ ment especially are well recognized. An international bridge con¬ nects the French concession area with the ex-Russian area. The Japanese and Italian concessions lie upstream beyond the bridge, on opposite sides of the river, and are not as convenient for shipping as the areas downstream from the bridge. LIVING COSTS The following table indicates ordinary living expenses in Tientsin or Pekin: Hotel board and room, per month Rents, small house or apartment, per month Estimated necessary living expenses per month Single man__ $175-$300 175- 300 300- 500 350- 600 1 $120 120 120 2 175- 250 $350 350 i 500 750 Single woman. ... __ ____ Married couple. ..... ... Married couple and 2 children. ..... 1 Minimum. 2 For 6 to 8 rooms. Prices are in local Chinese currency (Yuan dollars). There are few boarding houses in Tientsin or Peking. Occasionally room and board are obtainable with private families at rates slightly lower than the hotel rates. In renting houses at Tientsin the tenant must furnish all lighting fixtures, and generally must make all interior repairs and provide for the upkeep of the heating, plumbing, and other installations, besides doing all interior decorating and painting during the term of the lease. Local transportation is an important item of expense. Hired motor cars cost from $3 to $5 (silver) an hour. The average busi¬ ness man’s rickshaw hire, if he does not use a motor car, will amount to approximately $250 local currency per annum. For persons with families the rent of a four-room cottage at the seashore, with no modern improvements, costs from $600 to $800 local currency for the season. 550 COMMERCIAL HANDBOOK OF CHINA I ig. 21 . Modern-type Chinese buildings, part of plant of Teaching University, an American, missionary institution 5 miles north of Peking TIENTSIN CONSULAR DISTRICT 551 EDUCATIONAL FACILITIES In recent years steps have been taken to provide American educa¬ tional facilities for American children resident in North China. The Tientsin American School and the Peking American School provide grade-school facilities, and the North China American School at Tunghsien, near Peking, provides educational facilities through the high-school grades. SIGNIFICANT COMMERCIAL AND ECONOMIC CHANGES Changes in the character of the trade of the port are apparent from a careful study of the customs statistics. Of particular interest has been the falling off in imports of foreign gray and white cotton piece goods and yarn, replaced by native gray goods and the local production of cotton yarn and cloth. The machinery trade shows a growth corresponding to the industrial development, as does the import of electrical equipment. Exports have more than doubled during the past decade, and the import trade shows an increase of 64 per cent, this increase representing not only a greater per capita consumption of foreign goods but a greater diversification in the character of imports, including goods which may be classed as other than necessities. AMOY CONSULAR DISTRICT By Consul Leroy Webber LOCATION AND AREA The Amoy consular district comprises approximately 20,000 square miles of the southern portion of Fukien Province, lying between 24° and 25° N. latitude, and between 117° and 120° E. longitude. The latitude of the city of Amoy corresponds with that of Key West, Fla. Amoy is 334 miles from Hongkong, 603 from Shanghai, and 778 from Manila. South Fukien is one of the most beautiful districts of South China. It is very mountainous, is well wooded, and has many short, shallow streams. The climate along the coast in the eastern part is subtropical, frosts being practically unknown. February to June, inclusive, are the rainy months. The average annual rainfall is 48 to 50 inches. In the hot summer months the temperature rises to 100° F., with a humidity of 88° to 90°. The winter temperature rarely falls below 50° F. The months of November to January, in¬ clusive, comprise the dry season and that is probably the best time to visit Amoy. The district is well protected from the severe typhoons of the summer and autumn by the island of Formosa. POPULATION The estimated population is 6,000,000, practically all of which live in towns or villages. The average density of population for the district is approximately 300. Resident foreigners in the district in 1924, according to officials statistics, were as follows: Americans, including 91 Philippine Chinese_ 233 British_ 243 Danish_ 10 Dutch_ 101 French_j._ 38 Japanese and Formosans_6, 298 Russians_ 2 Total_6,925 Though the majority of the population engage in agricultural pursuits, the district is not self-supporting. Food products, including rice, are heavily imported annually. The purchasing power of the people is small and in consequence the standard of living not high. CITIES The most important cities of the district are shown in the follow* ing table: 552 AMOY CONSULAR DISTRICT 553 Cities Estimated population Euro¬ peans Ameri¬ cans American firms and organizations Amoy 1 ___ 260,000 40, 000 75,000 75, 000 40,000 40,000 25, 000 2, with branches or representatives. 15, represented by foreign and Chinese firms. 2 religious missions. 1 religious mission. Do. Do. Kulangsu 1 .. 300 5 4 3 6 87 4 Changchow _ Chuanchow Shihma_ Tungan _ 5 Anhai 1 Treaty port and foreign concession. There are British and Japanese concessions, as well as a small nominal American concession on the Amoy Harbor front. Kulangsu, a small island opposite Amoy, a mile long and one-half mile wide, was made an international settlement by China in 1903. It forms the foreign consular and residential section of the port. It is administered under land regulations and by-laws agreed upon between the powers and China. The administration is vested in a municipal council, consisting of five foreigners (elected annually by the taxpayers) and one Chinese (appointed by the Chinese authori¬ ties). The acts of the council are subject to a certain amount of control by the consular body. The foreign population of the island is placed at 300 and the Chinese at 40,000. In addition there is also a Japanese and Formosan population, estimated at about 800. EDUCATION Education continues to progress. The number of public schools and pupils attending them is on an increase. Practically all of the schools now embrace the more practical branches of study in addi¬ tion to the regular study of Chinese literature and classics. Public schools are generally supported by Government funds and by tuition fees received from the scholars. Both public and private educational institutions draw their staffs largely from those educated in the foreign mission schools or colleges. Throughout south Fukien there are many American and foreign mission schools of various denomi-' nations. In Amoy there are a number of private higher-grade schools, chief among which is the Tung Wen Institute. This college was established about 26 years ago and is under the direction of an American superintendent, assisted by two other American instruc¬ tors and a staff of native teachers. The enrollment is about 300 and the institution is supported by endowment by local Chinese and also by tuition fees. Probably the biggest advance made along educational lines in Amoy has been the establishment in 1921 of Amoy University. This university, built and conducted along modern lines, has been heavily endowed by the wealthy Chinese of the district. Its faculty con¬ sists of graduates of American or European universities, and it has an enrollment of 240 students, although the university can accom¬ modate 2,000. There are 10 large buildings now, and it is expected that within five years about 50 buildings will be completed and fitted, making the Amoy University one of the most modern and finest educational institutions in China. 554 COMMERCIAL HANDBOOK OF CHINA AGRICULTURE Fully 60 per cent of the population is engaged in agriculture. Rice is the chief product grown, followed in order of importance by tobacco, sugar, opium poppy, sweet potatoes, and fruits. Two crops of rice are harvested yearly, and the annual production is estimated at approximately 50,000 tons. Most of the production is consumed locally for food and in the manufacture of samshu, a native wine which is exported in considerable quantity. The average annual rice production per acre is estimated at 9,870 pounds. Tobacco, the second crop in importance, is cured for use both in China and for export to Chinese abroad. South Fukien produces about 10 per cent of China’s total tobacco crop, of an approximate value of $1,500,000 gold. About 6,000,000 piculs of sugar are produced annually, all of which is consumed locally. There are several small sugar factories having some modern equipment. Sugar production is on a decline through inability to meet foreign competition, the high cost of labor, and transportation difficulties. Narcissus bulbs form one of the principal exports to the United States. The opium poppy is cultivated on a large scale in the Tungan district. Sweet potatoes are grown throughout the district and form one of the principal native foods. The principal fruits are pomelos (grapefruit), for which Amoy is celebrated; oranges, bananas, peaches, pears, lungngans, and persimmons. As in the rest of South China, agricultural methods and imple¬ ments are primitive. The water buffalo is the beast of burden. Hogs, chickens, and ducks are raised on a large scale. There are no sheep or cattle in the district. Most of the lands used for farming are held by the clans, every¬ thing being more or less directed by the head of the clan. Loans and mortgages are made, usually at high rates. Where land is leased or rented payments are made in the form of crops. The first crop is generally considered payment. Fertilizers are extensively used. Bean cake and sulphate of ammonia comprise the principal types. In 1923, 8,528,000 pounds of sulphate of ammonia and 1,586,169 piculs of bean cake were imported. FISHERIES Fish are plentiful the year round, and fishermen numerous and skillful. Nearly all fish characteristic of the China coast, including oysters, shrimps, and prawns, are obtained and consumed locally. MANUFACTURING The following list gives the only important manufacturing indus¬ tries in the district: AMOY CONSULAR DISTRICT 555 Name Capacity Approxi¬ mate number of employ¬ ees Approxi¬ mate capital in industry 1 Estimated output Disposition of produc¬ tion Amoy Tinning Co. 15,000 tins daily— 120 $166,000 2,500,000 tins per Local consumption and export to Amoy Chi- China Canning Co. 10,000 tins daily... 99 10,000 y£) 911,872 782,849 993,998 547, 396 Machinery and parts. 517, 533 2, 823,975 5,450, 730 1 Unavailable, 650 COMMERCIAL HANDBOOK OF CHINA Imports Metals and minerals: Iron and mild steel, new: Bar_ piculs.. Rails..do_ Iron, galvanized sheets..do.... Oils: Kerosene, American ..American gallons.. Lubricating, mineral __gallons.. Sugar, refined_piculs.. Tobacco leaf_do_ Wax, paraffin_do_ Wines, beer, spirits, etc.: Sake in bulk_piculs.. Woolen goods: Coating and suiting--.yards.. 1913 1923 1924 Quantity Value in haikwan taels Quantity Value in haikwan taels Quantity Value iu haikwan taels 77, 815 7,700 42, 258 238,894 23,100 262, 517 222, 288 215, 579 56, 405 892,148 898,429 517,371 422,639 556,325 82,815 « 1,428,084 1, 766,680 707,231 5,894, 360 665, 063 6,476, 696 2,101, 200 9,920, 652 3, 239,835 453, 832 49, 647 14, 476 124, 894 276, 049 447,454 1,666, 690 124,131 19, 868 53, 389 26, 050 886, 849 1,140, 658 796, 666 520, 096 664,105 1, 527, 030 122, 701 27, 596 57,424 26, 464 678, 237 1, 029,364 976, 766 711,245 544,188 38,190 310, 868 0) (>) 351, 254 826, 733 330, 371 725, 446 1 Unavailable. RECENT DEVELOPMENTS IN FOREIGN TRADE Since the Russo-Japanese War, Japan has held a predominant po¬ sition in the foreign trade of South Manchuria, and it is therefore natural that the greater portion of the trade of the Kwantung leased territory is in the hands of Japanese. Even before the establish¬ ment of its new political boundaries, Japan was the foremost cus¬ tomer of Manchuria. There has been a rapid growth in the foreign trade of the Kwan¬ tung leased territory and South Manchuria through the port of Dairen, owing to the commercial and industrial development of the territories served, and both imports to and exports from this terri¬ tory have registered remarkable gains. Imports from and exports to the United States during 1923 amounted to $12,173,236 and $3,390,109, respectively. MONEY, BANKING, AND CREDIT BANKS Banking facilities as affecting transactions between this district and the United States are believed to be ample, and are generally satisfactory to American exporters and importers. The local banks engaging in foreign-exchange business are branches, two of Japanese banks and one of a French bank. There are, however, branches or agencies of all of these banks maintained in America. In addition, an agency of the International Banking Corporation is in operation in Dairen. The only complaint heard concerning banking facilities is that there is little accommodation afforded to the Chinese. The explanation ventured for this is that the Chinese of this territory are not yet familiar with the processes involved in foreign trade. The following table sets forth pertinent data regarding the bank¬ ing establishments maintaining offices in this district; DAIREN CONSULAR DISTRICT 651 Instutition Nation¬ ality Head office Capital Yokohama Specie Bank_ Japanese.. ...do.. _ Yokohama Tokyo_ Hongkong. New York. Paris_ Paid up (fully), 100,000,000 yen. Subscribed, 80,000,000 yen; paid up, 50,000,000 yen. Authorized, £50,000,000; paid up, £20,000,000. Capital and surplus, $10,000,000. Paid up (fully), 55,000,000 rubles. Bank of Chosen - . . __ Hongkong & Shanghai Bank¬ ing Corporation. International Banking Cor¬ poration. Russo-Asiatic Bank _ British_ American. French_ LOCAL CURRENCY AND EXCHANGE The financing of imports to this port from America presents about the same problem as it does to ship to Japan proper. The local currency is the gold yen (par value $0.4985; average value for 1923, $0.4866), and practically all of the importing is in the hands of branches of firms having head offices in Japan. Consequently the cost of imported articles is met by means of exchange transac¬ tions in gold yen, and local distribution is accomplished in the same way. There are exchange problems resulting from the varying relative values of Chinese and Japanese currencies, both of which are employed in the domestic market, but the solution of these can be made only by the local importer or distributer. The export trade is most seriously affected by the changing values of Japanese and Chinese exchange. The reason for this is that the raw products which, in some form, make up the principal exports of this territory must be purchased from Chinese dealers in their own currencies. Fluctuations in the value of the Japanese yen, such as have taken place in recent months, make it very difficult for Japanese exporting firms who have their capital in yen to keep prices low enough to facilitate trading. The difficulty created by this situation is especially noticeable in the market for beans and bean products. QUOTATIONS AND CREDITS Quotations are made both f. o. b. and c. i. f., but local importers prefer the latter method. Local dealers request credit terms for varying periods up to 90 days, but the wisdom of granting credit— except in the case of concerns known to be reliable—is questioned. In most cases this credit should be extended by local banks, which are in a much better position than anyone else to know the financial position of local firms. Credit may be and is extended by means of discounting trade acceptances. MERCHANDISING METHODS Merchandising methods are much the same as in Japan. Direct representation should be undertaken only as a part of an elaborate marketing plan which would have for its purpose the gradual de¬ velopment of a sales organization covering the whole of Manchuria. Casually the spring and fall seasons are periods of heaviest buying. Dairen, on account of its excellent communications by land and sea, is the logical assembling and distributing point for both the Kwan- tung leased territory and other Manchuria. Buyers 5 organizations 652 COMMERCIAL. HANDBOOK OF CHINA are not of any importance, excepting the Consumers’ Union of the South Manchuria Kailway, which supplies household requisites to a considerable number of railway employees. It has been demonstrated that American goods can be sold in Manchuria in competition with foreign goods. The import trade from the United States might, however, be improved if American exporters could give it a more intensive study with reference to ad¬ vertising and representation. The most effective representation has been found to consist of connections with local establishments. The field is not sufficiently large to encourage direct representation, although a traveling representative, when in the Far East, might be routed through this territory for demonstration purposes. As Dairen is a free port, its trade enjoys comparative freedom from taxation. Taxes affecting import trade are usually indirect and are assessed upon volume of business, depending upon the kind, rather than upon particular articles. ADVERTISING Advertising is becoming a more important factor in the marketing of goods in this territory. Newspapers comprise the principal me¬ dium, but billboards, printed circulars, and street-car displays are also employed. There are no taxes on poster advertising. TRADE ORGANIZATIONS The principal trade-promotion organization in this district is the Dairen Chamber of Commerce, but a knowledge of the Japanese language is necessary in order to take advantage of the facilities it offers. Therefore it is the practice of the consulate in Dairen to se¬ cure from the chamber of commerce such information as might be of interest to American business firms and place it at their disposal either through letters and reports or directly, as occasion arises. TRAVEL FACILITIES In Dairen, the only place where commercial travelers to this terri¬ tory would find it necessary to stop, the only available hotel is the one under the management of the South Manchuria Kailway. It offers comfortable, modern accommodations on both the European and the American plan. Commercial travelers may obtain information regarding hotel accommodations, rail and steamship travel, interpreters and guides, from the American consulate or from the Yamato Hotel in Dairen; or from the Japan Tourist Bureau, with offices in Dairen and other important centers in the Orient. The most effective method of making contacts with Japanese or Chinese firms is to secure letters of introduction to well-established local firms, should that be possible. In the absence of such letters, the American consulate is often able to advise commercial travelers and to render assistance relative to the making of contacts with firms of good character. DAIREN CONSULAR DISTRICT 653 PROPERTY VALUES AND RENTS Property values and rental charges are, on an average, compara¬ tively reasonable in this territory, but are, of course, highest in Dairen, the chief city. Recent periods of business depression have tended to lower land values as well as rents. The somewhat over¬ built character of the city has also operated to keep rent rates moderately low, although rates for convenient locations remain somewhat high. Land rights are usually obtained by lease rather than by purchase, owing to the fact that the major portion of the usable land is govern¬ ment-owned and not for sale. TAXES AND OTHER ASSESSMENTS There are various taxes collected in this territory, but foreigners are as a rule called upon to pay only three kinds. These are (1) a business tax, (2) an income tax on juridicial persons, and (3) a family tax. General business taxes may be considered as based upon the volume of sales in wholesale and retail business, with A and B classifications for both types of business, depending upon the commodity dealt in. Thus, Class A wholesale business is as¬ sessed upon volume of sales at the rate of 12 yen for 10,000 yen; Class B, IT yen for 10,000 yen. A retail business is assessed 33 yen per 10,000 yen and 50 yen per 10,000 yen for classes within A and B, respectively. In addition, 2 yen is collected for each employee engaged in the particular business in question. Income taxes are levied on juridical persons whose head offices are in the Kwantung leased territory and with respect to income on property or business in the Kwantung leased territory, except those whose offices are in Japan proper or another of its depend¬ encies. Such taxes are collected on profits of over 10 per cent of capital employed at the rate of 4 per cent; over 20 per cent at 10 per cent; and over 30 per cent at 20 per cent. Reserves are taxable also at varying rates. Individuals residing within Dairen are subject to what is called a municipal family or house tax, and it may be said that the system in practice here is unlike any other system in force in Japan proper. The amount to be levied is first decided upon with reference to local requirements. Then juridical persons and persons forming a house¬ hold are divided into 30 classes, according to salaries received above 600 yen annually. The amount of tax to be collected from any in¬ dividual is then determined by dividing the total amount to be levied by the sum of the products of the number of rate payers in each class and the rate unit for that class, and multiplying the result by a rate specified for the individual in question. It will be noted at once that an arbitrary unit rate, based upon their salary, is fixed for each class of individuals. Thus, an individual does not compute his own tax according to a certain percentage of his net income, but has it computed for him by means of a system designed to assess the required revenue from a given number of persons hav¬ ing a certain income, at the same time distributing the taxes among 30 classes of individuals grouped according to salary. 654 COMMERCIAL HANDBOOK OF CHINA LIVING CONDITIONS There are no boarding establishments in Dairen that could be recommended to commercial travelers. Since the Yamato Hotel fur¬ nishes the only available boarding or lodging accommodations, its rates represent the approximate cost of living in Dairen for com¬ mercial travelers. The entrance fee to the local club is 50 yen and dues are 7 yen per month. Motor hire may be reckoned on a basis of 4.50 yen per hour or 1.50 yen per trip. Aside from motion pictures and oc¬ casional concerts by local or visiting talent, there are no noteworthy entertainment facilities, and there are no educational facilities for foreign children. Provision has been made for baseball, tennis, and golf. Membership in the local golf club requires an initial expense of 125 yen and 5 yen per month thereafter. CHANGES IN TRADE CONDITIONS IN RECENT YEARS The growth of the bean industry, with the attending rise of export trade in bean products, and the development of modern port facili¬ ties and land communication facilities constitute the main reasons for Dairen’s commanding position as a trade center. The World War, changes in the character of shipping, and the progress of manufacturing in Japan have had important influences on the trade. Between 1908 and 1918 Dairen advanced from fifth to second place among the ports of China, according to customs returns. Gradual progress was registered between 1913 and 1918. There followed three years of marked prosperity and then a depression set in which is still felt in diminishing degree. However, the position of the port has been maintained. Exports of beans and bean products have become increasingly important, often approximating 50 per cent of the trade. The character of imports has changed to meet the de¬ mands of the industrial and social progress of Manchuria. The manufactures of Japan strongly predominate. The influence of the principal nations in the import trade of Dairen has been a big factor in maintaining a diversity in both imports and exports. A remarkable index to the influence of various nations in Dairen’s trade is found in the character of the shipping. Before the World War Japanese shipping was paramount, followed by that of Great Britain and Germany; after the war Germany’s position was assumed by America, although, with regular freight and passenger services restored, Germany is now rapidly recovering. The promise for the future of Dairen lies in the fact that it is not only a remarkably well-placed terminal point for all oversea trade destined for North China, but that it is the logical distributing center for all Manchuria—a territory sufficiently vast to give oppor¬ tunity for far greater development of Dairen as its leading port and entrepot. FOOCHOW CONSULAR DISTRICT By Consul Ernest B. Price LOCATION AND AREA The Foochow consular district comprises the northern 37 counties (hsiens) of the Province of Fukien, which is situated on the south¬ ern coast of China about midway between Shanghai and Hongkong. Lying between latitudes 25° and 28° N., the district corresponds in latitude with Florida from the city of Tampa southward. The area of Fukien Province is 46,332 square miles, and that of the Foochow district may be roughly approximated at 30,000 square miles, or about that of the State of Maine. The climate is semitropical, the customs at Foochow having re¬ corded no frost during the past 10 years. The rainfall is heavy and well distributed, generally occurring from January through September. The three remaining months are relatively dry. The average rainfall at Foochow from 1918 to 1923, inclusive, was 60.25 inches. The average minimum temperature was 34.5° F.; average maximum temperature 97°. POPULATION The Chinese postal estimates of 1922 gave the total population of Fukien Province at 13,157,791, or 284 per square mile. The popu¬ lation of Foochow district may be estimated at 10,000,000, or about 330 per square mile, the densest population of Fukien being in the Min River Valley and in the coast regions between the cities of Foochow and Amoy. CITIES The most important cities of the district are shown in the fol¬ lowing table: Cities Esti¬ mated popula¬ tion Euro¬ peans and Ameri¬ cans Ameri¬ cans Firms Foreign Ameri¬ can Foochow i..... . 700,000 400 250 25 10 Santuao 1 . 40,000 10 2 1 Hinghwa.. 60,000 50 36 Kienning.. 45,000 5 2 Yenping. 35 ; 000 39 39 1 Treaty ports where foreigners may reside for the purposes of trade. Foochow, the provincial capital, is the only important city, from the point of view of foreign trade. With the exception of a small 655 656 COMMERCIAL HANDBOOK OF CHINA percentage of goods that cross the northwest boundary from and to the Yangtze Valley by way of Kiangsi Province, and a still smaller percentage of direct trade between the city of Hinghwa and Shang¬ hai, all the export and import trade of the district passes through Foochow. Santuao is a collection center for teas, which, however, are shipped to Foochow for export. Yenping, situated at the junc¬ tion of the most important tributaries of the Min, is next after Foochow in importance as an assembling and distributing point for trade. AGRICULTURE Ninety per cent of the population of the Foochow district make their livelihood directly or indirectly from agriculture. The most important products are rice, tea, and fruits. RICE Although only about 10 per cent of the surface area of the district is arable land, and only a limited proportion of that is suitable for rice culture, the growing of rice engages the attention and provides the livelihood of more people than all other industries combined. In the coastal region two crops are grown, the first planted in March and harvested in July, the second, planted in April between the rows of the first crop and harvested in November. In the inland districts but one crop is grown. A normal average yield is 44 bushels to the acre. The total estimated annual production in a good year is 66,000,000 bushels, but this is insufficient to meet the needs of the people, and there is an average importation of about 100,000 bushels annually. TEA Once second in importance to rice, tea has gone to third place among agricultural products and among exports, owing to the com¬ petition of cheaper India and Java teas. There are two general varieties, black and green. The black is exported abroad and the green is sent to other parts of China, There are three crops, the first and best being harvested in May and coming to market about June 1. The total annual estimated production of tea of all grades is 28,000,000 pounds, of which in 1923 approximately 15,500,000 pounds were exported abroad and to other parts of China. Foochow teas are still regarded by tea men as the finest grown, but they have become comparatively too expensive. FRUITS Fruits constitute one of the leading classes of agricultural prod¬ ucts and stand fourth in importance as an item of export. Foremost of the fruits are oranges, of which the annual average production is estimated at 27,000,000 pounds. Approximately two-thirds of the crop is exported to other parts of China. Next are “ Chinese olives,” a fruit akin in appearance, though not in species, to the foreign olive. The estimated annual production is about 12,000,000 pounds, 50 to 65 per cent of which is exported to other parts of China either in fresh, dried, or pickled form. Other interesting fruits are lung- ngans—a native fruit harvested in November, with an estimated an- FOOCHOW CONSULAR DISTRICT 657 nual production of 25,000,000 pounds—of which possibly 10 per cent is exported in dried form; litchis, harvested in July, with an annual production estimated at 20,000,000 pounds; and “plums,” with an annual production of about 10,000,000 pounds. OTHER PRODUCTS Other products are grown in variety. The leading ones of this lesser group, with the estimated annual production of each, are shown in the table below: Products Average produc¬ tion per acre Estimated annual production Disposition Bamboo shoots_ .pounds.. 20 ,000,000 8 , 000, 000 7, 568, 000 1, 500, 000 2, 500, 000 25, 000, 000 1 , 000, 000 2 , 000, 000 1 ,100, 000 200,000 Local consumption and export. Local consumption. Do. Do. Do. Local consumption and export. Do. Sweet potatoes_ Wheat..... . Sugar cane_ Peanuts.... Tea oil._ _bushels.. .. do ... ..pounds.. . . ..bushels.. .. ...pounds . 440 30 1,300 30 Wood oil... ....do.. . Peanut oil... .do_ Do. Mushrooms.. ..do_ Do. Canmhor do Export. TIMBER CUTTING Timber may be divided into two classes—fir poles and pine lumber. The fir forms virtually a crop, as the cuttings are replaced by plant¬ ings. The poles are shipped to all parts of China for use as beams and rafters for houses. Pine is brought down the river in log rafts and is sawed into lumber in the sawmills in Foochow. It is a direct competitor with Oregon pine. The Foochow product is inferior in quality but cheaper. Both the fir and the pine being almost entirely exported, the export figures ma} r be taken as a fair basis for estimating total production. The total export of poles in 1923 numbered about 13,000,000, sawed pine lumber amounted to 40,000,000 square feet, besides 1,500,000 boxes made locally from pine lumber. MINERALS AND MINING The extent of the mineral resources of the district is rather prob¬ lematical, little mining or even prospecting having been done. In 1917, the latest year for which reliable figures are available, the fol¬ lowing minerals, in the order of their importance, were being worked: Coal (anthracite of high grade, with an annual production of approximately 35,000 tons), molybdenum (51 per cent molyb¬ denum, 49 per cent sulphur), talc (annual production, 250,000 pounds), porcelain clay, limestone, iron, lead, silver, gold, copper, and graphite. Of the minerals named only gold, molybdenum, limestone, kaolin, and talc were being produced in 1922, and these only in small quan¬ tities. The chief obstacles to the development of the mining industry are inadequate mining laws and lack of transportation facilities. 100020°—26-43 658 COMMERCIAL HANDBOOK OF CHINA MINES Mines in operation or being prospected under regular charter in 1923 were: Company Location of mine Nature of ore Output in 1923 Capital (nominal equiva¬ lent in United States dollars) Nationality Head office Leesan Coal Mining Co... Chien Ming Coal Mining Co. Hua Pao Copper Mining Co. Chienou district_ _do.. Nanping district.. Anthracite.. Gold_ Copper. 03 o 05 $120,000 50,000 50,000 Chinese... ...do.. ...do.. Foochow. Do. Do. 1 No definite figures available, but production was small. In addition there were several regularly registered Chinese com¬ panies no longer active, and a great number of small unregistered mines, particularly coal and iron, the latter turning out an indefinite but fairly large output consumed locally. The best coal in the dis¬ trict, said to contain but 3 per cent ash, is from extensive anthracite deposits near Shaowu. MANUFACTURING AND INDUSTRIAL DEVELOPMENT * Next to agriculture in importance to the economic life of the dis¬ trict is a small group of native industries including paper making, sawmilling, and the manufacture of paper umbrellas, tin foil, and matches. Next comes a group of lesser industries, of what might be termed the “ modern type,” including a leather tannery and factory, a factory for making rubber soles for shoes, and a few knitting and weaving mills. Summarized, the industries mentioned stand about as follows: Industries Capacity Approxi¬ mate number of employees Approxi¬ mate capital invested (Mex.) Estimated output, 1923 Disposi¬ tion of output Paper making _1_ 120,000 tons _ 60,000 $1,800,000 59,000 tons_... 85 per cent exported. Sawmilling.. 8,700,000 logs. 800 870, 000 36,000 square feet All ex- of lumber; 1,500,- ported. 000 boxes. Paper umbrella manu- 3,000,000 pieces. ... .. 2,000 150, 000 2 ,000,000 pieces_ 75 per cent facture. exported. Tin-foil manufacture. . 450 tons. 1,200 240, 000 210 tons_ _ 70 per cent exported. Matches. . 80,000 gross 30 120 , 000 40,000 gross._ Local. Weaving mills. 1 ,000,000 pieces .. 2,000 200,000 500,000 pieces_ Consumed locally. Knitting mills_ 80,000 dozen pairs 250 80, 000 50,000 dozen pairs Local. of socks. of socks. The only industry whose product is exported outside of China is the paper-umbrella industry. About 1,000,000 umbrellas are ex¬ ported abroad annually. The export in the other industries is to other parts of China only. FOOCHOW CONSULAR DISTRICT 659 TRANSPORTATION AND COMMUNICATION WATERWAYS Waterways are the most important means of transportation in the district, there being no railways, and, outside of the city of Foochow, no roads capable of accommodating vehicular traffic or even pack animals. The “lower districts,” from Foochow east and south along the coast of Amoy, are reached by small steamers and junks. The “upper districts,” from Foochow north and east through the upper reaches of the Min River and its tributaries, are reached by launches of 6-foot maximum draft as far as Shuikow, and from there by small river boats only. The “northern districts,” from Foochow north along the coast to Chekiang, are traversable by small coastwise steamers and junks. Fig. 23.—The Bridge of Ten Thousand Ages at Foochow, which it is proposed to replace with a modern steel and concrete structure The Min River from Foochow to the sea is navigable for vessels of 24-foot maximum draft as far as Pagoda Anchorage, 20 miles from the sea and 10 miles from Foochow. Steamers of 15-foot draft and under come all the way to Foochow. Back of the three areas mentioned above is a hinterland not accessible even to boats, com¬ prising about 40 per cent of the area of the district, where all trans¬ portation is accomplished by human carriers. Means of transportation Average load per unit Average mileage per day Average cost per ton-mile (United States) Maxi¬ mum haul (miles) Per cent of traffic carried Steamers, junks, and launches .__ .tons.. 250 70 $0.04 140 20 River boats, sail or hand propelled. ... .. .. do_ 20 25 .05 200 40 Human carriers... .. pounds.. 100 20 .80 75 40 660 COMMERCIAL HANDBOOK OF CHINA The above figures are a rough estimate only and are to be dis¬ counted by additional consideration of the factor of serious risk involved, which has not been included because it is indeterminable. This is particularly true of river transportation. It is estimated that 1 river boat in 10 is either partially or totally wrecked in mak¬ ing the 200-mile trip from Shaowu to Foochow. Cargo thus carried can not be covered bv insurance. \j ROADS In the hinterland, mountainous and almost unknown to foreigners, the only roads are rough, narrow, stone paths. Fully 40 per cent of the goods transported in that district is carried over these paths on the backs of men—the slowest, most expensive transportation in the world. TELEGRAPHS, CABLES, AND WIRELESS SERVICE Foochow is connected with Hongkong, Shanghai, and world points by the eastern extension, Australasia & China Telegraph Co. (British), which has a relay cable station at the mouth of the Min Kiver, connected with Foochow by a land line. The Chinese Govern¬ ment Telegraph Association lines cover the district, and the same in¬ stitution maintains a wireless station in Foochow. Wireless rates are $0.25 (Mex.) per word to points within the radius, which is small. Telegraph and cable rates are the same as in other districts of China for all interior points and for w T orld ports. TELEPHONES The Fukien Telephone Co. (Ltd.), a Chinese company, capital¬ ized at $45,000 (Mex.), covers the city of Foochow and surrounding towns. It has three exchanges with 752 subscribers; switchboards are manual, metallic circuit, multiple type, 12 in number. Kates are $7 (Mex.) per month for original phones and half that amount for extension phones. The company plans to change its equipment to the better system. POSTAL FACILITIES Adequate postal facilities, provided by the Chinese Postal Admin¬ istration, cover the district. Foochow has about two mails a week from Shanghai and three' from Hongkong. Important points throughout the district have frequent mail service. SHIPPING AND WAREHOUSING FACILITIES Next after the lack of railroads and other means of rapid trans¬ portation, the great drawback to the progress of the district is the inadequacy of Foochow’s harbor facilities. Only vessels of 15-foot draft or under are able to come closer to the city than Pagoda Anchorage, 10 miles below. While the anchorage has an excellent harbor capable of accommodating 30 steamers at a time, it, too, is handicapped by a bar at the mouth of the Min Kiver, where ocean steamers must wait from two to five hours for the tide, both in enter¬ ing and in clearing port. FOOCHOW CONSULAR DISTRICT 661 CARGO-HANDLING FACILITIES There are no dock accommodations at Pagoda. Cargo is trans¬ ferred by ship’s tackle into sail and hand-propelled boats, in which it is sealed by the customs until arrival at Foochow, two or more days later. Facilities for handling cargo at Foochow are inadequate, there being no bonded warehouses, cranes, trucks, or other facilities for speedy handling. Cargo boats from Pagoda Anchorage must wait their turn for unsealing and examination, after which cargo is trans¬ ferred to docks and from docks to warehouses by human carriers. Altogether it may take a week from the fall of the ship’s anchor at Pagoda to the arrival of the cargo in the consignee’s warehouse. Climatic conditions do not permit storage in the open. Business houses usually maintain their own warehouses, and space is difficult to obtain. Goods should be packed with unusual care for protec¬ tion against both pilferage and climate. Boxes and cases should be strapped. Those containing goods liable to deterioration from dampness should be lined with zinc or with lead foil. PUBLIC WORKS AND UTILITIES ELECTRIC-LIGHT PLANTS The Foochow Electric Light Co. (Ltd.), a Chinese company, operates with a capital of $1,000,000 (Mex.). It is equipped with three generators of American manufacture having a total capacity of 2,500 kilowatts, operated by a 2,500-horsepower boiler of British manufacture, and a 3,300-horsepower turbine of American manufac¬ ture. The plant supplies alternating current, 220 volts, 60 cycles, on 3-phase power terminals, and 110 volts on light terminals. Rates are $1 to $2.50 flat rate per point, depending on the candlepower; $0.28 per kilowatt-hour by meter for lighting; and $0.15 per kilo¬ watt-hour for power. (Rates as here given are in terms of Mexi¬ can dollars). It has a 1,200-kilowatt lighting load and a 300-kilo- watt power load. The company owns and operates several small industrial plants and has the franchise for an extensive water¬ power plant, now under investigation. In addition to the above company, there are about nine small plants in the larger cities of the district. CONSERVANCY WORK In 1919 a Min River conservancy board was created by the Chi¬ nese Government—consisting of representatives of both Chinese and foreign business interests, and of which the foreign consular body are ex officio members—to carry out a project for the deepen¬ ing of the channel of the Min River from Pagoda Anchorage to Foochow to a minimum low-water depth of 10 to 12 feet, to enable steamers up to 15-foot draft to come up to Foochow. The basis of the plan eventually adopted was the erection of a system of train¬ ing walls to enable the river to scour its own channel. The cost was to be met by a special surtax on shipping and goods, and the prospective revenue was given as a security for a loan from the 662 COMMERCIAL. HANDBOOK OF CHINA Chinese Maritime Customs to provide operating capital. By the end of 1923 very fair progress had been made, but it was decided, in order to speed up the work, to purchase a suction dredger. It is anticipated that the project will be completed in the near future, but work will necessarily have to continue for some years, however, to combat the natural silting of the river and keep the channel clear. The engineer in chief is an American. EXPORT AND IMPORT TRADE There is a general impression that the foreign trade of Foochow suffered seriously as a result of the decline of the tea trade, but comparative figures of the value of the trade of the port show that in 1903—a year in which tea to the amount of over 40,000,000 pounds (valued roughly at 6,000,000 haikwan taels) was shipped out—the total value of the trade of Foochow was equal to about $10,700,000 United States currency; in 1913, when tea exports had declined to 20,000,000 pounds, valued at approximately 4,000,000 haikwan taels, the total value of the trade was equal to $16,900,000 United States; and in 1923, -when tea exports totaled less than 16,000,000 pounds, with a value of 2,880,000 haikwan taels, the value of the total trade was equal to approximately $31,500,000 United States. It is worth noting that the export trade figures alone for the three index years increased five times, while the import figures almost doubled. In short, the trade had merely changed from a situation in which a single export commodity practically dominated the trade, to one in which there was a healthy distribution among a number of different commodities, both export and import. The port of Foochow stands fifteenth among the 47 customs ports of China in the value of its total trade, and taken with its tributary port of Santuao it stands fourteenth. In the following table the trade of Foochow is shown for 1913, 1923, and 1924, in terms of United States gold: Items 1913 1923 1924 Exports _ $7,066, 443 13, 480, 775 $19, 268, 649 15,928,474 $16, 088, 629 16, 239, 844 Gross imports_ Gross value of trade. _ 20, 547, 218 3, 629, 743 35,197,123 3, 712,807 32, 328,473 3, 253,905 Reexports ____ Net value of trade__ 16, 917, 475 31,484,316 29,074, 568 Note. —In 1913 1 haikwan tael was equal to United States gold $0,729; in 1923, to $0.8231; in 1924, to $0.8097. EXPORTS The principal exports of the district in order of their importance are timber (in the form of fir poles, sawed pine timber, and prepared boxes), tea, paper, mushrooms, bamboo shoots, paper umbrellas, tin foil, camphor, oranges, olives, and dried litchis. Among Chinese ports, Foochow ranks first in the export of poles, bamboo shoots, olives, and mushrooms; second in the export of tin foil, oranges, paper, pine lumber, and paper umbrellas; third in the export of cam¬ phor and tea (both black and green); and fourth in the export of dried litchis. FOOCHOW CONSULAR DISTRICT 663 Foochow district is primarily a producer of raw products which find their principal market in other districts of China. The port of Foochow, however, ranks tenth among the 47 customs ports of China in the value of its original exports, and eleventh in the value of its exports to foreign countries. It is noteworthy that whereas in 1903 the value of the tea exported from the port of Foochow was approximately 80 per cent of the value of the first 10 products, it represented only about 50 per cent of that value in 1913, and 20 per cent in 1923. On the other hand, exports of the other nine principal products increased in value in every case. Timber reached first place, tea held second place, and paper was a close third. The total value of these first 10 products showed in 1913 a slight increase over 1903, but in 1923 they nearly tripled the value in either other index year. The principal exports from Foochow in 1913, 1923, and 1924 are shown below: Commodities 1913 1923 1924 Quantity Value in haikwan taels - Quantity Value in haikwan taels Quantity Value in haikwan taels Bamboo shoots -. _pounds.. 12, 527,866 599,048 8, 882, 533 544,187 17,495,066 1,337,750 Camphor ... __ .. ...do .. 27, 600 14, 700 149, 200 148,883 70, 733 49, 066 Litchis, dried_ _do_ 58, 533 12,404 345, 600 70, 502 153, 600 35, 066 Mushrooms_ .. . ..do.. . 387, 066 179, 936 496, 933 548,987 605, 600 552, 535 Olives_ . _do_ 5, 649, 733 121, 566 3, 932, 800 108, 397 7, 013, 200 204, 396 Oranges, fresh... _do_ 13, 750, 400 210, 005 14, 964, 133 161, 296 17, 049, 466 183, 216 Paper_ _ .do_ 13,862, 400 1, 360,307 18, 565, 733 2, 057, 071 29, 314,133 3, 340, 565 Tea: Black . _do_ 16,828,133 3, 637, 295 6, 046, 933 1, 569, 503 5,906, 666 1, 947, 958 Green_ _do.. 647, 600 91,650 9, 474, 666 1, 326, 392 8, 057, 466 1, 273, 620 Brick... _do_ 2,154, 533 195, 856 8, 000 778 Dust... _ _do_ ' 938, 666 53, 713 110,000 4, 826 65, 600 1,840 Timber: Boxes ... ... _ pieces.. 894, 758 ) ( 1,531,735 0) 1, 269, 617 198,910 Planks_ .square feet.. 6,179, 297 } 2, 023, 935 «6, 552, 369 2,127, 863 40, 725,169 2, 327, 032 Poles. _pieces.. 834, 758 f [ 3,616, 571 12, 622,127 9, 551, 258 3,614, 910 Umbrellas, paper ..do_ 759, 256 68,000 1, 355,379 311, 737 1,382, 005 497, 521 1 Not obtainable. Note—F or the haikwan tael, equivalent values in United States currency are as follows: In 1913, $0,729; 1923, $0,823; 1924, $0.8097. IMPORTS The principal imports into Foochow in the order of their im¬ portance are flour, kerosene, cotton piece goods and yarn, sugar, coal, leather, slab tin, matches, and beans. The United States supplied nearly 50 per cent of the flour direct and over 7 per cent by trans¬ shipment through Hongkong. Of the kerosene the United States supplied over 63 per cent direct, and a portion of the 15 per cent transshipped through Hongkong. The United States supplied over 17 per cent of the dried fish by direct shipment and probably most of the 35 per cent transshipped through Hongkong; also about 4 per cent of the machinery by direct shipment, and at least a con¬ siderable portion of the 60 per cent imported through Hongkong and the 33 per cent imported through Shanghai. It should be noted that the Chinese Maritime Customs, from which source statistics of trade are obtained, credit Hongkong with all goods transshipped at that port, hence it is impossible always to determine the country of origin of imported goods. The leading articles imported in 1913, 1923, and 1924 follow, 664 COMMERCIAL HANDBOOK OF CHINA Commodities FOREIGN GOODS Cotton piece goods: Cambrics, lawns, Shirtings__do... T cloths_do.. Velvets and velveteer __ yards. Cotton yarn_pounds. Cigarettes_thousands. Coal__ tons. Flour_barrels. Leather......pounds. Matches__ gross. Metals: Iron and mild steel, .tons. Kerosene: American Sumatra. Sugar.. -tons.. CHINESE GOODS Coal__tons. Cotton piece goods: Drills..pieces. Sheetings....pieces. Matches__gross. 1913 1923 1924 Value in Value in Value in Quantity haikwan Quantity haikwan Quantity haikwan taels taels taels d 26,786 34,163 8,610 50,789 16,066 89,060 17,751 86,055 2,448 24,069 2,780 28, 512 21,245 99,047 22,058 294,133 17,885 192,480 8,897 28,336 8,952 58, 738 7,364 51,487 _ 9,104 37, 805 54, 210 341, 584 40, 997 300,500 74, 252 167, 463 21,859 103, 991 34,075 179,051 54, 024 14,110 28,058 9, 950 11,391 5, 296 4, 683,866 906, 517 76,800 30, 216 21,600 7, 381 5,160 15, 328 7,436 32, 905 9,536 43, 867 3,779 21,162 11,512 111,750 23,002 208,071 79,482 490, 716 187,120 1, 335, 733 175,270 1, 240, 520 117,333 35,193 404,000 137, 422 313, 866 109,818 357,858 97,337 25,183 7,997 4,168 2, 262 1,550 60, 446 1,370 96,665 1,301 169, 904 _ 661 70, 617 638 88,320 587 90, 528 -- 261 197, 758 257 216, 949 160 147, 333 f 3,138,017 I f 2, 204, 480 564,170 3,239,827 511,348 < 577,608 } 1,134,139 \ 307,079 64, 645 1. 4,412 J l 479,281 82,159 2,316 218,923 3, 997 799,157 7,380 1,051, 400 262,682 0 ) 403, 442 0 ) 446,909 665, 620 0) (0 30, 236 0 ) 12,038 105, 212 46,156 0) 45, 580 285, 450 385, 200 1,398; 133 0 ) 1,559; 333 233; 257 24,320 0 ) 24,836 144, 864 1,348, 933 (') 4, 445; 200 0 ) 133, 684 C 1 ) 79,925 0 446,909 777,126 209,187 0) 254, 667 95,378 i Not available. The following table of estimated percentages illustrates the distribution of the import trade of the Foochow district, as to points of origin: Articles From other Chinese ports From Japan From Great Britain From Hong¬ kong From United States Per cent Per cent Per cent Per cent Per cent Beans. _____ 99. 92 0. 01 0.07 Cigarettes__ 97. 40 0.15 2.45 Coal . _____ 62. 15 37.81 .04 Cotton piece goods: Shirtings._______ 60. 37 39. 63 Dril’s 93.66 6. 34 Jeans_ 98. 75 1. 25 T cloths_ .. .. __ 2. 32 97.68 Cambrics, lawns, and muslins__ 54.63 45. 37 Dyed cotton, italians_ 12. 38 87. 62 Velvets and velveteens__ 82. 95 17. 05 Sheetings . _ 100. 00 Nankeens _ 100. 00 Cotton yarn _ _ 98. 95 1. 05 Flour . .. ___ 43. 33 7. 73 48.94 Iron and mild steel_ 68. 06 .01 31. 73 Kerosene . _ 10. 77 10.23 15.24 63. 76 Lead, pig..__ 54. 52 45. 48 Leather _ 15. 89 .02 84. 09 Matches . __ 99. 24 . 55 .21 Sugar _ 6. 21 . 20 93. 59 Tin, slabs or pig _ .02 99. 98 Fish, dried and salt... 27. 79 19.73 35.38 17.10 Machinery___ 33.64 3. 47 60.04 2. 79 FOOCHOW CONSULAR DISTRICT 665 MONEY, BANKING, AND CREDIT BANKS The following banks handle foreign exchange transactions in the Foochow district : Organizations Nationality Head office Capital (paid up) American-Oriental Bank of Fukien. Bank of China ._ . _ _ American. __ Chinese_ Foochow_ _ Peking ... _ $250,000 Mex. $60,000,000 Mex. (authorized). 60,000,000 yen. $20,000,000 Mex. Bank of Taiwan_ Hongkong & Shanghai Banking Cor¬ poration. Japanese_ British .. . Taipeh (Formosa). Hongkong. .. . LOCAL CURRENCY There are in use in the Foochow district no less than 9 distinct currencies, 5 actual and 4 arbitrary. ACTUAL CURRENCIES Subsidiary coins consist of copper cash, copper cents, 10-cent and 20-cent pieces, the actual value of which varies with the value of the metal content. The “ clean ” Mexican or silver dollar, includes the Chinese Yuan and “ dragon ” dollar, the Japanese trade yen, the Hongkong silver dollar, etc. These dollars when not struck with a die, or “ chopped,” as it is called, are called “ clean ” Mexican dollars. The “ chopped ” Mexican or silver dollar , includes all silver dollars of recognized standard which have been “ chopped ” or struck with a metal die to denote genuineness. These are dealt in by weight only. The “big dollar ” or “clean dollar ” paper note is issued as the equivalent of a “ clean dollar.” The “ tai fu ” paper-dollar note is issued as the equivalent of 1,000 copper cash. ARBITRARY CURRENCIES The “ cheque dollar ” is an arbitrary standard adopted by foreign-exchange banks to represent the nominal value of the “ chopped ” Mexican dollar for banking and exchange purposes. As the actual coins vary considerably in weight and fineness, the banks have adopted the arbitrary fineness of 0.7416 of a Kuping, or pure silver, tael or ounce, for their banking dollar. The Shanghai tael is an arbitrary standard of value considered as 545.25 grains of silver 0.980 fine, used by the foreign exchange banks of Shanghai in quoting foreign exchange, and hence the basis of most interport banking. The Foochow tael. —Theoretically this unit is equivalent to 523.5 grains of silver. It is used in some local business transactions. The haikwan or customs tael represents a standard of 583.3 grains of silver, pure, used by the Chinese Maritime Customs in collecting customs charges. It may be said as a rough generalization that the livelihood of the people is measured in terms of copper cash, and hence of copper- cash paper notes, that is the “ tai fu ” currency, while all foreign business and interport trade is measured in terms of pure-silver content, and hence of “ cheque ” dollars and Shanghai taels. The other currencies are regarded as and have a market value as ratios to these two bases, with the exception of the haikwan tael, which has its one specific use. CREDITS Purchases abroad are usually handled by confirmed letter of credit cash against shipping documents, on initial orders. Once connec- 666 COMMERCIAL HANDBOOK OF CHINA tions are established, credits of 30 to 60 days are usually granted. The local branches of foreign banks can usually give credit infor¬ mation on local importers and exporters. It is highly advisable that individuals representing themselves as acting on behalf of a principal carry with them or have filed at the consulate their powers of attorney. While a consulate accepts no responsibility for firms it names or introduces, it should be in a position to furnish inquiries with suitable bank references, and with evidence of authority to act. MERCHANDISING METHODS Until recently most foreign goods which found their way into the north Fukien market were imported from Shanghai or Hongkong by local merchants, through brokers or through manufacturers 7 agents in these two centers. There is an increasing tendency to form direct connections abroad, particularly with America. (The con¬ sulate will be glad to advise, in specific instances, which of these methods is to be recommended.) The local import and export house is still a useful and sometimes necessary link in the chain, as it simplifies credit arrangements and saves the expense of investigating suitable advertising, storage, and merchandising methods. Manu¬ facturers contemplating a general sales campaign in China would do well, in any case, to do three things: (1) To obtain from each American consulate direct information as to the local situation in the particular line of merchandise and advice as to the best method to adopt to introduce the line in the particular locality; (2) to es¬ tablish and keep strictly to distinctive brands or marks on which the name and nationality of the producer and of the goods is clearly indicated in Chinese as well as English; and (3) to protect both agents and consumer by definite delimitation of powers granted and of territory to be covered, filing such information at the proper American consular office. ADVERTISING * In order of effectiveness the advertising mediums of the district may be given as (1) introduction through the Chinese Chamber of Commerce, Foochow, to the trade guild handling the line, and filing of copies of the trade-mark and other brand marks; (2) billboard and handbill posters in Chinese; (3) newspaper advertising. TRADE ORGANIZATIONS Either through the Bureau of Foreign and Domestic Commerce in Washington, or from the American consul direct, lists of firms may be obtained. Besides the consulate, specific assistance along certain lines can frequently be obtained from the Foochow branch of the American Association of China; the British Chamber of Commerce, Foochow; and the Chinese General Chamber of Commerce, Foochow. These organizations are frequently helpful in establishing contacts. TRAVEL FACILITIES Foochow can be reached by China Merchants Steam Navigation Co., San Pei Steamship Co., and Osaka Shosen Kaisha steamers FOOCHOW CONSULAR DISTRICT 667 from Shanghai, and by Douglas Steamship Co. steamer from Hong¬ kong, Swatow, and Amoy. If advised in advance the consulate will gladly assist in arranging for accommodations and for letters of in¬ troduction, interpreters, and other essentials. Representatives of business houses should carry their credentials with them. HOTELS There is no regular first-class foreign hotel in Foochow. Com¬ fortable accommodations can generally be obtained, however, with a local British resident, through a letter of introduction. Rates charged are from $9 (Mex.) to $12 per day, for room and board. Arrangements should be made in advance from Shanghai or Hong¬ kong by cable. PROPERTY VALUES AND RENTS All foreign business houses are located on Nantai Island, a suburb of Foochow situated just across the river, where are also the cus¬ toms offices, post office, and telegraph offices. In that section prop¬ erty values are relatively high, and suitable business and residential locations hard to buy, or even to rent. A suitable property combin¬ ing office and residential quarters would cost about $40,000 (Mex.). Rents are based on an approximate 10 per cent return on the value. It is impossible to give figures for rent of office or warehouse space, as these vary greatly. The only property taxes foreigners pay are a transfer tax at time of purchase, and a voluntary subscription toward the upkeep of roads, sanitation, and lighting, amounting to about the equivalent of $20 (United States) a year. LIVING COSTS Living costs are somewhat less in Foochow than elsewhere in China. Where board and room can be found on a monthly basis, it works out to about the equivalent of $75 (United States) a month per person. For a family living in a rented house the cost (in United States currency) per month would be about as follows for two in a family: Rent, $50 to $60; food, $40 to $60; servants, $30 to $40; clothes, clubs, fuel, etc., $30 to $60; total, $150 to $220. For four in a family these expenses would range approximately as fol¬ lows: Rent, $50 to $60; food, $60 to $100; servants, $40 to $50; clothes, clubs, fuel, etc., $60 to $100; total, $210 to $310. There is no school for foreign children in Foochow. Mothers must employ private governesses or teach their own children. There are two foreign clubs, the Foochow Club and the Foochow Recrea¬ tion Club, with ample facilities for sports and recreation. CHANGES IN TRADE CONDITIONS IN RECENT YEARS The outstanding changes in trade conditions in the Foochow district in the 10 years 1913 to 1923 are the decline of the tea trade and its replacement by other industries (principally timber and paper), accompanied by a doubling in the total value of the trade; an increased importance of the district as a supplier of food and other raw products to other parts of China; the shifting of the 668 COMMERCIAL HANDBOOK OF CHINA control of trade from foreign to Chinese hands; the growth of modern-type industries, such as match factories, knitting and weav¬ ing factories, leather tanneries, rubber factories, and soap manu¬ factures, and a pronounced increase in the value and number of American interests. Whereas, in 1913, there were but two branches of American firms in Foochow and less than 200 Americans resident in the district, in 1923 there were 10 American firms with either head offices or branches in Foochow, among them being 2 general import and export houses, a bank, 2 insurance companies, and 5 firms hand¬ ling special lines of import; while there were 429 American citizens resident in the district. The great growth of American missionary enterprise in the district should be noted, as having an indirect though effective relation to the promotion of American trade inter¬ ests. American goods to the value of about $2,000,000 (United States) entered the district in 1923, as against less than $1,000,000 in 1913. HARBIN CONSULAR DISTRICT By Consul G. C. Hanson LOCATION AND AREA The Harbin consular district includes the Province of Heilung¬ kiang and all that part of the Province of Kirin lying north of a line drawn between the cities of Changchun and Kirin. In general it lies between 43° and 54° north latitude, or approximately in the latitude of Minnesota, the Dakotas, and the southern part of the Canadian Provinces of Manitoba, Alberta, and Saskatchewan. Its area, including that of Barga, Mongolia, is 390,000 square miles; exclusive of Barga it approximates 220,000 square miles. The aver¬ age annual rainfall is 42 inches; average minimum temperature, 28.4° F.; average maximum temperature, 61° F. June and July are the rainy months; it is generally dry during the rest of the year. North Manchuria is reputed to have as great a number of sunny days in the year as any other section of the world. The winters are dry and exceedingly cold, with comparatively little snow, while the growing season is short but intense. POPULATION The population of the district, according to the Chinese Maritime Customs, is in the neighborhood of 6,000,000; according to the figures of the economic bureau of the Chinese Eastern Railway, in the neigh¬ borhood of 11,000,000. Great areas of Heilungkiang Province average scarcely more than one inhabitant to the square mile; Kirin Province is much more thickly populated; and in the region of Harbin the average density is probably 300 per square mile. CITIES The leading cities of the district are shown in the following table: Cities Population (estimated) Europeans Americans American business firms Harbin 1 ...... 150,000 200,000 40,000 15,000 40,000 30,000 100,000 100 32 Fuchiatien_ . _ Tsitsihar_ _ . .. Hailar 1 .... 3,000 1,500 20,000 Taheiho !._____ 4 Manchouli l __....... 1 Treaty port where foreigners may reside for trade purposes. Harbin , on the Sungari River at the junction of the Changchun branch with the main line of the Chinese Eastern Railway, is the distributing center for the trade of North Manchuria, and to a 669 670 COMMERCIAL HANDBOOK OF CHINA great extent, under normal conditions, for eastern Siberia. It is the headquarters of the Chinese Eastern Railway and the seat of the government of the railway zone. Harbin is a Russian city. Fuchiatien is adajacent to Harbin, and is connected with it by a paved road. Its administration is wholly Chinese, and its status as a treaty port is not clearly defined. It is the Chinese center for wheat, beans, corn, barley, and hemp products from the interior. These products are brought in by cart and by river boats. Tsitsihar is the capital of Heilungkiang Province. It is a Chinese city, and is the collection point for farm products from the fertile Nonni Valley. Hailar is in reality a Mongolian town. It is a center for the accumulation of wool, hides, raw skins, cattle, sheep, and horses from the Mongolian nomads. Within recent years it has become a large settlement for Cossack refugees from Siberia, who have engaged in farming and cattle breeding. Taheiho , opposite Blagoveshchensk in Siberia, is a seat of the Chinese Maritime Customs and the principal point of trade between that portion of Manchuria and the Amur district of Siberia. Manchouli (Manchuria Station) is important mainly as being Manchuria’s western gateway into Siberia. AGRICULTURE The leading products of the district are beans, wheat, Italian millet, kaoliang, corn, and barley. Beans and wheat are the only ones which enter to any extent into the export statistics of North Manchuria, the other products being largely consumed locally for distillation purposes, as articles of diet, and as cattle feed. STOCK RAISING Stock breeding is an important industry in North Manchuria. In 1923 it was estimated that the animals in the district numbered as follows: Large horned cattle, 636,000; horses, 1,879,200; pigs, 2,198,000; sheep, 1,808,200. In 1923, 1,262 horses were exported. Meat exports are becoming increasingly important, approximately 6,000 tons having been shipped abroad in 1923. FORESTS Along the western line of the Chinese Eastern Railway forests are found on the Khinghan Mountains, while almost the entire east¬ ern line traverses wooded country. The southern branch contributes only a small proportion of the timber cut in North Manchuria. The principal species are Korean pine (31 per cent), spruce (26 per cent), fir (3 per cent), elm (7 per cent), oak (3 per cent), white birch (5 per cent). Among other species may be mentioned Manchurian walnut, velvet tree, ash, maple, and aspen. During the first six months of 1924 the district exported approxi¬ mately 170,000 tons of timber and lumber. MINERALS AND MINING Coal occurs at Chalainor, on the Han River near Mergen; Puhai, on the southern line of the railway; at Machiaohe; and near Kia- HARBIN CONSULAR DISTRICT 671 musze Station, on the southern line of the railway. The latter de¬ posits contain coal of excellent quality, while the Chalainor coal is a lignite of low grade. The total annual production of coal is ap¬ proximately 300,000 tons. Practically all of the coal mined is con¬ sumed by the Chinese Eastern Railway. The development of the Machiaohe mines is planned, but lack of capital is an obstacle to the development of mining in North Manchuria. The Chalainor mines are located at Chalainor Station, a distance of 18 miles from Manchuria Station. These are the only coal de¬ posits in North Manchuria utilized at present to any extent. It has been estimated that the total reserve supply of lignite in the explored regions is approximately 19,000,000 to 20,000,000 tons. From 1909 to 1922 these mines were exploited as a concession from the Chinese Eastern Railway Co., but in 1922 the railway began to work the mines itself. Until 1914 the yearly output varied between 96,000 and 160,000 tons, depending upon the demand. It began to increase in 1915, and exceeded 290,000 tons in 1920. In 1923 the output was 180,000 tons. Approximately 70 per cent of the total quantity is consumed by the Chinese Eastern Railway. Gold .—Gold is washed on the Suifenho near Sansing and in other places, chiefly on the tributaries to the Amur, where not less than 15,000 men are engaged in the industry. The gold washers, usually with the commonest tools, remove the most accessible metal, and then go elsewhere to do the same. There are no mines of any importance. Soda .—In the western part of North Manchuria soda is obtained by the evaporation of lake water. The annual production is about 11,000 tons. In 1923, 156,760 pounds were exported. Other minerals .—No attention has been paid to the production of iron, copper, or graphite. Millstones and brimstone are obtained in quarries near the railway, which also supply building materials for the railway and the near-by towns. MANUFACTURING The leading industries of the Harbin district are flour milling, the manufacture of bean oil, and the distilling industry. Flour milling .—This industry stands first in importance. The amount of capital invested is equivalent to approximately $10,000,- 000 in United States currency. About 2,500 persons are employed by the industry. The output is estimated at 150,000 tons. Exports of flour in 1921 were 86,532 tons; in 1922, 42,661 tons; in 1923, 56,332 tons. Bean-oil industry .—The manufacture of bean oil holds second place. There are in operation 60 steam-power plants and approxi¬ mately 1,000 small native mills. No estimate is possible regarding the number of employees. The estimated output is 300,000 tons of cake and oil. In 1922, 205,610 tons of cake and 10,480 tons of oil were, exported; in 1923, 296,210 tons of cake and 8.920 tons of oil. Distilleries .—In addition to distilleries of hanshin (a native product), of which there are several hundred, consuming an aggre¬ gate of over 100,000 tons of grain annually, there are eight modern spirit distilleries. The total amount of capital invested in the latter is estimated at $2,500,000 to $3,000,000. The aggregate capacity of 672 COMMERCIAL HANDBOOK OF CHINA these distilleries is up to 9,500 gallons daily, or above 2,600,000 gallons annually. The actual output, however, is believed to be less than 800,000 gallons. All the above branches of manufacturing industry were created by Russians, following the construction of the Chinese Eastern Rail¬ way. They have passed through many crises and still suffer from lack of cooperation in the matter of acquiring raw materials, the marketing of their products, and insufficient operating capital. LABOR CONDITIONS The majority of laborers in the manufacturing enterprises of North Manchuria are Chinese, while Russians are employed for work requiring responsibility and particular skill. In Harbin there is always a sufficiency of labor obtainable, but enterprises along the line and in the interior often must contract for labor in the south. The average pay for unskilled labor ranges from $4 to $8 a month, including board and lodging, and from $10 to $15 a month without board or lodging. Depending upon the location of the particular plant, the pay of a miller (usually Russian) runs from $62 to $150 a month; for a machinist, from $30 to $150; for an oiler, from $8.50 to $15. Work is performed in double shifts of laborers, who work 8 hours one day and 16 hours the next. In the flour-milling industry there is a decided shortage of skilled workmen, and for this reason employers carry men on their pay rolls even at periods when the mill is closed down. With the exception of workmen employed on the various branches of the Chinese Eastern Railway, employers in North Man¬ churia provide no compensation for their men in case of sickness or accident, and they are not provided quarters. Strikes are very rare. TRANSPORTATION AND COMMUNICATION WATERWAYS Sungari .—The Sungari River rises in the Chang-pai-shan Moun¬ tains. From its source to the city of Kirin, a distance of 330 miles, it is not navigable. Steam navigation is possible only from the city of Kirin. From Sanchiako, the point where it joins the Nonni River, the Sungari is broad and flows through a plains country. From Kirin to Harbin the river is navigable only for ships draw¬ ing from 3 to 4 feet of water. East of Harbin it is navigable for ships drawing from 5 to 6 feet of water, but in dry seasons ships drawing above 3 or 4 feet have difficulty in passing the Sansing shallows. The really navigable sections of the Sungari are from Maincheng to Harbin (200 miles) and from Harbin to its mouth (450 miles), or a total of 650 miles. Amur .—West of the mouth of the Ussuri River the Amur is the boundary line between China and Russia, its right bank being Chinese territory and its left bank Russian. East of the mouth of the Ussuri River the Amur flows entirely through Russian territory. The Amur is one of the great rivers of the world. Ships drawing 12 feet of water can sail up to Khabarovsk, those drawing 10 feet can go to Blagoveshchensk, while those drawing from 4 to 5 feet may go to the mouth of the Argun River, or more than 1,580 miles. HARBIN CONSULAR DISTRICT 673 Ussuri .—Ships drawing from 4 to 5 feet of water may navigate the Ussuri River as far as the city of Hulan, a distance of 230 miles from its mouth. Normi .—The Nonni River has its source in the Ilehuli Mountains of Heilungkiang Province and flows in a southeasterly direction into Kirin Province, where it empties into the Sungari River. Only very small steamers can sail up this river to Fularki, about 20 miles from Tsitsihar. Argun .—The Argun, one of the upper branches of the Amur, is an international waterway between China and Russia, its right bank being Chinese and its left bank Russian territory. The river is not navigable except for Chinese junks when water conditions are favorable. RAILWAYS The Chinese Eastern Railway has a mileage of 1,078, with spurs to timber concessions aggregating 286 miles additional. The average freight rates per ton-mile range from 3 to 13.9 cents gold. The Chinese Eastern Railway is the principal means of trans¬ portation in North Manchuria. It traverses the entire country from east to west, from Manchuria station (Manchouli) to Pogranichnaia, and connects with the South Manchuria Railway by a branch south¬ ward from Harbin to Changchun. It connects the ports of the Pacific Ocean, through its trans-Siberian connections, with the ports of the Baltic and North Seas. The enterprise has been largely instrumental in colonizing this vast territory and in making its resources available to the outside world. It has cemented the scat¬ tered agricultural, cattle-raising, and timber regions of the country into one unit. Over the Chinese Eastern come also all imported goods. Its importance, however, is not limited to its role of a carrier. Ever since its construction the Chinese Eastern Railway has been the dominant civic factor in the district. It has created cities and towns, over which it administered; it has maintained schools, hos¬ pitals, and, until recently, churches. It has been a pioneer in North Manchuria in many branches of industry, with its sawmills, its plant for the dry distillation of wood, its parquet factory, and its plant for the hydraulic press packing of wool and skins. The Chinese Eastern Railway gives employment to approximately 16,000 persons, who represent an important proportion of the buying public. The Tsitsihar Light Railway , the only other railway line in North Manchuria which carries passengers and freight, is an unimportant, antiquated, narrow-gauge line, with a total extent of 17 miles, con¬ necting Tsitsihar (the capital of Heilungkiang Province) with the station of the same name on the Chinese Eastern Railway. ROADS There are no roads in North Manchuria, but overland traffic is carried over trails which existed prior to the construction of the Chinese Eastern Railway. There were three such roads from the south. The oldest ran from Mukden to Kirin, at which point it branched, one route leading to the city of Ninguta and the other to 100020°—26-14 674 COMMERCIAL HANDBOOK OF CHINA Potune. At Acheng, an old Manchurian town 25 miles from Har¬ bin, a branch road followed the right bank of the Sungari, River through Pinchow to Sansing, and on to Fuchin, near the mouth of the Sungari. Another road originating at the lower course of the Liaoho followed the western bank of this stream as far as Fakumen, crossed the river at Chengchiatun, and entered Potune from the south. From this latter point a direct trail led to Acheng, and another to the city of Tsitsihar. From Tsitsihar the road continued along the left bank of the Nonni River to Mergen, wound its course over the Little Khinghan Mountains, and reached the Amur River at Aigun, opposite the Siberian town of Blagoveshchensk. A third trail crossed the Great Wall at Hsufenko, followed the Khinghan foothills through Mongolian territory, crossed the Taoerho at a point approximately 30 miles west of the city of Taonanfu, and reached Tsitsihar. In addition to these meridianal roads there are also transversal trails connecting towns and villages in the district. These are all dirt roads, the surface of which is never repaired; and bridges are built over streams in but few places. Traffic is there¬ fore possible only when the winter frosts harden the swamps and the streams. It is believed that during the winter months, from November to April, approximately 1,000 miles of such roads may be used for motor traffic. TELEGRAPHS, CABLES, AND WIRELESS SERVICE The Chinese Telegraph Administration maintains 96 stations in the district. The rate, in Mexican currency, to Shanghai is 18 cents, and to New York $1.90. The Great Northern Telegraph Co. operates as part of the Chinese Telegraph Administration service, with one station. Rates are as above. The Chinese Eastern Railway has contacts within the railway zone and one telegraph station at every railway station. Telegrams to New York may ordinarily be forwarded by any of the following routes: The Great Northern Telegraph Co.’s transit route via Siberia-Europe and Atlantic cables; the Eastern Exten¬ sion Telegraph Co.’s route via Hongkong-Suez and Atlantic cables; the Commercial Pacific Cable Co. via Manila and San Francisco. The Kirin provincial government maintains contact with Muk¬ den and Dairen, and has one wireless station at Harbin. The Harbin station transmits telegrams to and from wireless stations in Manchuria only and works with the station in Dairen. It also receives news telegrams broadcast from foreign stations. TELEPHONES An automatic telephone system was installed at Harbin in October, 1921. It represents an investment of approximately $600,000 (L T nited States), and gives an annual gross revenue equiva¬ lent to nearly $200,000 in United States currency. On July 1, 1924, it served 2,087 subscribers from one central over 5,936 miles of wire, and recorded a daily average of 35,196 conversations. The system is adapted to serve 3,000 subscribers. A fee of $100 to $125 (United States) per annum is charged. This system, the property HARBIN CONSULAR DISTRICT 675 of the Chinese Eastern Kailway, was installed by an American firm and gives excellent service. In 1922 the Chinese Eastern Kailway improved its interurban telephone system by replacing the former one-line installation by a double-line system. This enterprise operates a total of five separate interurban telephone lines—two on the southern, two on the western, and one on the eastern branch. The automatic telephone at Harbin may be connected with these interurban lines. A recent project includes the connection of Harbin with Vladi¬ vostok by telephone. For this service it is planned to utilize iron wires and repeaters. POSTAL FACILITIES In an administrative sense North Manchuria is a separate postal district, the Kiwei district, which was withdrawn from Mukden control in 1921. The district has a total of 238 postal agencies and 118 offices, with head office at Harbin. It has 15 town box offices, 116 rural box offices, 45 rural stations, and 143 stamp-selling agen¬ cies. Mail is carried on the Sungari and Amur Rivers between April and October as far as Taheiho, a distance of 900 miles from Harliin, and the rest of the year overland by horses, couriers, and motor trucks. The Chinese Eastern Railway is used all through the year. The mail service is excellent. SHIPPING AND WAREHOUSING FACILITIES PORT ACCOMMODATIONS Harbin and Fuchiatien ancnorage and landings are abreast of the port of Harbin and the adjoining native city of Fuchiatien. The Sungari River is not affected by the tides. The depth of water during the navigation season varies from 3 to 6 feet, and the maxi¬ mum draft of a Sungari vessel cioes not exceed 6 feet. The major portion of the river bank is stone faced, and the vessels moor alongside. The Chinese Eastern Railway Co. has a dock excavated inside the normal line of the river bank, situated immediately above the boundary between Harbin and the native city. Railway sidings run along the entire Chinese Eastern Rail¬ way berthing places at both river bank and dock. There is no rail accommodation in connection with the native city berthing place. All cargo is carried by coolies, except timber, which is pulled up by hand. No figures are available relative to the amount of tonnage which enters and clears the port. The approximate tonnage of steamers is known, but that of barges is not, and the latter tonnage exceeds that of steamers. The approximate carrying capacity of vessels which navigated the Sungari during the summer of 1924 is as follows: Steamers, 14,400,000 pounds; barges, 62,280,000 pounds. The following craft were prohibited from sailing: Chinese East¬ ern Railways’ 11 steamers and 30 barges, with an aggregate carry¬ ing capacity of 43,200,000 pounds; 4 steamers and 12 barges belong¬ ing to a Russian firm and having an aggregate capacity of 18,000,000 pounds. 676 COMMERCIAL HANDBOOK OF CHINA CARGO-HANDLING FACILITIES There are no cranes for handling cargo at Harbin and Fuchiatien bund and railway dock. The average rate of discharge of cargo from barge to railway car is approximately 72,000 pounds per hour; from barge to cart, 83,000 pounds per hour; from barge to Chinese Eastern Eailway godown, 65,000 pounds; fro*m barge to railway platform, 126,000 pounds per hour. The cost of transference of cargo from ship’s tackle to port for a distance not exceeding 70 feet from barge to stowage is 3 cents Mex. per bag (approximately 190 pounds) ; for distances over 70 feet there is a proportionate increase in cost. The bulk of cargo handled at Harbin is timber and grain. WAREHOUSING AND STORAGE Warehouses and storage sheds, built of corrugated iron sheeting and ample for present requirements, adjoin the landings. They are generally used for the storage of grain, salt, coal, and timber. The storage charge for ordinary goods is 15 cents silver per pood of 36 pounds for the first 15 days. The rate for tea is 8 silver cents per pood of 36 pounds for a period of 30 days. Timber is stored in the usual manner; grain is piled up in pyramid fashion and covered with straw matting. As the climate is very dry during the seasons grain is stored in the open, this simple method does not adversely affect it. The transfer of cargo from storage to dealer is effected by carts. The Chinese Eastern Eailway makes a bund tax, or wharfage charge, of from one-half to three-fourths of a silver cent per pood of 36 pounds, according to where the vessel is berthed. Steamers are also charged a berthing fee of $3 Mex. and barges $2 a day while alongside. There are no fees for anchorage in the stream. PUBLIC UTILITIES ELECTRIC-LIGHT PLANTS North Manchurian Electric Enterprise Co. (Japanese).—Located at Harbin; total capacity, 600 kilowatts; direct current, 110 volts. The plant serves approximately 3,000 subscribers, who pay 40 Jap¬ anese sen per kilowatt-hour. The service is very poor. /. I. CJmrin & Co. (Eussian).—Newtown-Harbin; total capacity, 130 kilowatts; direct current, 200-220 volts. The company serves approximately 1,000 subscribers, who pay 35 Japanese sen per kilo¬ watt-hour. Service is good. The Chinese Eastern Railway. —Harbin, (a) Eailway depot: 2 generators, 130 kilowatts, 220 volts, (h) Harbin railway work¬ shops: 4 alternators, total capacity 116 kilowatts, 25 cycles, 250 volts; 110 volts for lighting. ( c) Old Harbin: 2 generators, direct current, 220 volts, capacity 70 kilowatts. Number of subscribers unknown. Eates vary for railway em¬ ployees and for private subscribers from 4 silver cents to 40 cents per kilowatt-hour. The United Manchurian Flour Mills (Eussian).—Pristan-Harbin. Five dynamo machines, 450 kilowatt, direct current, 220 volts; steam HARBIN CONSULAR DISTRICT 677 engines. Subscribers include one-quarter of the city; charge, 40 Japanese sen per kilowatt-hour. Yueh Ping Electric Go. (Chinese).—Fuchiatien-Harbin. Two 600- kilowatt turbines; alternating current; 110 volts for lighting, 220 volts for power; charges, 35 silver cents per kilowatt hour for light, 17Y2 silver cents per kilowatt hour for power. This plant, which is 2 years old, was constructed by an American firm, and gives excel¬ lent service. In addition the Chinese Eastern Railway operates electric-light plants at settlements in the railway zone. Small plants are also in operation in various Chinese cities in the district. MOTOR-BUS SERVICE There are no tramways operating in the district, but in Harbin approximately 150 passenger autobuses are doing a good business. Passenger automobiles are also connecting towns in the interior, where they follow the ancient trade routes during the season of the year when frosts have made these roads passable for motor carriages. EXPORT AND IMPORT TRADE EXPORTS The leading exports of the Harbin district are shown in the fol¬ lowing table: Articles Average, 1911-1913 Average, 1921-1923 Quantity Value Quantity Value Beans... Piculs 5, 287, 860 239, 577 41, 788 590, 759 1,695, 980 Haikwan taels 10,728,463 280,147 348,424 105,363 4,073,711 Piculs 5,239,028 2,730,486 211,112 1,891,599 1, 748,646 Haikwan taels 13,164,115 5,763, 577 1,990,091 937, 629 4,084, 379 Bean cake .. Bean oil -..... Skins (furs)..... Wheat.... Note. —The average value of the haikwan tael, expressed in terms of United States currency, is as follows: 1911, $0.65; 1912, $0. 74; 1913, $0. 73; 1921, $0.76; 1922, $0.83; 1923, $0. 80. It is interesting to note the marked increase in the export of bean cakes, bean oil, and furs during the period from 1913 to 1923. In the case of bean cakes the increase is due to greater demand from Japan, and in the case of bean oil is due to increased demand for this product in Europe. Disturbed conditions in Siberia and Russia caused the export of Siberian furs to China. Previously such furs were exported to Europe. It is impossible to estimate w T hat percentage of exports goes to various countries abroad, be¬ cause the Chinese Maritime Customs do not keep statistics of this sort at Harbin. IMPORTS Practically no imports are arriving in North Manchuria from Siberia. Changchun is now the principal port of entry of imports into this district, and the Chinese Maritime Customs keep no records of such imports. The principal imports of North Manchuria are 678 COMMERCIAL HANDBOOK OF CHINA petroleum and petroleum products, Fushun coal, piece goods, ma¬ chinery of all kinds, railway supplies, perfumery, and drugs. Amer¬ ican imports consist of petroleum, piece goods, machinery, tools, canned goods, and motor cars. In recent years German imports have regained a strong foothold in this market. Constant efforts are being made to foster the importation of Russian goods. Since the Chinese authorities assumed control in 1920 over the Chinese Eastern Railway Zone there has been a marked increase in internal taxes, which has had the effect of hampering American and other foreign trade. MONEY, BANKING, AND CREDIT BANKS The following are the leading banks of the district which handle foreign exchange and bills: Banks Nationality Head office Capital Branches in district International Banking Cor- American... New York.. $10,000,000 (U. S.). Harbin. poration. Peking. Chinese-Amcrican Bank of Chinese_ $7,500,000 Mex. Do. Commerce. Hongkong & Shanghai Banking Corporation. British.. Hongkong.. $20,000,000 Mex_ Do. Russo-Asiatic Bank. Russian_ Paris_ 45,000,000 rubles_ Harbin, Hailar, Chang¬ chun, and Man- chouli. Harbin, Changchun. Yokohama Specie Bank Japanese_ Yokohama.. 100,000,000 yen _ (Ltd.). Bank of Chosen_ _ .. do _ _ Seoul._ 50,000,000 yen_ Harbin, Changchun, Kirin. Numerous branches Bank of China. _ Chinese.. .. Peking_ $20,000,000 Mex... Bank of Communications,. .do_ _do_ 1,000,000 Kuping taels. throughout the dis¬ trict. Do. Provincial Bank of the _do_ Mukden_ 20,000,000 feng piao„._ Do. Three Eastern Provinces. LOCAL CURRENCY Business is transacted locally in two currencies—Japanese yen and Chinese local dollars. The Japanese yen currency consists entirely of bank notes issued by the Bank of Chosen. These notes read, “ Payable in gold coin or in Nippon Ginko (Bank of Japan) notes,” but actually they are re¬ deemable only in the Bank of Japan notes; and in order to obtain Bank of Japan notes in any quantity it is necessary to present the Bank of Chosen notes at the head office of the Bank of Chosen at Seoul. These notes, however, pass freely as a medium of exchange, and are usually quoted at practically the same value as the yen in Japan. In no case up to the present time has the difference in value exceeded one-fourth of 1 per cent. The Chinese local dollars consist of bank notes issued by the four principal Chinese banks. These notes were originally redeemable in actual silver dollars, but for the past three years there has been an embargo on the export of silver from Harbin except with special permission of the Chinese authorities, and since April, 1924, the Chinese banks have refused to cash their bank notes with silver dollars for any amounts in excess of $10 per person. Under these HARBIN CONSULAR DISTRICT 679 conditions, of course, the local dollar has to be considered as prac¬ tically a paper currency, and the rate of exchange against the local dollar in comparison with the Shanghai dollar fluctuated at times during the last three or four months of 1924 down to as low as 35 per cent discount. The fact that it is not freely supported by silver renders it liable to daily fluctuations of 2 to 3 per cent. Outside of Harbin and the other cities along the Chinese East¬ ern Kailway most of the payments for Chinese products and goods are effected in what is known as “ tiao ” or “ feng piao.” These two currencies are entirely on a paper basis and unredeemable at any fixed rate in silver or any other stable currency. It is said that the amount of feng piao issued by the Government bank has run into so many millions that they have lost account of the amount outstanding. The farmers, however, accept only tiao or feng piao in payment for their produce; and it is due chiefly to the demand for these cur¬ rencies for use in paying farmers that they maintain nominal values. The values, of course, fluctuate from 30 to 40 per cent throughout the year, on account of political conditions and the need of funds by the authorities in control of the issue. The tendency during the past few years has been toward a gradual decline in the value of the two currencies, and so long as it is necessary to issue them to meet military and other expenses their value is likely to de¬ cline further. While it is impossible to estimate the amount of tiao and feng piao outstanding, the amount of local dollar notes outstanding is said to be somewhere in the neighborhood of $15,000,000 to $20,000,- 000. The amount of silver held against these notes is estimated to be not over $3,000,000 to $4,000,000. Kemittance charges to Shanghai at the beginning of 1925 amounted to about 8 per cent, but these charges vary considerably. CREDITS Owing to business conditions local credits are difficult to obtain, and in the case of loans against real estate and property the interest rate is usually 18 per cent or higher. The Japanese banks are the only institutions which are making advances against real estate to any great extent. It seems to have been their policy in Harbin to give loans freely against land and property, and it is reported that one Japanese organization has loans outstanding to the extent of over 7,000,000 yen against land and buildings. Loans against local merchandise, with the exception of export and import cargo, are also very difficult to obtain. In this connection, facilities are freely given to reputable firms by the foreign banks at rates of interest which are as low as those prevailing in other ports in China. Method of effecting export credits .—Export credits are given against railway waybills covering beans and other produce for ex¬ port, on the understanding that ocean bills of lading will be delivered in a few weeks. Methods of effecting import credits .—Import credits are arranged on the basis of a cash margin varying from 10 to 25 per cent, against which a banker’s letter of credit is opened up in favor of the shipper abroad. The balance of the amount is paid either upon arrival of 680 COMMERCIAL HANDBOOK OF CHINA the documents or at a certain fixed time after the documents have arrived. Transfers of funds to the interior Chinese cities and towns are usually very difficult to arrange, and are accomplished chiefly by means of native orders issued by small Chinese private banks and large firms. These orders are supposedly payable on demand, but it is usually necessary to register them with the firm and wait several days before payment is effected. General suggestions to American manufacturers and merchants regarding credits .—American manufacturers and merchants engaged in business transactions with firms in China should rely to a great extent upon the advice and assistance of a good foreign bank. Nat¬ urally, if possible, an American bank should be chosen, as it not only can render the same service as other foreign banks, but it may have a better understanding of the conditions under which the Amer¬ ican merchant or manufacturer desires to work. Firms in China often ask to have goods sent on consignment, or sent out billed for collection with either documents against accept¬ ance or documents against payment. This method of handling bills is satisfactory, provided that the firm ordering the goods is re¬ sponsible and trustworthy; but there are firms that will take a chance on placing such orders in the hope that a certain market will improve, or at least will not fall. If it should happen that by the time the goods arrive the market has declined, such firms may refuse to take up these drafts and the American merchant may be forced to sell his goods at a loss of 20 to 50 per cent. American merchants who intrust their foreign business to their local bankers should make inquiries as to the name of the foreign bank wdiich will handle their business abroad. Many banks in America have their foreign business handled by foreign banks of various nationalities, and in some cases there is no doubt that the services of these foreign banks are as satisfactory as though the busi¬ ness had been handled by an American bank in China. POWERS OF ATTORNEY The nature of the power of attorney for a representative of an American firm visiting North Manchuria is important. There are various knds of powers of attorney. Some cover over a printed page, and confer upon the bearer many powers which he will not have the slightest occasion to use, but omit other powers which should be clearly specified. One phrase in particular that results in many misunderstandings as to the powers conferred by the instru¬ ments reads somewhat as follows: u * * * and in general to transact whatever other business that may be necessary on behalf of the company.” This phrase can not be interpreted to mean that the holder has power to borrow, to sign loan forms, or to sign contracts which obligate the company to certain payments. Therefore, in case American companies wish their agents abroad to have the power to sign drafts, checks, and contracts, to open up accounts, and to bor¬ row on promissory notes or through bank Overdrafts, such authority should be specifically stated in the power of attorney. HARBIN CONSULAR DISTRICT 681 ADVERTISING AND MERCHANDISING The following publications constitute the leading advertising me¬ diums of the district: Newspapers and periodicals Frequency of publica¬ tion Language Nationality of owner Date of es¬ tablish¬ ment Esti¬ mated circula¬ tion Russki Golos _ Morning daily_ Russian .. Russian_ 1920 1,000 Novosti Zhizni_ _do. I... ...do_ _do_ 1907 3; 000 Zarya .__ Morning and evening do. . . _do_... / 1920 3,000 daily. \ 1924 3', 000 Tribuna____ Morning daily_ ...do_ _do_ 1922 2, 000 Rupor _ Evening daily_ _do. . _do _ _ 1921 1, 500 Molva_ Morning daily _ ...do__ do___ 1924 ' 500 Pochta _ Evening daily_ ...do_ . ... do. _ 1924 300 Sviet . __ _ Morning daily. __ ...do . _ .. do. . _ 1922 1,000 Kopeika.... ... do . _ . .do.. . do ___ 1923 ' 500 Harbin Daily News. . . _ .. do. . . . _ English. American .. _ 1918 500 Harbin Herald _ Evening daily_ do . . British.. __ 1924 100 Commercial Telegraph__ Weekly _ Russian . Russian_ 1922 500 Ekonomicheski Viestnik_ Monthly_ .. do__ Chinese Eastern 1921 1, 500 Railway. International Daily_ Chinese. . Chinese__ 1918 3, 000 Harbin Dawning __ _do__ .. do _ _do.. 1923 2,000 Sungari Daily News__ _do_ ..do. _ _do__ . .. 1924 LOOO The first four newspapers mentioned have the widest distribution also in settlements along the railway line. There are no standard rates for advertising, inasmuch as these vary and are always subject to bargaining. The average on a monthly contract would probably be approximately 30 yen for a space 3 by 3 inches. Advertising in North Manchuria is employed only as a means of calling the attention of the buying public to articles in stock, particularly to new shipments received. Indiscriminate distribution of cata¬ logues and pamphlets in languages other than Russian and Chinese is a waste of effort and money. Harbin is the commercial distributing center of North Manchuria. In this city are located the banks and the head offices of all the important firms doing business in the district. It is the point to which dealers from the interior come to replenish their stocks at the warehouses of foreign as well as of Chinese houses. The winter* months are the busiest, because the condition of the roads in the interior then enables merchants to make use of them and the farm¬ ing population has more leisure and more money. Business in North Manchuria is in the hands of many nationals, and competition is therefore extremely keen. If a conservative firm can show a net profit of 15 per cent for the year, with the investment turned over three times, it is considered very good. Indent business, which ties up capital for a long period of time, is not in favor, and preference is always given to local stocks. One reason why Russian and Chinese merchants hesitate to order direct from abroad is because foreign exporters do not care to guarantee term of delivery, while local sales contracts often carry a penalty clause covering nonde¬ livery on time. Foreign manufacturers, therefore, with branch of¬ fices here which carry stocks, usually dominate the situation. 682 COMMERCIAL HANDBOOK OF CHINA TRADE ORGANIZATIONS The leading trade organizations of the Harbin district are the American Chamber of Commerce, Harbin, the objects of which are to protect and extend American business and trade interests, but which is also prepared to arbitrate trade disputes; Harbin Russian Chamber of Commerce (Harbin Exchange Committee), 5 Kitaiskaia Street, Harbin, which issues weekly trade bulletins, and which is connected with organizations of importers and of exporters; British Chamber of Commerce, Harbin; German Chamber of Commerce, Russo-Asiatic Bank Building, Harbin; Chinese Chambers of Com¬ merce of Harbin and Fuchiatien. TRAVEL FACILITIES AND HOTELS Railway travel in the district is very comfortable. Interpreters are obtainable at the hotels at reasonable rates. The English lan¬ guage is useful at Harbin, but a knowledge of Russian is almost indispensable. Living at hotels in Harbin is not desirable owing to high prices and the lack of modern conveniences. There is only one hotel in Harbin where accommodations are fairly good. Both hotel and boarding-house accommodations are poor judged by American stand¬ ards. The leading hotels are the Hotel Moderne and the Grand Hotel. The Hotel Moderne is located at 34 Kitalskai Street, Pristan-Harbin. It contains 56 rooms without bath and 39 with bath. It is operated on the European plan only. The owners are Russian. The cable address is “ Moderne Harbin.” The Grand Hotel, at 42 Sungariski Prospect, Newtown-Harbin, has 49 rooms, all without bath. It is operated on the European plan only. The owners are Russian. The cable address is “Grandhotel Harbin.” PROPERTY VALUES AND RENTS Property values and rents in Harbin vary with the location, whether in the residential section, business section, or in the suburbs. Office space in the business section, not on the main street, may be had for an average of $0.25 (LTnited States) per square foot, while the price on the main street would be approximately twice that amount. Charges for warehouse space vary from $0.01 to $0.03 (United States) per pood (36 pounds) a day, according to kind of merchandise and the period during which stored. Rent for residen¬ tial purpose varies widely. Owing to the peculiar circumstances existing there, American business men desirous of renting or purchasing property at Harbin, should consult with the American consulate before committing them¬ selves in this respect. Apartment life offers the only fairly comfortable mode of living in Harbin. A good, seven-room apartment may be secured for ap¬ proximately $125 (United States) a month. Electric light is not expensive. A fairly good cook is paid $25 Mex. a month; “ boys ” are paid $18 to $25 Mex. a month, and “ coolies ” $10 to $15 Mex. Japanese maidservants receive $20 to $25 Mex. a month. HARBIN CONSULAR DISTRICT 683 TAXES AND OTHER ASSESSMENTS Taxes and other assessments are levied by the Harbin Municipal Council and by the local Chinese police and other authorities. As these assessments are irregular and uncertain, it is difficult to make any comment upon the kinds or amounts of such levies. CHANGES IN HARBIN TRADE CONDITIONS IN RECENT YEARS From the outbreak of the war to the end of 1924 many changes occurred in Harbin trade conditions. The declaration of war caused local merchants to realize on their stocks, prices fell, important enemy firms were closed, and many imports stopped. There was a general upsetting of the market. There followed a period of great commercial activity, Harbin merchants becoming the middlemen to supply all Russia, which was isolated on the west and beset by military difficulties. Trade capital greatly multiplied and foreign manu¬ factured goods were imported in large quantities. The revolution in Russia in 1917 checked the boom. The ruble collapsed and foreign trade fell off. Lack of rolling stock, which had been withdrawn from the Chinese Eastern Railway for military purposes in Siberia, led to a condition closely akin to trade paralysis. Neither exports nor imports could be moved except under almost insuperable diffi¬ culties. With the fall of the Omsk government in 1919, the Siberian market was entirely lost to Harbin, and in 1920 trade was at a very low ebb indeed. There was a brief trade revival in the spring of 1921, due to free expenditures of gold in the hands of the Bolsheviki; but when private trade with Siberia was suppressed at the end of 1921, trade depression returned. Good crops and large exports of furs in 1922 caused another trade expansion, but 1,500 business houses failed on account of speculations and the shrinkage of credit. Traffic to Vladivostok was interrupted during the Bolshevik efforts to seize that port. The wet summer of 1923 spoiled local production, but bumper crops in 1924 served to partially restore prosperity. CURRENCY For the 10-year period prior to the war Russian rubles had been the commercial currency of the Harbin consular district. Paper money called “ tiao,” issued by the Chinese banks in Kirin and Heilungkiang Provinces, was also in circulation and fluctuated in value in terms of the ruble. The depreciation of the ruble com¬ menced with the beginning of the war, and the revolution in Russia hastened its downfall. By the end of 1920 the ruble had become valueless and the Chinese dollar and the Japanese yen had taken its place as the mediums of exchange in the railway zone. Attempts are being made to put the Soviet chervonetz on the local market, but the Chinese Eastern Railway, Chinese Postal Service, Telegraph Administration, and Chinese firms and shops are on a silver-dollar basis. At the end of 1924 Russian and Chinese landlords were fixing rent contracts in silver dollars rather than in yen, and Russian shopkeepers and restaurants were generally demanding payment in 684 COMMERCIAL HANDBOOK OF CHINA silver dollars. Thus the silver-dollar note is gradually replacing the yen note in North Manchuria. CHINESE EASTERN RAILWAY Before 1914 the polic} 7 of the Chinese Eastern Railway was to develop Vladivostok both for import and for export trade and to discourage local industry. There was only a small exchange of freight with Russia. However, the export of local product, mostly beans, was increasing, and this constituted the principal freight of the railway. The result of this policy was an annual railway deficit, which the Russian Government made up. The deficit was $2,967,129 (United States) in 1913 and $2,256,458 in 1914. During the World War the Chinese Eastern Railway became the vital link in the Trans-Siberian system, which connected Russia with Vladivos¬ tok, its only outlet to the sea. Much attention was paid to the trans¬ portation of military freight and little to local freight. There was a great increase of freight, especially war material. However, local transportation also increased, as Harbin, which was the center of activities, prospered and needed construction material, which arrived as freight. In 1916 imports, principally from the south, increased, while exports decreased. Vladivostok still held its dominant posi¬ tion, but was not so strong relatively to Dairen as formerly. The railway was not able to give cars to its local clients quickly, so cart traffic increased. Transit freight, which had consisted of war and other materials, ceased and export cargo increased in 1919. The disturbances in Russia, the effects of which were felt in North Manchuria, demoral¬ ized the technical condition of the railway, discipline became lax, and transportation diminished year by year, the climax being reached during the latter part of 1919. The Russian Government refused further support, and the railway was receiving worthless paper money. The unsettled political situation at Vladivostok forced export cargo south. Export and import cargo through Vladi¬ vostok diminished, while the exchange of freight with the South Manchuria Railway at Changchun increased. In 1916 eastbound freight was double that moving south, while in 1919 the situation was reversed. The railway carried export cargo, principally local products, over 80 per cent of which was shipped south, and some import cargo, solely from the south. Cart traffic was cutting into the railway’s business, and the end of 1920 found the railway in a bad financial and technical situation. In October, 1920, the Peking Government and the Russo-Asiatic Bank came to an agreement in regard to the temporary management of the railway, and a new board of directors was soon after selected. A new economic bureau started to study the resources of the country and found that many products were not being transported by rail. An agricultural department was formed, three agricultural ex¬ perimental stations were opened to encourage agriculture; breeding of dairy cattle was introduced; a veterinary inspection system was installed; a wool-washing plant was erected at Hailar; lumbering was developed by the building of railway sidings; and local industries, such as coal mining and the raising of sugar beets, were promoted. HARBIN CONSULAR DISTRICT 685 Commercial agencies were established in 1921 for the purpose of attracting freight. Freight rates were reduced and cart traffic fell off considerably. In the summer of 1922 a traffic agreement was entered into with the South Manchuria Kailway. Some friction arose between the railway and the local Chinese authorities in 1923 regarding the jurisdiction over lands belonging to the railway. An agreement was reached in the fall of 1924, and a new board and general manager were appointed. At the beginning of 1925, when bumper crops had brought increased freight to the railway, 80 per cent of the export cargo was moving south and 20 per cent moving east. KALGAN CONSULAR DISTRICT By Vice Consul E. F. Stanton LOCATION AND AREA The Kalgan consular district includes the whole of Inner and Outer Mongolia; the special administrative districts of Jehol, Chahar, and Suiyuan; that portion of Chihli Province between the sections of the Great Wall which lie north and south of Kalgan; and also the portion of Shansi which lies north of the southernmost part of the Great Wall. Roughly, the district extends to Siberia on the north and to Manchuria on the east, lying between latitude 40° and 52° N. and between longitude 80° to 120° E. Its corresponding territory in North America would extend from Oregon to Michigan, and would include north and south, the State of Nebraska as well as the Canadian Provinces of Alberta, Sasketche,wan, and Ontario. The area of the Kalgan district is thus about 1,500,000 square miles. Mongolia, the main geographical division of the district, con¬ sists almost entirely of an immense upland, geographically con¬ sidered as two separate regions—northwest Mongolia and the Gobi. Northwest Mongolia is in general a mountainous, well-watered re¬ gion. of which one section, Urunghai, is a forest country. Where the forests fail there are meadows covered with pasture. The Gobi region is divided for purposes of description into Outer Mongolia, Gobi proper, and Inner Mongolia. Outer Mongolia comprises the country between the Khanghai Mountains on the west and the Khingan Range on the east, and runs from the Gobi proper northward to the Siberian frontier. Inner Mongolia extends from Kansu to Manchuria, and from the Chinese Provinces of Shensi and Chihli northwestward to the Gobi. The Gobi proper covers an im¬ mense stretch of territory, much of which lies beyond the limits of Mongolia. It is true desert—a region of gravel, sand, and rock split up irregularly by low, broad-capped ranges and detached hills much denuded and disintegrated. The altitude varies from 3,000 feet on the east to 5,000 feet on the south and west. The Gobi is crossed in many directions by caravan routes between China and Outer Mongolia, Sinkiang, and northwest Mongolia; but there appears to be no part of it which is capable of permanent settlement. There are no rivers, and the lakes are few, small, and for the most part brackish. Water is lacking everywhere, except during the short rainy season. LAKES AND RIVERS The principal river of Outer Mongolia is the Selenga, which has many tributaries, the chief being the Orkhon. The basin of the Selenga extends from Uliassutai to Urga. Both the Selenga and 686 KALGAN CONSULAR DISTRICT 687 Orkhon flow northeastward as far as their confluence on the Siberian frontier, and the Selenga is navigable from this point down to Lake Baikal, a distance of some 200 miles, steamers plying during part of the year to Selenginsk. The valley of the Kerulen River forms a great national highway across Outer Mongolia. Along a considerable portion of the lower reaches it is unfordable, and there are no boats except at the ferries. In the trans-Khingan portion of Inner Mongolia there are few rivers of an}^ importance, but of the many lakes, Dalai Nor is the largest. It is about 40 miles around and lies at an altitude of 4,200 feet. It is generally shallow and the ice on the lake does not thaw until the end of April. Its waters are clear, though impregnated with soda. In southeastern Mongolia, streams are by no means infrequent, and grass grows more or less abundantly; but west of the route from Kalgan to Urga there is a great dearth of water, owing to the small precipitation. In its curved course around the Ordos Plateau the Yellow River is not subject to inundations, and flows between low, level banks through a populous and well-cultivated valley 20 to 40 miles broad. It is unfordable in any part, is much used by large boats, and could possibly be navigated by the right type of river steamer. The rate of the current is nearly 3 y 2 miles an hour, and the voyage from Paotow upstream to Ningsiafu usually takes 20 to 25 days, whereas from 8 to 10 days is the usual downstream schedule. CLIMATE The difference in mean temperature between the northern and southern confines of the Kalgan consular district is marked, the range amounting to as much as 35° F. in the month of January, and averaging 19° F. throughout the year. From October to April Mongolia is practically the center of the high-pressure area prevail¬ ing over continental Asia. By May the high-pressure area has moved in a northerly direction, and in June, July, and August the barometer in Mongolia stands at its lowest. At Urga the mean annual temperature is 27° F. and the mean for January is —16° F. An absolute minimum of —45° F. has been reached in January and a maximum of 101° in June. The average rainfall at Urga, typical of northern Mongolia generally, amounts to less than 8 inches, 79 per cent of which occurs in summer. At Kalgan the an¬ nual precipitation averages from 10 to 15 inches, the average maxi¬ mum temperature is 98° F. in July, and the average minimum 6° in January. POPULATION The population of Mongolia is estimated at approximately 2,500,000, though no census has ever been taken. The population is densest in the north and west along the Siberian frontier, and in the regions lying close to Manchuria and China proper. The average density of the whole area, however, is somewhat less than 2 to the square mile. The following table gives the estimated area and population for this district: 688 COMMERCIAL HANDBOOK OF CHINA Regions Estimated area in square miles Estimated population Estimated population per square mile Mongolia__________ 1,370,000 60, 000 2, 500,000 7,142,185 2, 257, 961 2 Chihli Province north of the Great Wall.. ... ___ 119 Shansi Province north of the Great Wall. .... 30, 000 75 Total for district_____ 1, 460,000 11,900,146 8 CITIES Kalgan , by virtue of its geographic position and its rail con¬ nections, is the gateway to the vast territory of Mongolia and the regions of Kansu and Sinkiang. Fully 80 per cent of the furs, hides, skins, and other raw products of Mongolia pass through Kalgan on their way to China and abroad. Urga , the capital of Mongolia, is approximately 700 miles north of Kalgan. It may be said that practically the whole of Mongolia is commercially tributary to this city. From Urga radiate caravan routes to Kiakhta on the north, to Uliassutai and Kobdo in the far west, and to Kalgan in the south. Kweihwating , a city of commercial importance, is now connected by rail with Paotow on the Yellow River. The cities of Urga and Ivweihwating, which might be termed subsidiary commercial centers of trade, are linked up with Kalgan—by rail in the case of Kweihwat- ing, and by motor transport or camel and ox caravans in the case of Urga. The cities of Kalgan, Dolonnor, and Chilifeng were opened to foreign trade by presidential mandate on January 8, 1914. None of these cities contain either foreign concessions or special com¬ mercial areas, but foreigners may lease land in them for periods varying from 80 to 50 years. The Chinese authorities have in con¬ templation the setting aside of a special area for foreigners in Kal¬ gan, but as these plans involve certain municipal improvements, the construction of good roads, and effective measures to prevent the recurrence of floods, the lack of funds has thus far prevented the plans from being carried out. In Kalgan there are consular repre¬ sentatives of the United States, Japan, and Russia. Russia also maintains a consular representative in Urga and is understood to be contemplating similar appointments to other points in Mongolia. The following table summarizes the more salient facts relating to important cities in this district: Cities Esti¬ mated popula¬ tion Euro¬ peans Ameri¬ cans Ameri¬ can firms Kalgan...._. 75,000 50,000 65,000 60,000 35,000 80,000 40,000 125 15 8 Tatungfu __ 7 1 Kweihwating ........ 8 2 Urga_ _ 2,000 0 ) 0 ) 0 ) 3 Chaoyangfu__ Chengtehfu_____ Chihfeng.. _!_ 1 Not known. KALGAN CONSULAR DISTRICT 689 AGRICULTURE Of, the 1,500,000 square miles comprising the Kalgan district, only a small fraction is devoted to agriculture. Except for small, isolated areas in Mongolia, little of the land has agricultural possibilities. This is doubtless due in part to the scanty rainfall (about 8 inches) and the long, extremely rigorous winters. The agricultural methods and tools employed are primitive, and the rotation of crops is apparently unknown. In Chahar, Suiyuan, and Jehol the principal crops are wheat, beans, and linseed. Kaoli¬ ang and millet are also raised for local consumption, the stalks being used as fodder. Though the amount of wheat produced is consider¬ able, there are but few flour mills in the district and there is in con¬ sequence a fairly heavy importation of flour, largely from the United States. Soy beans comprise the bulk of the bean crop, the greater part of which is shipped to Tientsin for export. Chahar produces annually over 2,500,000 bushels of linseed out of a total for the district of approximately 5,000,000 bushels. More than 80 per cent of this crop is exported. The table below summarizes data relative to the more important crops raised in the district: Products Planting season Harvesting season Esti¬ mated produc¬ tion per acre Estimated annual pro¬ duction Percent¬ age con¬ sumed locally Wheat.. Apnl-May.. August-September_ _do__ Bushels 15 Bushels 36,608, 783 10,459,652 5, 229, 826 50 Beans.. .do.. 12 30 Linseed___ .do.. .do. 15 20 LIVESTOCK The Mongols are a pastoral people, both by necessity and instinct, and have been so for hundreds of years. Their wealth is measured in terms of horses, cattle, and sheep. No systematic attempt to secure statistics of Mongolia’s wealth in livestock has ever been at¬ tempted; but the estimate below may be considered a fair approxi¬ mation : Horses- 1, 840, 000 Camels_ 365, 000 Horned cattle_ 1, 725, 000 Sheep and goats_ 11, 500, 000 Total_ 15,430,000 HORSES Horses comprise one of the chief forms of Mongolia’s natural wealth. The Mongolian horse is generally bay or bay-brown in color, stands from 50 to 59 inches in height, has a big, often hook¬ nosed head, a short neck, a well-developed chest, and strong legs and back. Rigorous climatic conditions have brought about the 100020°—26-45 690 COMMERCIAL HANDBOOK OF CHINA survival of the fittest and produced a strong and enduring, if un¬ pretentious, breed of horses that are regarded as almost indefatig¬ able. The price of an average Mongolian horse varies from $20 to $40 (Mex.). Better animals bring up to $60, while particularly mettlesome amblers or race horses will bring from $500 to $1,000. While the Mongol has been generally averse to parting with his horses, increasingly high prices have overcome this attitude and in the past few years an average of 70,000 horses have been exported annually to China. The majority are used for agriculture and general transportation purposes, but probably several thousand are purchased each year for racing and riding. It is doubtful whether the Mongolian horse could be exported ad¬ vantageously to foreign countries, but the establishment of breeding farms with good European sires would, it is believed, result in the development of a new type which would find a ready market in foreign countries. CAMELS Mongolian camels are estimated at approximately 365,000 head. Estimating each camel to yield an average of about 6 pounds of wool, the yearly output available would approximate 2,200,000 pounds. Of this amount the local population uses approximately 400,000 pounds, leaving an exportable balance of 1,800,000 pounds. The actual export of camel wool from this district for 1923 amounted to just short of 2,000,000 pounds, over 90 per cent of which originated in Mongolia. CATTLE \ « The number of horned cattle in Mongolia has been estimated at 1,725,000 head. The yearly increase approximates 572,000 head, the yearly loss 375,000 head, leaving an approximate net yearly increase of 175,000 head. It will be noted that the yearly loss is extremely heavy. The Mongols make no attempt to protect their livestock from the rigors of climate, but herd them on the steppes the year round. In summer they pasture the animals in localities having water, and in winter they choose places having comparatively little snow, to enable the cattle to get at the grass underneath. Every year a greater part of the newborn perish, while the older cattle which survive diminish in weight from 20 to 25 per cent. Thus neglected, the cattle are subject to many diseases, the commonest of which are rinderpest and epidemic pneumonia. Anthrax occurs, but not to a ravaging extent. In 1910 Russian veterinarians first made inoculations against rinderpest, and in the following years special expeditions for the purpose were sent from Chita, in Siberia. The Mongols had thousands of their cattle inoculated, but political disturbances have interfered with this work in recent years. Before and during the war, Russia was the chief buyer of Mon¬ golian cattle. In 1916 Russia bought and exported 175,000 head, in 1917, 100,000 head. What percentage of this amount went to China is not known, but over a period of several years the entire increase of Mongolian cattle was consumed abroad. There were years when, in order to satisfy the demand of the Russian and Chinese markets, even the reserve stock was used. KALGAN CONSULAR DISTRICT 691 The number of hides available yearly for export is estimated as in the neighborhood of 84,000. Hides are exported mainly via Kalgan and Tientsin, a small quantity going to Japan through Dairen. Compared with pre-war exports, present exports show a considerable decrease. Germany, which formerly was one of the chief buyers, has again entered the market. Lately America and Europe have also increased their purchases, and exports to Japan likewise show an increase. The establishment of leather factories in Manchuria and in the Province of Chihli has resulted in bright¬ ening the Mongolian market. SHEEP It is estimated that about 800,000 head of sheep are available annually for export. Mongolian mutton, which was formerly ex¬ ported almost exclusively to Russia, has in more recent years ap¬ peared in European markets. In 1918 a British company, appre¬ ciating the high quality of Mongolian mutton, began the export of sheep carcasses to London. This firm has established a slaugh¬ terhouse at Harbin and is building one at Hailar. The establishment at Kalgan of refrigerating plants and slaugh¬ terhouses of modern type, and the adaptation of railway cars for the transportation of meat to Tientsin and Shanghai would, it is believed, prove a profitable undertaking. Great numbers of sheep can be easily drawn from Mongolia and western China to Kalgan. It is estimated that 15,960,000 pounds of wool, 500,000 sheep and goatskins and 700,000 lambskins are available annually for export from the Mongolian market. The Mongolian Central Cooperative Society, a commercial organization of the Mongolian government, has been granted a monopoly of the export of intestines. In 1921 approximately 60,000 pounds of salted and 10,000 pounds of dry intestines were exported from Mongolia. MINERALS AND MINING The variety of deposits found in the consular district, such as coal, iron, gold, silver, copper, lead, asbestos, and graphite, indicates that Mongolia and those sections of Chihli and Shansi which lie wdthin this district are potentially rich in minerals. The funda¬ mental element required for the development of these resources is adequate transportation. Mongolia is devoid of railways, and until Urga, the capital, is connected by rail with the Peking-Suiyuan line, or a trunk line is constructed into Mongolia, exploitation of the minerals of Mongolia on a large scale is hardly possible. COAL The Geological Survey of China has made extensive studies of the mineral resources of northern Shansi and northwestern Chihli. The data given have been obtained from the society’s publications. North Shansi .—The Tatungfu coal field in northern Shansi ex¬ tends southwest of the city of Tatungfu for approximately 66 miles. Surveys have not extended beyond this point, but it is known that the coal formation reappears some 30 miles farther south. The width of the formation, running southwest from Tatungfu, is about 33 miles. There are two distinct coal series in the formation. The 692 COMMERCIAL HANDBOOK OF CHINA lower series, Ferro-Carboniferous in age, contains three coal seams which are 5 to 8 feet thick in places, but which are reduced to shale in others. It has been estimated that approximately 354,000,000 tons have been extracted by old native mining operations and that there re¬ mains a reserve of approximately 1,000,000,000 tons. Suiyuan .—As far as is known the coal deposits in the district of Suiyuan are located in the Ta Ching Shan Mountains north of the city of Kweihwating and north of Saratsi, some 60 miles west of Kweihwating. Bulletins of the Geological Survey of China in¬ dicate that the coal in the Kweihwating region is anthracite, with the reserve approximating 100,000,000 tons, while the coal of the Saratsi area is bituminous, with estimated reserves amounting to 300,000,000 tons. Chahar .—This district is not known to contain any large deposits of coal, but from a list of mines supplied by the Chahar Bureau of Industries, it appears that three “ hsien ” (districts) to the north¬ east and northwest of Kalgan contain deposits with, according to Geological Survey estimates, 10,000,000 tons of bituminous coal. Jehol .—Fields of this district are located in the vicinity of Chih- feng and Chaoyang. The anthracite reserves have been estimated at 80,000,000 tons, and the bituminous at 850,000,000 tons. The coal-mining area conceded to various Chinese companies in this district by the Deparmtent of Mines up to 1921 amounted to ap¬ proximately 76 square miles, an area exceeded by but few Provinces in China. Mongolia .—Information relative to the coal resources of Mongolia is extremely meager. Coal fields which have so far been discovered lie generally to the west and the east of Urga. The district of Tushetu Khan, approximately 100 miles west of Urga, contains three known coal beds, and it is reported that three more have been discovered. Another coal field is reported in the district of Sain Nain Khan, approximately 350 miles southwest of Urga. The Ivobdo district also contains a coal field, while the district of Tzagatu Khan, some 300 miles east of the city of Kobdo, is said to contain two coal fields. Both bituminous and anthracite are said to exist in these fields. IRON Iron-ore deposits in the district are reputed to be as great as those of coal. From the data obtainable it appears that the portion of Chihli Province which lies within this district contains one of the largest iron-ore fields in China. The iron-ore resources of Mongolia are reported to be enormous. It is noteworthy that in the majority of instances iron ore and coal have been found in the same localities. This condition might prove a factor of importance in the development of industrial life in Mongolia. Two iron deposits have been reported in the Tushetu district west of Urga, and a third in Tsetsen Khan, some 150 miles east of Urga. A fourth is said to be located in Sain Nain Khan, and a fifth near the Songuin River in the Kobdo district. In the Hsuanhuafu section of Chihli, the Lungkuan district, northwest of the Peking-Suiyuan Railroad, is particularly rich in iron ore. The geological survey places the ore reserves of this dis- KALGAN CONSULAR DISTRICT 693 trict at 49,200,000 tons and the iron content at 26,000,000 tons. The reserves of the Hsuanhuafu district proper are given as 20,000,000 tons, containing 9,600,000 tons of iron, while the H'uailai district, 45 miles southwest of Hsuanhuafu, contains 4,000,000 tons of ore with iron content of 2,400,000 tons. The only known iron-ore deposit in the district of Jehol is in Chaoyang, figures for which are 300,000 tons of ore containing 150,000 tons of iron. GOLD The principal gold deposits of Mongolia are found on the Kudara, Kuitun, and Iro Rivers. The Russians were apparently the first to realize the possibilities of gold mining in Mongolia, and surveys of various sections of the country resulted in the securing of con¬ cessions and the active exploitation of Mongolia’s gold resources. The principal deposits in the territory so far surveyed are easily accessible through Urga on the south, or from Verkhni-Udinsk on the Trans-Siberian Railway, and from Kiakhta on the north. Lack of railroad facilities, however, will continue to act as a deterrent in the exploits of these deposits. The most important section of the gold area referred to is the Iro River district. One placer deposit in particular, about 1 y 2 miles long, with a width of gravel of 70 to 210 feet and an average depth of 10 y 2 feet, is reported to have yielded as much as $35 gold per cubic yard. COPPER Copper also has been found in different parts of Mongolia, five deposits having been so far investigated and surveyed. The largest deposit in point of area and reserves is located in Sain Nain Khan, where the seam is reported to stretch over a distance of 35 kilo¬ meters and where pieces of native ore weighing up to 36 pounds have been frequently found. While detailed information is not obtainable, the surveys by Russian engineers have left little doubt that Mongolia is sufficiently rich in copper to repay exploitation on a large scale—ever having due regard for the transportation problem. OTHER MINERALS Other important metals known to exist in considerable quantity in this consular district are silver, lead, zinc, graphite, and asbestos. It has been stated that graphite of excellent quality exists in large quantities in Mongolia, and that two graphite mountains are located on the Kos Gol. The figures below summarize the approximate an¬ nual production of the four leading minerals found in the consular district: Minerals and metals Approxi¬ mate annual produc¬ tion Approximate reserves Iron. do_ Gold. ..ounces.. Silver.. do_ 203,000 0 ) 50,000 17,000 2,400,000,000 38, 750,000 (0 0 ) 1 Not known. 694 COMMERCIAL HANDBOOK OF CHINA MINES COAL Chimingshan Colliery. —Near Hsiahuayuan station on the Peking-Suiyuan railway, 137 miles from Peking. Head office: Peking-Suiyuan Administration, Peking. Capital: $775,934 (Mex.) of which $351,102 was paid by the Ministry of Communications and the rest by the Peking-Suiyuan Railroad. Under the administration of the Peking-Suiyan Railway. Mining area: 36.44 square li. Peipaio Coal Mining Co. (Ltd.). —Head offie: 38 Via Marco Polo, Italian Concession, Tietsin. Location of mines: Peipiao, Chaoyang, Jehol district. Established in 1921; the railway company inaugurated mining operations in 1918. Capital: $5,000,000 (Mex.), two-fifths subscribed by the Peking-Mukden Railway and three-fifths by merchants. It is planned to produce 2,000 tons per day of bituminous coal in two years’ time. The Peipaio product is good steam coal, suitable for locomotives and marine boilers, and has the reputation of being the best coal along the Peking-Mukden Railway. Tung Pao Mining Co. (Ltd.). —Office: Tatungfu, Shansi. Location: Pai Chia Wan, Kowchuan, North Shansi. Established in May, 1921; registered August, 1921. Capital: $3,000,000 (Mex.) subscribed by Shansi merchants in cooperation with Cantonese merchants. The mines produce two kinds of coal—the navy or smokeless coal on top, and first-class steam coal for locomotives and steamers at the bottom of the coal-bearing series. The company put down 10 shafts and for a while had as many as 3,000 employees. Pao Feng Coal Mining Co. (Ltd.). —Location: Tatung, Shansi. Established February, 1913; registered July, 1913. Capital: $600,000 (Mex.). IRON Lungyen Mining Administration. —Head office: Huang Shou Yi Hutung, Peking. Established in March, 1919; registered December, 1919. Capital. $5,000,000 (Mex.), one half subscribed by the Chinese Government and the other half by Chinese capitalists. SILVER Jehol Silver Mines. —Location: 45 miles northeast of Chengteh, Jehol. The mines have been worked by the natives for about 75 years. Estimated possible annual output, 75,000 ounces. The Jehol Mines embrace two workings 5 miles apart—the Ku Shan Tze mine and the Yen Tung Shan mine. Output for 1916, 17,000 ounces. MANUFACTURING This consular district is of little importance industrially, but de¬ velopment will follow the construction of adequate railroad facilities. The potential mineral wealth of the district affords almost unlimited possibilities for industrial expansion. The following is a summary of data relative to industries in the Kalgan district: Industries Capacity Approxi¬ mate number of em¬ ployees Mint . 500,000 coins per 500 day. Flour mills. 2,500 bags per day. 100 Dairy farming. 50 Soda refineries... 90 Leather.. ... ... 28 Motor-car bodies_ 60 Approxi¬ mate capital 1 Estimated output Disposition $375, 000 350,000 coins per day. Chahar. 410,000 50,000 bags per an¬ num. Local and Peking. 100,000 Peking and Tien¬ tsin. 60,000 1,450,000 pounds Local and Tien- per annum. tsin. 20,000 10,670 pieces per annum. Local. 20,000 35 bodies per an¬ num. Do. 1 All given in terms of Mexican currency excepting the first item, which is United States dollars. KALGAN CONSULAR DISTRICT 695 The local construction of motor-car bodies is an industry of con¬ siderable interest. The industry has sprung up as the result of the introduction of automobiles on the Kalgan to Ufga route, and while still conducted on a small scale, is indicative of the possibility of developing new industries in this district. There is a growing de¬ mand for bodies produced locally, now that their durability and soundness of construction has been demonstrated. Transportation companies frequently purchase only the chassis and have a body made to order locally. These bodies cost $125 (Mex.) and repre¬ sent a saving of $200 to $250 (Mex.) on the price of a car delivered in Kalgan complete with body. LABOR CONDITIONS Industrialism has barely made its appearance in the Kalgan dis¬ trict and there is, therefore, very little of what might be termed organized or regulated labor. It is only in such lines of industry as mints, flour mills, electric-light plants, telephone companies, and railroad workshops, that wages and working hours have been at all systematized. With the exception of a union of the employees of the Peking- Suiyuan Railroad, there are no organized labor unions or societies. This union is affiliated with the Union of Railway Laborers and was organized in connection with a strike which occurred on the Peking-Suiyuan line on October 27, 1922. TRANSPORTATION AND COMMUNICATION With the exception of the Yellow River, the Kalgan district has no great natural water thoroughfares such as are found in central and southern China. The existing alternative, as represented by caravan routes winding across the desert and mountain, while pic¬ turesque, is obviously and increasingly inadequate to meet the grow¬ ing industrial activities. The most imperative need of this region is the construction of additional railway lines to connect with the approximately 500 miles of railroad which now serve this vast terri¬ tory. The construction of a main railway line along the present Kalgan-Urga-Kiakhta caravan route is of the utmost necessity to the economic development of this region. The Kalgan consular dis¬ trict undoubtedly presents interesting possibilities, particularly by virtue of its mineral and livestock wealth. Facilities for transporta¬ tion are, however, indispensable to the inauguration of commercial and industrial prosperity. WATERWAYS The only navigable waterway is that section of the Yellow River between Paotow and Ningsiafu, a distance of approximately 500 miles. Sailing boats and rafts constructed of some 20 or 30 goatskin bladders, with a wooden superstructure are used. Attempts were made some years ago to use steam launches, but without success. However, it is believed that with properly constructed shallow-draft launches profitable transportation could be developed. The rafts and boats now plying the river carry from 15 to 20 tons, the rates varying from gold $20 to $25 per ton for the voyage. The down- 696 COMMERCIAL HANDBOOK OF CHINA stream run from Ningsia to Paotow occupies from 8 to 10 days and the return trip 10 to 20 days. No figures relative to the yearly volume and value of goods transported along its railway are avail¬ able, but it is estimated that Kansu and Sinkiang export yearly 114,000,000 pounds of sheep and camel wool, 6,000,000 pounds of horsehair, 1,500,000 skins, and furs to the value of $10,000,000 (United States currency). The annual imports are said to include 500,000 chests of tea, 500,000 pounds of sugar, and manufactured goods (hardware, machinery, cigarettes, cotton cloth, and miscella¬ neous articles) to the value of $2,000,000 (United States). These figures are not given as actual values of the annual imports and exports, but merely indicate the commercial possibilities of the region and the importance of the river as a means of transportation. The following table summarizes methods of transportation in the district: Mediums Average load Average mileage per day Average cost (U. S. currency) per ton- mile 1 Railways __ 400 tons.. 175 $0.05 .40 Automobiles__ 2,000 pounds__ 140 Camels___ 260 pounds.... 20 .10 Boats....... 35,000 pounds.. .. 30 .05 i It should be noted that the figures 5 cents per ton-mile on the railway represents the average on second class freight. Cereals by the Peking-Suiyuan Railway are carried at the rate of $0.03 a ton-mile. RAILWAYS In 1905 construction work Tvas started on the Peking-Suiyuan Railway, the only system of rail communication in the district. It was constructed with the surplus earnings of the Peking-Mukden Railway and the cost was approximately $42,000,000. It is one of the few lines in China built entirely with Chinese capital and by Chinese engineers. The Peking-Ivalgan section of the line was open to traffic in 1909. Through passenger and freight traffic between Peking and Suiyuan was inaugurated in 1915, and in 1923 the extension to Paotowchen was completed. The main line is 468 miles in length. A branch to Mentowkow, 16y 2 miles in length, connects Peking with this important mining district, and another small branch runs from Tatungfu to the coal mines at Kowcliuan. The Peking-Suiyuan Railway runs from Fengtai to Suiyuan via Peking, connecting with the Peking-Mukden and Peking-Hankow systems at Fengtai. It forms the natural highway over which millions of dollars’ worth of wool, tea, hemp, grain, and coal are annually transported to Tientsin in the east, Kansu and Sinkiang in the west, and Mongolia in the north. There are no railways now under construction in the district, but several have been projected. In addition to extending the existing line from Paotow to Ningsiafu in the Province of Kansu, a main trunk line has been projected from Kalgan to Urga and thence to Kaikhta, a total distance of approximately 900 miles. Other projected lines in this district are the 44 Chihli Extra-Mural ” KALGAN CONSULAR DISTRICT 697 railways: Peking to Jehol, 130 miles; Jehol to Chihfeng, 140 miles; Chinchow to Chihfeng, 190 miles; Kalgan to Dolonnor, 190 miles; Dolonnor to Chihfeng, 130 miles; Chihfeng to Taonanfu, 330 miles. The total approximate length of these lines will be 1,110 miles. It is proposed to construct these lines from the surplus earnings of the Peking-Mukden and Peking-Hankow lines. It is more than probable, should their construction actually be undertaken, that foreign capital will have to be employed. ROADS With the exception of one automobile road between Kweihwating and Paotow, a distance of approximately 120 miles, constructed by the Governor of Suiyuan, there are no roads in this district which have been actually constructed for automobile use. However, it should be noted that the country through which the main caravan routes to Mongolia run is well adapted to automobile traffic. The land is characterized by a series of gently rolling steppes with long stretches of almost perfectly level ground. There are three main trade routes in the district, over all of which it is possible to use automobiles. The most important one con¬ nects Kalgan with Urga, a distance of approximately 750 miles. From Urga the route runs north to Kiakhta on the Siberian border, a distance of approximately 200 miles. This route is practicable for automobile traffic over its entire length. The Kalgan-Urga section sprang into prominence some three years ago with the successful introduction of automobiles on this stretch, and the increasing de¬ mand for cars on this run during the last two years has been remark¬ able. At present there are 200 cars operating between Kalgan and Urga, approximately 75 per cent of which number represents cars engaged in a general passenger and transportation business, while the remainder consists of cars owned by various foreign firms and operated in connection with the conduct of their business in Mon¬ golia. The second main route, the Kobdo-Uliassutai-Urga-Manchuoli caravan route, the total length of which is approximately 1,450 miles, practically crosses Mongolia from east to west. This is one of the most important trade arteries of Mongolia and connects the im¬ portant administrative and economic centers of the country. The road is fairly well adapted to automobile traffic and is used by cars to some extent. The utility of the route is restricted, however, by the fact that there are no intermediate supply and repair stations between the cities mentioned. In consequence it is essential for a car undertaking any section of this trip to load up with considerable supplies of oil, gasoline, and other necessaries. This dead weight naturally reduces the amount of cargo and therefore renders the operation of cars somewhat unprofitable. The third route, the Lanchowfu-Ningsiafu-Paotow road, links up Kansu and Sinkiang with Paotow on the Peking-Suiyuan Railroad, and is approximately 650 miles in length. The road between Lan- chowfu and Ningsiafu passes through somewhat mountainous country and is not suitable for automobile traffic. From Ningsiafu, however, the road is fairly well adapted to motor traffic. 698 COMMERCIAL HANDBOOK OF CHINA Of the shorter but fairly important roads, mention should be made of the road approximately 88 miles in length connecting Kal- gan with Dolonnor or Lama Miao. From 15 to 20 cars operate on this route at the present time. TAXES Certain taxes are levied to maintain some of the roads mentioned. The authorities of Chahar impose a tax of $25 on private cars, or cars not engaged in a general passenger and transportation business (in which category all foreign-owned cars are included), and a tax of $50 on all Chinese-owned cars, the activities of which are almost wholly confined to the transportation of passengers and cargo. These charges are collected every time a car, either Chinese or foreign, leaves Kalgan for Urga or Dolonnor. Payment is ac¬ knowledged by the issuance of a pass indicating that the road tax has been paid. These charges are levied for the upkeep of the Kalgan-Urga road, or, rather, the Chinese section of it, from Kalgan to Ude, a small telegraph station about midway between Kalgan and Urga. TELEGRAPHS AND WIRELESS SERVICE The telegraph system in the strictly Chinese portions of the dis¬ trict is operated by the Chinese Telegraph Administration. The rates in force, exclusive of Mongolia, are (in Mexican currency) 9 cents a word to stations within the same Province; 18 cents a word to stations in other Provinces; to Shanghai, 18 cents; to New York, $1.90; and to San Francisco, via the Pacific, $1.70 a word. In Mongolia two lines are in operation, constructed by the former Imperial Russian Government, under agreements concluded with China in 1913 and 1914. The first line from Kobdo to Kosh-Agatch, in the Tomsk district, connects western Mongolia with Siberia and Russia. Kobdo and Urga are not directly connected, but telegrams from one point to the other are transmitted by Tomsk, Irkutsk, and Kiakhta. The Mongolian government, however, has already com¬ pleted part of a line to connect Kobdo with Urga, via Uliassutai. The second line constructed by the Imperial Russian Government links up Uliassutai with Monda on the Siberian border. These two lines were handed over to the Soviet Government by article 10 of the treaty concluded between the present Mongolian Peoples’ Revolutionary Government and the Russian Soviet Government under date of November 5, 1921. The other main system in Mongolia of special significance, in that it links up China directly with Europe, is the Peking-Kiakhta line, since 1908 under the control-of the Ministry of Communications. This line runs via Kalgan and Urga, and is by far the most expedi¬ tious in China, even to such points as New York City and the Atlantic seaboard. It was partially destroyed during the political upheaval in Mongolia in February, 1921, but was restored in 1922 through the efforts of the Chinese Telegraph Administration. The rate to all European countries via Kiakhta is $1.45 per word; to New York City, $1.90; to San Francisco, $2.15. There is also a telegraph line running from Urga 400 miles east¬ ward to Sain Peissu, which was partially constructed by Baron KALGAN CONSULAR DISTRICT 699 Unigeren and later completed by the Mongolian government. This line, it is understood, will be eventually extended to Manchouli on the Chinese Eastern Railway. Wireless installation located in Kalgan is controlled by the Min¬ istry of Communications and has a normal range of 600 geographical miles by day and 1,300 by night, with antenna power of 5 kilowatts. It may be used for ordinary commercial purposes at the rate of 9 cents per word for foreign messages and 6 cents per word for Chinese. Urga has one of the most powerful wireless stations in China. Originally erected for the Chinese Government, it has since been taken over by Mongolia. At present this station is operated by the Mongolian government for strictly administrative purposes, and is very heavily guarded. Its normal range is 1,200 geographical miles and 3,000 miles by night, and has an antenna power of 25 kilowatts. It is possible for the station to establish direct contact with Moscow. There is a small wireless installation at Kobdo, which is under¬ stood to be merely a small receiving and transmitting station. TELEPHONES The following table summarizes data relative to telephones in this district: Location Operating company Number of sub¬ scribers Type * Equipment Kalgan _ .. Kalgan Telephone Co..._ 450 Manual... Japanese. American. Do. Kweihwa _. __ Kweihua Telephone Co.... 300 .. ..do. -. Tatung Tatung Telephone Co___ 250 .do. Do. Urga._.. Mongolian Government _ 300 .do_ Do. POSTAL FACILITIES The Chinese Postal Administration maintains regular and sys¬ tematic service throughout the strictly Chinese sections of the dis¬ trict. Postal, parcel-post, and money-order services are maintained at an admirable standard of efficiency. First-class mail from New York reaches Kalgan in about four weeks. The Chinese Postal Administration maintained postal service between Kalgan and Kiakhta, via Urga, prior to the political upheaval of 1921 in Mon¬ golia; but with the inauguration of the Mongolian Peoples 1 Revolu¬ tionary Republic the Chinese were forced to leave, and the postal service maintained by the Mongolian government so far has been inadequate. Biweekly service operates between Urga and Kiakhta at 10 cents United States currency per letter. Pony-express service is maintained west of Urga to Sainchabi and Uliassutai, and east to Sain Peissu. There is no official mail service between Kalgan and Urga. Mail for Urga at present is carried by either Chinese or foreign motor cars. A somewhat anomalous state of affairs exists in Mongolia with respect to the postal situation. The agreement concluded between Soviet Russia and Mongolia on November 5, 1921, when Russia 700 COMMERCIAL HANDBOOK OF CHINA recognized the independence of Mongolia, provided for a special postal and telegraph convention with a view to Russian participa¬ tion in the establishment of postal and telegraphic communication in Mongolia. On the other hand, the Sino-Russian agreement of May 31, 1924, specifically states, “ The Government of the Union of Soviet Socialist Republics recognizes that Outer Mongolia is an integral part of the Republic of China, and respects China’s sovereignty therein.” Such being the case, China probably would not readily admit the legality of agreements concluded by the Soviet Govern¬ ment with an independent Mongolia relative to the establishment of postal, telegraphic, or other communicative routes in Chinese territory. WAREHOUSING AND STORAGE FACILITIES There are no firms in this district engaged exclusively in a storage or general shipping business. There are a number, however, of large grain and general merchandise dealers who have constructed corru¬ gated-iron warehouses for the storing of their goods. American fur and wool merchants make use of these warehouses to some extent, the charges in each case depending upon the service. Climatic con¬ ditions in this district are so propitious, however, in both summer and winter that grain, wool, and skins are very generally stored in the open. PUBLIC WORKS AND UTILITIES ELECTRIC-LIGHT PLANTS All the more important cities in this district are equipped with electric-light installations. The North China Light Co. (Ltd.), with a capitalization of $350,000 Mex., operates a 120-kilowatt power plant in Kalgan. Equipment consists of three-phase alternator, 2,200 volts; also direct- current and reciprocating generators; and one Babcock & Wilcox boiler with heating surface of 873 square feet. The plant was in¬ stalled by Mitsui Bussan Ivaisha. The company proposes to install additional equipment capable of supplying 20,000 lamps. The Tatung Electric Light Co. (Ltd.) is capitalized at $200,000 Mex. and operates a 200-kilowatt plant in the city of Tatungfu, in Shansi. In the city of Kweihwating, Suiyuan, the Kweisui Electric Light Co. (Ltd.), capitalized at $200,000 Mex., operates a 100-kilowatt plant. Paotow, the present terminal of the Peking-Suiyuan Railroad, has an electric-light sj^stem installed by the Suiyuan-Paotowchen Elec¬ tric Light Co., and operates a 70-kilowatt plant with 2,000 lamps. The electric-light plant in Urga, Mongolia, was originally in¬ stalled by Russians in the early part of 1920. It is understood that the present Mongolian government is contemplating the replace¬ ment of this small plant with a new installation, the equipment of which, it is said, will cost approximately $60,000 Mex. The ma¬ chinery is understood to be of German make. It is planned to con¬ nect up the new plant with a surface coal mine, some 15 miles outside of Urga, by a light railroad. KALGAN CONSULAR DISTRICT 701 EXPORT AND IMPORT TRADE In the opinion of local merchants who have traded in Mongolia and other sections of the consular district during the past 10 years, the introduction of railway traffic, which has brought in foreign merchants to purchase wools, skins, and furs, has increased the ex¬ port and import trade of this district at least 50 per cent. Compara¬ tive figures are not available, but it is estimated that 35 per cent of the trade increase is represented in exported commodities—furs, skins, and wool. While the growth of imported foreign goods has not equaled that of exports, there has been a steadily increasing de¬ mand for foreign-made articles of all sorts, a demand which will inevitably expand with the further commercial development of Mongolia. EXPORTS Figures below represent exports of the 10 most important com¬ modities through Kalgan for 1923. Figures for the preceding years are not available, but those for 1923 will give a fair idea of this dis¬ trict’s exports, in both value and volume. Article Quantity Value (Mexican currency) Animal scraps for glue......chin.. Camel wool. _ do_ Goatskins_____ ... ... .. pieces.. Lambskins_ ____ . . ..do_ Linseed __ ___ ... __ chin.. Live horses. ___ _ . ....head.. Live sheep.._ do_ Marmot skins.. _ . _ .. pieces.. Rape_ ...chin.. Sheep wool _do_ Squirrel skins________pieces.. Total..____ 5,421,118 1,459,855 19, 589, 811 422, 358 3, 408, 580 26,405 352, 038 2, 356, 663 6, 297, 620 18, 662, 523 1, 512,122 271,055 109,489 26,446, 244 169, 943 136, 343 1,056, 200 2,112, 228 2,191, 706 251, 904 802, 488 2, 041, 364 35, 588,964 It is not possible to state accurately what percentage of the prod¬ ucts originating in this district is exported to other points in China and what proportion to foreign countries; but the following is a rough estimate: Article Percentage to China Percentage to foreign countries Camel wool... .... 60 40 Goat and lamb skins. ....... . ... 53 47 Linseed_ .. ... .. 20 80 Marmot skins..... .. 65 35 Rapeseed...... 34 66 Sheep wool ___ 40 60 Squirrel skins.... 53 47 EXPORT DUTIES Goods originating in Outer Mongolia and not covered by transit pass are subject to a 6 per cent export duty levied by the Mongolian government on the basis of its appraisal of market values, also likin 702 COMMERCIAL HANDBOOK OF CHINA charges at Kalgan and Chu Yung Kuan on the Peking-Suiyuan Railroad, and 2 y 2 per cent native customs tax at Tientsin. Com¬ modities from Inner Mongolia pay likin at Dolonnor, Kalgan, Chu Yung Kuan, and Tientsin. Produce originating west of Fengchen on the Peking-Suiyuan Railroad pays likin at Fengchen and the native customs at Tientsin. Foreign firms that ship to Tientsin for export to the United States or other foreign countries obtain from the Chinese Maritime Customs in Tientsin transit passes which exempt their goods from payment of the various likin charges indicated above. The foreign exporter, therefore, pays merely the ordinary customs export tax at Tientsin, except in the case of goods originating in Outer Mongolia, on which he is obliged to pay the Mongolian government’s 6 per cent export duty. IMPORTS Imports of foreign goods have not yet reached large proportions in quantity or value. They consist mainly of flour, sugar, kerosene, hardware, and miscellaneous toilet and fancy articles. The list be¬ low is for 1923: Articles Quantity Value (Mexican currency) Automobiles. number.. 5 $12, 500 Automobile tires. _do_ 200 12,000 Blue indigo. _chin. 495,600 148,680 Cloth_ ...bolts.. 594, 418 8, 024, 643 Flour__ _chin.. 2, 988, 580 209, 200 Gunny bags. ..pieces.. 268, 647 80, 594 Hardware.. _chin.. 76, 400 0) Hemp. _do_ 987, 660 296, 298 Articles Quantity Value (Mexican currency) Kerosene. ..chin.. Matting...pieces . Sugar_... chin.. Tea... _ do... 1,935,600 140, 790 2,943,930 14, 006,476 432, 046 $232,272 98, 553 441, 589 9, 804, 533 216,023 Wooden bowls_ pieces.. Total__ 19, 576, 885 1 Not known. Note.— 1 chin equals pounds; 1 bolt equals about 12 yards. Of the above total approximately $1,000,000 represents imported foreign goods. The automobiles imported were all of American manufacture. Probably 80 per cent of the imported flour was Amer¬ ican. and approximately 50 per cent of the imported kerosene origi¬ nated in the United States. In view of the fact that a large percentage of such imports as tea, sugar, flour, and cloth eventually find their way into Mongolia, it may be of interest to compare the actual figures for 1923 with the estimated import capacity of Mongolia, as estimated by a Russian economist. Articles Estimated capacity Imported in 1923 Cloth ...yards.. 14, 700, 000 7,133,016 Flour__ Sugar.... Tea..... _ pounds.. . do_ . do_ 612, 000, 000 460,000 30, 400,000 3, 984, 773 3, 984, 773 18, 675, 301 Imported foreign goods are subject to a 5 per cent ad valorem tax at the maritime port of entry, and a further 2% per cent tax, KALGAN CONSULAR DISTRICT 703 upon the payment of which goods may be carried into the interior without additional charges. An American exporter can, therefore, land his cargo in Kalgan, Kweihwa, or Paotow upon the payment of a total tariff charge of 7 y 2 per cent. Goods sent to Mongolia are subject, in addition, to customs duties levied by the Mongolian government—6 per cent on ordinary goods, 12 per cent on tobacco, and 30 per cent on luxuries. American exporters entering this market usually grant agencies to a general export and import house in Tientsin. Such Tientsin firms have generally made careful surveys of the North China markets and are in a position to judge the marketing possibilities of any particular commodity. MONEY, BANKING, AND CREDIT BANKS There are no foreign banks and only two important Chinese bank¬ ing institutions in this entire area. They are the Bank of China and the Bank of Communications, with branches in all the more import¬ ant cities in this district with the exception of Mongolia. Their revenues are almost entirely derived from short-term loans to mer¬ chants or exchange shops and from the remitting of funds from cities in this district to Shanghai, Peking, Tientsin, and Hankow. Loans are generally made on the basis of from 9 per cent to 14 per cent per annum. The remittance rate between Kalgan and Shanghai is usually about 1 per cent, and slightly less to Tientsin. At present there is no reliable banking institution in Mongolia. As a conse¬ quence the majority of firms, both foreign and Chinese, make their own arrangements for the remittance of funds. Silver dollars are generally remitted by motor car from Kalgan and Urga, the rates varying from 4 per cent to 20 per cent, depending on their scarcity or abundance. LOCAL CURRENCY The local currency situation presents the anomalies and peculiari¬ ties to be found in other sections of China. Chinese silver dollars and bank notes were formerly extremely popular in Mongolia, but in 1921, with the inauguration of the Mongolian People’s Revolu¬ tionary Government, the two Chinese banks operating branch offices in Urga were forced to close up. There has been a marked decline in the volume of Chinese bank notes in circulation in Urga, but the silver dollar continues to be popular and forms practically the only currency accepted in Mongolia at present. The attempts of the Mongolian government to issue and introduce its own paper currency have not so far met with success. CREDITS In view of the fact that local Chinese banks are not prepared to handle foreign drafts, letters of credit, etc., foreign firms do banking of this nature through the foreign banks in Tientsin. The great majority of foreign firms, such as fur merchants and general im¬ porters and exporters, are merely small branch houses, with head offices located in Tientsin. This is particularly true of the fur firms 704 COMMERCIAL HANDBOOK OF CHINA doing business in Kalgan and Mongolia. The foreigners sent into this district are fur experts, and as such deal directly with the fur market. The comprador system is not much in evidence in the Kalgan district. Most firms rely on a well-trained native staff, which es¬ tablishes the contacts and secures the business that formerely con¬ stituted an integral part of the functions of the comprador. ADVERTISING The only advertising mediums employed in the district, and per¬ haps the only advertising forms that could be effectively used, are billboards, posters, pictures, and calendars. The use of these is wide¬ spread. There is no tax on advertising, but the placing of posters on public buildings is prohibited. Cigarette companies have insti¬ tuted most of the advertising used, general merchandise being rarely advertised. The use of the Chinese language is indispensable. Strikingly colored, lively pictures, also catchwords and well-known phrases, should be used as much as possible. TRADE ORGANIZATIONS The principal Chinese chambers of commerce in the district are those located in the following cities: Kalgan, Tatungfu, Kweihwat- ing, and Urga. These organizations represent the business inter¬ ests of Chinese merchants, and take up questions of commercial policy, as the need arises, with the local officials. In some instances such organizations possess considerable commercial and political influence, but as a rule they do not attempt to exercise their in¬ fluence. TRAVEL FACILITIES Railway travel in the district is confined to the Peking-Suiyuan line. The express trains have both dining and sleeping car accom¬ modations, and the trip from Peking occupies about 6% hours. Travel to Urga is by motor car, arrangements for which can be made with Chinese transportation companies or with an American firm. The trip averages from 41/2 to 5 days each way, and single fare varies from $30 to $35 gold. The baggage allowance is approx¬ imately 40 pounds. Travelers are advised to call at the consulate, where everything possible will be done to help them establish business contacts and to • obtain all pertinent information available. HOTELS There are two hotels in Kalgan under foreign management. One, under American management, is opposite the American consulate and a short walk from the railway station. The other, largely pat¬ ronized by fur merchants in winter, is under Russian management, and its cuisine is largely Russian. Accommodations for travelers in the other cities of the district, except Urga, are limited to Chinese inns, which are fairly clean and comfortable. There are no hotels KALGAN CONSULAR DISTRICT 705 in Urga, but two Russian boarding houses accommodate travelers. All are operated on the American plan. PROPERTY VALUES AND RENTS The section of Kalgan in which the foreign community chiefly resides lies upon high ground, and is thus not in danger by floods from the river, which divides Kalgan into two sections. This factor and the proposal of the local authorities to continue the development of the district by the construction of roads and bridges have caused land values in this section to increase from $130 to $500 (United States) per acre. The offices and residences of the principal for¬ eign firms are for the most part located in the higher section, while the fur firms are located on the other side of the river, close to the fur and wool markets outside the city gates. Land values in the old Chinese town average approximately $150 (United States) per acre. Most of the larger foreign firms have acquired land on long-term leases and have constructed their own quarters. Others rent Chinese compounds containing 10 or 15 small rooms, permitting residential and office quarters to be together. A monthly rental for such quar¬ ters varies from $25 to $60 (United States). The tendency is to¬ ward increasing rental values. In Urga combined business and residential quarters could formerly be obtained for approximately $50 (LTnited States) per month. The present regulations of the Mongolian Peoples’ Revolutionary Gov¬ ernment are not such as to encourage the location of foreign firms in Urga. LIVING CONDITIONS In such cities as Tatungfu, Kweihwating, and Urga, living costs are considerably less than in Kalgan, but few foreign firms maintain foreign representatives in such cities, though they make frequent trips to these points. There are no clubs or institutions for recreation in the district. The considerable amount of private entertaining done by the foreign residents comprises practically the whole social life of the port. Automobiles may be hired in Kalgan at $5 (Mex.) per hour, but on account of the poor roads they are seldom used in the city itself. The usual conveyance is the ricksha at 20 to 25 cents per hour. 100020 °— 26 - 46 NANKING CONSULAR DISTRICT By Consul John K. Da-vis LOCATION AND AREA The Nanking consular district comprises Anhwei Province, Kiang- su Province north of the Yangtze River, and the districts of Nanking and Chinkiang south of the river. The latitude of the district corre¬ sponds with that of South Carolina, Georgia, and eastern Alabama, and its area is approximately 90,000 square miles. The average annual rainfall in the district is 48 inches; average maximum tem¬ perature 102° F.; average minimum temperature 13° F. The rainy season is July, August, and part of September, also February, March, and April. The dry season extends from the middle of September to the middle of January. POPULATION Estimates by the Chinese Postal Administration give the popula¬ tion of the district as 48,067,529; average density for the consular district, 618 per square mile; Anhwei Province 362; Kiangsu Prov¬ ince 875 per square mile. CITIES The population of the principal cities in the district is given in the following table: City and Province Population (estimated) Europeans Americans Nanking, Kiangsu 1 .-.... 400, 000 97 419 Chinkiang, Kiangsu 1 ___ 102, 500 74 Wuhu, Anhwei 1 ...... 126; 800 28 78 Pengpu, Anhwei 1 .... 70, 000 3 2 Nantungchow, Kiangsu..----- 150, 000 5 17 Yangchow, Kiangsu....... 250, 000 7 35 American business firms 5 3 2 2 1 Treaty port or voluntarily opened commercial port in which foreigners may reside for trade purposes. Nanking , the ancient capital of China and the present capital of Kiangsu Province, lies on the south bank of the Yangtze River, 210 miles from its mouth. The treaty with France in 1858 stipulated that Nanking should be an open port, but it was not formally opened until 1899. In conjunction with Pukow on the opposite bank of the river, Nanking is destined to become one of China’s foremost commercial and transportation centers. Chinkiang , situated 60 miles below Nanking at the confluence of the Grand Canal and the Yangtze River, is on the Shanghai-Nan- king Railway. It was opened to foreign trade in 1861 and before 706 NANKING CONSULAR DISTRICT 707 completion of the Tientsin-Pukow Railway was an important dis¬ tributing point. The shift of trade to Nanking has decreased the importance of Chinkiang, although it is still the distributing point for the Grand Canal area in north Kiangsu. Foreign business houses are restricted to the British concession, which is situated on the river front outside the city wall. Yang chow , 15 miles north of Chinkiang on the Grand Canal, has many wealthy residents but is of little importance commercially. Nantungchow , in Kiangsu Province, on the north bank of the Yangtze River, approximately 130 miles from Nanking and 100 miles from Shanghai, claims to be the model city of China. Indus¬ trially it is the most important town in the district. Wuhu, in Anhwei Province, is situated on the south bank of the Yangtze River, 60 miles above Nanking. It was opened as a treaty port in 1877. Foreign business houses are located in the foreign set¬ tlement, which is under the control of the local Chinese authorities. Wuhu is the most important rice exporting center in China. Pengpw is located in Anhwei Province on the Tientsin-Pukow Railway where it crosses the Hwai River. Voluntarily opened to trade by China in 1924, it is an important distributing center for the territory served by the Hwai River and its tributaries. AGRICULTURE The principal agricultural products of the district, in the order of their importance, are shown in the following table: Products Planting season Harvesting season Average pro¬ duction per acre Estimated annual pro¬ duction Rice__ April to May 15_ September to Oct. 15_ June and September_ August, September, and October. October and June_ 1 ton_ Tons 8,197,167 i 66, 663, 876 166, 667 620,000 Wheat (2 crops)_ October and June_ 12 bushels_ Cotton_-1. Beans and peas (2 crops) Peanuts__ April ... March and June.. 14,500 pounds. 14.11 bushels.. May to June 15_ October ... ___ Sesamum.. Kaoliang_ April____ _do.. August and September.. September .. 800 pounds_ 5,600 pounds.. 900 pounds.... 12, 000 600,000 240,000 Corn__ .do. June.... Bushels. Rice .—The staple food of the Chinese living in Central and South China is rice, and the principal centers of production are found in the Yangtze Valley. There are only four Provinces producing a surplus sufficient for export, and the most important of these is Anhwei, which is situated in the Nanking consular district. The main center of assembly for export is Wuhu, the greatest rice¬ exporting port in China. Wheat .—Throughout the Nanking consular district, wheat is an important crop, second only to rice, and is harvested twice a year. A large quantity of wheat flour is consumed annually in this dis¬ trict. The bulk of the wheat harvested is prepared by local mills. Beans .—In the district many varieties of beans are grown, in¬ cluding several soy types. The local consumption is large. Beans 708 COMMERCIAL HANDBOOK OF CHINA are used as a human food, as feed for animals, and for making bean oil, bean paste, bean curd, and “ soy.” The residue after the oil has been pressed out is made into cakes, which are used extensively for fertilizer, both locally and in South China*. The oil from the soy bean is used for the manufacture of soap, in cooking, in paints, for lubricating, and as an illuminant. Cotton .—Iviangsu is one of the two largest cotton-producing Provinces in China, which is the third largest producer of raw cotton in the world. The University of Nanking and the National Southeastern University, both located in Nanking, have done excel¬ lent work in the acclimatization of American seed cotton and in developing native varieties by selection. As it has been found that American cotton deteriorates quickly if the seed is distributed direct to the farmers, the practice is to acclimatize the seeds at an experi¬ ment station before distribution. The University of Nanking has Fig. 24.—The ordinary family gristmill of the country people of China accomplished remarkable results with its specially developed seed, and has trained many Chinese who now assist in teaching the farm¬ ers of the district modern methods of cultivation. Although much locally produced cotton is exported to Japan, the bulk is used in the mills of Nantungchow and Shanghai. Peanuts .—Kiangsu is one of the chief peanut-producing Prov¬ inces in China. Domestic consumption is considerable and the large surplus is exported principally to South China. The value of these exports varies from $2,000,000 to $4,000,000, United States currency, annually, but no direct shipments are made from this district to foreign countries. Sesamum seed , although principally produced in the lower Yellow River Basin, is also grown in this district. For centuries the Chi¬ nese farmers produced the seed principally for its oil, which is used as an illuminant, and prior to 1894 the product was raised for local NANKING CONSULAR DISTRICT 709 consumption only. In that year, however, there commenced a for¬ eign trade which in recent years has grown to large proportions. The prosperity resulting from the development of sesamum culti¬ vation was unquestionably due in part to the release of suitable land by the suppression of poppy growing. None of the sesamum pro¬ duced in this district is shipped direct to foreign countries, but is purchased by large exporters in Shanghai, Hankow, and Tientsin. Kaoliang (kafir corn or sorghum ).—Kaoliang is extensively grown in the northern portion of this district and furnishes the poorer classes with many useful products. Its consumption is exclusively domestic. Practically no portion of the plant is wasted. The grain is used as a food (in the form of porridge and as flour) and in making a powerful alcoholic drink. The stalks are employed in making fences, bridges, in house building, and as a fuel. Before the grain is fully ripe the green leaves are gathered and stored for cattle fodder in the winter, and after the crop is harvested the roots are dug up for fuel. Corn (maize) is grown throughout the district in the hilly sec¬ tions. Its consumption is entirely domestic. Spirits are made from the grain, which is also used as a human food and for animal feed. The roots, stalks, and cobs are used as fuel. MINERALS AND MINING Iron, coal, copper, sulphur, and phosphate are mined in this dis¬ trict, but only the first two named are worthy of mention. There are considerable deposits of both iron and coal, but those of coal are not extensive and the product is of inferior quality. There are considerable deposits of iron ore both in Anhwei and in Kiangsu. The largest is the Fenghwang deposit near the city of Nanking, which is estimated by British engineers to contain some 30,000,000 tons of good grade iron ore. This deposit is undeveloped. In this district the mining industry is in its infancy. The methods in general use are primitive in the extreme but once modern processes are adopted the deposits of iron and coal should create large in¬ dustries. Foreign capital is not welcome and native capital is not yet freely invested in mining enterprises. In the following table is shown the annual production, extent of resources, and export of iron and coal in 1924. Minerals Nature of ore Annual production Extent of resources Exports in 1924 Iron.... Good. Tons 400, 000 20,000 300,000 Tons i 85,000,000 70,000, 000 225, 000, 000 Tons 521,634 Coal...... f Anthracite.. \Bituminous_ 55, 561 1 Ore. IRON Although there are large iron deposits, the production of ore is very limited. This condition is occasioned by the limited demand for pig iron for domestic consumption and the lack of suitable coal 710 COMMERCIAL HANDBOOK OF CHINA available for coke production. The local coal does not possess the right qualities and the cost of transportation from the nearest avail¬ able supply, in Shantung, is prohibitive. The output of the mines depends, therefore, directly upon the iron and steel industry in Japan, to which country practically the entire ore output of the mines is exported. It is probable that until steel mills are established in this part of China capable of absorbing large quantities of pig iron, the development of the existing iron fields, dependent as it is upon the iron and steel industry in Japan, will be very slow. At present all mining is by the open-cut method except in the case of very unimportant sedimentary deposits, which supply only native furnaces where smelting is accomplished by means of charcoal. The Yu Fan Iron Mines are the most important operated in the district. Although operated by Chinese, they are seemingly con¬ trolled by Japanese and are stated in the China Year Book to have a contract with the Japanese Government for the annual delivery of 300,000 tons of ore. A light railway carries the ore from the mines to the Yangtze River, a distance of 4 or 5 miles. All equip¬ ment is Japanese, and the entire output is exported to Japan, where it is smelted. In high-water seasons shipments are made direct, but during low-water periods transshipment at Wuhu is necessary. The Pao Using Mines , owned and operated by Chinese, are under contract with a Japanese firm to supply iron ore up to a maximum of 50,000 tons annually. It is claimed that there is much iron that can be easily worked, and which is said to contain from 62 to 67 per cent of pure metal, with an estimated iron-ore reserve for the district of 11,000,000 tons, containing 5,000,000 tons of iron. A railway from the mines to the Yangtze River, a distance of 3 miles, is contemplated, but at present the ore is conveyed by boats to Tsaishihchih, a town on the Yangtze River 6 miles below Taiping. The Yi Hwa Iron Mining Co. was developed quite extensively by Japanese, who established rail connections with the Yangtze River and employed modern appliances. The vein of ore, however, did not turn out to be as promising as was expected, and the venture is reported to be more or less a failure. Other iron mines in this district are unimportant, and the present demand for ore is not sufficient to warrant any extension of oper¬ ations. COAL Throughout the Provinces of Anhwei and Kiangsu there are numerous small coal mines, but with the exception of the Chiawang mine near the Shantung border, the coal-bearing areas are small, widely distributed, and generally contain coal which is friable, dusty, and high in ash and sulphur. At present the coal mined is of little industrial importance, but it is possible that some method may be worked out whereby, through careful mining and suitable washing, part of the sulphur and ash can be eliminated from the coking coal, thus making it suitable for the blast furnace. Should this occur, the future possibilities for development of both coal and iron would be greatly increased. NANKING CONSULAR DISTRICT 711 Practically all coal in this district is mined very near the surface and without the use of power equipment. There are only two ex¬ ceptions to this statement. Chiawang Coal Mining Co ., Tungshanhsien , Kiangsu. —The coal obtained from the Chiawang Mine is bituminous and, although it contains a considerable percentage of sulphur, is the best mined. It comes from the most important coal field in this district. The mines are approximately 17 miles northeast of Hsuchowfu near the Shantung border, and are connected with the Tientsin-Pukow line at Liuchuan, a distance of 9 miles, by a light railway. The shafts are sunk 70 feet, reaching four seams of coal, 2 to 9 feet thick. The dip of the seams worked is only about 10°, and it is not yet known whether there is more coal below that depth. The field extends over 10 miles from east to west and 5 miles from north to south. On this basis the probable reserve is estimated at 144,200,000 tons. Semimodern mining methods are employed, under Chinese or¬ ganization and control, with a daily production of 500 tons. Pu Yi Coal Mining Co ., Liehshan , Anhwei. —Coal-mining opera¬ tions have been conducted at Liehshan, “Wolf Mountain” for about 1,000 years. The present company was established in 1915, ob¬ taining possession of properties that had been unsuccessfully worked by two preceding companies. The field is approximately 25 miles northwest of Liehshan and about 15 miles northeast of Fulichi, a railway station on the Tientsin-Pukow line. The company reports an annual net profit of approximately $300,000 (Chinese currency) for 1919, 1920, 1921, and 1922, with a daily output of 700 tons of anthracite, and 100 tons of bituminous coal. The mines are active, and semimodern methods are employed. MANUFACTURING AND INDUSTRIAL DEVELOPMENT Handicraft industries still predominate in the Nanking consular district, but each year witnesses an expansion of those industries carried on under modern methods, and an increase in the number of modern plants operated. Cotton and flour milling are the prin¬ cipal industries conducted along modern lines, and recently a new cement plant was put into’ operation. The products of the industries in this consular district, with the exception of processed eggs, are consumed by the China market exclusively. The manufacturing industries in this consular district are, cotton yarn, with an annual capacity of 114,000 bales, and an estimated out¬ put of 80,000 bales; cotton cloth, annual capacity, 220,000 pieces, estimated output, 180,000 pieces; sheetings, annual capacity, 180,000 bales, estimated output, 130,000 bales. These three industries give employment to 10,000 persons and have an approximate capital of $7,500,000. The flour industry has a daily capacity and output of 21,100 bags, has 1,000 employees, and the approximate capital is $3,000,000. Egg processing employs 10,000 persons, and has an esti¬ mated annual output valued at $3,000,000. The cement industry has a daily capacity and output of 500 barrels, employs 100 persons, and has an estimated capital of $600,000. The match factories have an annual capacity and output of 300,000 gross, employ 900 persons, and the approximate capital in the industry is $900,000. 712 COMMERCIAL HANDBOOK OF CHINA The handicraft industries furnish such products as silk piece goods, brocades, velvets, gold tapestry, cotton cloth, hand carvings, brass ware, vegetable oils, and tallow (both vegetable and animal). LABOR CONDITIONS to The wages of male employees in rice mills for a 12-hour day, are from $12 to $24 per month; flour mills, male employees, 6-hour day, from $12 to $20 per month; egg processing, male and female em¬ ployees, 10-hour day, 30 cents per day; weaving, male and female employees, 9-hour day, 40 cents per day; knitting, male and female employees, 9-hour day, 60 cents per day. With the steady upward tendency in the cost of living, there is a corresponding steady increase in the cost of labor which will doubt¬ less continue for several decades. The modernization of industries, while resulting in higher cash wages, is resulting in the lowering of the standards of living and health of the laboring class, since it is taking the workmen away from their homes in villages and towns and is massing them in congested and unsanitary tenement districts in the cities. There is very little child labor in the modern industrial plants because the industries found here are not those in which child labor can be used to advantage. Strikes are of rare occurrence and of small importance, and there are no labor organizations worthy of the name. Labor, while seemingly cheap, is much less efficient than in the * United States. Longer hours are observed, but the production per capita is relatively smaller. TRANSPORTATION AND COMMUNICATION WATERWAYS The district is well supplied with waterways. The Yangtze River, which flows through it for the last 450 miles of its course, is the center of a network of navigable rivers, canals, and lakes, possessing a total estimated length of 2,000 miles. This system of natural and artificial waterways furnishes the principal means of transport and communication. On the Yangtze River four regular lines of river steamers are operating, as well as many coast and ocean steamers, while numerous small steamers, launches, and junks ply the lesser waterways. The greater part of the passenger and freight traffic in this district is conveyed on this system of lakes and streams. Passenger fares, in Chinese currency, on the Yangtze River steam¬ ers, from Yanking to the principal ports on the Yangtze River, are shown in the following table: Nanking to— Fare Distance Nanking to— Fare Distance Shanghai__ $18 Miles 215 Chinkiang __.. $9 Miles 65 Hankow... 35 370 Wuhu... 9 50 NANKING CONSULAR DISTRICT 713 Freight rates on these steamers vary according to the class of mer¬ chandise, but the following rates (from Nanking) per ton, in Chi¬ nese currency, will serve to give an idea of their general nature: Nanking to Shanghai, $5.70; to Hankow, $7.50; to Chinkiang, $3.75; to Wuhu, $3.75. Ordinary junk freight, exclusive of loading and unloading charges, is approximately $0,014 per ton per mile. On the Yangtze River, when shipped between treaty ports, goods are liable to the duties of the Chinese Maritime Customs. On the interior waterways merchandise is liable to inland transit dues, or likin taxes, which average 2 y 2 per cent ad valorem. In addition to the likin taxes there are often many other special levies, such as destination taxes and similar tolls. Goods of foreign manufacture shipped in bulk may avoid likin taxes by taking out transit passes after the payment of transit-pass dues, which amount to one-half of the amount of the original import duty. RAILWAYS The followings railways are operated in this consular district (with mileage in district as indicated) : Shanghai-Nanking Rail¬ way, head office in Shanghai, 45 miles; Tientsin-Pukow Railway, head office in Tientsin, 375 miles; Lung-Hai Railway, head office in Peking, 250 miles. In conjunction with the excellent system of waterways already described, the two trunk railways which terminate at Pukow and Nanking make these together one of the most important assembly and distribution centers in all China. The Tientsin-Pukow Railway brings down a large volume of beans and cereals, which are either loaded onto vessels at Nanking or ferried across the Yangtze and sent to Shanghai by the Shanghai-Nanking Railway. The Lung- Hai Railway, which crosses the Tientsin-Pukow line at Hsuchowfu, will be, when completed, the longest east-and-west railway line in China and will supply an important agricultural section. There are no other lines of railway under construction. ROADS Road construction in the Nanking consular district has in reality but just commenced. There are at present only three long roads or systems of roads constructed—one surrounding the city of Nantung- chow, which was built by enterprising Chinese industrialists; one in northern Anhwei, which was made by famine refugee labor with relief funds; and the third in northeastern Kiangsu, which was con¬ structed by an enterprising military administrator. There are no macadamized or concrete country roads in this district, the roads which have been built being entirely of dirt. In the majority of cases roads are not kept up after being built, the native carts and wheelbarrows, with tires for too narrow, tend to cut roads to pieces in very short periods. In northern Kiangsu and Anhwei there are roads which are passible for light motor vehicles, but the absence of bridges and the rapid deterioration of the cars caused by the rough character of the highways prevent rapid development of motor 714 COMMERCIAL HANDBOOK OF CHINA transport. The main hope for road construction in the immediate future is that semiprivate companies desirous of operating motor transport lines between important points will build their own roads. The following table gives a summary of the methods of transpor¬ tation : Medium • Average load Average mileage per day Average cost per ton-mile Maximum haul Miles Railways....__ 35 tons. 350 $0,023 233 Steamboats_____ 2,000 tons... 300 .013 450 Junks.. 50 tons.... 10 .015 450 Carts ____ 2,666 pounds. 20 . 12 200 Pack animals_ 200 pounds_ 30 .33 200 Wheelbarrows.... 266 pounds_ 20 .30 100 Coolie carriers..... 133 pounds... 30 .40 100 Fig. 25.—To aid in famine relief a thousand miles of roads were built in China with funds contributed by the American Red Cross The figures given for the maximum haul for junks, carts, pack animals, wheelbarrows, and coolie carriers are mere approximations. Goods can be conveyed almost the entire width of this district by any of these means, and even a greater distance if necessary. The cost per ton-mile for all carriers but railways and river steamers varies greatly according to the season of the year, the depth of the water in the streams, and the nature of the country and roads tra¬ versed. Accordingly, the statements in the foregoing table should be regarded as reliable approximations only. The average transportation costs on cereals in this consular dis¬ trict works out as follows in silver-dollar currency per short ton per mile: Railways, $0.023; steamers, $0.013; carts, $0.12, NANKING CONSULAR DISTRICT 715 TELEGRAPHS, CABLES, AND WIRELESS SERVICE The Chinese Telegraph Administration operates 82 stations in this district and handles messages to any part of the civilized world. Cable messages are forwarded by the administration through the cable company’s offices in Shanghai with whom they have agree¬ ments. The rate to New York is $1.95 (Mex.) per word. There are no commercial or military wireless stations in this dis¬ trict, and the importation of radio receiving and transmitting ap¬ paratus is forbidden. TELEPHONES The Nanking Telephone Co., in the city of Nanking, is the largest telephone company in the district. It is furnished with American equipment. It has 1,495 subscribers, and the rates are $6 (Mex.) per month. There are other smaller companies located in various cities in the district. POSTAL FACILITIES The Chinese postal service is conducted along modern lines under the supervision of foreigners. Its ramifications extend to every vil¬ lage of importance, and its activities include the transmission of registered, special delivery, and insured mail matter; domestic and foreign parcel-post and money-order services; and a postal savings bank. An exchange of correspondence between New York and Nanking can be effected in slightly over three months, and letters are often received from New York in 25 days. SHIPPING AND WAREHOUSING FACILITIES f HARBOR FACILITIES Each of the three Yangtze River ports of this consular district open to foreign trade possesses a large harbor which furnishes ade¬ quate anchorage.* Vessels may enter freely night or day, and the regulations only require that they anchor out of the fairway. The companies operating regular services have branch agencies at Nanking, Chinkiang, and Wuhu, and have “ hulks ” or floating wharves, which are connected with the shore by pontoons and which furnish a combination dock, office, and warehouse. Nanking is the terminus of the Shanghai-Nanking Railway; and Pukow, directly across the river, is the terminus of the Tientsin- Pukow Railway. There are no public docks on the Nanking side of the river, but the Tientsin-Pukow Railway maintains nine pon¬ toons, each 200 feet long, and one wharf 300 feet in length. At all berths there is good water, ranging from 50 to 60 feet in depth during summer months and never less than 26 feet even in winter. The Tientsin-Pukow Administration has installed on pontoon No. 5 a hand crane capable of lifting 25 tons. With this exception all cargo in the Nanking consular district is handled by hand. The majority of ships calling at Nanking supply their own stevedores, but it is required that all goods moving between the pontoons, warehouses, and trains be handled by coolies employed by the rail¬ way company. 716 COMMERCIAL HANDBOOK OF CHINA In the following table is shown the number and tonnage of ves¬ sels entered and cleared through the Maritime Customs at Nanking during 1924: Ocean steamers River steamers Other vessels Total Flag Num¬ ber Tons Num¬ ber Tons Num¬ ber Tons Num¬ ber Tons American___ 10 47,124 185, 518 26, 072 62, 736 82 27, 742 4, 200,486 92 74, 866 4, 394, 222 2, 956,192 63, 726 13, 072 2, 226, 890 32,372 4,280 British___ 112 2,286 1, 626 2 120 8,218 41,478 2,518 2,166 16 Chinese_ 22 2, 888, 642 990 518 French__ 14 Italian_ 182 13,072 36, 650 182 Japanese_ 38 55, 658 1,150 6 2,134, 582 5,914 456 1,644 28 Norwegian....__ 22 26, 458 4,280 Swedish_ 2 2 Total_ 220 407, 846 5,152 9, 258,356 1, 276 99, 418 6,648 9, 765, 620 The following table shows the number and tonnage of vessels entered and cleared through the Maritime Customs at Chinkiang during 1924: Ocean steamers River steamers Other vessels Total Flag Num¬ ber Tons Num¬ ber Tons Num¬ ber Tons Num¬ ber Tons American_ 16 62,870 51,198 210, 870 131 37,909 28 542 175 101,321 3, 700, 814 3, 220, 248 4 British_ 18 2,044 1,622 3, 644, 631 2,937, 208 73 4,985 72,170 4 2,135 2,343 2 Chinese_ _ 194 527 French_ 2 Italian_ _ 25 690 25 690 Japanese_ 62 79. 382 1, 142 2, 091, 210 30 2,074 1,234 124 2, 172, 666 122, 626 Norwegian_ 124 122, 626 Total.. 414 526, 946 4,939 8, 710, 958 685 80,465 6,038 9, 318, 369 The following table shows the number and tonnage of vessels entered and cleared through the Maritime Customs at Wuhu dur¬ ing 1924: Ocean steamers River steamers Other vessels Total Flag Num¬ ber Tons Num¬ ber Tons Num¬ ber Tons Num¬ ber Tons American. ..... 8 39,716 148, 715 42, 266 530, 179 75, 338 52 23,188 4,117,134 2,911, 886 2, 262, 798 11 169 71 63,073 4, 278, 393 3, 002, 766 2, 893, 089 75, 338 British___ 111 2,320 76 12,544 48, 614 100,112 2, 507 1,977 1,858 60 Chinese__ 39 1,622 316 Japanese _ 300 1,150 408 Norwegian. _ 60 Total_ 518 836,214 5,144 9, 315, 006 811 161, 439 6, 473 10, 312, 659 Goods brought into the Nanking-Pukow port are distributed to in¬ terior points by the two railway lines, as well as by small steamers, launches, and junks plying the inland waterways. Those imported at Wuhu and Chinkiang are distributed principally by small steam¬ ers, launches, and junks. NANKING CONSULAR DISTRICT 717 Owing to the probability of numerous transshipments, rough han¬ dling, and danger from pilferage, careful packing in strong, compact containers is essential for shipments to this district. Marking should be distinct and preferably should be placed on the top, one side, and one end of each package. WAREHOUSE AND STORAGE FACILITIES Nanking and Pukow each has a warehouse of wood construction with metal roof, having storage space for 3,600 and 8,000 tons, re¬ spectively. The rates in Nanking are $0.05 and at Pukow $0,015 per ton per day. In general it may be stated that at all ports in this consular dis¬ trict nothing is ever left outside a locked door unless guarded by responsible employees of the owner or of a transportation company. The climatic conditions of this section of China render it impera¬ tive that perishable goods be shipped in air-tight, water-tight con¬ tainers. At Nanking goods are transported in handcarts from warehouses to dealers; in Chinkiang and Wuhu they are moved by wheelbar¬ rows, and by coolies employing carrying poles. PUBLIC WORKS AND UTILITIES ELECTRIC-LIGHT PLANTS The principal electric-light plants in this district (all under Chi¬ nese ownership), with their capacity and rates are shown in the fol¬ lowing table: Rates Location Capacity of plant Per kilo¬ watt- hour Per 50- candle- power lamp per month Anking . ... Kilowatts 386 $0. 24 $3.84 3. 00 Chinkiang ___ 380 Liyang . _ 160 2. 90 Luho _ 40 2. 70 Nanking ____ 680 . 24 2. 70 Hsiakwan . _ . _ 1,000 125 .24 2. 70 N antungchow___ 2. 60 Shiherhwei_ ... 60 2. 80 Tatung. ___ 75 .20 Tsingikiang___ . 150 Wuhu._.. 530 .22 2. 80 Yangchow____ 146 3.00 Equipment British and German. British. Do. German. American, German, and British. American. Do. Do. American and German. French. Considerable extension in electric lighting plants would have occurred during the past few years had it not been for the general political unrest which has frightened capital. When more stable conditions are established it is probable that several existing plants will be enlarged and several new ones built. WATERWORKS The Chinkiang Municipal Waterworks, in the British concession in Chinkiang, has a capacity of 12,000 gallons per hour. It is 718 COMMERCIAL HANDBOOK OF CHINA equipped with two filters, a chlorine plant, and a steam pumping system. Water from the Yangtze River is used. The rates per 1,000 gallons are 50 cents for domestic use and 25 cents for indus¬ trial use. Plans have been made for waterworks in the city of Nanking, but haA r e been indefinitely postponed owing to the disturbed political situation. An American firm has completed a preliminary survey and may eventually obtain the contract when more stable conditions are established. TRAMWAYS There are no tramways in this consular district. In Nanking, however, there is a city steam railway from the suburb of Hsiakwan, a distance of approximately 8 miles. This railway connects with the Shanghai-Nanking Railway in Hsiakwan. It may in time be . electrified and extended into a tramway system. CONSERVANCY AND RECLAMATION WORKS The most important conservancy project in this consular district is the draining into the sea of the Hwai River system of water¬ ways. If successfully accomplished this would prevent the recur¬ rence of the disastrous floods which periodically reduce to famine the most productive sections of northern Kiangsu and northern Anhwei. It would also reclaim many acres of fertile soil which are now covered by a series of small lakes. Plans have been completed for a survey under the auspices of the Hwai Valley Conservancy Board, organized in 1922. The total cost of the undertaking has been estimated at between $5,000,000 and $6,000,000 United States currency. EXPORT AND IMPORT TRADE The tables in this section cover only goods which arrive or de¬ part on steamers, and which pass through the Chinese Maritime Customs. Reliable estimates indicate that the rail-borne trade is practically as large as the water-borne. This rail-borne trade con¬ sists of goods brought to or sent from Nanking by the Shanghai- Nanking Railway and which, being passed through the customs at Shanghai, are consequently included in the returns for that port. The values (United States currency) of imports and exports through the principal ports in this district are shown in the following table: Port Exports Imports 1913 1923 1924 1913 1923 1924 Nanking_ $4, 357, 661 6, 780, 322 7, 394, 250 $14,958,647 1, 595, 004 9, 408,385 $14, 523, 929 4, 665, 738 14, 523, 929 $4, 828,165 6, 967. 760 5, 578, 222 $11,105, 704 9, 999, 791 8,095,336 $10,447, 339 10, 728, 037 7, 768, 578 Chinkiang... Wuhu. Total. 18, 532, 233 25, 962, 036 33, 713, 596 17, 374,147 29, 200,831 28,943,954 EXPORTS The quantity and value (United States currency) of exports pass¬ ing through the Chinese Maritime Customs at Nanking, Wuhu, and NANKING CONSULAR DISTRICT 719 Chinkiang, excluding exports by rail, are shown in the following table: Articles 1913 1923 1924 Quantity Value Quantity Value Quantity Value Beans.tons.. 29, 764 $702, 418 14, 728 $515, 589 31,914 $1,411,028 Cereals....do_ 171, 254 5, 378, 075 77, 664 3, 283, 443 217, 737 10, 794, 449 Eggs and egg products: Albumen, yolk and frozen ...tons.. 996 I f 12,524 I \ 6,530 2, 256, 417 Fresh and preserved } 299,591 )■ 2,814, 886 ..thousands.. 12,940 1 [ 110,514 1 { 102,109 948, 446 Seeds: Rape .tons.. Sesame . _do_ 4, 540 21,822 ) 2, 244,996 / 11,249 \ 192 } 487,811 | 10,284 564, 346 Silk and silk piece goods.do_ ' 635 2, 075, 095 676 4,379,103 261 Vi 2, 256,840 The increase in the exports of egg products has been brought about by the erection at Nanking of a large British plant in which such products are prepared, and by the enlargement of this plant in the past decade. The fluctuations in the exports of rape and sesame seed have been caused by the varying demands in foreign countries. There have been no important changes in the routing of exports during the past 20 years beyond the tendency to forward increas¬ ingly large quantities of agricultural produce to Shanghai by rail instead of by river steamers. With the exception of egg products and iron ore, there are virtually no exports of importance which are sent direct from this district to foreign countries. Such of the products as are eventually sent abroad are first shipped to Shang¬ hai, and therefore appear under the export figures of that port. IMPORTS The quantity and value (United States currency) of the principal imports into this district are shown in the following table: Articles 1913 1923 1924 Quantity Value Quantity Value Quantity Value C igarettes. .thousands.. Cotton_pieces.. 612,921 $847, 384 5, 012, 439 1, 521, 515 1, 593, 428 2,934, 999 1,359,402 $2, 323,124 5, 467, 404 1, 057, 973 4, 657, 751 3, 726, 687 1, 231,406 1,045, 779 52, 833 26, 573, 557 54, 326 $2, 607, 243 5,986, 715 2, 012, 499 4, 882, 273 5, 230, 957 Metals and minerals..T.tons.. Oil, kerosene . _American gallons Sugar....tons.. 16,964, 360 52, 673 30, 022,858 47, 678 The principal changes of importance have been increases in im¬ ports of cigarette and kerosene. Owing to the efforts of the large foreign and Chinese cigarette companies, the past 20 years have witnessed a tremendous increase in the use of cigarettes by the Chinese of all classes. The larger imports of kerosene have been brought about by expansions that have occurred in the American and British organizations marketing this commodity, the entry of new companies into the market, and the increased consumption re¬ sulting from the abandonment of vegetable oils as illuminants by the Chinese rural population. 720 COMMERCIAL HANDBOOK OF CHINA The most remarkable change in the sources of cigarettes has been a decrease in imports from Great Britain from 40 per cent of the total in 1903, and 45 per cent in 1913 to only 3 per cent in 1923; and an increase in imports from the United States from 5 per cent of the total in 1903 and 3 per cent in 1913 to 40 per cent in 1923. The sources of the foreign manufactured cotton goods imported have remained practically unchanged for the past 20 years, although there has been a large increase in the percentage of domestic cotton goods manufactured in modern plants. The metals and minerals imported in 1923 came from practically the same sources as in 1903 and in 1913. The estimated percentage from the United States, however, has increased from 50 to 70 per cent, and that from Great Britain from 25 per cent in 1903 and 20 per cent in 1913 to 30 per cent in 1923. Imports of kerosene have come increasingly from the United States. Imports of American kerosene constituted 50 per cent in 1903 and 1913 but- in 1923 had risen to 85 per cent. Those from the Dutch Indies, which were 10 per cent in 1903 and 5 per cent in 1913, had practically vanished in 1923. Those from the Straits Settle¬ ments and Singapore, which amounted to 20 per cent in 1903 and 15 per cent in 1913, had also almost disappeared in 1923. Imports from Hongkong fell from 15 per cent in both 1903 and 1913 to 12 per cent in 1923. Owing to the inability of the average Chinese merchant to cor¬ respond in any language save his own, and to the absence of Ameri¬ can or European general import firms, the best means by which American manufacturers can sell their products here is through agencies established in Shanghai. For firms whose volume of sales will probably warrant the expense, the establishment in the more important ports in this district of branches equipped to handle their own marketing will be found the best method. If the conduct of an export business through these same branches can be arranged, the chances of success will be greatly increased. MONEY AND BANKING BANKING FACILITIES There are in the Nanking consular district no foreign banks, and no Chinese banks which handle transactions with foreign countries. Neither do they supply credit information, nor handle financial in¬ vestments in the American sense. The proximity of Nanking to Shanghai and the excellent com¬ munications between them makes Shanghai the logical import and export center for the Nanking district. Credits and financial proj¬ ects generally are, therefore, arranged through Shanghai banks. LOCAL CURRENCY The unit of price in all domestic and retail business throughout the district is the Yuan dollar. The Yuan dollar and the Mexican dollar both circulate freely and without discount in favor of either, but the former is rapidly taking the leading place. NANKING CONSULAR DISTRICT 721 ADVERTISING Local merchants do practically no advertising. The advertising campaigns of foreign firms are supervised and paid for by the marketing organizations of the manufacturers. The majority of advertisements observed are put out by American, European, and Japanese firms. In order of volume, the advertisements deal with cigarettes, cosmetics and toilet requisites, patent medicines, kero¬ sene, and paraffin candles. Local newspapers are of comparatively slight importance for advertising purposes. The best means of reaching the district through newspapers would be through two Chinese newspapers (Sin Wan Pao and Shun Pao) published daily in Shanghai, but which enjoy a wide circulation in the Nanking district. The most effective form of advertising has been found in the use of posters and painted signboards. In Kiangsu Province there is a tax on poster advertising which varies according to the size and nature of the posters or signs used. Signboards are taxed 0.06 tael (equivalent to approximately 8% cents Chinese currency) per square foot per month; while posters affixed to walls are taxed 0.05 tael (7 cents Chinese currency) per square foot per month. TRAVEL FACILITIES AND HOTELS There are only two modern hotels in this consular district, both located in Nanking and under British management. The Bridge House Hotel has 30 rooms, and rates are $7 and up per day for a double room and $4 and up per day for a single room, American plan. The Yangtze Hotel has 30 rooms, and the rates are $4 and up per day, American plan, and $2.50 and up per day, European plan. It is advisable to make reservations at either hotel in advance, for they are often crowded to capacity. Railway and steamship travel is convenient and comfortable if care is taken to travel only by express trains and by first-class steamers. Sleeping cars and dining accommodations are found on both the Shanghai-Nanking and the Tientsin-Pukow railways. The commercial traveler should always have his passport as proof of nationality and should have credentials that will establish his con¬ nection with the firm or persons represented. A power of attorney clearly setting forth the exact extent of his authority should also be carried. No language other than English is necessary for traveling by the regular steamship and railway lines, but on any trip into the interior of the district—that is, away from the three treaty ports—an inter¬ preter will be necessary; and bedding, food, and the usual staff of servants should be taken. It is always advisable to call beforehand at the American consulate having jurisdiction over the territory to be traveled. TRADE ORGANIZATIONS There are no trade organizations in this consular district that will be of any assistance to the commercial traveler. Each city has a 100020°—26 - 47 722 COMMERCIAL HANDBOOK OF CHINA chamber of commerce, but they make no endeavor to cultivate foreign trade. PROPERTY VALUES AND RENTS Land in Nanking, with the exception of the suburb of Hsiakwan, is only slightly more expensive than in other cities of commercial importance, so that the following table will serve to give a fairly general idea of values in this district. Hsiakwan is the most im¬ portant wholesale and shipping section of Nanking, the Drum Tower area is an educational and residential section, while the Futzemiao is a retail business and amusement district. Location Purchase price per unit Rent of office space Rent for ware¬ house space Rent for residence purposes Nanking: Hsiakwan suburb____ _per 100square feet.. $25 $12 $12 $12 Drum Tower section ... _do_ 20 8 8 10 Futzemiao section_ __do_ 15 5 10 10 As compared with the United States or with European countries, taxation in this district is very light. With the exception of the land transfer tax and likin dues, the taxes vary greatly in the dif¬ ferent “ hsien ” or counties, so that it is impossible to give any state- * ment of rates which will hold true even for one Province. Taxes on land, with the exception of the land transfer tax, are remarkably low and vary in each hsien. As a rule, such taxes are levied only on cultivated land and consequently do not apply in cities and towns where land taxation takes the form of taxes on places of business as such, both as a direct “ shop tax ” and as license dues. Buildings not used as places of business usually escape all taxation. In the case of particular crops special taxes are levied, sometimes based upon the area under production and sometimes upon the estimated yield. With the exception of missionary societies, Americans may not acquire real property save in ports opened either by treaty or voluntarily by the Chinese Government. In such open ports leases in perpetuity may be obtained with the exception of the newly opened port of Pengpu, in which leases are limited to terms of 30 years. Warehouses and similar buildings may, however, be leased at points other than open ports, although difficulties are often en¬ countered which vary in different localities. LIVING COSTS There are in the Nanking consular district no furnished apart¬ ments or rooms for rent and no boarding houses. Although a single man or woman can often obtain accommodations in a mess or private residence after becoming known to the people of the port, such accommodations are not generally available. The rent charged for an unfurnished house of 6 to 8 rooms is from $125 to $150 and for one of 8 to 10 rooms between $160 and NANKING CONSULAR DISTRICT 723 $240 per month. This is the rent actually paid by American and European residents in this consular district, but the number of houses is so small that in the majority of cases the buildings are rented prior to their erection. All foreign firms maintaining repre¬ sentatives in this consular district furnish them with residential quarters, and all firms that have been established for any length of time own the property in which their employees reside. In such ports as Nanking, Chinkiang, and Wuhu the foreign communities are small and must of necessity find amusement among themselves. There is considerable entertaining, and there are com¬ fortable clubs, also golf courses and tennis courts. Nanking is a city of magnificent distances, and the use of a motor car is essential to the transaction of business along modern lines. Practically all firms represented in the city maintain a motor vehicle for the use of their representative. Motor cars may be hired at $4 an hour. In Nanking there is an American school for American and European children. This school is supported by the residents. CHANGES IN TRADE CONDITIONS IN RECENT YEARS The most significant changes in Nanking trade conditions during recent years have been railway connections which have made Nan¬ king and its subport of Pukow the logical assembly and distribution point for this section of China; the gradual but steady change in the standards of living of the Chinese population, which has resulted in increased importation of modern machinery and commodities; the tendency to produce locally modern manufactured products here¬ tofore imported. The completion of two trunk lines of railway, the Shanghai-Nan- king in 1909 and the Tientsin-Pukow in 1912, has radically changed transportation and trade conditions. Goods formerly shipped be¬ tween Shanghai, Chinkiang, and Nanking by river steamer now go over the Shanghai-Nanking Railway, and a large volume of native produce from Anhwei, Kiangsu, Honan, and Shantung has been diverted to Pukow by the Tientsin-Pukow Railway. The comple¬ tion of these lines and the construction of the eastern extension of the Lung-Hai Railway has resulted in large imports of locomotives, rolling stock, machinery, and general railway supplies. The erection of a number of new electric-light plants, and the en¬ largement of those already existing, has caused a considerable growth in the import of electrical supplies, while the completion of a number of flour mills in this district and the development of cotton mills in Shanghai and elsewhere has resulted in an increase in the con¬ sumption of domestic products and a corresponding decrease or lack of increase in imports of foreign flour and cotton goods. SWATOW CONSULAR DISTRICT By Vice Consul Gordon L. Burke LOCATION, AREA, AND CLIMATE The Swatow consular district has an area of 17,000 square miles and comprises that part of Kwangtung Province in southeastern China lying east of meridian 115° E. and between parallels 22° 40' and 25° N. Its latitude thus corresponds with that of central Mexico. The climate is subtropical, with an average temperature of 70° F.; the average minimum temperature is 64° F. and the average maxi¬ mum 76°. The annual average rainfall is about 74 inches. The rainy season extends from February to July; the remainder of the year is dry. POPULATION The estimated population is about 8,000,000, Avith an average density for the district of, roughly, 470 to the square mile. With the exception of six principal cities, the population is mainly rural. CITIES The leading cities of the district are shown in the following table. There are eight American business firms in Swatow, but none in any of the other cities listed in the table. Cities Popula¬ tion (esti¬ mated) Euro-) peans Ameri¬ cans Cities Popula¬ tion (esti¬ mated) Euro¬ peans Ameri¬ cans Swatow 1 _ 100,000 300,000 250,000 250 55 Chenghai ...__ 100, 000 60, 000 60,000 Chaochowfu.. __ 10 13 Kityang___ 10 Chaoyang___ 3 Kaying.... 10 9 6 1 Swatow is the only port of the district open to foreign trade. AGRICULTURE The three leading crops of the Swatow district are rice, sugar, and oranges. Two crops of rice are produced during the year. The first crop is planted in April and harvested in June and July; the second is planted in July and harvested in November and December. Production ranges from 20 to 70 piculs per acre. The entire crop is consumed locally and is not sufficient to supply the demand. Swa¬ tow oranges are known all over China for their excellence, and the sugar produced in the district is preferred by the Chinese on account of its flavor. The greater part of the sugar and oranges produced is exported. Other crops grown in the district are sweet potatoes, peanuts, jute, vegetables, and tobacco. 724 SWATOW CONSULAR DISTRICT 725 MINERALS AND MINING Coal, iron, lead, tin, wolfram, and bismuth are the principal min¬ erals found. There are no mines such as are familiar to the western mind, but small amounts of the various minerals named are mined by primitive native methods. The slump in prices of steel-hardening alloys after the war brought to almost complete standstill the investi¬ gation and production of minerals in the Swatow district. Coal occurs in the Kayingchow region. The product is anthra¬ cite, between 75 and 83 per cent carbon. It is generally mixed with Hongay anthracite for use in native industries, such as burning lime and distilling samshu. Iron is found in the Kayingchow region and is generally made into cooking pans. In 1923, $147,969 worth of these pans were exported. Lead occurs in the Mei, Chengping, and Fungshun districts. The production is used locally. Tin is produced in small amount in Kityang for the manufacture of tin foil for native consumption. Wolfram and bismuth occur in several places, but especially in the Kityang region. These minerals were exported in large quan¬ tities during the war, but exports have fallen off greatly in more recent years. MANUFACTURING AND INDUSTRIAL DEVELOPMENT There is little manufacturing in the Swatow consular district. There are two match factories in operation—the Chao Shan Yao Hua Match Co., and the Ming Sing Majtch Co. The Chao Shan Yao Hua Match Co. has an estimated capital of about $50,000 gold. It employs 250 workmen, and has an approximate output of 20 cases per day. The Ming Sing Match Co. is capitalized at about $25,000 gold. This company employs 150 workmen and has an output of 15 cases per day. The products of these two factories are consumed locally and in the surrounding districts. There are a few small canning factories, whose products are ex¬ ported mainly to the South Seas. Native industries comprise the manufacture of sugar, chinaware, grass cloth, joss paper, ramie thread and yarn, tinfoil, and bamboo ware; the drying and pre¬ serving of fruits; and the expressing and exporting of oil from imported peanuts. The making of drawn work, laces, embroideries, nankeens, native fancy cloth, and the canning of fruits have reached considerable proportions in recent years. Foreign industries are few, the principal ones being a small ice plant and a soda-water plant operated by British interests. There appears to be little immediate opportunity for foreign industries in this district. LABOR CONDITIONS Labor conditions generally were very good in 1923. Wages were increased proportionately to meet increases in the cost of living, and there were few strikes. Female labor is employed by the match and canning factories. The working day varies from 8 to 10 hours, and the woman worker’s daily wage from 25 to 45 cents silver. 726 COMMERCIAL HANDBOOK OF CHINA TRANSPORTATION AND COMMUNICATION WATERWAYS The section of the Han River from Chaochowfu to Samhopa, a distance of about 70 miles, is navigable for motor launches. The Yung River is navigable for steam launches from Swatow to Kit- yang, about 36 miles, and navigation is extended in summer to Meeou, 20 miles beyond. Motor launches also run from Kweisu via Chaoyang, a distance of about 40 miles. In addition to the inland launch traffic there are large seagoing launches which connect Swa¬ tow with Ungkung to the north and Swabue to the south. In accordance with the several treaties, foreign goods shipped into the interior under transit passes are free from likin and other dues. RAILWAYS In the district there are two minor railways with head offices at Swatow. These are the Ohaochow & Swatow Railway (26 miles) and the Swatow-Changlin Light Railway (10 miles). Little freight is transported by these two lines, freight generally being moved by water. ROADS The only modern roads are in the cities of Swatow and Chao¬ chowfu, and these are but 8 miles in length. There is an ever-grow¬ ing movement for widening the streets of the cities, but no sugges¬ tions for developing country roads. There is practically no auto¬ mobile traffic. TELEGRAPHS, CABLES, AND WIRELESS SERVICE Swatow has no cable connections with other ports. The Chinese Telegraph Administration operates land wires, but owing to politi¬ cal disturbances recent communication has been uncertain. Tele¬ grams for Shanghai are usually mailed to Hongkong and cabled from there. Military authorities operate the only wireless station, through which communication can occasionally be had with Hongkong, Foo¬ chow, Waichow, and with ships at sea. TELEPHONES There are two interurban telephone lines in the district, the prin¬ cipal one connecting Swatow with Chaoyang and Kityang, a distance of about 116 miles. Three other short lines, two of them privately owned, are also operated. The Swatow Telephone Co. (Chinese) claims 400 subscribers, operates the manual magneto system, and charges $5 to $6 Mex. per month per instrument. The company is capitalized at $120,000 Mex. Its equipment is chiefly Japanese, but some of the telephones are American and Swedish. POSTAL FACILITIES The Chinese Postal Service covers the district. Parcel-post pack¬ ages for the United States are accepted and money orders issued SWATOW CONSULAR DISTRICT 727 payable in America. Mail is routed via Shanghai or Hongkong, and requires about 30 days between Swatow and New York. SHIPPING AND WAREHOUSING FACILITIES The principal firms in Swatow maintain their own wharves and pontoons for transferring cargo. Many ships, however, anchor in midstream and transfer cargo from lighters. The depth of water at mean low tide is 4 to 7 fathoms. Following is a table of the shipping movements at SwatoAv for 1923, exclusive of innumerable local boats: Classes and flags Entered and cleared Vessels Tonnage Ocean steamers: American__ 22 2,460 61 18 670 78 222 2 18 88, 486 3, 301,304 149, 589 24, 432 760, 986 89, 642 206,169 1,522 31, 050 British. Dutch... French_ ..... Japanese_... Norwegian. Chinese.. .. Chilean ___ _ Danish.. Classes and flags Entered and cleared Vessels Tonnage Ocean steamers—Contd. Russian_ . 6 2,678 German. _ 4 4, 580 Portuguese_ 2 224 Total.... 3,563 4, 660, 662 Launches__ _ . ... 26, 202 360, 735 Junks__ 107,976 2,125,452 The three principal shipping companies control a storage capacity of upwards of 60,000 tons. Their warehouses, however, are designed for their own cargo, though their trade practices include free storage for varying periods. All southern trade is on ex-ship delivery terms, and in such cases Chinese consignees generally store in their own or public native godowns. Cargo is carried by coolies from landing to godowns. PUBLIC WORKS AND UTILITIES ELECTRIC-LIGHT PLANTS The five electric-light plants in the district may be summarized as follows: Swatow-Kaiming Electric Light Co. —Location, Swatow; Chinese owned; kilowatt lighting load, 1,700 to 1,800 amperes, night; rate, 25 cents Mex. per unit, less 5 per cent for over 100 units; plant operated by steam engine; equip¬ ment, German and British. Chaochow-Chongming Electric Co. —Location, Chaowchowfu ; Chinese owned ; rate, $2 Mex. monthly per lamp of 25 candlepower; operated by steam en¬ gine ; equipment, American and British. Chaoyang Electric Light Co. —Location, Chaoyang; Chinese owned; equip¬ ment, German, and consisting of one Banz motor, one 75-kilowatt dynamo (al¬ ternating current). Kwang Yao Electric Light Co. —Location, Kayingchow; Chinese owned; rate, $2 Mex. per lamp; capacity 60 K.V.A.; equipment, American. Hingning Hsing Kuang Electric Light Co. —Location, Hingning; Chinese owned; rate, $2 Mex. per lamp; capacity, 40 K.V.A.; equipment, American. WATERWORKS The Swatow Waterworks Co. (Ltd.) has a service reservoir of 800,000 gallons, and a pumping station near Ampow. Its equipment is British. Rates are 3 cents Mex. per 10 gallons. 728 COMMERCIAL HANDBOOK OF CHINA OTHER PUBLIC WORKS There are no tramways in the district and no conservancy works except those bound up in the Han River Conservancy Bureau and the Swatow Bund Construction Bureau, neither of which is active. EXPORT AND IMPORT TRADE The following tables show Swatow’s foreign trade for the years 1903, 1913, and 1923. Values are in United States dollars. 1903 1913 1923 Imports of foreign goods: From foreign countries___ $8, 781, 829 269, 576 $14, 681, 075 361, 521 $23, 231, 795 2, 339, 750 From Chinese ports _ Total foreign imports..... 9, 051, 405 15, 042, 596 25, 571, 545 Reexports of foreign goods: To foreign countries ___ 30,845 6, 468 132,110 89, 751 200, 350 157, 646 To Chinese ports___ Total reexports_ . ____ 37, 313 221, 861 357, 996 Net total foreign imports.. ...... 9, 014, 092 14, 820, 735 25, 213, 549 Imports of Chinese products.... . 11,755, 201 14, 140, 390 25, 666, 748 Reexports of Chinese products: To foreign countries _ ____ 334,138 32,116 912, 892 71, 379 1, 645, 282 60, 903 To Chinese ports___ .. .. ... Total Chinese reexports... . . .. ... _ 366, 254 984, 271 1, 706,185 Net total Chinese imports. _______ 11,388, 947 13,156,119 23, 960, 563 Exports of Chinese products of local origin: To foreign countries. _____ 2, 977, 308 4, 646, 678 5,133, 002 4, 376, 927 8, 594, 329 7, 754, 961 To Chinese ports______ Total exports of local origin._ _ ___ 7,623, 986 9, 509, 929 16, 349, 290 Gross value of the trade of the port___ 28, 430, 592 38, 692, 915 67, 587, 583 Net value of the trade of the port . . _ 28, 027,025 37,486, 783 65, 523, 402 Note. —In 1903 the haikwan tael equaled $0.64 in United States currency; in 1913, $0.73; and in 1923, $0.80. Trade of Swatow by Articles 1903 1913 1923 Principal articles Quantity Value Quantity Value 1 Quantity Value EXPORTS Bags of all kinds_number.. Bamboo and bamboo ware 2, 398, 597 $61,370 867,907 $41,510 1,963,089 $133,658 ..... .value... 38,863 140,144 157,344 Chinaware (not pottery and earthenware). .. tons.. 1,876 88,863 4,541 9,541 835, 819 Cloth: Native, fancy ..number.. 156, 660 290, 436 Nankeens.._pounds.. 1, 218,400 372,278 337,200 93,617 1, 853,466 578, 282 Clothing, Chinese, and boots and shoes... _value 78, 413 28,996 106, 659 141,150 Cuttlefish. _ _ ..tons.. 177 193 155, 011 Drawnwork on grass cloth __ _value 680, 302 Eggs, fresh and preserved ___..number.. 35, 537,139 166, 520 28, 558, 370 172, 565 44, 886, 000 359, 677 1 Values for imports of native goods (except medicines) in 1913 are not available. SWATOW CONSULAR DISTRICT 729 Trade of Swatow by Articles— Continued Principal articles exports— continued Fishing nets.pounds.. Flour, potato_tons.. Fruits, dried and preserved ...tons.. Garlic..do_ Grass cloth..pounds.. Iron pans....tons.. Joss sticks..do_ Laces..value. 1903 Quantity Oil, peanut.. _ _tons.. Oranges, fresh__ _do_ Paper: Joss_ _do_ Other_ _do_ Persimmons, dried.. _do... Samshu.... _do_ Samshu, medicated. _do_ Sugar: Brown_ _do .. White_ _do_ Thread and yarn ramie .pounds.. Tinfoil_ _ .* .tons.. Tobacco, prepared.. _do_ Turnips, dried and salted _tons.. Umbrella, paper_ number.. Vegetables, fresh, dried, and salted... _tons.. IMPORTS OF NATIVE GOODS Beans: Black.. _tons.. Green_ _do_ White.. _do_ Yellow... .. .do_ Bean cake. _do_ Cigarettes_ _do_ Coal. _do_ Cotton goods: Drills..... number.. Sheetings.. _do_ Y arns _ .pounds.. Cotton, raw . _tons.. Dates, black and rec _do_ Fibers: Hemp.. _do_ Ramie do_ Fish, dried and salted..do_ Flour, wheat_ _do_ Fungus___pounds.. Peanuts..tons.. Peanut, kernels_do_ Horns, deer, young_pairs.. Lily flowers, dried_tons.. Matches_gross. . Medicines_value.. Oil, peanut.tons.. Rice and paddy_do_ Samshu..do_ Seeds, melon...do_ Tea, green....pounds.. Tobacco, leaf and stalk.tons.. Vermicelli and macaroni ....j_tons.. IMPORTS OF FOREIGN GOODS Bags of all kinds_number.. Bicho do mar_pounds.. Cereals, rice and paddy.tons.. C igarettes.number.. Clothing, hats, etc. (not in¬ cluding hosiery, etc.) .value.. Coal.tons.. 198,000 3,650 318 2,896 644,933 884 1,713 578 7,246 3,646 5, 246 1,410 635 638 39, 389 28,068 124 1,850 133,116 12,927 3, 735 7,089 48,865 169, 346 ” 2, 250 6, 835 400 , 285 874 4, 546 ""585 300, 533 6, 678 542 485 522 131, 993 2,266 407 764, 533 846 1,905 87, 669 352,800 357 62, 343 Value $34, 593 82,938 3, 560 27, 766 343, 610 29, 689 104,147 55, 311 136, 842 491,156 485, 499 67, 699 37, 327 47,306 1, 455, 679 1, 568, 788 81,166 490,971 8,280 106,121 102, 797 196, 655 1,320,008 3, 221,402 7, 200 17, 277 38 50,175 37, 297 472,181 ”31,"663 44,832 190, 308 17, 450 45, 448 59, 224 50, 629 3, 719,162 143, 590 22, 625 80, 655 46, 067 117, 293 2, 897 37, 080 10, 214 3,800 3, 618 194, 873 1913 Quantity 4,425 4,755 2,957 852,933 1,221 1, 512 1,272 13, 000 3,738 7,225 974 905 28, 956 8,827 1, 549, 200 186 2,086 173, 733 16,699 48, 320 203,921 14, 980 6,667 819 4,193 ”’817 "7,’214' } 1,465,194 51,” 545 Value $293,180 ”668," 269" ”’ 99 ’ 340" ”176,840 1, 458, 536 676, 606 210,880 49,687 4,207 2,000 1,464 2,128 . 2, 424, 530 64,305 364, 266 64,837 6, 663 231, 424 9, 791, 000 18,169 305, 493 287, 896 65,175 1923 Quantity 516, 533 4,788 6, 743 6, 010 1,080, 533 1, 528 1,361 { 3, 577 9,084 6, 767 78,929 1,500 1,177 1,284 43, 733 5,138 1, 595, 866 199 2, 071 4, 512 667,671 12,858 4,423 8,088 4,905 37, 792 215,170 447 48,841 20,322 25, 506 15,147, 600 599 1,230 1,041 3,634 1,454 5, 508 269, 733 13,876 1, 300 435 1,169, 212 1,143 34, 366 3, 791 740 1,396, 533 1,742 2,343 3,178, 405 386,000 188, 701 54, 392, 000 51,166 Value $171,789 201,078 651, 346 109, 612 787, 529 101,158 122, 794 261,198 665, 297 545, 044 1, 623, 952 1,382, 393 95, 738 96, 032 117, 694 2, 361, 574 456, 248 282, 502 223, 203 795, 238 119, 305 106, 827 139, 442 206, 990 436, 759 182,481 1, 723, 290 8,908, 021 364, 582 390, 728 80,029 99, 941 2, 555, 024 244, 210 134, 805 187, 332 843, 370 109, 663 383, 361 161, 840 1,100,164 106,460 93,874 298, 574 409,120 171, 490 1, 649, 552 386, 642 93, 274 185,467 174,936 393,624 114, 538 84, 315 9, 567,960 97, 206 191,314 275, 020 730 COMMERCIAL HANDBOOK OF CHINA Trade of Swatow by Articles— Continued Principal articles IMPORTS OF FOREIGN GOODS— continued Cotton goods: Shirtings— Gray, plain .number.. White, plain_do_ Plain cotton prints .do_ Dyed cottons, plain, col¬ ored— Italians_number.. Venetians_do_ Poplins.....do_ Lastings_do_ Dyed cottons, figured, poplins.. number.. Y arns.. pounds.. Thread on spools...gross.. Dyes, colors, and paints: Aniline_value.. Indigo, artificial_tons.. Dyes and colors, un¬ classed__tons.. Fish and fishery products ....tons.. Flour.1.do_ Ginseng..pounds.. Leather_do_ Linen goods and mixtures .. yards.. Machinery and parts..value.. Manures_tons.. Medicines__value.. Metals and minerals: Tin in slabs....tons.. Tinned plates_do_ Milk, condensed, in tins __dozens.. Oil, kerosene....gallons.. Paper.. tons.. Soda....do_ Spirits of wine_gallons.. Sugar: White..tons.. Refined...do_ U mbrellas_number.. Wax, paraffin_tons.. Wool and cotton unions: Coatings and suitings -yards.. Wool and cotton unions, unclassed_yards.. Woolen goods, coatings and suitings.... yards.. 1903 Quantity 114,496 257,850 2,462 562 19, 299,866 19,658 11 4,101 43, 300 155,333 607 116 710 589 10,132 4, 725,930 259 364 991 709 1,078 10, 991 42 Value $224, 536 681, 702 11, 338 2,180 1, 954,496 27,124 18, 378 5, 347 676 164,102 65,465 19,094 113 3, 645 2, 220 102, 925 338, 319 35,195 11,046 420, 780 26, 458 10,393 499 34,376 69, 034 4, 998 4,083 1913 Quantity 102,424 174, 447 43,897 20, 841, 466 48,124 482 1,114 4,710 16, 566 17, 275 446,933 12,090 496 750 809 27, 921 5, 956, 950 1,019 1, 220 5,237 3, 605 126, 407 55,119 Value $228,916 528,161 132,832 2,900, 737 64,239 50, 377 190, 215 86,934 592,459 761,873 37,027 107,131 2, 559 19, 811 12,117 195, 325 371, 000 60, 751 35,897 673,129 92, 011 43, 022 336,077 240, 825 55, 680 18,855 1923 Quantity 76,496 70,484 25, 078 22,910 15,992 11,526 44,726 14,149 1, 274, 533 291, 326 222 1,103 7,985 16, 531 20, 955 770, 666 213, 008 '"’2,"992‘ 1,039 2, 688 2 254 5, 575,013 1,436 1,671 305,160 5,118 3, 536 161, 453 921 157,335 138, 291 129, 867 Value $347, 275 422, 809 94, 792 175, 399 168,126 119, 916 338,464 166, 746 477, 955 364,384 166, 687 146, 614 117, 298 1,111,234 992, 291 175, 396 212, 754 130, 067 92,663 202, 629 214, 322 835, 088 387, 561 103, 893 1, 323,158 178,185 94, 731 141, 728 644,801 455, 502 102, 876 99, 075 138, 722 127, 091 196, 464 3 Tons. MONEY, BANKING, AND CREDIT BANKING FACILITIES The following banks, through their Swatow offices, handle foreign exchange and bills: Bank of China, Neclerlandsch Indische Hand- elsbank, and Bank of Taiwan. The average annual rate of interest paid by the above banks is o 1 /} per cent on fixed deposits and 2 per cent on current accounts. LOCAL CURRENCY The various local currencies, fictitious and actually existent, are the Swatow tael, the local (tek peng or T-mace) dollar, the “ dragon SWATOW CONSULAR DISTRICT 731 dollar, the “.727” dollar, subsidary silver coins, coppers, and cash. The haikwan or customs tael does not constitute a business currency. A point of interest in the local currency situation is the Swatow tael and tek peng or 7-mace dollar. The tek peng dollar does not fluctuate, 700 taels always being the equivalent of $1,000 of this currency. Although the Swatow tael may be termed a fictitious currency, it is the money of account of the native banks and the larger shops, and serves as the basis of computation of local rates of exchange, which are all quoted in terms of this unit by the native banks. How¬ ever, it is customary for the foreign banks to quote foreign curren¬ cies directly in terms of silver dollars or the “.700 ” dollar if desired. The tek peng or “.700” dollar currency is represented only by paper issues of the local banks, and its use is confined to Swatow and Chaochowfu. This dollar is the chief currency of native busi¬ ness, although actual payments may be made in silver dollars at the rate of the day. The custom of the local banks is to make daily note settlements—that is, at the close of business each bank ex¬ changes the notes of other banks for its own. Overdrafts are com¬ mon, and rates of interest vary from 10 to 30 per cent per annum throughout the year. The only foreign bank which issues silver-dollar notes is the Bank of Taiwan, but this bank note is not popularly received. It never reaches the interior, and in Swatow it is current only among foreign banks and Government institutions. CREDITS In exporting goods to the United States the American importers usually provide letters of credit, and the shippers are instructed to draw either at sight or at so many days (30 to 90), according to the terms of the letter. In importing from the United States the American exporter in¬ variably demands a letter of credit, which could be procured locally or in Hongkong. The usual amount of deposit required by the banks for such a document is 25 per cent of the amount of the letter, but well-known merchants may procure such documents with a deposit of 10 per cent. Chinese merchants prefer long credits, and often 90 days are stipulated. Importing from Europe is simpler. The local importer only sends an order with a request to draw on him at 30, 60, or 90 days, through a designated (or any) bank, without a letter of credit or authority to draw. Of course, in such cases the Euro¬ pean exporter must first be satisfied as to the standing of the local firm, which can be ascertained by referring to the exporter’s local bank. ADVERTISING Newspaper circulation in this district is very limited, few such publications reaching the farmer class. Newspaper advertisements come to the attention of only the educated, and therefore should be supplemented by some other form of advertising. The handbill is the quickest and surest way to advertise among all classes. Poster advertising (on which there is no tax) is also advantageous. Trade catalogues are of little use, as they appeal only to the educated few. J 732 COMMERCIAL HANDBOOK OF CHINA TRADE ORGANIZATIONS The British Chamber of Commerce is the only foreign chamber of commerce in Swatow. There is a Chinese Chamber of Commerce and there are about 20 guilds. TRAVEL FACILITIES AND HOTELS The best time to visit Swatow is from November to February, when the weather is delightful. The other months are warm. Swa¬ tow is most easily and comfortably reached from Hongkong, though there are occasional direct steamers from Shanghai. The leading hotels of the district are the Astor House and the Oriental Hotel, both in Swatow, the former under Chinese owner¬ ship and the latter British. PROPERTY VALUES, RENTS, AND TAXES For property in the business section of Swatow the cost per chang* (100 square feet) ranges from $500 to $1,000 Mex., and in the resi¬ dential section from $100 to $200 Mex. per chang. Office space is limited, and the average rates of rent range from $35 Mex. per month for two rooms to $125 for five rooms. Rent for warehouse space averages $5 Mex. a month or $50 a year per chang of floor space. Rent for residential purposes averages $100 to $150 Mex. per month. Swatow is the only treaty port in this consular district. There are no foreign concessions in Swatow, the city being under the con¬ trol of Chinese officials. There is no limitation to the area in which foreigners may reside. Foreigners may acquire property in the usual manner by leasing it in perpetuity. Foreigners pay no taxes in Swatow. The only public activity of this class of residents is manifested in the formation of committees employed in collecting and expending funds for the construction and maintenance of roads and pathways in the neighborhood of dwell¬ ings where foreigners live. LIVING COSTS The approximate cost of living per month, which includes board and lodging, club dues, laundry, transportations, and incidentals, is for a single person approximately $225 Mex., and for a married couple $325. The chief recreations are tennis, swimming, and boating. There are no educational facilities for American children, most of whom in this district attend the American school in Shanghai, TSINAN CONSULAR DISTRICT By Vice Consul H. L. Milbourne LOCATION AND AREA The Tsinan consular district includes all of Shantung Province except the former leased territory of Kiaochow and that portion of the Shantung Peninsula forming the consular district of Chefoo. Roughly, it lies between 35° and 38° north latitude—corresponding to the latitude of North Carolina and southern Virginia—and be¬ tween 115° and 120° east longitude. The area of Shantung is given as 55,984 square miles, and the 94 “ hsien,” or counties, comprising the Tsinan consular district have an area of approximately 46,000 square miles. The area of the Province, therefore, corresponds to that of Iowa, and the area of the consular district is about equiva¬ lent to that of Pennsylvania. Central and southeastern Shantung is mountainous and rugged. The western part is flat and low, and, being cut by numerous streams leading to the Yellow River, is subject to floods. The central part of the northern section is a barren plain, also subject to inundation. CLIMATE Shantung shares the general climatic conditions of North China, the winters being long, cold, and dry, the summers short and hot. Temperature ranges from zero to 100° F. The rainy season is in July and August. The Province is subject to prolonged droughts and at times to sudden and disastrous floods. During the abnormal rainfall in the summer of 1921, following a drought of several years’ duration, the Yellow River broke its northern dike near Litsing and flooded 1,800 square miles of land, rendering more than a quarter of a million people homeless. POPULATION In 1920 the population of Shantung was 30,803,245 (Chinese Post Office estimate), or 550 to the square mile. Of China’s 19 Provinces, Shantung ranks sixth in population and third in density of popula¬ tion. The population of the Tsinan consular district is estimated at 26,000,000. Foreign residents in the district include about 470 Americans, 160 British, 70 Germans, and 2,800 Japanese. Of the American residents, about 90 per cent are missionaries, representing 14 different missionary societies. 733 734 COMMERCIAL HANDBOOK OF CHINA CITIES * The most important cities of the district are shown below. There are four American business firms in Tsinan, but none in any of the other cities listed. Cities Population (estimated) Europeans Americana Tsinan 1 __- _ 283, 000 97, 000 90, 000 73, 000 55, 000 42, 500 160 130 Weihsien.... .. 29 Taianfu ___ _ 12 45 Tsining___ 6 28 Teh chow.......... 2 19 Chowtsun......... . 23 1 Treaty port where foreigners may reside for trade purposes. Tsinan , the provincial capital, is advantageously situated at the junction of two railways. Its commercial importance has increased rapidly during the last 10 or 15 years, its growth being stimulated by the construction of the Kiaochow-Tsinan Railway, opened in 1904, connecting the city with the port of Tsingtao, followed by the con¬ struction of the Tientsin-Pukow Railway, opened in 1912, affording connections with the two ports which give the railway its name. The earlier growth of Tsinan was due to its favorable central posi¬ tion within a few miles of the Yellow River, to its water communica¬ tion with the Grand Canal and the Gulf of Chihli, and to the various important agricultural producing centers in its immediate vicinity. Tsinan was voluntarily opened to foreign residence and trade by imperial decree of 1904. The city consists of the old Chinese walled city and the new district outside the Avails, usually referred to as “ The Settlement.” Both the native city and the commercial-port area are under Chinese administration and police control. The American, British, German, and Japanese Governments maintain consular establishments at Tsinan. Weihsien , the second largest city in the district, is situated on the Kiaochow-Tsinan Railway about midway between Tsinan and Tsing¬ tao. A motor road connects Weihsien with Chefoo. Plans for a railway between these two cities have been under consideration for a number of years, but for various reasons they have not progressed beyond the point of discussion. Weihsien Avas declared open to foreign trade and residence by imperial decree of 1904, but as a commercial-port area has never been delineated it is not considered as actually so opened. Salt, tobacco, embroidery, lacquer ware, tin¬ ware, hair nets, and bristles constitute the bulk of the trade. Weih¬ sien was the site of the first American mission in Shantung, opened in 1861. Talon is situated on the Tientsin-PukoAv Railway, about 45 miles south of Tsinan. It is the center of an important peanut and fruit¬ growing district, but Taian is principally noted, however, for its proximity to Taishan, the most famous of the five sacred mountains of China. Tsining is the terminus of a 20-mile branch line of the Tientsin- Pukow Railway running southwest from Yenchowfu. It is also situ¬ ated on the Grand Canal. Tsining is an important collecting and TSINAN CONSULAR DISTRICT 735 shipping point for cotton, wheat, and cattle. The industries of the city include a flour mill and three egg-products factories. Tehchom , about 60 miles north of Tsinan, is also situated on both the Tientsin-Pukow Railway and the Grand Canal. It is the site of one of the Chinese Government arsenals and is a shipping point for cotton, bean oil, and other agricultural products. Chowtsunls on the Kiaochow-Tsinan Railway, about 50 miles east of Tsinan. Its excellent climatic conditions for the growth of mul¬ berry trees make it an important silk-producing center. Chowtsun was also opened by imperial decree of 1904, but, like Weihsien, has never been actually opened to foreign trade. AGRICULTURE AND LIVESTOCK The population of Shantung, in common with that of China as a whole, is almost entirely dependent upon agriculture for a liveli¬ hood. The soil in most parts of the Province is far from poor, and its products are surprisingly varied. Wheat, kaoliang (kafir corn), millet, and beans are the staple crops in the lowland districts east of Tsinan. Agricultural products (in order of importance) Planting season Harvesting season Average produc¬ tion per acre Estimated annual pro¬ duction Wheat_bushels.. September . May_ 16 480 36 N 34 1,600 1,200 16 47, 000, 000 135, 000, 000 34, 000, 000 30, 000, 000 £60, 000, 000 40, 000, 000 10, 000, 000 Cotton___pounds.. May.... September__ Millet_bush els.. _do__ .do. _ .. Kaoliang__do_ Peanuts _pounds.. Tobacco . _ . .. do. . .do.. .do. _.do_ .do_ _do__ _do.. Beans ... _ .... bushels.. June_ October_ Note. —Weights of the various bushels are as follows: Wheat, 60 pounds; millet, 48 pounds; kaoliang, 48 pounds; beans, 60 pounds. GRAINS Nearly one-half of the land in this section is sown in wheat in the autumn. In the spring kaoliang and millet are planted in about equal proportions on the remaining half of the land cultivated. The wheat is harvested toward the latter part of May, and beans are planted in its place. Kaoliang and millet are cut in September and wheat is again sown, while the land from which the bean crop is harvested in October is allowed to lie fallow until the follow¬ ing spring. About one-tenth of the land is reserved for vegetables and other crops. COTTON Cotton is grown extensively in western Shantung in the Yellow River and Grand Canal basins. In recent years American cotton has been successfully introduced and cultivated throughout this section. The greater part of Shantung’s cotton crop is sent to Tsinan, sold to Japanese buyers, and shipped over the Kiaochow- Tsinan Railway to Tsingtao for export to Japan. The manufacture of wadded garments—a household industry carried on by women— consumes a large share of the annual production. A considerable quantity is also used by the Loo Feng Cotton Spinning & Weaving 736 COMMERCIAL HANDBOOK OF CHINA Co., which operates a mill with 16,000 spindles at Tsinan, and by the cotton mills at Tsingtao. PEANUTS Peanuts are grown wherever sandy soil obtains; the principal producing districts are Taian and Laiwu, in central Shantung. The estimated normal crop of peanuts in the Province is 250,000 tons, more than half of which is for export, either shelled, unshelled, or in the form of oil. Most of the oil is extracted by native meth¬ ods, although there are two oil mills at Tsinan and others at Tsingtao. Shantung peanuts are larger and contain more oil than those grown in other Provinces of China. TOBACCO Tobacco is an important crop in the Ankiu, Weihsien, Changlo, and Changi districts. A low and uncertain grade of tobacco had been grown in Shangtung for many years, but it Avas not until 1914 that experiments were made with a view to producing a type of tobacco which could be used in the manufacture of high-grade cigar¬ ettes. In that year a foreign tobacco company conducted extensive inA T estigations in the Weihsien district and found that both soil and climate were suitable for the growth of Virginia and North Carolina leaf. Large quantities of selected American seed were imported and distributed free of charge to the farmers, who agreed to plant it on the understanding that the foreign company would purchase the entire crop at a fair price. Thus a real tobacco market has been created, and a high-grade tobacco stock has been firmly established. There being no tobacco factories in Shantung, the entire tobacco crop is shipped to the manufacturing centers of Shanghai, Tientsin, and Mukden \ 7 ia Tsingtao. BEANS Beans are groAvn generally throughout the Pro\ r ince. Roughly, 50,000 tons are distributed through Tsinan annually, the greater part of which is shipped to Tsingtao over the Kiaochow-Tsinan RailAA ay. Practically the entire bean crop is consumed within the ProA T ince, a part being used in the manufacture of oil by nath 7 e methods. OTHER CROPS Other important crops are maize, grown in the northwestern and southern parts of Shantung; sweet potatoes, grown almost e\ T ery- where throughout the Province; and walnuts, groAvn principally in the Tsingchow and Taian districts. The maize and sweet-potato crops are consumed locally, while the bulk of the walnut crop finds its way to Tientsin and Shanghai. Crops of lesser importance in¬ clude hemp, rice, buckwheat, ginger, and sesame. Many A 7 arieties of fruit are grown, including apples, pears, peaches, persimmons, apri¬ cots, plums, cherries, and grapes. Truck gardening is an important occupation throughout the Province. Melons, strawberries, cabbage, garlic, and a wide variety of vegetables are extensh 7 ely grown. Mulberry trees and scrub oak are grown in the eastern part of the Province for sericulture purposes. TSINAN CONSULAR DISTRICT 737 / STOCK RAISING Cattle are raised everywhere, but the individual herds are small. The number is roughly put at 1,000,000 head, of which from 10,000 to 20,000 are exported and about 100,000 head butchered within the Province each year. Conditions for raising cattle vary greatly in different sections. Summer pasturage in the mountains is good, but there is not suf¬ ficient provender or winter shelter for large herds. In some dis¬ tricts, notably Tsaohsien, Tsaochow, and Tingtao, cattle are plenti¬ ful and cheap, and their number could be increased, while in other districts, such as Weihsien, Changlo, and Changi, lack of pasturage confines this undustry to the raising of work animals only. During periods of crop failures and high prices cattle are sold indiscrimi¬ nately. Sheep, goats, and swine are raised in considerable numbers. AGRICULTURAL METHODS While his agricultural implements are of very primitive type, the Shantung farmer possesses a good knowledge of the most important principles of his occupation. The use of fertilizers, the necessity of following a rotation of crops, and the usefulness of leguminous crops in enriching the soil are understood in a general way. Every particle of arable land is under cultivation, while in the mountain¬ ous districts the hillsides have been terraced in order to extend the cultivable area. MINERALS AND MINING Coal and iron are the most important minerals found in Shantung. The.principal coal fields are at Tsaochwang, in the Yihsien district; at Fangtze, on the Kiaochow-Tsinan Railway, about midway be¬ tween Tsinan and Tsingtao; and at Tzeclrwan, on a branch line of „ the Kiaochow-Tsinan Railway which connects with the main line at Changtien, 60 miles east of Tsinan. The Yihsien coal field is con¬ sidered the best in Shantung. There are a number of small mines in the immediate vicinity of Poshan, south of Tzechwan, which have been worked by native methods for several hundred years. Other coal mines in the district are at Ningyang, on the Tientsin-Pukow Railway, and at Changkiu, north of the Kiaochow-Tsinan Railway between Tsinan and Chowtsun. Iron ore of high grade is found near Chinglingclien, on the Kiao¬ chow-Tsinan Railway, about 75 miles east of Tsinan. Resources and production (in tons of 2,240 pounds) of coal and iron are shown in the following table: Minerals Nature Annual pro¬ duction Extent of resources Export in 1923 Coal... /Bituminous . ..... Tons 1,800,000 Tons 655,000,000 30,000,000 100, 000, 000 Tons i 245,000 \Anthracite. __ Iron ore_ __ _ 65 per cent iron .... 80,000 15,000 1 Export from Tsingtao only. 100020°—26-48 738 COMMERCIAL HANDBOOK OF CHINA Gold has been discovered at numerous places in the northern part of the Province. The richest deposits are at Chaoyuan, Chiutien (near Pingtu), Chihhusan (near Ninghai), Hsiayutsen, and Kwei- shan. The mine at Chaoyuan is the only one in actual operation, and is said to be the only one that can be profitably worked. No accurate information is available as to its output. Copper and lead deposits have been discovered, but no mining operations have ever been undertaken. MINING The principal recent development in connection with the mining industry in Shantung was the transfer in 1923 of the coal mines at Fangtze and Tzechwan and the iron mine at Chinglingchen from Japanese to Chinese ownership. In 1898 Germany w r as given the right to develop the mines along the then proposed railway between Tsinan and Tsingtao. The Japanese took possession of the mines in 1914, and later, by virtue of the treaty of Versailles, the German rights were acquired by Japan. In 1922 a Sino-Japanese agreement was concluded to transfer the mines at Fangtze, Tzechwan, and Chinglingchen to a company to be formed under a special charter of the Chinese Government, in which the amount of Japanese capital should not exceed that of Chinese capital. The Sino-Japanese com¬ pany, the formation of which was provided for as above, was organ¬ ized in April, 1923, under the name of the Lu Ta Mining Co., with its head office at Tientsin. The capital of the company is said to consist of 200,000 shares of $50 1 each, of which the sum of $2,500,000 is reported to have been subscribed. The Lu Ta Co. formally took possession of the mines in August, 1923, and transferred its head office to Tsingtao. Mines Location Nature of product Output, 1923 Capital paid up Nationality of company Head office Chung Hsing.. Lu Ta Mines_ Poshan Mines_ Tsaochwang. . Fangtze_ Poshan _ Bituminous... _do_ _do... _ Tons 730,000 650,000 280, 000 30, 000 30, 000 1 3, 500,000 2 $2, 500, 000 Chinese_ Sino-Japanese. Chinese_ Tientsin. Tsingtao. Poshan. Ningyang. Changkiu. Huafeng.. Ningyang _ _do.. __ _do__ Tienyuan _... Changkiu_ _do_ _do_ . Chinglingchen. _ Chinglingchen Iron. . _ Cl 1 Taels. 2 Local currency, of which $1 equals about $0.50 United States. 3 Operated by the Lu Ta Mining Co. Chung Using mine .—The Chung Hsing Coal Mining Co. was established in 1880 with a capital of $20,000. In 1898 German capital was admitted, but was bought out in 1908. The capital has now been increased to 3,500,000 taels. The mining area controlled by this company is 122 square miles in extent and has an estimated coal deposit of 200,000,000 tons. 2 The present output of the mine is about 700,000 tons annually. The company operates eight shafts, all of which are equipped with modern mining machinery of Ger¬ man make. A new shaft, 1,000 feet deep, was sunk in 1922. About 1 Throughout this chapter, unless otherwise stated, dollars refer to local currency, in which $1 equals about $0.50' United States. 2 The long ton is used in the material in this chapter having reference to minerals. TSINAN CONSULAR DISTRICT 739 5,000 laborers are employed. The company operates a railroad 27 miles long, between Tsaochwang and Taierhchwang, affording con¬ nections with the Grand Canal. The Tientsin-Pukow Pailway has constructed a branch line from Lincheng to Tsaochwang, a distance of about 20 miles, and has contracted for 60,000 tons of coal annually. Some 60,000 tons are coked annually at the mines. The rest of the output is shipped to Pukow and other points along the Tsien-Pukow line. Fatngtze mines. —The original Fangtze coal mine was worked by the Germans from 1902 to 1914. When the mine was taken over by the Japanese in 1914 new veins were traced near the old mine and operations were started in 1917. The machinery of the original German mine has been dismantled and set up at Tzechwan, only the briquet factory being left intact. The equipment of this mine, as well as of the briquet factory, was of German make. The Fangtze north and central mines are not yet producing, while the south mine has only a nominal output. The equipment of the Fangtze east and west mines, the only two now in operation, is of German and Jap¬ anese manufacture. The present output is about 150,000 tons a year. When working at full capacity about 800 laborers are employed. The output of the Fangtze mines is shipped over the Kiaochow- Tsinan Railway to Tsingtao and other distributing points. Tzechwan mine. —This mine, formerly called Hungshan, covers an area of about 6 square miles and has an estimated deposit of about 70,000,000 tons. There are 12 seams, the first lying at a depth of 100 meters and the last at a depth of 270 meters. The total thickness of the seams is about 6 meters. Mining operations at the Tzechwan mine were started by the Ger¬ mans in 1904. There are three shafts—one sunk in 1904, another in 1910, and the third, originally intended for ventilating purposes, in 1913. The mine is equipped with a complete electric light and power plant consisting of two alternating sets of German manufacture and one Parson’s turboalternating set. Other equipment includes com¬ plete air compression, ventilator, and coal-washing plants, coal sepa¬ rator and conveyors, machine shop and foundry, hoisting engines, boilers, and pumping equipment—all of German make. About 4,000 Chinese miners are employed, working in 8-hour shifts, and receiving about 40 cents a day. The output of the Tzechwan mine is transported over the Kiaochow-Tsinan Railway to Tsingtao and other distributing points along the line. The present annual output is about 500,000 tons. Poshan coal mines .—This group of mines is now being wrnrked by some 40 Chinese and Japanese firms and individuals, applying both native and foreign methods. The fields cover an area of about 100 square miles. The deposit is estimated at 170,000,000 tons. The total annual output is about 300,000 tons. From 150,000 to 200,000 tons of coke a year are being made at' Poshan, about half of wdfich find its outlet over the railway. Other coal- mines. —The coal mines at Ningyang and Changkiu are relatively unimportant. Chinglingchen iron mine. —The Chinglingchen iron mine covers an area of about 120 square miles and is estimated to contain 100,- 000,000 tons of ore. The thickness of the vein is 15 to 17 meters. 740 COMMERCIAL HANDBOOK OF CHINA The quality of the ore varies materially, but the average runs high. An analysis of an average sample, made by a German chemist, showed 65 per cent iron, 23 per cent manganese, 3 per cent phos¬ phorous, and 8 per cent sulphur. The Germans were preparing to work this mine when the European war broke out in 1914, and Japanese operation of the mine dates from 1916. During the Japanese operation of the mine the output varied according to the requirements of the Japanese Government. In 1919 it was 179,000 tons; in 1920, 128,000 tons; in 1921, 88,000 tons; and in 1922, only 26,000 tons. There was no production during 1923. When pro¬ ducing its maximum, about 1,200 coolies are employed in the mine. There is no need at present for hoisting machinery at Chinglingchen. The ore-filled cars are operated by gravity from the adits, and the empties are hauled back by mules. The only equipment at the mine consists of an old boiler plant and small blacksmith and repair shops. MANUFACTURING AND INDUSTRIAL DEVELOPMENT With the proximity of fuel and raw materials at Tsinan, consider¬ able industrial development is beginning. Practically all of the in¬ dustries, of which flour milling takes the lead, are owned and oper¬ ated by Chinese. Other industrial enterprises include a cotton spinning and weaving mill; a beet-sugar mill and alcohol factory; hair-net, carpet, and egg-products factories; vegetable-oil mills; paper factory, match factories, needle factory, tanneries, fertilizer factory, bone mill, hat factories, cement works, brick and tile factory, and silk filature; the Tientsin-Pukow Railway shops and a number of small machine shops; besides the usual native handicraft indus¬ tries. The establishment of flour mills of modern type has been a de¬ velopment of the last few years. There are at present 10 such mills at Tsinan, 1 at Tsining, and 1 at Tungping, all equipped with American milling machinery and all but one owned and operated by Chinese. The capacity of the 12 mills in the district is about thirty-eight thousand 50-pound bags daily. The plaiting of braid from wheat straw, a cottage industry, has grown to considerable proportions and is a large source of revenue to the population of north central Shantung. The main producing cen¬ ters are Shaho, Laichow, Pingtu, Chengi, Showkwang, and Yangsin. The manufacture of hair nets from human hair was begun about 15 years ago and reached vast proportions in 1921. Since then the industry has been on the decline. This is a home industry. Hair¬ net dealers in the treaty ports supply the hair to the interior villages, where the nets are made by hand, collected, and returned for exami¬ nation and repair before being packed for export. The manufacture of bobbin lace by hand is also an important home industry. • * •ITT Sericulture, although carried on in a crude way, is probably one of the most valuable industries in the Province. In the central and southern part of the Province mulberry trees are grown from slips imported from Kiangsu and Chekiang Provinces. The quality of the mulberry leaves, however, is inferior, and only a small quantity of white silk is produced, the bulk of the product being yellow. In comparison with the chief silk-producing Provinces in China the TSINAN CONSULAR DISTRICT 741 output is small. The annual production of raw silk in Shantung is said to be about 400,000 piculs, most of which is hand reeled. The principal producing centers are Tsingtao, Linchu, Changshan, Laiwu, Sintai, Mengyin, and Jihchao. Although the silk industry in Shantung centers around Chefoo, there are two native filatures at Chowtsun, a Government filature equipped with machinery of modern type at Tsingtao, and a small native filature at Tsinan. The principal market for silk goods is at Chowtsun, followed by Chefoo and Ninghai (in the Chefoo consular district), Weihsien, Tsingtao, and Tsinan. The total annual silk- goods production of the Province is about 530,000 pieces, of which about half is plain silk called “ chou ” and about a quarter is pongee. The manufacture of egg products is another industry started within the last 10 or 15 years. There are now 3 egg-product factories at Tsinan, 3 at Tsining, and 1 at Yenchow. The manufacture of bricks, tiles, and pottery is important in many parts of the Province where suitable clay is available. Poshan, on a branch line of the Kiaochow-Tsinan Railway, has been celebrated for centuries for its glassworks. LABOR CONDITIONS Labor is relatively cheap in China. This is particularly true in Shantung with its population of 550 to the square mile. Wages for common male labor average about $8; female, $6; and child labor, about $5 a month. The average for carpenters, blacksmiths, masons, stone workers, painters, and shoemakers’ and tailors’ apprentices is about $15 a month. Owing to the surplus of labor in the Province, thousands of farm laborers emigrate annually to Manchuria. For the same reason, labor strikes are unknown in Shantung. TRANSPORTATION AND COMMUNICATION WATERWAYS There are three principal waterways in the district, but they are suited only to junk traffic. The Yellow River crosses the northern part of the Province, from west to northeast, emptying into the Gulf of Chihli. Paralleling the Yellow River to the south is the Siao- tsing Ho, which connects Tsinan with the Gulf of Chihli at Yang- kiokow. The Grand Canal is the third of the principal waterways. It enters Shantung at Taierhchwang, on the southern border, and runs northwest, leaving the Province north of Tehchow. RAILWAYS The Tientsin-Pukow Railway (head office, Tientsin) connects Tsinan with Tientsin (221 miles north) and with Pukow (408 miles south, opposite Nanking) where connection is had with Shanghai. The Kiaochow-Tsinan Railway (head office, Tsingtao) connects Tsinan with Tsingtao, 245 miles east. The Tientsin-Pukow Railway operates 260 miles of line in the district, and the Kiaochow-Tsinan Railway operates 245 miles. 742 COMMERCIAL HANDBOOK OF CHINA Branches of the Tsinan-Pukow Bailway in Shantung are as fol¬ lows: Lokow to Hwangtaichiao, 4.85 'miles; Yenchow to Tsining, 20.1 miles; and Lincheng to Tsaochwang, 19.55 miles. Branches of the Kiaochow-Tsinan Bailway are as follows: Changtien to Poshan, 24.2 miles; Tzechwan to Tzechwan colliery, 4 miles; and Chinling- chen to Tienshan, 4.3 miles. Statistics of the two railways show that 454,000 tons of goods were shipped into Tsinan and 446,000 tons shipped out during 1923. The principal items of import were coal, wheat, peanuts, kaoliang, cotton, lumber, millet, coke, kerosene, and sugar. The principal ex¬ ports were flour, peanuts, cattle, coal, bran, cotton, kaoliang, beans, lumber, and eggs. Of the exports, coal, peanuts, cotton, eggs, and cattle are the only items which enter to a great extent into foreign export trade. On the Tientsin-Pukow Bailway freight rates per ton per English mile are as follows: First class, $0.0956; second class, $0.0797; third class, $0.0611; fourth class, $0.0398. Passenger fares per English mile are: First class, $0.06; second class, $0.04; third class, $0.02. On the Kiaochow-Tsinan Bailway freight rates per ton per English mile are as follows: First class, $0.0229 (preferential rates to Tsingtao) ; second class, $0.0196; third class, $0.0164. Passenger fares per English mile are: First class, $0.0558; second class, $0.0282; third class, $0.0156. There are no railway lines under construction in Shantung at the present time, but there are three projects under consideration: (1) To connect Tsinan, the junction of the Kiaochow-Tsinan and Tien¬ tsin-Pukow Bail ways, with Shunteh (Chihli Province), a point on the Peking-Hankow Bailway; (2) to connect Kaomi, a point on the Kiaochow-Tsinan Kailway near Tsingtao, with Hsuchow (Kiangsu Province), a point on the Tientsin-Pukow line and the junction of the latter line with the proposed railway from Lanchowfu (Kansu Province), to the sea at Haichow, the new port to be constructed on the coast north of Shanghai; (3) to connect Weihsien, on the Kiaochow-Tsinan Bailway, with Chefoo on the coast. ROADS The leading roads of the district are listed in the following table. In addition there are 337 miles of roads in the district which are adaptable to motor transportation and 182 miles which were con¬ structed for motor transportation but which are not so used. Roads W eihsien-C hefoo_ Y ucheng-Hsiawa_ Tsining-Tsaochow_ Tehchow-Lintsing_ Tsining-Shanhsien_ Yucheng-Tungchang— Chowtsun-Tsingcheng Mileage con¬ structed for motor transpor¬ tation Esti¬ mated number of motor cars in opera¬ tion 227 35 90 4 77 5 57 2 3 47 10 37 4 Pas¬ senger rates Cents per mile ^ 00 00 OO OO OO OO TSINAN CONSULAR DISTRICT 743 In addition to the above there are 337 miles of roads in the dis¬ trict which are adaptable to motor transportation, and 182 miles which were constructed for motor transportation but are not so used. The Weihsien-Chefoo motor-car service, the most important of its kind in Shantung, was started in September, 1922. Although only a dirt road, the roadbed is kept in very good condition except dur¬ ing the rainy season. The cars leave Weihsien and Chefoo daily, making the run in either direction in 10 to 12 hours. From Weihsien the line runs through Shalio, Laichow, Lungkow, Hwanghsien, Tengchow, and on to Chefoo. The road is leased and operated by a Chinese company. Most of the cars are secondhand machines which have been equipped with special bodies to adapt them to passenger transportation. At present no provision has been made for the transportation of freight over any of the motor-car roads in the district. In all, there are about 1,100 miles of roads in Shantung either constructed for or adaptable to motor transportation. Early in 1920 a proposal was made to build some 1,600 miles of motor roads connecting all the important cities in the Province; but owing to the state of the provincial treasury nothing was done toward carry¬ ing out the project until the autumn of 1920, when the Chinese Government undertook, with funds derived from famine surtaxes on railway fares and freight rates, the construction of the highway from Weihsien to Chefoo. The highway follows the route of the proposed Weihsien-Chefoo Railway and was built in a manner to form the roadbed for such railway. According to the Government’s report, $670,000 was expended in building the road, and 3,700 famine laborers were given employment. As a famine relief measure the American Red Cross Society, in 1920 and 1921, constructed with famine labor approximately 400 miles of dirt roads in the western and northern sections of the Province, through the heart of the famine area. The Red Cross spent more than $750,000, United States currency, in the project, employing 26,700 laborers and supporting over 150,000 people dur¬ ing the winter of 1920. The highway stretches from Tehchow, in the north, to Lintsing, Kwantao, Tungchang, and a point on the Yellow River, in the south, and again, from Tungchang through Kaotang to Yucheng, on the Tientsin-Pukow Railway, and from Yucheng through Linyi to Wuting, whence one branch runs south to Tsinghochen, on the Yellow River, and another northeast to Chengtzekow, where the junk traffic between Manchuria and Shan¬ tung reaches the northern section of the Province. The highways were turned over to the provincial government in June, 1921. The construction of these highways has given impetus to the introduction of motor cars, especially for passenger transport, and has led to further interest in roads in other parts of the Province. As a means of protecting the roads, the Red Cross also introduced a type of wide-Avheeled cart to replace the narrow-wheeled Chinese cart. SUMMARY OF TRANSPORTATION The following is a summary of the transportation by the methods in common use in this district: 744 COMMERCIAL HANDBOOK OF CHINA Mediums Average load Average mileage per day Average cost per ton-mile Maximum haul Railways.- __ 15-30 ton cars_ __ 250 3 10-50 25 25 20 / i $0. 06905 \ 2 .01963 .025 ■ .10 .25 .17 Miles j- 260 200 100 50 100 Junks _ 28 tons._ Carts_ _ 1 ton __ Pack animals__ 400 pounds_ Wheelbarrows_ ... ... .. 640 pounds_ 1 Tientsin-Pukow Railway. 2 Kiaochow-Tsinan Railway, preferential rate to Tsingtao. 3 The first figure refers to rate upstream, the second to rate downstream. TELEGRAPHS, CABLES, AND WIRELESS SERVICE t There is but one telegraph company in the consular district—the Chinese Telegraph Administration, which operates 77 stations in the Province. Rates to Shanghai are $0.18; to New York, $1.95. The actual distance of the overland routes in the Province totals about 3,500 miles. There are no submarine-cable stations in the consular district. The wireless station at Tsinan, constructed by the Japanese, has not been in operation since it was handed over to the Chinese in 1922. TELEPHONES The Tsinan Telephone Co. has recently installed new telephones and the service is now quite satisfactory. Subscribers number 2,652; annual rates are $84. The automatic type of instrument is in use. Equipment is of German make. No further improvements or ex¬ tensions are planned for the present. POSTAL FACILITIES Postal establishments in Shantung include 1 head office, 2 first- class offices, 116 second-class offices, and 29 third-class offices. During 1923, 382,200 parcels, valued at more than $14,000,000, were posted. Hair nets represent the major part of the value of the parcels posted at Tsinan. Other articles of export by parcel post, in the order of their importance, are silk, cloth, furs, ironware, and brass ware. In 1923 money orders to the value of more than $6,000,000 were issued and nearly $13,000,000 w T orth cashed. A large part of the value of the money orders cashed represents remittances from Shan¬ tung laborers in Manchuria to dependents in Shantung. Arrange¬ ments have been entered into for the carriage of mails over several of the motor roads in the district. PUBLIC WORKS AND UTILITIES ELECTRIC-LIGltT PLANTS The Tsinan Electricity Works was established in 1906. Its equip¬ ment then consisted of two semiportable engines with belt-driven alternators, a secondhand German plant formerly used at Tsingtao. In 1910 new machinery was purchased and a new building erected. The plant is now equipped with 2 turboalternators of 500 and 1,000 kilowatts, respectively, 2 high-speed vertical engines coupled direct to 2 Siemens alternators, and 5 Babcock & Wilcox boilers having a TSINAN CONSULAR DISTRICT 745 combined heating surface of 12,710 square feet. The number of lamps actually connected is about 40,000. The capital of the com¬ pany is $700,000. Ijp The Tsaohsien Electric Light Co. is planning an extension, but it is not at all certain that the plan will be carried through. No other extensions are planned. The following are the electric-light plants located in the district. All are under Chinese ownership. The power load of the Tsinan plant is 200 kilowatts. Location Tsinan. ... Tsining... Tenghsien Poshan_ Weihsien.. Lighting load Rates Location Lighting load Rates Kilowatts Cents Kilowatts Cents 900 / 135 Chowtsun.. 60 35 \ i * 3 4-15 Fangtze. . ___ . 60 0) 3 170 35 Tungchang..__ 37^ ( 4 ) 3 113 35 Taian... ... 25-40 ( 4 ) 3 100 60 35 35 Tsaohsien.... 25 ( 4 ) i Light. 3 Power. 3 Kilovolt-amperes. 4 Flat rate. WATERWORKS AND TRAMWAYS Projects for both waterworks and tramways at Tsinan have been under discussion for a number of years, but financial and political considerations have delayed their progress. Both projects require considerable capital outlay, which has not been forthcoming. No conservancy or reclamation projects are under consideration in the district at the present time. EXPORT AND IMPORT TRADE Tsinan, though open to foreign trade, is an interior city and main¬ tains no customs establishment compiling statistics of trade. The consular district has no seaports. It is not possible, therefore, to give statistics of trade which might be of interest and value in indicating the trade possibilities of the district. EXPORTS The Tsinan district is the center of production of numerous Chinese products prominent in the export trade of the country, in¬ cluding peanuts, peanut oil, hair nets, straw braid, egg products, cotton, carpets, hides and skins, wool, silk and silk goods, and wal¬ nuts, but these products go out of the district through Tsingtao and Chefoo, the two treaty ports of the Province, and through Shanghai and Tientsin, the principal export centers of North China, with both of which the district has easy means of communication. With the exception of the export of hair nets and of carpets, there is practically no direct export trade between the district and the United States. The original hair-net district of China is Chefoo, and bv far the largest share of the business is still handled at that port, but in recent years Tsinan has become an active competitor. In 1919, only 55,087 gross of nets were shipped direct from Tsinan to the United States; in 1920 the direct shipments totaled 131,660 746 COMMERCIAL HANDBOOK OF CHINA gross, while in 1921 they reached the high point of 512,317 gross. Since then, owing to the decreased demand in the American market, the direct shipments have been reduced by about half. The direct shipment of carpets from Tsinan to the United States has shown a steady increase. In 1920 direct shipments totaled only 66 square yards, as compared with 484 square yards in 1921, 3,676 square yards in 1922, and 7,610 square yards in 1923. Many of the carpets exported from Tsingtao are manufactured at Tsinan. Carpets are also shipped from Tsinan to Shanghai for export. Peanuts are the leading agricultural export staple of the Province, Shantung being the largest producer of peanuts in China. Large quantities of peanuts, shelled and unshelled, and of peanut oil are exported to the United States from Tsingtao. The following table shows the exports declared at Tsinan for ship¬ ment to the United States during the calendar years 1922 and 1923. Values are in United States dollars. Articles 1922 1923 Quantity Value Quantity Value Soybeans.....pounds.. 4,000 10,000 $106 457 Peanuts, shelled......do_ Embroideries_ .. . .. 24,000 $1,446 84 444 54,977 617, 725 Human hair........pounds.. 571 7,610 306,668 Carpets....square yards.. Hair nets........gross.. Works of art_J___ 3,676 350, 831 25,678 935, 309 68 1,146 Household effects______ 117 Total value..... 962, 764 674, 793 IMPORTS For imports of foreign goods the district depends upon Shanghai, Tientsin, and Tsingtao. The Japanese trade of the district, both import and export, is almost entirely through the port of Tsingtao, but other foreign imports are drawn largely from Shanghai and Tientsin. Petroleum products—principally kerosene, but including gasoline, lubricating oil, grease, candles, and wax—hold first place among American imports into the district. Industrial machinery and equipment, however, hold the greatest opportunities for future American trade. The possibilities of the district for industrial development are great, but so far progress has been slow. A con¬ siderable part of the electric light and power equipment in the district is of American manufacture; all flour-milling machinery is American; some mining machinery and supplies have come from the United States; and the more modern egg-products factories are equipped largely with American machinery. The beet-sugar factory at Tsinan is also partly equipped with machinery of Amer¬ ican make. Any extensive scheme involving the control of the Yellow River, the restoration of the Grand Canal, and the diversion of water for irrigation purposes would offer opportunities for American ma¬ chinery and equipment. With the development of the mineral re¬ sources of the district, mining machinery and equipment should TSINAN CONSULAR DISTRICT 747 find a market. Machine tools should also show an increasing de¬ mand. Both the Tientsin-Pukow and Kiaochow-Tsinan Railways have in recent years made purchases of American locomotives and rail¬ way equipment. Some possibility of introducing light railway equipment in connection with mining development may also present itself. Iron and steel products for construction and other work, as well as a great variety of American hardware, find a small but steadily growing market. Cigarettes manufactured in the United States and by foreign firms in China are sold extensively. Recently, a 20 per cent sales tax on cigars and cigarettes has been imposed by the provincial authorities. Electrical supplies and fixtures bid fair to continue a satisfactory item of American imports. American drugs and pharmaceutical supplies are finding an in¬ creased demand, and there is every reason to believe that this busi¬ ness will increase. Soap finds a good market in the district. American lumber finds a market in the Tsinan district, along with Korean and other timber from the Far East. Paints and oils of American manufacture hold first place among foreign imports of a similar nature, but the low cost of Chinese paints has prevented any extensive sale of American paints to Chinese. For foreign use and for industrial purposes there is a good demand, and it is believed that the market will gradually expand. American roofing materials find a limited but growing market. Better roads in the district are resulting in the gradual introduc¬ tion of motor vehicles, principally of American manufacture. There is also a good market for bicycles and for bicycle and ricksha tires. Among miscellaneous items that may be mentioned are sewing machines, cheaper grades of watches and clocks, optical goods, toilet articles, typewriters and office supplies, and canned goods and provisions. MONEY, BANKING, AND CREDIT BANKS The Yokohama Specie Bank (Ltd.) and the Chinese-American Bank of Commerce (headquarters at Peking), are the only two banks in the district which offer facilities for foreign exchange. LOCAL CURRENCY Formerly the standard monetary unit in ordinary business trans¬ actions at Tsinan was the “tiao,” or small-coin dollar. The silver dollar, however, has gradually replaced the tiao, and prices for staple goods and most other commodities are now quoted in silver dollars. The increasing demand for payment in silver is mainly responsible for the recent depreciation of copper coins. At present $1 silver exchanges for about 260 coppers. Coppers, however, re¬ main the popular currency among the masses of the people in the Province. With the depreciation of copper currency, there are now large issues of copper notes by many cash shops. As Shantung requires a large amount of money in the autumn to finance the movement of crops, the local dollar is at a premium at that season of the year. Except for extraordinary market con- 748 COMMERCIAL HANDBOOK OF CHINA ditions, remittance charges to Shanghai range from three-fourths of 1 j)er cent to 1 per cent at its height the average rate being from one-fourth to one-half of 1 per cent. CREDITS Until recently, because of the lack of facilities for foreign com¬ mercial credit and the lack of a large volume of direct trade with foreign countries, practically all of Tsinan’s foreign trade was financed through Shanghai, Tientsin, and Tsingtao. Export and import credits were generally opened with banks at these centers. Facilities for financing export and import trade direct with foreign countries, however, are now available through the two banks named above. In opening a letter of credit it is suggested that the credit be opened with a bank at Tsinan, or that it be made without reference to a particular bank, so that the beneficiary may negotiate it on the spot, thereby avoiding the necessity of transferring funds from other centers and the possible inconveniences incident to exchange. ADVERTISING AND MERCHANDISING ADVERTISING Newspaper advertising in Chinese is employed to some extent, but the principal methods used are posters, street processions, and the distribution of samples. None of the newspapers have a large circulation and none are of such a character as to be important advertising mediums for American products. A local tax of 20 cents a square foot per annum has been imposed on outdoor posters and billboards, as a result of which most of the foreign firms at Tsinan have discontinued this form of advertising. MERCHANDISING METHODS The day is past when American firms can expect to establish them¬ selves at one or two of the principal commercial centers of China and distribute their goods throughout the country on a large scale in competition with foreign products. American firms must es¬ tablish branches and agencies in the lesser distributing centers. There are at Tsinan to-day offices or responsible agencies of but five of the larger American trading organizations in China. Of these, one is an oil company; two are tobacco companies; one is an importer and exporter of general merchandise, but mainly an importer of in¬ dustrial machinery and electrical supplies; and one is a sewing- machine company. Owing to the lack of American representation in general lines, native firms carrying American goods usually ob¬ tain their supplies as required from their head offices in Shanghai or Tientsin. There are a few Chinese firms at Tsinan which are pre¬ pared to establish direct connections with importers and exporters in foreign countries. Chinese buyers generally prefer to purchase their supplies of foreign goods through foreign firms established in the country. TRADE ORGANIZATIONS There are two Chinese chambers of commerce at Tsinan, the cham¬ ber of commerce of the Settlement and the general chamber of com- TSINAN CONSULAR DISTRICT 749 merce of Tsinan, but neither organization offers any special facili¬ ties for assisting or promoting American trade with the district. PROPERTY VALUES AND RENTS Property values and rents in Tsinan are comparatively high. The purchase price for land in the commercial settlement ranges between $900 and $5,000 per mow (one-sixth of an acre), according to loca¬ tion. In the matter of rents, landlords usually figure a return of from 8 to 9 per cent on the investment. Most foreign firms own combined offices and residences and also own their warehouses. No apartments, furnished or unfurnished, are available. Very few houses are for rent and those offered are semi foreign houses, most of which are not suitable for occupancy by a business man of standing. TAXES AND OTHER ASSESSMENTS In addition to the retail or lease tax of $36 and $24, which is assessed according to the location of the property, there is also a land tax of $2 per mow per annum. Land in the commercial settle¬ ment of Tsinan is held under a 30-year lease, with option for renewal for an additional period of 30 years. LIVING COSTS There are no boarding houses in the city and no private families who take in boarders. As already stated, suitable residential quar¬ ters are seldom available. Estimated necessary living expenses for a single person range from $3,000 to $3,750. For a married couple such expenses would approximate $6,000, and for a couple with two children, $7,500. In making an estimate of the necessary living expenses at Tsinan, the cost of entertaining, cost of summer vacations, club dues, local transportation charges, and the cost of educational and recreational facilities must all be taken into consideration. Few of the foreign residents of Tsinan own motor cars. The usual means of local trans¬ portation is by ricksha. Motor cars may be hired for $3 an hour; the cost of a ricksha with one coolie is $18 a month. The initiation fee of the Tsinanfu Club is $50, with monthly subscription of $10 and additional fees for tennis and golf. There is a foreign school at Tsinan offering instruction along modern American lines for chil¬ dren in the kindergarten and primary grades. The school fees are $90 and $120 a year, respectively. CHANGES IN TRADE CONDITIONS DURING RECENT YEARS In the matter of industrial development the most striking changes are the establishment of flour mills of modern type, the development and decline of the hair-net industry, and the more recent growth of the carpet industry. Being advantageously situated in the heart of a great agricultural producing district, at the junction of two railways, and near the Yellow River and the Grand Canal, the importance of Tsinan as a distributing center for a large part of Shangtung is being recognized and the city is undergoing a gradual healthy growth. TSINGTAO CONSULAR DISTRICT By Consul Walter A. Adams LOCATION AND AREA The Tsingtao consular district comprises the territory of Kiao- chow, formerly leased to Germany but now administered by Japan. Its area is approximately 342 square miles, and its latitude is be¬ tween 35° 54' and 36° IT' N., corresponding to that Nashville, Tenn. The climate is dry and equable. The average minimum tempera¬ ture is between 25° and 35° F., and the average maximum tempera¬ ture between 75° and 85° F. Upon rare occasions the temperature rises to 95° in summer, and falls to zero in winter. The average annual rainfall is 18.47 inches, the month of August averaging by far the wettest. POPULATION The Japanese census of 1922 gives the population of the Tsingtao consular district as 243,781. The population of the city of Tsingtao and its suburbs was estimated at about 117,000. The average den¬ sity of population throughout the district is calculated at 712.81 per square mile. CITIES Tsingtao is the only city of importance in the district. It is unusual in the following respects as compared with other ports of purely Chinese growth: 1. It is only about 25 years old, and consequently has not devel¬ oped any of the native crafts, such as the production of lacquer or the art of carving, for which many Chinese cities are noted. 2. It has a complete system of modern public works, including sewerage, drainage, abundant roadways, and an efficiently operated set of railway-equipped piers for shipping. 3. There are no foreign “ concessions ” or “ settlements ” in Tsing¬ tao. The homes, offices, and factories of Chinese and foreigners alike are scattered throughout the length and breadth of the city. 4. Practically all buildings are of foreign architecture and are equipped with modern plumbing. The city is thoroughly sanitary and is popular as a health and vacation resort. It has a splendid bathing beach situated immediately in front of a modern hotel, open in summer from the 15th of June to the 15th of September. Among the outdoor sports are golfing, swimming, motoring, riding, tennis, picnicking, and hiking. The mountain and sea vistas, un¬ folded with unwearying variety to the motorist, rider, and hiker, are unsurpassed in the Far East. 750 TSINGTAO CONSULAR DISTRICT 751 The coastal territory commercially tributary to Tsingtao lies as far south as Haichow, in Kiangsu, and as far north as Siatsun, on the Shantung Promontory. The Kiaochow Bay ports, as well as all the territory inland along the Kiaochow-Tsinan Railway, includ¬ ing Tsinan, are naturally tributary to Tsingtao. It is roughly esti¬ mated that the population of the territory commercially tributary to Tsingtao is between 10,000,000 and 15,000,000. AGRICULTURE 1 The agricultural products of the Kiachow territory are as follows: Products in order of im¬ portance Planting season Harvesting season Average produc¬ tion per acre Esti¬ mated annual produc¬ tion Disposition Sweet potatoes... Peanuts _ Apr. 20-30. May 1-10. . Oct. 20-30_ ..do .. Piculs 91 39 8 7 10 6 Piculs 771,480 413,000 27, 722 23, 651 13, 923 2,826 Consumed locally. Used as food and oil; surplus exported. Consumed locally. Do. Do. Do. Wheat_ Millet... Soy beans_ Kaoliang.. Sept. 25-0ct. 10... Apr. 20-May 5_ June 20-30__ Apr. 10-20. June 15-30.. Aug. 25-Sept. 5_ Sept. 20-Oct. 5_ Aug. 20-30. Agriculture as an industry is relatively unimportant, but the experimental work of the Bureau of Agriculture and Forestry of the Kiaochow administration is extremely important in the future wel¬ fare of Shantung. The Kiaochow Bureau of Agriculture and Forestry conducts its experiments in two sections—plant production and animal production—chiefly at Litsun, where it has a well- equipped station occupying about 60 acres of land. Special at¬ tention is paid to experiments with a view to improving the varieties of fruits suitable to local conditions and of such industrial plants as cotton, sugar beets, peanuts, tobacco, and hemp. Improvement of native domestic animals by the introduction of foreign breeds (such as Holstein cattle, Berkshire hogs, and merino sheep) and the improving of breeds of poultry constitute a special feature of the bureau’s work. The bureau also publishes and circulates bulletins dealing with more advanced agricultural methods, distributes selected seeds to farmers, and sends experts into the country districts to help them in their difficulties with insect and fungous pests. It encourages the idea of scientific culture by holding agricultural fairs and giving prizes to farmers who grow the best crops. At the fair held in November, 1924, more than 870 farmers of the Ivaiochow territory participated, and 102 prizes were awarded by the bureau. FORESTRY ' A stranger in Tsingtao is frequently surprised by the thick green covering of trees over the hills and mountains of the district, against 1 The writer is indebted to Mr. D. Y. Lin, Chief of the Bureau of Agriculture and Forestry, for the statistics and material in this chapter under the headings “Agriculture” and “ Forestry.” 752 COMMERCIAL HANDBOOK OF CHINA the background of bare and deforested China beyond. The work of reforestation was begun by the Germans early in their occupation. They spent 1,526,000 gold marks on forestry work in the Kiaochow territory. They reforested 3,300 acres of land in and around Tsingtao, distributed millions of seedlings for compulsory private planting, created parks and demonstration orchards, set aside per¬ manent forest preserves, and established strict forest preservation laws which are still enforced by a trained organization of foreign police. The Japanese continued the German reforestation program. At a cost of about $320,000 Yuan they reforested the Laoshan area and drafted a comprehensive 10-year program for the reforestation of the watersheds along the Hai Pei, Litsun, and Pai Sha Rivers, upon which Tsingtao depends for its water supply. During the two years of Chinese administration, beginning with December 10, 1922, the German and Japanese forestry enterprises have been maintained and developed. Under Chinese management the Bureau of Agriculture and Forestry has planted the remaining bare areas of the reservations, raised more than 5,300,000 seedlings in the different nurseries, distributed over 250,000 seedlings for private planting, repaired 48,480 square meters of forest roads, created five parks, and planted 7,068 trees along roadsides for shade and aesthetic purposes. One interesting feature of the forestry work of the Kiaochow administration is a rural school established and maintained by the administration in Laoshan for the benefit of the children of the farmers. The farmers send their children to school free of any money charge, but pay for the school work by giving up a specified amount of their time to the protection of the forests. The success of this unique arrangement in forest management indicates that it might be introduced to good advantage in other parts of China. The area under forest in the Kiaochow territory is 40,000 acres, of which all excepting about 6,220 acres is privately owned. Among the more important trees are pine, robina (commonly known as acacia), oak, white cedar, juniper, zelkova, celtis, ash, poplar, alnus, sterculia, elm, catalpa, sophora, and paulownia. MANUFACTURING AND INDUSTRIAL DEVELOPMENT The most important industrial enterprises in the district are 7 cotton mills (6 Japanese and 1 Chinese) ; 7 neanut-oil settling plants, all Japanese; 4 match factories, all Japanese; 3 egg-preserving plants (2 Japanese and 1 German) ; 2 peanut-oil extraction mills, both Japanese; 2 bone-meal factories, both Japanese; 2 flour mills (1 Chinese and 1 Japanese); 2 refrigerating plants, both Japanese; 2 Japanese mineral-water plants; 1 slaughterhouse and 1 electric- light plant, under Sino-Japanese control; 2 straw-braid plants, both German; 1 cigarette factory, British; and 1 each of the following industries: Sawmill, soap factory, tannery, pottery, cement plant, brewery, and silk filature, all Japanese. The following is a brief summary of data pertaining to some of the main industries of the district, so far as such data can be ascertained: TSINGTAO CONSULAR DISTRICT 753 Industries Capacity Approxi¬ mate number of em¬ ployees Approxi¬ mate capital 1 in industry Estimated output Disposition Cotton spinning.. .. 20,000 bales per 18, 650 $41, 500,000 18,200 bales per 90 per cent con- month. month. sumed in Shan- tung house- holds. Salt production_ 180,000 tons per 8, 000 10, 000, 000 180,000 tons per Chinese Govern- annum. annum. ment monopoly. Peanut-oil extraction 3,500 tons of oil per 3,300 ( 2 ) 28,000 tons of Exported to Amer- and refining, and month; peanut peanut oil per ica, Europe, and peanut grading. grading, 9,000 annum. Japan. tons per month. Silk filature.. 1,100 bales per an- 1,500 2, 500, 000 1,000 bales per an- Exported to Amer- num. num. ica and France through Japan and Shanghai. Refrigerating plants. 184,000 cubic feet.. 100 2, 600, 000 Variable... _ Exported to Japan. Match factories 1,650 tons per 770 1, 500, 000 Capacity_ Consumed in month. Shantung. Brewery. . 100,000 cases of beer 160 500, 000 _do... Consumed in Tien- per annum. tsin, Darien, and Tsingtao. Slaughtering 1,000 animals a day 233 400, 000 Variable_ Consumed in Japan and Tsing- . tao. Ssufang railway 1,400 shops. Egg sorting and 800,000 cases per 600 Capacity . _ Exported to Japan. packing annum. Manufacturing Products valued at 600 Value ordinarily Do. wooden soles for $400,000 Yuan about $100,000 Japanese shoes. per month. Yuan per month. 1 Yuan dollars. 2 $1,000,000 Yuan in peanut-oil extraction; peanut grading unascertained. The British Cigarette Co. is now erecting in Tsingtao a modern cigarette factory and printing plant. When complete these enter¬ prises will represent an investment of some $2,500,000 Yuan and will give employment to about 3,000 persons. It is estimated that, including investments represented by all the small machine shops and similar establishments, the capital devoted to industrial enterprises in the commercial port of Kiaochow Bay totals well over $100,000,000 Yuan. Much of this development has occurred since the autumn of 1914. At that time there was not a single spindle in operation. There are now in the commercial port seven cotton mills, with a total of 274,800 spindles, operating 24 hours a day. New cotton mills and extensive additions to the exist¬ ing mills are being planned. Other local industrial enterprises are also exhibiting a healthy tendency toAvard expansion. Tsingtao bids fair to become, within a comparatively short time, one of the greatest manufacturing and industrial centers in China. Tsingtao depends for its water supply upon a system of wells, which are now supplying their full capacity of 11,000 cubic meters of water daily to the port. At certain seasons of the year there are indications of water shortage, and with the city’s rapid industrial expansion the water supply will shortly become inadequate. The sinking of another group of wells, removed from the locations of the present groups, and a careful continuance of the Japanese plans for reforestation are imperative if the port’s water requirements during the next 10 or 15 years are to be assured. 100020°—26-49 754 COMMERCIAL HANDBOOK OF CHINA Article XXIII of the treaty for the settlement of outstanding questions relative to Shantung contains the following provision: The Government of the Chinese Republic, on its part, declares that the entire area of the former German leased territory of Kiaochow will be opened to foreign trade, and that foreign nationals will be permitted freely to reside and to carry on commerce, industry, and other lawful pursuits within such area. Under this provision foreigners are free to construct factories and to reside and carry on their business anywhere within the entire and well-defined area of the former German leased territorv of Kiao- t j chow. A noteworthy fact in connection with Tsingtao’s rapid industrial development since 1914 is that most of the factories here are merely branches of much larger manufacturing enterprises with head offices in Japan and elsewhere. So far as can be ascertained there are no definite organizations among the laborers of the commercial port, and very little difficulty in the way of strikes has thus far been experienced in the industrial life of the port. There are no restrictions in the matter of employment of child labor. Children are employed to some extent in the textile industry of the port. The minimum age of employees is about 10 or 11 years. It is practically impossible to obtain any accurate and compre¬ hensive statistics concerning labor turnover in this district. One cotton mill states that in keeping the number of its employees up to 3,500 it must take on from 200 to 250 new employees each month. Another mill states that two years ago the average length of an em¬ ployee's stay was six months, but that now, because of increased pay for continuous service, the average length of employment is one year. All of the cotton mills complain that during the past three years the wages of textile employees have almost doubled. They attribute the increase from 20 cents to 35 cents per day to competition for labor among the different mills. MINERALS AND MINING There are no mines in the Tsingtao consular district, but Tsingtao is the administrative center for the principal coal mines of Shan¬ tung. (See chapter on the Tsinan consular district.) TRANSPORTATION AND COMMUNICATION WATERWAYS The only navigable waterway in the Tsingtao consular district is Kiaochow Bay, upon which the harbor of Tsingtao is situated. This will be discussed under the section of this chapter devoted to shipping. RAILWAYS The only railway in the Tsingtao consular district is the Kiaochow- Tsinan Railway, extending 256 miles, exclusive of branches, be¬ tween Tsingtao and Tsinan, where it connects with the Tientsin- Pukow Railway. Only 17 miles of the line lies within the Tsingtao consular district. The head office is in Tsingtao. TSINGTAO CONSULAR DISTRICT 755 The Kiaochow-Tsinan Kailway has been under the control of the Chinese Government only since January 1, 1923, and does not use the freight classification promulgated by the Ministry of Communi¬ cations in Peking for the use of Chinese Government railways. The Kiaochow-Tsinan Kailway is considering the adoption of that classi¬ fication, but it is understood that local customs and traffic conditions offer some obstacle to such a course. The freight classification and rates now in force are as follows: SMALL SHIPMENTS Small shipments are transported by “ express ” at the rate of $0.01 Yuan per kilometer for each 100 kilos. The rate per kilometer is the same, regardless of the distance which an “ express ” shipment goes. Small shipments are transported as ordinary freight at so much per 100 kilos, rates varying according to the distance of the haul. LARGE SHIPMENTS Commodities are divided into two general classifications—■“ cheap goods ” and “ ordinary goods.” Under the classification of “ cheap goods ” fall commodities of relatively large bulk or weight per dollar of value, such as sand, rock ballast, and limestone. Under the classification of “ ordinary goods ” fall the general commodities of commerce. Ordinary goods are subdivided into first, second, and third grades, according to quantit}^ Shipments of 1 to 5 metric tons are “ first grade,” shipments of 5 to 10 tons “ second grade,” and shipments of 10 to 15 tons (carload) “third grade.” Each of these grades has its own schedule of rates. An export rebate of 50 per cent of the freight on coal, coke, and wheat bran is paid to shippers upon presentation to the railway of customs export certificates. GOODS TAX During the periods of both the German and the Japanese manage¬ ment of the Kiaochow-Tsinan Kailway the Chinese authorities made repeated but unsuccessful efforts to establish tax stations along the railway for the purpose of taxing goods moving over it. Until after its transfer to China, goods moving over the railway were tax free. Goods moving over the Tienstin-Pukow Railway between Tsinan and Tientsin and between Tsinan and Pukow were and still are sub¬ ject to a transit tax. A glance at a railway map of this section of China will indicate that the taxation of goods moving over the Tsinan-Pukow line and the nontaxation of goods moving over the Kiaochow-Tsinan line gave Tsingtao a distinct advantage over Tientsin (other things being equal) as an entrepot for goods moving to and from Tsinan and the territory tributary thereto. Under the German and Japanese administrations the growth of Tsingtao was also fostered by means of preferential freight rates and special con¬ cessions to enterprises calculated to promote trade and industrial development. The tax-free era for goods moving over the Kiaochow-Tsinan Railway ended on September 21, 1924, when, over the vigorous and 756 COMMERCIAL HANDBOOK OF CHINA sustained protests of Chinese and foreign merchants, the Shantung authorities imposed a “ goods tax ” upon shipments moving over the line. The tax divides all commodities into two general classes— lightly taxed goods and heavily taxed goods, and is a surcharge of varying percentages of the railway freight charges. The fol¬ lowing are the leading commodities coming under each group and the rate of taxation: Per cent of freight charges Lightly taxed goods: Coal_ 1 Foshan pottery_ 1 Stone and implements_ 1 Clay sand_ 1 Brick and tiles, native_ 1 Lime_ 1 Bed clay and alum_ 1 Grain, inland transportation_3 Vegetables and melons_ 3 Hardware and ironmongery_ 5 Matting, reed_ 5 Per cent of freight charges Lightly taxed goods—Continued. Bamboo ware and wooden posts- 0 Poshan glassware_ 6 Cotton cloth, native_ 8 Timber_10 Goods not otherwise specified- 20 Heavily taxed goods: Livestock_ 40 Leaf tobacco (kiln-dried)_ 40 Cotton, raw, for export_ 40 Eggs_ 40 Grains, for export_ 40 The goods most heavily taxed are those entering into the export and foreign trade of Tsingtao. Peanuts, peanut oil, and petroleum products are taxed under the classification “ goods not otherwise specified.” The tonnage of the principal commodities hauled by the Kiaochow- Tsinan Railway in 1923 was: Metric tons Coal__ 1,070,000 Peanuts: Shelled_ 6, 075 Unshelled_ GO, 6G3 Coke_ 48, 010 Wood of all kinds_ 4G, 203 Cotton yarn_ 43, 020 Kaoliang_ 40, 776 Petroleum_ 39, 489 Cotton, raw_ 39, 381 Beans_ 33, 205 Metric tons Bran (chaff or husks)_ 29,611 Hardware_ 29, 006 Wheat_ 27, 987 Lime- 22, 981 Cows_ 16, 512 Eggs_ 15, 899 Tobacco leaf and cigarettes. 15, 357 Peanut oil_ 15, 300 Flour_ 14, 281 Sugar_ 13, 534 Earthenware or pottery_ 13, 524 ROADS In the commercial port of Kiaochow there are 189 miles of roads constructed for motor transportation. There are estimated to be 250 motor cars in operation, and the passenger rates are $4 per hour. The character of surfacing and the average width of com¬ mercial port roads are shown in the following table: Surface Length Average width Macadamized_________ Miles 144. 00 1. 34 16. 33 28.00 Feet 33. 66 17. 50 28. 48 16. 36 Stone, square cut _____ Metaled asphalt ........... Dirt_;...._______ Total length .......... 189. 67 TSINGTAO CONSULAR DISTRICT 757 There are 5.26 miles of concrete sidewalk in the commercial port and 64.25 miles of stone flagging embedded in the roads for the iron- rimmed wheels of Chinese carts and wheelbarrows to run upon so as to prevent undue wear on the ordinary road surfacing. About 25 miles of the above roadway extend from Tsingtao into the Lao Mountains. The remainder of the mileage is in and immedi¬ ately about the city. There are two bus lines running on schedule between Tsingtao and Tsangkow, a distance of about 10 miles. The motor-bus fare for the full distance is $0.50 Yuan. TELEGRAPHS, CABLES, AND WIRELESS SERVICE The Chinese Telegraph Administration operates three stations in the district—one in Tsingtao, one in Ssufang, and one in Tsangkow. The telegraph lines of Tsingtao extend to Tsinan and Chefoo. The only cable connection from Tsingtao is with Sasebo, Japan. The Tsingtao end of the cable is operated by the Ministry of Communica¬ tions. The Tsingtao wireless station is also operated by the Ministry of Communications. Its call letters are XRT. The wave lengths used are 600 and 800 meters. Its radius by day is 300 to 500 miles and by night about 1,500 miles. This station communicates only with other wireless stations under the control of the Chinese Min¬ istry of Communications and with ships at sea. It accepts commer¬ cial messages, at the usual telegraph rates, for points with which it is authorized to communicate. It is not, however, ordinarily used by the public for transmitting land messages except when the tele¬ graph lines can not be used. The telegraph rate from Tsingtao to New York is fixed quarterly by the Chinese Ministry of Communications. TELEPHONES The government of the commercial port of Kiachow Bay operates a telephone system in Tsingtao. There are 2,100 subscribers. Equip¬ ment is of Japanese and German make. There are four central offices with switchboards and operatives. These offices are located at Tsingtao, Tsangkow, Ssufang, and Litsun, the three last being suburbs of Tsingtao. The installation of a telephone costs from $100 to $300 Yuan for the drop. In addition there is a special installation fee of $25 Yuan. For a wall telephone the quarterly fee is $25 Yuan; for a desk phone the quarterly fee is $29 to $31 Yuan. POSTAL FACILITIES There are no special features connected with the postal service at Tsingtao. At times mail is received in Tsingtao from New York within 24 or 25 days after its dispatch, but the transit time is usually from 27 to 30 days. Under normal traffic conditions mail between Tsingtao and Peking goes by rail via Tsinan and Tientsin, and mail between Tsingtao and Shanghai (and between Tsingtao and the United States) goes by rail via Tsinan and Pukow. Tsingtao mail to and from the United States is transshipped at Shanghai to and from the trans-Pacific steamers. 758 COMMERCIAL HANDBOOK OF CHINA SHIPPING AND WAREHOUSING FACILITIES HARBOR FACILITIES Vessels of any draft can enter the outer harbor of Tsingtao at all tides in all seasons. The shallowest water through which a vessel floats on its way to the “ commercial harbor ” through the inner harbor is at “Horseshoe Reef.’’ At the period of the lowest tides of the year the minimum depth of the water at this point is about 37 feet. The outer harbor is separated from the inner harbor by a long neck of land called Tai Hsichen (Yuni San Point), which stretches itself into the bay and forms a breakwater. The piers are inclosed in a basin called the “ commercial harbor,” formed by the arms comprising No. 1 and No. 4 piers. The depth of the water at the period of lowest tides at the entrance of the basin is 29 feet. The commercial harbor is reserved for ocean-going and coastwise steamers. Native junks load and discharge their cargoes in the “small harbor” or “junk harbor,” in which the depth of the water is approximately 10 feet in certain places. In other places within the small harbor the bottom is exposed at low tide. While one or two very small coasting steamers (little more than large launches) use the junk harbor in discharging native passengers and inward cargo, it is used in the main by junks plying between Tsingtao and the small ports in Kiaochow Bay and along the coast as far south as Haichow and as far north as Siatsun. There is ample anchorage room in the inner harbor for any reason¬ able number of vessels. Outside this anchorage ground, however, the bay shoals rapidly and is navigable throughout its inner reaches only by launches of very shallow draft and by junks. Vessels entering the harbor are required to anchor in the quaran¬ tine anchorage area in the outer harbor opposite Tsingtao Island (Arcona) until they have been granted pratique. The employment of pilots by vessels arriving at or departing from Tsingtao is optional. Organizations of Chinese merchants at Tsangkow, Tafutao, Hung- shihyieh and Shatzekou levy taxes upon junk cargoes for local ex¬ penditure as follows: (1) On cargoes loaded on junks for export, a loading tax of 1 per cent of the value of such cargoes; (2) on cargoes imported in junks a weighing tax of four-fifths of 1 per cent of the value of such cargoes. Inquiries among American firms indicate that the preceding taxes have not thus far been imposed upon American goods. In the “ commercial harbor ” of Tsingtao there are four piers with berthing space extending for a length of 10,650 feet. Pier No. 1 is used principally for coastwise vessels. It is 2,534 feet long, and it can accommodate six vessels at a time. There are four warehouses opposite berths A, B, C, and D. Berths E and EE are for coaling and are generally used only when vessels requiring a large quantity of bunker coal are in port. Pier No. 2 has a lineal berthing space of 3,666 feet—1,329 feet (berths F, G, H) on the south side, 336 feet (berth M) on the end, and 2,001 feet (berths FF, GG, and HH) on the north side. Berth F is used by the smaller ocean-going vessels drawing about 20 feet. Berth G can accommodate vessels drawing 23 feet, and berth H ves- TSINGTAO CONSULAR DISTRICT 759 sels drawing 27 feet when loaded. Berths FF and GG can accom¬ modate vessels drawing 27 feet, and berth HH, with water a little deeper, can accommodate vessels drawing 29 feet. Pier No. 3, only 564 feet long, is usually spoken of as the “ petro¬ leum mole.” It is equipped with two pipe lines (6 inches and 8 inches) for the discharge of oil tankers into the installations of two near-by oil companies. It is also used for the discharge of timber and other cargo not subject to damage if stored in the open, as well as for dangerous goods. There are no warehouses on the pier, but in the immediate neighborhood there are two storehouses (isolated) available for rental to firms desiring to store dangerous goods there¬ in. The water alongside has a comparatively narrow channel and is 29 feet deep. The berth can therefore take a vessel drawing not more than 27 feet. Pier No. 4 has 3,886 linear feet of berthing space and is used principally for coal, heavy machinery, and salt. There are two berth¬ ing spaces, K and L, upon this pier which can accommodate vessels drawing 29 and 28 feet, respectively. At berth K three warehouses are available for rental to firms desiring storage on monthly or yearly terms. CARGO-HANDLING EQUIPMENT Pier No. 4 is equipped with a crane with a cargo-lifting capacity of 100 tons, available for rental at $70 for the first hour and $30 for each hour thereafter. In addition, there are two floating cranes. The larger one, with a lifting capacity of 30 tons, is available for rental at $25 for the first hour and $11 for each hour thereafter. The smaller crane is available for rental at $14 for the first hour and $8 for each hour thereafter. The general import and export cargo of the port is handled al¬ most exclusively by human labor. The supply of coolie labor is adequate and averages with that of the other coast ports of China. The average rate of loading and discharge of steamers is about 30 tons per hatch during each working hour. This includes taking cargo from the ship’s hold and storing it in the warehouse on the pier, and vice versa. The average wharfage charge for cargo of a general nature is $0.45 Yuan per ton. The rates for stevedorage are about $0.18 Yuan (base) per ton for day work, with an increase of 80 per cent for night work up to midnight and 150 per cent from midnight to morn¬ ing. Packages weighing or measuring more than 1 and less than 3 tons are charged for at double the stevedorage base rate. Packages weighing 3 tons or more and less than 5 tons are charged for at three times the base rate. For ordinary cargo the average cost of handling from ship’s hold into the warehouse, and vice versa, is 63 cents a ton. WAREHOUSING The four warehouses on Pier No. 1 have a total floor area of 105,984 square feet, and are easily accessible from the different berths. All the piers in the commercial harbor are equipped with railway tracks along their entire length, so that import cargo destined to Tsinan or points along the Kiaochow-Tsinan Railway may be loaded on railway bracks directly from the ship’s hold with 760 COMMERCIAL HANDBOOK OF CHINA a single handling. Three large, brick-walled, iron-roofed ware¬ houses on Pier No. 2, with a floor area of 148,932 square feet, are inadequate to house the import and export cargo handled on it. These warehouses are not available for rent in the ordinary sense of the word. They are the property of the Government and are used exclusively for the landing and shipment of cargo. Import cargo may be left therein for a period of four days without payment of other than ordinary wharfage charges (averaging about $0.45 Yuan per ton). After the expiration of that period demurrage is charged on cargo left in the warehouses or upon the piers. The three warehouses on Pier No. 4, at berth K, are in very poor condition and would require a considerable amount of repair to render them suitable for use. It is estimated that thev will hold about 2,000 tons of cargo. In addition to the foregoing, the Harbor and Wharf Administra¬ tion has 10 warehouses in the wharf area (generally known as the bonded area) with a total storage capacity of about 8,000 tons. They may be rented by firms desiring storage for import and export cargo. CUSTOMS AND SHIPPING PRACTICE AT TSINGTAO The establishment of a customhouse at Tsingtao under direction of the Chinese Maritime Customs was pro Added for in an agreement signed on April IT, 1899, by Heyking, German minister to China, and Sir Robert Hart, inspector general of the Chinese Maritime Customs. The agreement provided that all goods coming into the German leased territory of Kiaochow should be duty free, both from abroad and from China coast ports. The agreement also provided that the full tariff import duty in the case of foreign goods and coast-rate duty in the case of native goods should be paid upon the shipment of such goods from the leased territory to the interior of China. For the collection of such duties barriers Avere established at the Kiaochow-Tsinan Railway station and the A T arious other exits from the leased territory. In 1904 a Sino-German commission Avas appointed by the Chinese and German GoA^ernments for the amendment of the existing customs regulations, which had been found to be unsatisfactory. The investigation of the commission resulted in the conclusion that approximately 20 per cent of all coastwise and foreign imports into the German leased territory were consumed locally and the remain¬ ing 80 per cent shipped to the interior. An agreement 2 was arrived at in December, 1905, containing, among others, the following provisions: 1. The establishment of a very small, duty-free area, including the piers and warehouses thereon, together with the ground immediately adjacent thereto. 2. Full payment of import and coastwise duties upon all goods imported from abroad and Chinese territory leaving such free area, excepting certain sup¬ plies for the German armed forces and machinery (plant as well as parts of machinery), implements, and tools required for manufacturing, industrial, and agricultural purposes; also all building materials, fittings, and other articles for public and official works. The goods covered by this exception were to be duty free so long as they remained in the German leased territory. 3. Full payment of export and coastwise export duties upon all shipments passing from the German leased territory for export. - MacMurray : Treaties and Agreements with and Concerning China. Vol. I. p. 193, TSINGTAO CONSULAR DISTRICT 761 4. The payment of 20 per cent of all import and coast-rate import revenue to the government of the German leased territory (that being the percentage of the total imports estimated to remain in the leased territory) for ad¬ ministrative expenses. All of the above provisions excepting the second are still effective. Article XXVII of the Sino-Japanese agreement for the settlement of outstanding questions relative to Shantung provides for the free entry into the Kiaochow territory of machinery (plant as well as parts of machinery), implements, and tools required for manufactur¬ ing, industrial, and agricultural purposes; also all building materials, fittings, and other articles for public and official works, if such goods were contracted for in good faith on or before February 4, 1922, and imported within four years from that date. The continuance of the duty-free area (now known as the bonded area) was provided for in Article XXVI of the above-mentioned agreement. There is no advantage to be gained by leaving import cargo in this bonded area. The demurrage-exempt period is only four days. After this period, which is often inadequate for the clearance and removal of imported goods, the demurrage charges for storage in the bonded area offset the saving on interest charges. A refund of import duty may be obtained upon reexportation of the goods covered thereby. There is, however, an advantage to the public in the matter of goods landed for immediate transshipment. Such goods may be discharged upon the wharves or into the ware¬ houses thereon and reshipped without the payment and refund of import duty, the only formality being the filing of a transshipment application. Cargo for transshipment or importation may be re¬ packed in the bonded area under customs supervision without the payment of duty. Under China’s treaty provisions with foreign nations a foreign steamship may be cleared through the customs and the consulate concerned when all import duties upon cargoes discharged by such vessel and all export duties upon cargoes laded have been paid, and not before. As a matter of convenience, the Chinese Maritime Cus¬ toms permit steamship agents at the various ports in China to file a bond or guaranty covering their vessels’ liability for the payment of duties, thus enabling the steamers covered thereby to clear promptly. In Tsingtao no such bond or guaranty is required. In¬ ward cargo is discharged upon the wharves, which are under the custody of the wharf office, and the ship has no responsibility for the payment of duty. Outward cargo is laded from the custody of the wharf office, and the vessel in this case also is not responsible for the payment of export duty. Tsingtao is unlike any other port in China, in that all of its wharves or piers are publicly owned. Berths are granted without discrimination or favor to vessels applying therefor. This, of course, so far as Tsingtao is concerned, eliminates for newly established steamship lines the very difficult problem of terminal facilities. PUBLIC WORKS AND UTILITIES ELECTRIC-LIGHT PLANTS The Tsingtao electric-light plant is under Sino-Japanese manage¬ ment. It carries a lighting load of 1,200 kilowatts and a power 762 COMMERCIAL HANDBOOK OF CHINA load of 2,000 kilowatts. The rates vary according to the amount of current used per kilowatt hour. Current is sold through the meter except in a few cases where flat monthly rates are charged for current used in electric display signs. The plant has four steam turbine generators. The two largest are of Swedish manufacture, one is of Japanese make, and the smallest is German. Of the nine boilers in use, seven are of British manufacture and two German. An alternating current, three phase, with a frequency of 50 cycles is produced. The voltage at the power-station generators is *3,300; the voltage at customers’ terminals for light is 120. The plant supplies current to the city of Tsingtao and the suburbs of Litsun, Tsangkow, and Ssufang. WATERWORKS Tsingtao obtains its water supply from 64 municipally owned and operated wells formed by 6-inch brass, zinc-covered pipes sunk into the ground. Twenty-seven of these wells are located at Paisha and 27 at Litsun. The Litsun station is connected with the Tsingtao reservoirs by two 16-inch mains, and water reaches the city from the reserAvoirs by gravity. The Tsingtao waterworks have a delreering capacity of 11,000 tons per 24 hours. In addition to the aboA^e wells, there are 17 shallow wells at Litsun, and 13 “emergency” wells at Haipoho (about 1 mile from the reserAT>irs), of which onlv 10 are ordinarily used. Water rates for household and industrial use A r ary from $0.09 to $0.15 Yuan per cubic meter, according to the quantity used per month. Tsingtao is now consuming the full amount of water which its water system is capable of producing. It is regarded as possible that the city’s immediate industrial development may be retarded unless prompt steps are taken to increase its water supply. EXPORT AND IMPORT TRADE The treaty of 1898, by which China leased to Germany the Kiao- chow Bay territory for 99 years, may be said to haA T e constituted the origin of the port of Tsingtao. Before the German occupation it was a fishing A T illage of no importance. The rapid deA r elopment of Tsingtao as a maritime port in the brief space of 27 years and under the administration of three nations is apparent from the following figures: Items 1903 1913 1923 Total exports to foreign countries and to other Chinese ports._ Imports from foreign countries. ___ $2, 132, 508 3, 285, 907 1, 800, 837 $18, 976, 745 11,468, 621 7, 964, 548 $34, 761, 431 34, 552,117 19,136, 989 Imports from other Chinese ports __ Total exports and imports... 7, 219, 252 38, 409, 914 88, 450, 537 Note. —The above figures and those following refer only to the water trade of the port. They are in United States currency and were converted at the following equivalents for the haikwan tael: 1903, $0.64; 1913, $0.7415; 1923, $0.8231. In addition to the water-borne trade there is a large volume of trade over the Kiaochow-Tsinan Railway, TSINGTAO CONSULAR DISTRICT 763 EXPORTS The values (in haikwan taels) of the principal articles exported from Tsingtao for the years 1903, 1913, and 1923 are as follows: Articles 1903 1913 1923 Beef _______ _ Taels Taels 767,145 4,172 370, 962 Taels 1,470,456 720,610 344, 807 1, 020, 838 2, 201, 499 514, 058 3, 003, 271 43,197 4, 973,142 1, 031, 222 9, 038, 900 288, 251 931, 200 1, 780, 963 2, 777, 396 Bran _ - .. . . _ - - . ._ _ _ Bristles.. ..... . __ . __ 43,616 Clogs, wooden.. . .. _ . _ . _ Coal . .. . ... . 828, 909 Cotton yarn_ __ ..... __ . .. . .. ___ Eggs, fresh. ... .. .. . _ 178, 570 242, 783 1, 812, 543 Oil: Bean ____ . . _ . . .. _ 384, 484 703, 886 74 392 Peanut. .. ... _ ....__ . ___ Peanuts: In shell ____ . . . . _'_ Kernels. _ ..... ._ . . . ... _ 5,116, 403 Salt_ Silk, raw, yellow . . .. . . ___ _ 416, 280 573, 240 1, 690, 770 4,184, 714 5,755 Straw braid .. . _ . _ Tobacco_ __ ___ . ____ Most of the increases in the items of export are due merely to the rapid growth of a new port possessing many advantages, natural and acquired. The beef industry has been developed under the German, Japanese, and Chinese administrations. Practically all the exports of beef and eggs go to Japan. The existence and growth of tobacco exports are purely the result of the enterprise of large foreign tobacco companies which established experimental and pur¬ chasing stations along the Kiaochow-Tsinan Railway and en¬ couraged the local farmers to plant tobacco. Tobacco now has a great importance in the district around Erhshihlipu as a “ cash ” crop. The falling off in the exports of bean oil is due to the fact that the Shantung farmer has turned from the cultivation of beans to peanuts and tobacco. The drop in the exports of straw braid during the period from 1913 to 1923 is due to the fact that during the dislocation of trade in 1914, when Tsingtao was captured after a siege by Japanese troops, the straw-braid market was moved to Tientsin. Only in the last two or three years has it shown a tendency to return to this port. The following figures show, by percentages, the destinations of Tsingtao’s principal exports during 1923: Articles To other Chinese ports To Great Britain To Japan To Hong¬ kong To Ger¬ many To France To United States To other countries Beef. . ... _ _ 2 98 Bran_ . . ...._... 100 Bristles_ _ .... . 4 62 9 21 4 Clogs, wooden .... ._ . 100 Coal...__ 64 33 3 Cotton yarn _ .... 87 13 Eggs, fresh_ 100 Oil- Bean. _ ... _ 87 13 Peanut_ _ 51 20 29 Peanut kernels. ... 31 1 14 5 13 16 20 Peanuts in shell ... _ . 1 21 16 4 26 6 26 Salt___ _ 100 Silk, raw, yellow . . ... . 80 20 Straw braid... 3 2 77 1 8 3 2 4 Tobacco leaf ... . 96 2 2 764 COMMERCIAL HANDBOOK OF CHINA A casual examination of the above table shows that Japan not only takes a greater percentage of Tsingtao’s exports than any other foreign country, but more even than other parts of China (so far as water traffic is concerned). This great trade was developed dur¬ ing the Japanese occupation of the port of Tsingtao. Prior to the period of the Japanese occupation Japan’s interests in and trade with Tsingtao amounted to but little. Peanuts and peanut oil are the greatest items in Tsingtao’s ex¬ ports to the United States. An interesting feature of this trade is that whereas prior to 1922 American peanut buyers made their pur¬ chase contracts at Kobe (Japan) for Shantung peanuts, they are now largely buying direct from Tsingtao. Shipments go direct from this port to the United States, contrary to the former practice of transshipment at Japanese ports. IMPORTS Below are given the values (in haikwan taels) of the principal articles imported into Tsingtao through the Chinese Maritime Customs in 1908, 1918, and 1923. # - = Articles Cotton goods: Lastings, plain, colored Prints, plain_ Sheetings, gray, plain.. T cloths.__ Yarn.... Cotton, raw... Dyes: Aniline. Indigo.... Electrical materials. Flour, wheat_ Iron and mild steel: New . . . Old... Machinery, textile. . Oil, kerosene _ Rice. . . Sugar: Brown... .. Refined.. __ Timber: Hardwood_ _ Softwood . . 1903 Taels 32,574 14,189 421, 446 40, 868 3, 609, 407 57, 005 156, 055 649 30, 203 205, 868 29,849 851 1913 Taels 66, 585 332, 510 1, 205, 542 1,265,110 7,115, 761 306,173 1,154, 314 39, 833 291, 733 55, 092 266, 691 1,140 1, 216, 997 81, 086 655, 932 474, 879 1923 Taels 962, 492 839,441 1, 207, 980 272, 611 4, 310, 352 5, 649, 000 479, 332 1, 360, 569 226,158 775, 327 122,143 331,534 2, 804, 884 2, 961,214 1,083,113 805,896 1,134,554 10,094 165,145 111,374 432,424 The textile industry in Tsingtao had its beginning about six years ago, and the large imports of textile machinery are due to the es¬ tablishment and extension of spinning mills. The imports of textile machinery in 1922 amounted in value to 5,101,992 haikwan taels. The cotton yarn (valued at 514,058 haikwan taels in the 1928 exports) and the raw cotton (5,649,000 haikwan taels in the 1928 imports) represent only small fractions of local dealings in these commodities. Most of the cotton received in Tsingtao comes in by rail from and through Tsinan and the territory along the Kiaochow-Tsinan Rail¬ way. Most of the yarn shipped from Tsingtao goes by rail to and through Tsinan and the territory along the Kiaochow-Tsinan Rail¬ way, without being shown in the Chinese Maritime Customs statistics, from which the above figures are taken. TSINGTAO CONSULAR DISTRICT 765 The following figures show, by percentages, the origin of Tsing- tao’s principal imports by water during 1923: Articles From other Chinese ports From Great Britain From J apan From Hong¬ kong From Ger¬ many From United States From other countries Cotton goods: Lastings, plain, colored 38 62 Prints, plain . _ _ 38 61 1 Sheetings, gray, plain _ 14 86 T cloths. .. *_ . . 22 78 Yarn_ 3 97 Cotton, raw.. _ ... 2 97 1 Dyes: Aniline .... 61 1 1 17 20 Indigo._ ... __ 95 5 Electrical materials ..... 24 69 4 3 Flour, wheat_ 52 48 Iron and mild steel: New . ... ..... 44 13 40 3 Old.. 23 42 35 Machinery, textile_ ... 6 9 85 Oil, kerosene_ 3 5 92 Rice. _ . 32 66 2 Sugar: Brown ... . _ _ 1 99 Refined... _ . 60 39 1 Timber: Hardwood. ...__ 100 Softwood _ . . ... . 1 23 76 • Note.— There are notable inaccuracies in the above percentages, for the reason that Japan, like Hongkong, acts as a screen, hiding to a considerable extent the true origin of imports and the destination of exports. B'or example, although Japan produces only a negligible quantity of cotton, that country is accredited as the source of 97 per cent of the water-borne imports of cotton into Tsingtao, amounting in value in 1923 to 5,469,000 haikwan taels. Nearly all the cotton imported by water into Tsingtao is produced in, India, the United States, and China, Japan being merely a transshipment point. MONEY, BANKING, AND CREDITS BANKS The only banks in the district doing business in foreign exchange and foreign bills are the Yokohama Specie Bank (Japanese) and the Hongkong and Shanghai Banking Corporation (British), both too well known to require identification. These banks have branches in the United States, in Europe, and throughout the Far East. The Tsingtao branches handle all classes of foreign exchange and credits. LOCAL CURRENCIES The three currencies in circulation in Tsingtao are, in order of their importance, the Yuan dollar, Kiaochow tael, and the copper. The Kiaochow tael weighs 574.263 grains and is 987.75 fine. The copper fluctuates in exchange value from about 230 to 255 to the Yuan dollar. Comparatively few silver Yuan dollars are in circulation in Tsingtao. The principal currency of the port is the paper bank note based upon the Y uan dollar. Prices for practically all commod¬ ities of commerce, excepting bristles and straw braid, are expressed in YTian dollars. Prices for bristles and straw braid are quoted in Kiaochow taels, which are usually at a premium of about 6 per cent as compared with Shanghai taels. Copper coins are used for fractions of less than 10 cents. These coins are current in the Chi- 766 COMMERCIAL HANDBOOK OF CHINA nese hand-to-hand trade of the port and to a certain extent in the payment of labor, but they do not occupy an important position in local trade. Native bank orders, written and “ chopped ” entirely in the Chinese language, play an important part in the trade of the port and in the up-country trade. The making of large remittances is accomplished through the exchange at Tsingtao of native bank orders on banks in different Chinese cities, the exchange rate on any given day being settled by the demand upon that particular day. The daily exchange rate between the Kiaochow tael and the Shang¬ hai tael and also the Yuan dollar is fixed in this manner. The cost of the remittance of funds from Tsingtao to Shanghai through the usual banking facilities is normally from a quarter to a half of 1 per cent. At times fluctuation in exchange has a very disturbing effect upon Tsingtao's foreign trade. Because of their failure to fix ex¬ change by forward banking arrangements at the time of contract, local firms are at times involved in heavy losses in the matter of im¬ port and export shipments during exchange fluctuations. Tsingtao’s export trade to America, chiefly peanuts, is particularly sensitive to exchange fluctuations. Peanuts from Tsingtao, after surmounting the American customs barrier of 3 and 4 gold cents per pound, com¬ pete with American-grown nuts on a margin so small that at times only slight exchange fluctuations affect the trade seriously. CREDITS Speaking generally, it may be said that the export trade from Tsingtao to the United States is on a 00-day basis for shipments to the Pacific coast and on a 90-day basis for shipments to the Atlantic coast. In the same manner it may be said, subject to frequent ex¬ ceptions, that the import trade from the United States is on a 90-day basis. There is, however, a considerable amount of business with the United States, both import and export, transacted upon sur¬ render of bills of lading and other documents against payment. In Tsingtao the question of credits is an important phase of foreign trade—one that merits careful study by representatives of firms transacting or contemplating business in this territory. In establishing a credit to cover an importation from the United States a firm in Tsingtao presents to its bank a written, signed re¬ quest somewhat similar to the following: Please instruct your _ branch by wire/letter to negotiate the draft of_on me/us for full or_per cent of the invoice cost of _ Drafts to be drawn at_days/months sight and accompanied by all shipping documents. Marine insurance and war risks to be effected in_ This request is to remain in force for_calendar months. I/We hereby guarantee to accept all drafts drawn under the above credit on presentation and pay the same at or before maturity. All exchange in connection with the transaction is to be settled through you. In some instances the bank may establish the desired credit upon this written request without further ado, but more often it will require the applicant to deposit a percentage of the desired credit as a guaranty, protecting itself as regards the balance by holding, TSINGTAO CONSULAR DISTRICT 767 upon their arrival, the bill of lading and other shipping documents against payment. There are no public storage warehouses in Tsingtao. An Ameri¬ can firm in shipping goods to Tsingtao covered by a bill of lading attached to a 60 or 90 day sight draft, with flat instructions to the bank not to surrender bill of lading until the draft is paid, may place both the bank and its customer in an awkarcl predicament. Un¬ less the shipment is cleared promptly through the customs and re¬ moved from the public warehouses upon the piers, demurrage charges soon become disastrous. Frequently the purchasing firm desires, or perhaps finds it necessary, to avail itself of the full 60 or 90 s days stipulated in the draft. While the matter is one to be decided by each firm upon its own responsibility, the interests of the American firm would probably be adequately protected if the local bank were given some discretion in the matter of the surrender of shipping documents. Frequently the local banks, knowing with some intimacy the financial position and standing of Tsingtao firms with whom they are dealing, are able to release shipping documents, without the immediate payment of the covering draft, upon the execution by the purchasing firm of a “ trust receipt ” containing some such stipulations as the following: 1. That the goods in question (not delivered to purchasers) will be stored by the purchasing firm only as trustee on behalf of the bank, as a guaranty of payment of the accepted draft upon its maturity, and that the proceeds of the sale of all or any part of such goods will be handled, pending payment of the draft, only as trust funds belonging to the bank. 2. That the goods or, in the event of prior disposal, value thereof will, pending payment of the draft, be surrendered to the bank upon demand. 3. That, pending payment of the draft, the goods will be fully in¬ sured in favor of the bank against all risks. The export of merchandise from Tsingtao to the United States is accomplished under approximately the same credit and banking arrangements as imports. POWERS OF ATTORNEY Too much emphasis can not be placed upon the necessity of the proper wording of the powers of attorney which representatives of American firms should have in order to conduct expeditiously the business of their principals. Powers which do not answer the re¬ quirements of local banks are frequently the cause of embarrassment and loss of time to representatives of American firms. Where a general power is intended, it is not sufficient to have it couched merely in general terms. It should, in addition to a conventional blanket expression of general power, include the following specific powers: (!) To open and/or operate current accounts in the name of the principal; (2) to overdraw that account; (3) to borrow money in the name of the principal; (4) to pledge goods and/or securities; (5) to draw, accept, and indorse bills of exchange and related documents; (6) to make forward exchange settlements; (7) to substitute. 768 COMMERCIAL HANDBOOK OF CHINA ADVERTISING The local newspapers afford the most effective single means of advertising in Tsingtao. Of the four largest newpapers, two are published in the Japanese language, one in Chinese, and one in English. Their names, estimated circulation, and published ad¬ vertising rates may be obtained upon application to the consulate. For articles such as toilet preparations, patent medicines, wearing apparel, foodstuffs, office and household furniture and supplies, cigarettes and tobacco, and novelties, possibly the newspapers, sup¬ plemented by window and signboard posters, would be the most effective means of advertising. Pictures of a striking nature are essential to any comprehensive advertising campaign designed k> reach the majority of the population. Another reasonably effective means of advertising is the use of slides in motion-picture theaters, of which there are four in Tsingtao. The rates charged by the theaters for slide advertising vary according to the number of performances at which the slide is to be exhibited, but, on the whole, are considered reasonable. At one, where new pictures are shown every second day, the monthly rate for one slide is $15 Yuan. There are no regular advertising agencies in Tsingtao. Through their native dealers or agents, foreign firms arrange for roadside, wall, and street advertising. Roadside, street, or wall advertisements larger than 8 feet square and roof advertisements larger than 10 feet square are prohibited by municipal regulation. The following municipal tax is levied: Per square foot per month Roadside advertisements_•_$0. 04 Wall advertisements_ . 02 Roof advertisements_ . 02 Roof advertisements (with shelf and electrical wiring)_ .05 A reduction of 20 per cent is given in the rate of taxation for advertisements exhibited for longer periods than three months, and a reduction of 40 per cent for periods longer than six months. TRADE ORGANIZATIONS The leading trade organizations in Tsingtao are the American Chamber of Commerce, British Chamber of Commerce, Chinese Chamber of Commerce, German Chamber of Commerce, and Japa¬ nese Chamber of Commerce. The American and British organi¬ zations do not maintain offices. The addresses of their honorary secretaries change when new secretaries are elected. It is suggested that letters intended for these organizations be addressed in care of the American and British consulates, respectively. The American, British, and German chambers of commerce are small, informal organizations which ordinarily become active only when questions affecting their respective community or business in¬ terests arise. The Chinese and Japanese chambers have paid secre¬ tarial staffs and are quite active in fostering their respective inter¬ ests. The Japanese chamber especially is active in the compilation of useful statistics, arbitrating disputes in which its members are involved, and making investigations of an economic nature. It also maintains a laboratory equipped to make commercial analyses. TSINGTAO CONSULAR DISTRICT 769 HOTELS The two main hotels at Tsingtao are operated by Europeans under Japanese control. These hotels afford ample accommoda¬ tions upon the American plan. Commercial travelers are given a discount of 10 per cent from the regular rates. There are a number of first-class boarding houses in Tsingtao, the rates being somewhat higher in summer than winter, as Tsingtao is a popular summer resort. Board and room for an adult, how¬ ever, should not cost more than $150 Yuan per month throughout most of the year. PROPERTY VALUES AND RENTS In order to convey an understanding of the present status of real property in Tsingtao it is necessary to refer briefly to the begin¬ ning of the port. Shortly after the German Government became established in the leased territory of Kiaocliow Bay it acquired by purchase from the Chinese owners more than 12,000 acres of land to be used as the site for the city of Tsingtao. Of this the German Government sold outright to private individuals only about 310 acres, holding the remainder in reserve or leasing it to persons or firms for the erection of residential or business properties. When a Japanese military government occupied Tsingtao in; 1914 it took possession of the German public lands, and later, in 1917 and 1918, acquired by purchase from the Chinese owners some 2,700 acres of additional land. A great deal of this land was thrown open to the public for building purposes under 10-year leases. When the Kiaochow territory was restored to China on December 10, 1922, the Sino-Japanese agreement pertaining thereto provided for the extension of all valid leases for a period of 30 years upon the then existing terms and, at the expiration of that time, for a renewal for a further period of 30 years upon terms to be fixed at the time of renewal. In the negotiations concerning the titles to the 310 acres sold outright by the German Government the Chinese delegates maintained that since the German Government held the Kiaochow territory under only a 99-year lease it could not convey title to lands situated therein for a longer period than 99 years. The Japanese delegates held that the German Government, having divested the original Chinese owners of all rights in the land, was in a position to convey title in perpetuity. No understanding w T as reached, and the matter was left open for future settlement. That settlement has not yet been accomplished. It is not the policy of the Chinese Government to grant leases in perpetuity covering lands in the Kiaochow territory. All new leases issued by it are for periods of 30 years or for shorter periods. There have been few transfers of privately owned land since the restoration, and it is impossible at present (with the question of the titles thereto still pending) to give any fair idea of the value of such property. Most of the desirable public land sites open to lease have been taken up. No initial payment is made to the Gov¬ ernment in obtaining original leases, but the demand for leases is such in the transfer of leased land (which can be accomplished only 100020°—26-50 770 COMMERCIAL HANDBOOK OF CHINA by the sale of buildings thereon) between private individuals that land is rapidly acquiring a sales value. Leased land in the city of Tsingtao is divided into five classes, the annual rental charged by the Government being as follows (per fang-pu, a unit equivalent to 25 square feet) : Yuan First class_$0. 62 Second class_._ . 542 Third class_ . 465 Fourth class_ . 387 Fifth class_ . 310 The first and second classes are in the principal business sections of the city and the third, fourth, and fifth are in the residential sections. While no hard and fast statement can be made concerning the price at which office space may be rented in Tsingtao, it may be stated that office rooms with about 14 by 16 feet of floor space are at the present time being rented for about $50 Yuan per month, including light and heat. Warehouse space in the bonded area (adjacent to the wharves) may be rented for $0.60 Yuan per fang-pu (25 square feet) per month under rent agreements which usually cover a period of six months. The buildings in this area are made of corrugated iron and are owned by the Harbor Administration. The charge for ware¬ house space rented from private owners would perhaps be about 25 to 50 per cent higher. Houses containing from 8 to 10 rooms may be rented for resi¬ dential purposes at prices ranging from about $150 to $400 Yuan per month, depending upon their location and the size of the plot of ground upon which they stand. In outlying sections of the city, 2 to 3 miles from the business section, houses containing about seven rooms may at times be rented for approximately $100 Yuan per month. TAXES AND OTHER ASSESSMENTS Taxation in Tsingtao is comparatively light. Owned land is taxed at the rate of 6 per cent upon a taxation value arrived at in 1912, when owned land was divided into 11 classifications ranging in value from $2.40 Yuan per square meter in the main business section down to $1 in more or less undeveloped sections. Improvements upon land in Tsingtao are not taxed. LIVING COSTS Only occasionally are furnished rooms available without board. Where such rooms are available the question of rent is one for nego¬ tiation. The estimated necessary monthly living expenses (in Yuan dollars) are approximately as follows-: For a single man, $300; sin¬ gle woman, $270; married couple, $500; married couple with two children, (living in two rooms), $700. The estimate of necessary living expenses includes a small amount for recreation, such as moderate club expense, motion pictures, and similar expenditures, but does not include the expense of entertain¬ ing. It may be stated, however, that anyone desiring to participate TSINGTAO CONSULAR DISTRICT 771 in community social activities would find it necessary to do some en¬ tertaining. There is at present an efficiently managed school in Tsingtao open to American and European children. Students, upon graduation from the high school, may pass directly into American colleges and universities. CHANGES IN TRADE CONDITIONS IN PAST DECADE In 1913 Tsingtao was known principally as a summer resort. Trade was insignificant, but healthy and growing. There were, practically speaking, no industries. Connected with Tsinan—256 miles distant on the Tientsin-Pukow Railway—by the Shantung Railway (which owned and operated the principal coal and iron mines along its route), and equipped through German enterprise with a splendid harbor, Tsingtao was the open door to Shantung’s 30,000,000 people and its vast agricultural and mineral wealth. At that time Japanese interests in the port and in its trade were almost nonexistent. In the autumn of 1914 Tsingtao came into world-wide prominence. That time marked the inauguration of a notable change in Tsingtao’s foreign trade affiliations. A Japanese civilian population flocked to the port and soon became firmly established in trade and industry. •Japanese steamship lines began to ply between Japanese ports and Tsingtao, which shortly became an important source of raw materials and food supply. Shantung’s coal and iron ore went to Japan, and a large export trade developed in eggs, beef, salt, and peanuts. Kobe became the market in which the peanut buyers of Europe and Amer¬ ica made their contracts for Shantung peanuts and peanut oil. Freight rates guided Tsingtao’s exports to and through Japanese ports for transshipment. After Tsingtao’s restoration to China in December, 1922, there began a new phase in its history. Tsingtao became an important center of direct trade between China and foreign countries, and the port now ranks third among the world’s peanut export markets. American and European peanut buyers who formerly visited and placed their contracts in Kobe now transact their business in Tsing¬ tao. The city has manufacturing and industrial enterprises re¬ presenting investments totaling over $100,000,000 Yuan. It has climbed to fifth place in importance amongst China’s foreign-trade ports, and is connected with Europe and America by 18 direct trans¬ oceanic steamship lines. YUNNAN CONSULAR DISTRICT By Consul M. S. Myers LOCATION AND AREA The Yunnan consular district comprises the whole of the Province of Yunnan, which may be called the southwestern corner of China. It is bounded on the north by Szechwan, on the east by the Provinces of Kweichow and Kwangsi, on the south by Indo-China and Burma, and on the west it is bordered by Burma and Tibet. Roughly, Yunnan Province lies between 22° and 28° north latitude, corresponding with the northern half of Mexico. It has an area of 146,718 square miles, or slightly larger than that of Montana. Yun¬ nan Province is mountainous throughout, having high table-lands in the east, and high, narrow mountain ranges in the west, separated by deep river valleys. In general the climate is excellent, especially on the table-lands. It ranges greatly, however—from subtropical heat in the low- lying valleys to perpetual snow on the high mountains. At Yun- nanfu, 6,200 feet above sea level, the average minimum temperature in winter is 39° F., and the average maximum in summer, 79° F. Autumn and winter constitute the dry season; spring and summer make up the rainy season, with an average rainfall of about 40 inches. POPULATION According to estimates of the Chinese Post Office, the population is 9,839,000; other estimates place it at about 12,000,000. The popu¬ lation of Yunnan is the most heterogeneous in China. The Chinese, immigrants from other Provinces, are the most numerous, but there are many singular tribes of mixed Mongol stock, the most important and interesting of which are the Lolos and the Shans. The Chinese speak a Mandarin dialect, but the tribes have their own languages. CITIES In the following table are shown the leading cities of the district: City Population (estimated) Europeans (approxi¬ mate) Americans American business firms Yunnanfu._ _ 120, 000 75,000 26,000 30, 000 150 10 1 Kochiu ... . _ ___ 3 Talifu _ _ _ _ 8 1 Chaotung _ 10 Yunnanfu , situated at the railhead of the Haifong-Yunnanfu Railway, 534 miles from the seacoast at Haifong, Indo-China, is the capital, largest city, and chief commercial center of the Province. 772 YUNNAN CONSULAR DISTRICT 773 It was designated as a treaty port, but has never been actually opened, though foreign firms have located there and are engaged in import and export trade. Kochiu , about 25 miles west of Mengtz, is the seat of the tin in¬ dustry. Talifu , about 220 miles west of Yunnanfu, is the principal city of western Yunnan. It is a collecting point for skins and hides and some furs and a distributing point for cotton yarns. Near by are the quarries of the much-prized Tali marble. Chaotung , 227 miles north of Yunnanfu and 170 miles south of Suifu, in Szechwan, is the chief city in northeastern Yunnan. For¬ merly it was the center of an important caravan traffic with Szech¬ wan, but since 1910 much of this traffic has been carried by the Yunnan Railway, completed in that year. There are no foreign concessions in Yunnan Province. AGRICULTURE In the following table is shown the average production of the four principal products in the order of their importance: Product Planting season Harvesting season Average produc¬ tion per acre Estimated annual production Use or disposition of crop Rice_ . Beans (broad)_ Corn. ... _ Wheat__ Spring... Autumn. _ Spring. _ Autumn. .. . Autumn. _ Spring .. ... Autumn.. Spring.. ... . Bushels i 20 i 13 to 14 3 14 i 13 to 14 Short tons 1, 000, 000 2 400, 000 133, 333 106, 666 Food. Food and feed for animals. Do Food. 1 Bushels of 60 pounds each. 2 Includes all varieties. 3 Bushels of 56 pounds each. Rice, the most important crop and staple foodstuff of the popula¬ tion, is grown in the lower valleys throughout the Province and to some extent in the hills. The entire product is used locally, some rice being imported when the crop is poor. Beans of many kinds are raised, though the broad bean is the principal variety. Yellow beans and small kidney beans, cultivated in the summer, are the only beans exported. The bean exports are inconsiderable and go entirely to Tonkin. Wheat and maize are widely grown. Buckwheat and millet are important hill crops. Barley , from which the Tibetans make u tsamba,” is cultivated in the high altitudes of the northwest. The cultivation of opium has been widespread during the past few years, having become again one of the principal winter crops. Agriculture is the chief occupation of the people, and two crops a year are usually grown. Land holdings are very small, and the implements of cultivation are most primitive. MINERALS AND MINING Tin .—The tin belt under development is confined to the vicinity of Kochiu, about 25 miles west of the treaty port of Mengtsz. It extends about 20 miles north and south and between 3 and 4 miles 774 COMMERCIAL HANDBOOK OF CHINA east and west. The deposits are mostly residual in ferruginous clay, contained in water-worn cavities in the limestone. Except as stated below, only native mining and treating methods are used in this industry. The principal factors retarding the development of the industry are the dependence upon rains for providing an adequate supply of water for concentrating purposes, on account of which this phase of the industry can not be carried on during four or five months each year; native methods of treating the ore; and the high cost of transporting concentrates by pack animals to the smelters at Kochiu. The Kochiu Tin Trading Co., largely owned by the provincial government, is the leading tin-mining concern. Its original capital was $2,000,000 (Yunnan currency), and its principal mine is Malaga (Ma La Ko), located in the mountains between Mengtsz and Kochiu. The output in 1923 was about 900 tons of tin. The plant has modern equipment, of German make, with a capacity of about 400 tons per day, and an aerial tramway. The mine has never been operated at full capacity. Practically the whole tin output of the district is exported in slabs to Hongkong, where it is refined before shipment to western coun¬ tries. The number of laborers engaged in the tin-mining industry varies. During part of 1923 laborers employed were estimated at 20,000, but the force increased to 50,000 in the early part of 1924. During 1923 the price of tin in slabs at Kochiu ranged from $1,079 to $1,682 Yunnan ($415 to $648 United States currency) for 1,000 catties (1,400 pounds in this trade), or about 37 cents (United States currency) per pound. Coal is widely distributed, but little is known of its extent and . quality. The most important present production areas are the Kopaotsun field and the Hsiaolungtan field, both lying close to the Yunnan Railway. The former has produced as much as 20,000Tons of bituminous coal a year, but is now producing little. The output of the latter field is described as a hardened lignite, and its in¬ creasing output is now reported to be in the neighborhood of 20,000 tons annually. Copper .—The principal copper-producing districts are Chiaochia, Tungchwan, Yimen, and Lungling, in the northeastern part of the Province. Yungchang and several other districts in western Yun¬ nan also contain valuable deposits. According to Government re¬ turns, production has decreased about 50 per cent as compared with that of 1914 and 1915 and is only about one-twentieth of that of the reigns of Chien Lung and Chia Ching, of the Ching dynasty (1736- 1821 A. D.). The heavy cost of transportation by pack animals is the chief factor militating against the development of this industry. Disturbed conditions have also adversely affected the output. The average price of copper at Tungchwan, the main copper- producing district, during 1923 was about $289 (United States cur¬ rency) per short ton. Zinc .—Zinc mining in this Province is an old industry, having existed, it is claimed, before the Yuan dynasty (1280 to 1368 A. D.). Zinc deposits are numerous, according to official reports, the prin¬ cipal ones being found in the northeastern and eastern parts of the “YUNNAN CONSULAR DISTRICT 775 Province—the districts of Tungchwan, Yiliang, Chiaochia, Lutien, Loping, and Liman. Production has decreased since 1915, when it was over 2,000 tons annually, the highest point since the revolution of 1911. This industry has been affected by the same conditions that have affected the copper industry. The average price of zinc at Tungchwan during 1923 was about $58 (United States) per ton. Yunnan Province undoubtedly contains varied and important mineral deposits. In addition to the ones mentioned above, there are silver, gold, iron, lead, quicksilver, antimony, bismuth, mica, asbestos, soda, cobalt, and salt. As far as is known the tin deposits are the most important but owing to the lack of reliable data on the subject the relative importance of these mineral deposits can not be given. Mining operations are carried on by Chinese com¬ panies or individuals who use primitive native methods entirely. The operations are generally conducted on a very small scale, but it is believed that the extraction of the ore could not be done more economically by modern methods than it is at present. MANUFACTURING AND INDUSTRIAL DEVELOPMENT The manufacturing industries of Yunnan are of the primitive household type. The weaving of cotton cloth on native hand looms is the principal one, though leather, grass paper, bamboo baskets, canebrake mats, copperware, and some other articles are manufac¬ tured. The few small plants which use modern machinery are lo¬ cated at Yunnanfu, and include machine shops, factories for mak¬ ing socks, metal works, and a sugar factory. Hand machines are used in some places for knitting socks. LABOR CONDITIONS The wages of ordinary carpenters and masons average 27 cents (LYiited States currency) per day of 8 hours, without food. The masons are well regarded for craftsmanship, but the carpentry work is rough. The local hosiery factory, using electrically-driven machines, pays female labor 8 cents silver per dozen socks. The earnings on day shift of 8 V 2 hours, for an output of 11 to 12 dozen, averages 34 to 37 cents gold, without food; night shift of 8 hours, including mealtime, pays 12 cents silver per dozen, or about 32 cents gold for the average output of 7 dozen. A meal is furnished to employees at midnight. It may be of interest to note that day workers are now required by the local authorities to attend school, which is held at the factory, between 4.30 and 5.30 p. m. TRANSPORTATION AND COMMUNICATION WATERWAYS Yunnan has no navigable waters of commercial importance. Two flat-bottom stern-wheel steamers comprise the only powered com¬ mercial craft. They ply on Kunyang Lake between Yunnanfu and Kunyang, about 40 miles. 776 COMMERCIAL HANDBOOK OF CHINA RAILWAYS The Yunnan section of the Haifong-Yunnanfu Railway (Com- pagnie Francaise cles Chemins cle Fer cle l'lndochine et du Yunnan, mileage 534, head office Paris) runs between Hokow and Yunnanfu, 289 miles, and is commonly known as the Yunnan Railway. For purposes of computing the passenger and freight rates, the line is divided into four zones, the rates in Tonkin being payable in piasters and those in Yunnan in Yunnan dollars. As this railway provides the only practicable communication with the sea, its importance is obvious. The whole foreign trade passing through the port of Mengtsz—that is, of a large part of the Province—which amounted to $18,216,074 and $19,189,555 in 1922 and 1923, respectively, is hauled over this line. The Kopi Railway (Chinese)—Kopi Railway Co.—45 miles long, is the only other railway in the Province. It is 60-centimeter gauge and connects Kochiu, the tin center, with Pishihchai on the Haifong- Yunnanfu line. Its head office is at Kochiu. Tin in slabs consti¬ tutes the chief article of trade carried over it, the rate per short ton per mile being about 4 cents (United States currency). A 60-centimeter-gauge line connecting Kopaotsun, a station on the Haifong-Yunnanfu Railway, with Erhlunghsichu, in the cen¬ ter of the Kopaotsun coal field, is being surveyed and will be built by the Compagnie Francaise des Chemins de Fer de l’lndochine et du Yunnan under contract for the Ta Lu Coal Transportation Co. (Chinese). The line will be about 17 miles long and should be completed in three years. ROADS There are no roads for motor transportation in Yunnan Province. The main highways are very narrow—about 3% feet in width—and are mostly, or were once, paved with flags and cobblestones. Trans¬ portation is principally by means of pack animals or by coolie car¬ riers. The construction of a motor road connecting Yunnanfu and Shetze, a distance of about 65 miles, has recently been started. This new road will form a link in the Yunnanfu-Talifu road, which is about 220 miles long. TELEGRAPHS, CABLES, AND WIRELESS SERVICE The Chinese Telegraph Administration has 42 stations throughout Yunnan connecting with the rest of the Republic and with Hong¬ kong, Indo-China, and Burma. In recent years disturbances in other parts of China have made it necessary to route telegrams via Saigon, and thence by cable to Hongkong. The cost of a telegram to Shanghai by this route is about 63 cents (United States currency) per word. Yunnanfu has two wireless installations, one of 5 kilowatts, for the private use of the railway company to which it belongs, and the other of 50 kilowatts, belonging to the Yunnan government. The latter, though completed, is not in use. YUNNAN CONSULAR DISTRICT 777 TELEPHONES There is local telephone service in Yunnanfu, Kochiu, Mengtsz, and Talifu. There is no immediate prospect of extending any of these lines. The service in Yunnanfu is fairly satisfactory. POSTAL FACILITIES The Chinese Postal Administration maintains 275 offices in the district, and international postal rates apply to all mail matter. On parcels by mail from the United States via Indo-China the ad¬ dressee must pay a tax of 50 cents (Yunnan) per parcel irrespective of weight. The weight limit is 22 pounds for steam-served places and 11 pounds for places reached only by courier service. SHIPPING AND WAREHOUSING FACILITIES There are no public warehousing or storage facilities in the dis¬ trict. Goods are carried from the railway station either by porters or in small two-wheeled carts. PUBLIC UTILITIES ELECTRIC-LIGHT PLANTS The following table shows the location, capacity, rates, and char¬ acter of equipment of the principal electric-light plants in the dis¬ trict. They are all Chinese owned. Location Kilowatt lighting load Kilowatt power load Rates 1 Yunnanfu_ . 500 150 Per kilo¬ watt hour $0.11 Mengtsz__ 88 . 12 Linanfu . 45 . 11 Amichow_ 20 . 11 Hokow... 18.4 2 .54 Character and nationality of equipment Alternating current, 3 phase, 60 cycles; German. Alternating current, 3 phase, 60 cycles; British. Alternating current, 3 phase, 60 cycles; American. Alternating current, 3 phase, 60 cyclesBritish. Direct current,2-wire system; American dynamo. 1 Rates are in United States currency. 2 Rate per lamp. The Yunnanfu plant—Yao Lung Electric Lighting Co., capital now $1,000,000 Yunnan ($385,000 LTnited States currency)—is being extended by the addition of two generators of 350 kilovolt-amperes each, together with complementary equipment, all German. WATERWORKS The plant of the Waterworks Co. (Chinese), at Yunnanfu, has a capacity of 30,000 gallons per hour. Its meter rate is 10 cents (about 4 cents United States currency) per 100 gallons. The equip¬ ment comprises two motor engines of 40 horsepower each for pump¬ ing the water 500 meters to the reservoir. The capacity of the plant is too small, and water is usually turned off during the night. A small lake in the city furnishes the water supply. There is also a very small waterworks plant at Kochiu, 778 COMMERCIAL HANDBOOK OF CHINA FOREIGN TRADE The value of the foreign trade of the three principal ports in Yunnan for 1913 and 1923 may be summarized as follows: Port Exports Imports Total 1913 1923 1913 1923 1913 1923 Mengtsz__ _ $8, 200,106 $7, 442, 917 $6,381,971 $11, 746, 638 $14, 582, 077 $19,189, 555 Szemao__ . . . . 29,165 35, 285 137, 003 151, 495 166, 168 186, 780 Tengvueh.. . _ _ . 541,135 1, 264, 785 1, 779, 732 1, 946, 382 2,320, 867 3, 211,167 Note. —Values are converted to United States currency from haikwan taels at the rate of $0,741 in 1913 and $0.8231 in 1923. Attention should be drawn to the completion of the Yunnan Rail¬ way in 1910, the effect of which was immediately shown in increased trade, which was especially marked in exports. Szeviao .—The trade of this port, largely with Burma, has varied little during the past 20 years. Its chief import is raw cotton ($31,861 in 1923) and its chief export black tea ($10,904 in 1923). Tengyueh .—Although the trade of this port has increased con¬ siderably, it is still relatively small and is entirely with Burma. The principal imports are cotton yarn and raw cotton. The principal exports in 1923 were raw silk (from Szechwan), 363,733 pounds, valued at $984,823, and orpiment, 905,467 pounds, valued at $77,770. EXPORTS The quantity and value of exports through the port of Mengtsz for the yeafs 1913 and 1923 are shown in the following table: Item 1913 1923 Quantity Value Quantity Value Bristles_ Hides.-- Leather_... Goatskins... .. Tin slabs.. ... _pounds.. _ ...do_ .. _do_ _ . pieces.. _short tons.. 28,000 1,136,133 . 15,067 2, 800 8,553 $6, 605 117,052 4,888 883 7, 769, 312 220,667 789, 067 146,933 293,180 8,743 $135,194 154,087 106, 000 107, 344 6, 397,878 Tin in slabs has always constituted the premier export of this Province. Opium, of some importance in 1903, did not figure in the returns of 1913 nor of 1923 owing to the official prohibition of its cultivation. Leather exports, mostly low-grade products, and bristles have become important only in recent years. It was estimated that in 1923 about 40 per cent of the exports of tin were shipped to the United States, 16 per cent to Japan, 5 per cent to Great Britain, and most of the remainder to ports of China. Yunnan bristles are shipped directly and indirectly to the United States, while some goatskins and hides from this district are believed to reach the American market. Leather is exported to China coast ports. Customs policy .—Chinese goods shipped via Tonkin—all foreign trade goes by that route—are granted by treaty a special reduction YUNNAN CONSULAR DISTRICT 779 in the Chinese export duties amounting to 40 per cent of the pre¬ scribed duty. Chinese merchandise transported across Tonkin to a foreign desti¬ nation is subject to French transit dues amounting to 20 per cent of the duty provided in the customs tariff of Indo-China. There are additional nominal charges—statistical, seal, stamps on bill of lad¬ ing and customs document—besides dock taxes and toll amounting to 0.45 piaster per metric ton on exports. IMPORTS The quantity and value of the principal imports through the port of Mengtsz for the years 1913 and 1923 are shown in the following table: .Item 1913 1923 Quantity Value Quantity Value Cigarettes_ (thousands.. ---\pounds_ 55,366 $60, 094 6,080 797, 467 19, 697, 600 84, 455 1, 200, 020 522, 667 $30, 370 406, 620 Cotton yarn... . _ . Dyed cottons_ ... _ . Kerosene_ ... ... ... Tobacco, prepared . . ... _pounds . .. .. pieces.. __gallons.. ..pounds.. 16, 543, 600 26, 672 947, 360 958, 267 3, 025, 433 263, 373 206,314 167, 387 6, 283, 624 554, 027 411,389 148,914 The principal imports of 1913 in order of importance were as fol¬ lows: Cotton yarn, rice (18,924,533 pounds, valued at $507,553), dyed cottons, kerosene, and prepared tobacco. In 1923 the paper trade ($180,561) slightly exceeded that of tobacco on account of a large import of unsigned bank notes ($48,831). The chief item in this trade is Chinese joss paper. Except postal parcels containing miscellaneous articles ($120,800), the only direct import from Chinese ports is cigarettes—Shanghai cigarette factory products, which amounted to 797,467 pounds, valued at $406,620, in 1923. The other cigarettes are foreign, chiefly British and French (Indo-China). About 78 per cent of the yarn imports, used chiefly for making coarse native cloth, are British, 10 per cent Japanese, and the remainder from Indo-China and Shanghai. The great bulk of this import is in No. 10s. Dyed cottons—chiefly Jap¬ anese and some British—comprise italians, Venetians, lastings, and poplins, plain fast black, plain colored (chief items plain colored italians and lastings), and figured. The kerosene imports, which in 1903 were entirely American, were about 70 per cent American in 1923. The prepared tobacco is entirely Chinese, imports coming chiefly from Kwangtung and Fukien Provinces via Hongkong. Among the American goods on this market, there are, besides kero¬ sene, household stores (provisions) ; metals, such as nails, galvanized iron wire, and bamboo steel; electrical materials and fittings; flour; dried fruits; machinery; sewing and knitting machines; lubricating oil; photographic materials; telephone materials; and hand tools. Customs 'policy .—Foreign goods shipped via Tonkin are granted by treaty a special reduction in Chinese import duties amounting to 30 per cent of the prescribed duty. However, this reduction does not apply to the Chinese transit dues. 780 COMMERCIAL HANDBOOK OF CHINA Merchandise of foreign origin, other than French, transported across Tonkin is subject to French transit dues amounting to 20 per cent of the duty provided in the customs tariff of Indo-China. French goods, however, are imported into Indo-China free of duty and consequently are not subject to transit dues when transported across Tonkin to Yunnan. Besides transit dues, there are a number of nominal customs and other charges levied on all shipments, such as statistical, seal, stamps on bill of lading and customs documents, and dock taxes and toll amounting to about 1 piaster per metric ton on imports. Transportation .—Shipments from the United States can be made to Haifong, Indo-China, via Hongkong, on through bills of lading. Between Hongkong and Haifong there are regular and frequent steamer services. At the latter port the assistance of a forwarding agent is required for attending to the customs formalities and trans¬ shipment by railway (Haifong-Yunnanfu). BANKING AND CURRENCY BANKS The Banque de l’lndo Chine (paid up capital 68,400,000 francs), a French bank with its head office in Paris, maintains branches in Mengtsz and Yunnanfu. Exchange at Yunnanfu is confined almost entirely to transactions in Hongkong dollars, Shanghai dollars, and Indo-China piasters. Exchange on France is handled by the local bank, but on the United States references to Haifong or Hanoi branches are necessary. Except on France there is practically no foreign-exchange business here. LOCAL CURRENCIES Bank notes, chiefly the issues of the Fukien (provincial) Bank and the small issues of the Bank of Territorial Development and the Kopi Railway Bank, are restricted in their circulation. Silver coins, much below the official standard in silver, have been minted in the past few years, but are now rarely seen in Yunnanfu and the larger centers. The use of the Fukien bank notes is being enforced throughout the Province; consequently silver is becoming scarcer and the exchange of notes for silver is being severely restricted. The currency is naturally depreciating. There are no foreign bank notes in circulation. The unfavorable exchange on Hongkong—exchange transactions are largely on that port—during the past few years has had a de¬ terrent effect on imports. ADVERTISING AND MERCHANDISING Local newspapers are of limited usefulness as advertising medi¬ ums. Pictorial posters are probably the most effective. Printed or painted advertisements should, where practicable, give a pictorial representation of the article and the trade-mark, or chop. There is no tax on poster advertising. Firms filing their catalogues with the consulate should give the names and addresses of their far eastern representatives, so that inquirers may be referred to them. YUNNAN CONSULAR DISTRICT 781 The foreign trade of the Province is very largely handled by Chinese merchants who are not in a position to do business with western countries. Except French goods, bought in Tonkin, pur¬ chases of foreign goods are made chiefly in Hongkong and Shang¬ hai. There are only a few foreign general merchants here—no Americans. In view of the limited facilities for local representation, interested American firms will usually be obliged to get in touch with this market through their Hongkong connections. TRAVEL FACILITIES AND HOTELS In Yunnanfu the Hotel du Commerce, under French ownership, has 24 rooms, and the rates are $3 per day and up, American plan. The Hotel de la Gare, in Amichow, and the Hotel Kalos, in Mengtsz, are both owned by Greeks, and their rates are somewhat lower than the hotel in Yunnanfu. During the summer season hotel accommo¬ dations should be engaged in advance, as many French people from Indo-China come to Yunnan to escape the heat. There are two night stopping places on the train journey between Haifong and Yunnanfu, the first one at Laokay, on the Yunnan border, and the other at Amichow. Passengers must spend the night at the hotel, and while there should arrange for luncheon on the train next day, as the railway company furnishes no restaurant fa¬ cilities. Commercial travelers whose business is with the Chinese would do well to bring a Mandarin-speaking interpreter with them. Very few of the Chinese business men speak any language but Chinese. Com¬ mercial travelers should call at the consulate for information regard¬ ing local conditions. TRADE ORGANIZATIONS There are two trade organizations in Yunnanfu—the Yunnan General Chamber of Commerce (Chinese) and the French Chamber of Commerce. Neither of these organizations conduct any special service for the development of foreign trade. The Chinese cham¬ ber is the organization with which the Government deals in mat¬ ters relating to the merchants. It is frequently used by merchants as an arbitration tribunal for disputes involving its members. PROPERTY VALUES AND RENTS As this is not an open port, foreign merchants can not buy prop¬ erty. Only Chinese buildings are available for renting, and rents have increased considerably during recent years. A compound con¬ taining between 10 and 15 rooms, besides quarters for servants, will rent for $1,200 to $2,400 Yunnan ($462 and $924 United States cur¬ rency) a year. It is the custom among Chinese tenants to pay a de¬ posit, which is not returned until the building is vacated. There are no taxes that foreign tenants are required to pay. CHANGES IN TRADE CONDITIONS IN RECENT YEARS Beginning with 1910, exports exceeded imports every year until 1921, the excess in 1917 being approximately 7,000,000 taels. During 1921, 1922, and 1923 the excess of imports over exports amounted roughly to 4,000,000, 3,700,000, and 5,200,000 million taels, respec- 782 COMMERCIAL HANDBOOK OF CHINA tively, or a total of nearly 13,000,000 taels. This adverse trade bal¬ ance is undoubtedly one of the causes of the depreciation of Yunnan currency during these three years. Imports increased in these years— 11.164,849, 12,981,886, and 14,271,216 haikwan taels in 1921, 1922, and 1923, respectively—the last year being the record, while exports decreased—7,156,397, 9,240,969, and 9,042,543 taels, respectively. In 1923 exports were more than 3,800,000 taels less than the record of 1917 (12,865,668 taels). The export of tin in slabs for the 10 years ended in 1923 averaged 137,184 piculs a year and reached its maximum in 1917, with 185,- 634 piculs, valued at 11,579,628 taels. Since then the export of tin has fallen below the average in the years 1918, 1921, and 1923. Other metals exported in some quantity during the past decade were as folloAvs: Zinc, 30,050 piculs, valued at 317,775 taels, and 12,946 piculs, valued at 103,599 taels, in 1915 and 1921, respectively; lead, 13,236 piculs, valued at 174,694 taels, and 10,237 piculs, valued at 133,596 taels, in 1916 and 1917, respectively; and antimony, 8,118 piculs, valued at 77,126 taels, in 1915. The total export of antimony regulus between 1913 and 1917, when it practically ceased, was 24,133 piculs. Under the impetus of a strong demand and high prices, untanned goatskins were exported in 1919 to the extent of 1,084,400 pieces, valued at 588,980 taels. The 1921 export was also unusually large, consisting of 714,922 pieces, valued at 299,601 taels. Cow and buffalo hides, undressed, were exported in exceptional quantities in 1919 and 1920, the figures for these two years being 13,029 piculs, valued at 368,432 taels, and 10,605 piculs, valued at 338,208 taels. During the years 1913 to 1923 cotton yarn imports increased, ranging between 96,529 piculs, valued at 5,318,348 taels, in 1919, and 147,732 piculs, valued at 7.634,096 taels, in 1923. A marked expansion has occurred in dyed cottons, especially during the past few years, and Japanese goods have largely displaced British goods. The cigarette trade, which amounted in 1918 to 201,193,000, valued at 343,429 taels, has made rapid strides during the past few } r ears. Beginning with 1919 the great bulk of the imports— 3,218 piculs, valued at 418,362 taels—entered the district as native goods, the product of modern factories at Shanghai. The heavy transit dues on foreign-made cigarettes crossing Tonkin (Chinese- made cigarettes if shipped direct to Haifong are subject to much lower transit dues—2 per cent ad valorem) confine the trade largely to native goods. American products have supplied the bulk of the kerosene imports during recent years. Prior to 1922 the only year in which imports exceeded 1,000,000 gallons was 1915, when they amounted to 1,057,300 gallons, valued at 337.012 taels. In 1922 imports reached 1,331,590 gallons, valued at 595,762 taels, the record. Among other imports, medicines and household stores may be briefly mentioned. The trade in medicines—94,366 and 178,027 taels in 1913 and 1923, respectively—is growing and is now confined chiefly to products prepared in Shanghai and Hongkong. Household stores were valued at 105,555 taels in 1923, as compared with an average of 48,660 taels for the preceding 10 years. American canned provi¬ sions figure prominently in this import trade. APPENDIX CHINA TRADE ACT, 1922, AS AMENDED BY THE ACT OF FEBRUARY 26, 1925 AN ACT To authorize the creation of corporations for the purpose of engaging in business within China Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled , That this Act may be cited as the “China Trade Act, 1922.” DEFINITIONS Sec. 2. When used in this Act, unless the context otherwise indicates,— (a) The term “person” includes individual partnership, corporation, and association; (b) The term “China” means (1) China including Manchuria, Thibet, Mongolia, and any territory leased by China to any foreign government, (2) the Crown Colony of Hongkong, and (3) the Province of Macao; (c) That terms “China Trade Act corporation” and “corporation” mean a corporation chartered under the provisions of this Act; (d) The term “federal district court” means any federal district court, the United States Court for China, and the Supreme Court of the District of Columbia; (e) The term “Secretary” means the Secretary of Commerce; and (f) The term “registrar” means the China Trade Act registrar appointed under section 3. REGISTRAR Sec. 3. The Secretary is authorized to designate as China Trade Act regis¬ trar an officer of the Department of Commerce. The official station of the registrar shall be in China at a place to be designated by the Secretary. All functions vested in the registrar by this Act shall be administered by him under the supervision of the Secretary; except that upon appeal to the Secre¬ tary, in such manner as he shall by regulation prescribe, any action of the registrar may be affirmed, modified, or set aside by the Secretary as he deems advisable. ARTICLES OF INCORPORATION Sec. 4. (a) Three or more individuals (hereinafter in this Act referred to as “incorporators”), a majority of whom are citizens of the United States, may, as hereinafter in this Act provided, form a District of Columbia corpora¬ tion for the purpose of engaging in business within China. (b) The incorporators may adopt articles of incorporation which shall be filed with the Secretary at his office in the District of Columbia and may there¬ upon make application to the Secretary for a certificate of incorporation in such manner and form as shall be by regulation prescribed. The articles of incorporation shall state— (1) The name of the proposed China Trade Act corporation, which shall end with the legend, “ Federal Inc. U. S. A.,” and which shall not, in the opinion of the Secretary, be likely in any manner to mislead the public; (2) The location of its principal office, which shall be in the District of Columbia; (3) The particular business in which the corporation is to engage; (4) The amount of the authorized capital stock, the designation of each class of stock, the terms upon which it is to be issued, and the number and par value of the shares of each class of stock; 783 784 COMMERCIAL HANDBOOK OF CHINA (5) Tlie duration of the corporation, which may be for a period of not more than twenty-five years, but which may, upon application of the corpora¬ tion and payment of the incorporation fee, be successively extended by the Secretary for like periods; (6) The names and addresses of at least three individuals (a majority of whom, at the time of designation and during their term of office, shall be citizens of the United States), to be designated by the incorporators, who shall serve as temporary directors; and (7) The fact that an amount equal to 25 per centum of the amount of the authorized capital stock has been in good faith subscribed to. (c) A China Trade Act corporation shall not engage in the business of discounting bills, notes, or other evidences of debt, of receiving deposits, of buying and selling bills of exchange, or of issuing bills, notes, or other evidences of debt, for circulation as money; nor engage in any other form of banking business; nor engage in any form of insurance business; nor engage in, nor be formed to engage in, the business of owning or operating any ves¬ sel. unless the controlling interest in such corporation is owned by citizens of the United States, within the meaning of section 2 of the Shipping Act, 1916, as amended. (d) No certificate of incorporation shall be delivered to a China Trade Act corporation and no incorporation shall be complete until at least 25 per centum of its authorized capital stock has been paid in in cash, or, in accordance with the provisions of section 8, in real or personal property which has been placed in the custody of the directors, and such corporation has filed a state¬ ment to this effect under oath with the registrar within six months after the issuance of its certificate of incorporation, except that the registrar may grant additional time for the filing of such statement upon application made prior to the expiration of such six months. If any such corporation transacts busi¬ ness in violation of this subdivision or fails to file such statement within six months, or within such time as the registrar prescribes upon such applica¬ tion. the registrar shall institute proceedings under section 14 for the revoca¬ tion of the certificate. CERTIFICATE OF INCORPORATION Sec. 5. The Secretary shall, upon the filing of such application, issue a certif¬ icate of incorporation certifying that the provisions of this Act have been complied with and declaring that the incorporators are a body corporate, if (a) an incorporation fee of $100 has been paid him; (b) he finds that the articles of incorporation and statements therein conform to the requirements of. and that the incorporation is authorized by, this Act; and (c) he finds that such corporation will aid in developing markets in China for goods produced in the United States. A copy of the articles of incorporation shall be made a part of the certificate of incorporation and printed in full thereon. Any failure, previous to the issuance of the certificate of incorporation, by the incorpo¬ rators or in respect to the application for the certificate of incorporation, to conform to any requirement of law which is a condition precedent to such issuance, may not subsequent thereto be held to invalidate the certificate of incorporation or alter the legal status of any act of a China Trade Act cor¬ poration. except in proceedings instituted by the registrar for the revocation of the certificate of incorporation. GENERAL POWERS Sec. 6. In addition to the powers granted elsewhere in this Act, a China Trade Act corporation— (a) Shall have the right of succession during the existence of the corpo¬ ration ; (b) Shall have a corporate seal and may, with the approval of the Secre¬ tary, alter it; (c) May sue and be sued; (d) Shall have the right to transact the business authorized by its articles of incorporation and such further business as is properly connected therewith or necessary and incidental thereto; (e) May make contracts and incur liabilities; (f) May acquire and hold real or personal property, necessary to effect the purpose for which it is formed, and dispose of such property when no longer needed for such purposes; APPENDIX 785 (g) May borrow money ancl issue its notes, coupon or registered bonds, or other evidences of debt, and secure their payment by a mortgage of its prop¬ erty ; and (h) May establish such branch offices at such places in China as it deems advisable. SHAKES OF STOCK Sec. 7. Each share of the original or any subsequent issue of stock of a China Trade Act corporation shall be issued at not less than par value, and shall be paid for in cash, or in accordance with the provisions of section 8, in real or personal property which has been placed in the custody of the direc¬ tors. No such share shall be issued until the amount of the par value thereof has been paid the corporation; and when issued, each share shall be held to be full paid and nonassessable; except that if any share is, in violation of this section, issued without the amount of the par value thereof having been paid to the corporation, the holder of such share shall be liable in suits by creditors for the difference between the amount paid for such share and the par value thereof. Sec. 8. No share of stock of a China Trade Act corporation shall, for the purposes of section 7 or of paragraph (7) of subdivision (b) of section 4, be held paid in real or personal property unless (1) a certificate describing the property and stating the value at which it is to be received has been filed by the corporation with the Secretary or the registrar in such manner as shall be by regulation prescribed, and a fee to be fixed by the Secretary or the registrar, respectively, to cover the cost of any necessary investigation has been paid, and (2) the Secretary or the registrar, as the case may be, finds and has certified to the corporation that such value is not more than the fair market value of the property. BY-LAWS Sec. 9. The by-laws may provide— (a) The time, place, manner of calling, giving notice, and conduct of, and determination of a quorum for the meetings, annual or special, of the stock¬ holders or directors; (b) The number, qualifications, and manner of chosing and fixing the tenure of office and compensation of all directors; but the number of such directors shall be not less than three, and a majority of the directors, and the president and the treasurer, or each officer holding a corresponding office, shall, during their tenure of office, be citizens of the United States resident in China. (c) The manner of calling for and collecting payments upon shares of stock, the penalties and forfeitures for nonpayment, the preparation of certifi¬ cates of the shares, the manner of recording their sale or transfer, and the manner of their representation at stockholders’ meetings. stockholders’ meetings Sec. 10. (a) Within six months after the issuance of the certificate of in¬ corporation of a China Trade Act corporation there shall be held a stock¬ holders’ meeting either at the principal office or a branch office of the corpora¬ tion. Such meeting shall be called by a majority of the directors named in the articles of incorporation and each stockholder shall be given at least ninety days’ notice of the meeting either in person or by mail. The holders of two-thirds of the voting shares, represented in person or by proxy, shall constitute a quorum at such meetings authorized to transact business. At this meeting or an adjourned meeting thereof a code of by-laws for the corpo¬ ration shall be adopted by a majority of the voting shares represented at the meeting. (b) The following questions shall be determined only by the stockholders at a stockholders’ meeting: (1) Adoption of the by-laws; (2) Amendments to the articles of incorporation or by-laws; (3) Authorization of the sale of the entire business of the corporation or of an independent branch of such business; (4) Authorization of the voluntary dissolution of the corporation; and 100020°—26-51 786 COMMERCIAL HANDBOOK OF CHINA (5) Authorization of application for the extension of the period of duration of the corporation. (c) The adoption of any such amendment or authorization shall require the approval of at least two-thirds of the voting shares. No amendment to the articles of incorporation or authorization for dissolution or extension shall take effect until (1) the corporation tiles a certificate with the Secretary stating the action taken, in such manner and form as shall be by regulations pre¬ scribed, and '(2) such amendment or authorization is found and certified by the Secretary to conform to the requirements of this Act. (d) A certified copy of the by-laws and amendments thereof and of the minutes of all stockholders’ meetings of the corporation shall be filed with the registrar. DIRECTORS Sec. 11. The directors designated in the articles of incorporation shall, until their successors take office, direct the exercise of all powers of a China Trade Act corporation except such as are conferred upon the stockholders by law or by the articles of incorporation or by-laws of the corporation. Thereafter the directors elected in accordance with the by-laws of the corporation shall direct the exercise of all powers of the corporation except such as are so conferred upon the stockholders. Iu the exercise of such powers the directors may ap¬ point and remove and fix the compensation of such officers and employees of the corporation as they deem advisable. REPORTS AND INSPECTION OF RECORDS Sec. 12. (a) For the purpose of this Act the fiscal year of a China Trade Act corporation shall correspond to the calendar year. The corporation shall make and file with the registrar, in such manner and form and at such time as shall be by regulation prescribed, a report of its business for each such fiscal year and of its financial condition at the close of the year. The corporation shall furnish a true copy of the report to each of its stockholders. (b) The registrar shall file with the Secretary copies of all reports, certifi¬ cates, and certified copies received or issued by the registrar under the pro¬ visions of this Act. The Secretary shall file with the registrar copies of all applications for a certificate of incorporation, and certificates received or issued by the Secretary under the provisions of this Act. All such papers shall be kept on record in the offices of the registrar and the Secretary, and shall be available for public inspection under such regulations as may be prescribed. DIVIDENDS Sec. 13. Dividends declared by a China Trade Act corporation shall be de¬ rived wholly from the surplus profits of its business. revocation of certificate of incorporation Sec. 14. The registrar may, in order to ascertain if the affairs of a China Trade Act corporation are conducted contrary to any provision of this Act, or any other law, or any treaty of the United States, or the articles of in¬ corporation or by-laws of the corporation, investigate the affairs of the cor¬ poration. The registrar, whenever he is satisfied that the affairs of any China Trade Act corporation are or have been so conducted, may institute in the United States Court for China proceedings for the revocation of the certificate of incorporation of the corporation. The court may revoke such certificate if it finds the affairs of such corporation have been so conducted. Pending final decision in the revocation proceedings the court may, at any time, upon application of the registrar or upon its own motion, make such orders in respect to the conduct of the affairs of the corporation as it deems advisable. Sec. 15. (a) For the efficient administration of the functions vested in the registrar by this Act, he may require, by subpoena issued by him or under his direction, (1) the attendance of any witness and the production of any book, paper, document, or other evidence from any place in China at any designated place of hearing in China, or, if the witness is actually resident or temporarily sojourning outside of China, at any designated place of hear- APPENDIX 787 ing within fifty miles of the actual residence or place of sojourn of such witness, and (2) the taking of a deposition before any designated person having power to administer oaths. In the case of a deposition the testimony shall be reduced to writing by the person taking the deposition or under his direction, and shall then be subscribed by the deponent. The registrar, or any officer, employee, or agent of the United States authorized in writing by him, may administer oaths and examine any witness. Any witness sum¬ moned or whose deposition is taken under this section, shall be paid the same fees and mileage as are paid witnesses in the courts of the United States. (b) In the case of failure to comply with any subpoena or in the case of the contumacy of any witness before the registrar, or any individual so authorized by him, the registrar or such individual may invoke the aid of any Federal district court. Such court may thereupon order the witness to comply with the requirements of such subpoena and to give evidence touching the matter in question. Any failure to obey such order may be punished by such court as a contempt thereof. (c) No person shall be excused from so attending and testifying or deposing, nor from so producing any book, paper, document, or other evidence on the ground that the testimony or evidence, documentary or otherwise, required of him may tend to incriminate him or subject him to a penalty or forfeiture; but no natural person shall be prosecuted or subjected to any penalty or forfeiture for or on account of any transaction, matter or thing as to which, in obedience to a subpoena and under oath, he may so testify, except that no person shall be exempt from prosecution and punishment for perjury committed in so testifying. (d) For the efficient administration of the functions vested in the registrar by this Act, he, or any officer, employee, or agent of the United States au¬ thorized in writing by him, shall at all reasonable times for the purpose of examination have access to and the right to copy any book, account, record, paper, or correspondence relating to the business or affairs of a China Trade Act corporation. Any person who upon demand refuses the registrar or any duly authorized officer, employee, or agent such access or opportunity to copy, or hinders, obstructs, or resists him in the exercise of such right, shall be liable to a penalty of not more than $5,000 for each such offense. Such penalty shall be recoverable in a civil suit brought in the name of the United States. Sec. 16. In case of the voluntary dissolution of a China Trade Act corpora¬ tion or revocation of its certificate of incorporation, the directors of the corporation shall be trustees for the creditors and stockholders of the cor¬ poration ; except that upon application to the United States Court for China by any interested party, or upon the motion of any court of competent juris¬ diction in any proceeding pending before it, the court may in its discretion appoint as the trustees such persons, other than the directors, as it may deter¬ mine. The trustees are invested with the powers, and shall do all acts, neces¬ sary to wind up the affairs of the corporation and divide among the stock¬ holders according to their respective interests the property of the corporation remaining after all obligations against it have been settled. For the pur¬ poses of this section the trustees may sue and be sued in the name of the corporation and shall be jointly and severally liable to the stockholders and creditors of the corporation to the extent of the property coming into their hands as trustees. REGULATIONS SeU 17. (a) The Secretary is authorized to make such regulations as may be necessary to carry into effect the functions vested in him or in the registrar by this Act. (b) That the Secretary is authorized to prescribe and fix the amount of such fees (other than the incorporation fee) to be paid him or the registrar for services rendered by the Secretary or the registrar to any person in the administration of the provisions of this Act. All fees and penalties paid under this Act shall be covered into the Treasury of the United States as miscella¬ neous receipts. PENALTIES Sec. 18. No stockholder, director, officer, employee, or agent of a China Trade Act corporation shall make, issue, or publish any statement, written or oral, or advertisement in any form, as to the value or as to the facts 788 COMMERCIAL HANDBOOK OF CHINA affecting the value of stocks, bonds, or other evidences of debt, or as to the financial condition or transactions, or facts affecting such condition or trans¬ actions, of such corporation if it has issued or is to issue stocks, bonds, or other evidences of debt, whenever he knows or has reason to believe that any material representation in such statement or advertisement is false. No stockholder, director, officer, employee, or agent of a China Trade Act cor¬ poration shall, if all the authorized capital stock thereof has not been paid in, make, issue, or publish any written statements or advertisement, in any form, stating the amount of the authorized capital stock without also stating as the amount actually paid in, a sum not greater than the amount paid in. Any person violating any provisions of this section shall, upon conviction thereof, be fined not more than $5,000 or imprisoned not more than ten years, or both. Sec. 19. No individual, partnership, or association, or corporation not incor¬ porated under this Act or under a law of the United States, shall engage in business within China under a name in connection with which the legend “ Federal Inc. U. S. A.” is used. Any person violating this section shall upon conviction thereof be fined not more than $1,000 for each violation. JURISDICTION OF SUITS AGAINST CORPORATION Sec. 20. (a) That the Federal district courts shall have exclusive original jurisdiction of all suits (except as provided by the Act entitled “An Act creat¬ ing a United States Court for China and prescribing the jurisdiction thereof,” approved June 30, 1906, as amended) to which a China Trade Act corporation, or a stockholder, director, or officer thereof in his capacity as such, is a party. Suit against the corporation may be brought in the United States Court for China, or in the Supreme Court of the District of Columbia, or in the Federal district court for any district in which the corporation has an agent and is engaged in doing business. (b) Every China Trade Act corporation shall maintain in the District of Columbia a person as its accredited agent upon whom legal process may be served, in any suit to be brought in the Supreme Court of the District of Columbia, and who is authorized to enter an appearance in its behalf. In the event of the death or inability to serve, or the resignation or removal, of such person, such corporation shall, within such time as the Secretary by regulation prescribes, appoint a successor. Such corporation shall file with the Secretary a certified copy of each power of attorney appointing a person under this subdivision, and a certified copy of the written consent of each person so appointed. Federal taxation Sec. 21. Title II of the Revenue Act of 1921 is amended by adding at the end thereof a new section to read as follows: “ China trade act corporations “Sec. 264. (a) That for the purpose only of the tax imposed by section 230 there shall he allowed, in the case of a corporation organized under the China Trade Act, 1922, a credit of an amount equal to the proportion of the net income derived from sources within China (determined in a similar manner to that provided in section 21 7) which the par value of the shares of stock of the corporation owned on the last day of the taxable year by individual citizens of the United States or China, resident in China, bears to the par value of the ivliole number of shares of stock of the corporation outstanding on such date: Provided, That in no case shall the amount by which the tax imposed by section 230 is diminished by reason of such credit exceed the amount of the special dividend certified under subdivision (b) of this section. “(b) Such credit shall not be allowed unless the Secretary of Commerce has certified to the commissioner ( 1) the amount which, during the year ending on the date of filing the return, the corporation has distributed as a special dividend to or for the benefit of such individuals as on the last day of the taxable year were citizens of the United States or China, resident in China, and owned shares of stock of the corporation, (2) that such special dividend was in addition to all other amounts, payable or to be payable to such individr APPENDIX 789 uals or for their benefit, by reason of their interest in the corporation, and ( 3 ) that such distribution has been made to or for the benefit of such individ¬ uals in proportion to the par value of the shares of stock of the corporation owned by each; except that if the corporation has more thorn one class of stock, the certificate shall contain a statement that the articles of incorpora¬ tion provide a method for the apportionment of such special dividend among such individuals, and that the amount certified has been distributed in accord¬ ance with the method so provided. “ (c) For the purposes of this section shares of stock of a corporation shall be considered to be owned by the person in whom the equitable right to the income from such shares is in good faith vested. “ (d) As used in this section the term ‘ China ’ shall have the same meaning as when used in the China Trade Act, 1922” Sec. 22. Subdivision (b) of section 230 of the Revenue Act of 1921 is amended to read as folloivs: “ (b) For each calendar year thereafter, 12y 2 per centum of the amount of the net income in excess of the credits provided in sections 236 and 261/.” Sec. 23. Subdivision (f) of section 238 of the Revenue Act of 1921 is amended by adding after the figures “262” the word and figures “or 265.” Sec. 21f. Subdivision (c) of section 2\0 of the Revenue Act of 1921 is amended by adding at the end thereof a new sentence to read as follows: “A corpora¬ tion organized under the China Trade Act, 1922, shall not be deemed to be affiliated with any other corporation within the meaning of this section.” Sec. 25. That section 2 of the Revenue Act of 1921 is amended by adding at the end thereof a new paragraph to read as folloivs: “(12) A corporation organized under the China Trade Act, 1922, shall, for the purposes of this Act, be considered a domestic corporation.” Sec. 26. Subdivision (b) of section 213 of the Revenue Act of 1921 is amended by striking out the period at the end of paragraph (12) thereof and inserting in lieu thereof a semicolon, and by adding after paragraph (12) a new para¬ graph to read as folloivs: “ (13) In the case of an individual, amounts distributed as dividends to or for his benefit by a corporation organized under the China Trade Act, 1922, if, at the time of such distribution, he is a citizen of China resident therein and the equitable right to the income of the shares of stock of the corporation is in good faith vested in him.” Sec. 21. Subdivision (a) of section 216, paragraph (6) of subdivision (a) of section 235, and paragraph (3) of subdivision (a) of section 255, of the Revenue Act of 1921, are amended by inserting in each after the word and figures “ sec¬ tion 262” a comma and the words “ and other than a corporation organized under the China Trade Act, 1922.” The Revenue Act of 1921 was amended by sections 21 to 27, inclusive, of the China Trade Act, 1922, and the amended sections were carried into the Revenue Act of 1924. Section 264 of the Revenue Act of 1921 was changed to 263 of the Revenue Act of 1924. Section 11 of the Act of February 26, 1925, amended section 263 of the Revenue Act of 1924 to read asi follows: “ Sec. 263. (a) That for the purpose only of the tax imposed by section 230 there shall be allowed in the case of a corporation organized under the China Trade Act, 1922, a credit of an amount equal to the proportion of the net income derived from sources within China (determined in a similar man¬ ner to that provided in section 217) which the par value of the shares of stock of the corporation owned on the last day of the taxable year by (1) persons resident in China, the United States, or possessions of the United States, and (2) individual citizens of the United States or China wherever resident, bears to the par value of the whole number of shares of stock of the corporation outstanding on such date: Provided, That in no case shall the amount by which the tax imposed by section 230 is diminished by reason of such credit exceed the amount of the special dividend certified under subdivision (b) of this section. “(b) Such credit shall not be allowed unless the Secretary of Commerce has certified to the commissioner (1) the amount which, during the year end¬ ing on the date fixed by law for filing the return, the corporation has distrib¬ uted as a special dividend to or for the benefit of such persons as on the last day of the taxable year were resident in China, the United States, or possessions of the United States, or were individual citizens of the United States or China, and owned shares of stock of the corporation, (2) that such special dividend was, in addition to all other amounts, payable or to be payable to such persons 790 COMMERCIAL HANDBOOK OF CHINA or for their benefit, by reason of tlieir interest in the corporation, and (3) that such distribution has been made to or for the benefit of such persons in pro¬ portion to the par value of the shares of stock of the corporation owned by . each; except that if the corporation has more than one class of stock, the cer¬ tificates shall contain a statement that the articles of incorporation provide a method for the apportionment of such special dividend among such persons, and that the amount certified has been distributed in accordance with the method so provided.” Paragraph (13) of subdivision (b) of section 213 of the Revenue Act of i924 was amended by section 12 of the Act of February 2G, 1925, to read as follows: “ (13) In the case of a person, amounts distributed as dividends to or for his benefit by a corporation organized under the China Trade Act, 1922, if, at the time of such distribution, he is a resident of China and the equitable right to the income of the shares of stock of the corporation is in good faith vested in him.” RESERVATION OF RIGHT TO AMEND Sec. 28. The Congress of the United States reserves the right to alter, amend, or repeal any provision of this Act. Sec. 29. Hereafter no corporation for the purpose of engaging in business within China shall be created under any law of the United States other than the China Trade Act. Approved September 19, 1922; amended by Act approved February 26, 1925. REGULATIONS, CHINA TRADE ACT, 1922 The following regulations, effective immediately, are in accordance with the following sections of Ihe above law, approved September 19, 11)22, as amended. Section 3 . — Appeal from decision of registrar 1. Appeal from any decision of the registrar may be made direct to the Secretary, but only after due notice of the appeal has been filed with the registrar by the person appealing. No action shall be taken by the registrar pending the Secretary’s decision. 2. A transcript of the record in each particular case of any controverted question, together with a copy of the registrar’s decision, must accompany the appeal, with a certificate signed by the registrar that such transcript and deci¬ sion are correct copies. 3. In case of any dispute on the above, resulting in the failure of the registrar to sign such certificate, he shall submit his reasons in full with documents supporting to the Secretary. The person making the appeal may do likewise, provided his statement is submitted under oath. 4. The decision of the Secretary will be communicated in writing independ¬ ently to both the registrar and the person appealing as soon as practicable. Section 4(b).— Application for certificate of incorporation 5. The application for certificate of incorporation of a* China trade company shall contain the following information and be signed and sworn to, before a notarial officer of the United States or any State, by a majority of the in¬ corporators. All such applications originating in China shall first be sub¬ mitted to the registrar, who shall forward the same, together with his recom¬ mendation thereon, to the Secretary; upon presentation to the Secretary of an application originating in the United States the registrar will be advised and his recommendation obtained before action is taken. Copies of the certificate when issued are to be filed with the American Legation, Peking, and with the consular officers for the districts in which its main and branch offices or agencies in China are situated. (1) Date of application. (2) Place of application. (3) Name and address of resident incorporator. (4) Whether application for original or extended certificate. (5) Names and addresses of incorporators. (6) Reason, if any, for failure of any incorporators to sign. APPENDIX 791 (7) Nationality of each incorporator by name. (8) In case of naturalized citizens a certificate of naturalization must ac¬ company the application for each incorporator so naturalized. (9) Statement as to manner and extent proposed corporation will aid in the development of markets in China for goods produced in the United States. (10) Names and nationalities of stockholders with number of shares sub¬ scribed for by each. (11) Minutes of meeting adopting articles of incorporation. (12) Certificate by secretary of meeting regarding adoption of articles of incorporation, with certified copy of articles of incorporation signed and acknowledged by incorporators. (13) Signatures of incorporators. Section 17(b). —Registration fees i 6. The registration fees for China companies shall be as follows and shall accompany each application, except that for property value, which will be payable before certificate is issued: Certificate of registration (as provided in sec. 5)_ Certificate of property value (as provided in sec. 8) (Fee based on value of property and investigation necessary in each case.) Certificate of amendment of articles of incorporation or authority for dissolution (as provided in sec. 10)_:--- 100 7. The fees shall be payable in United States gold either in Shanghai, China, or in Washington, D. C., and shall be collected by the registrar or Secretary and turned over to any designated disbursing officer of the United States Treasury Department and handled by him in accordance with section 17 of the act. Section 8. — Certificate of property value 8. The certificate of property value shall contain the following information signed and properly sworn to before a notarial officer of the United States or any State : (1) Date of certificate. (2) Names of owner of property. (3) Exact description and location of property, with list or schedule. (4) Cost of property at date of purchase. (5) Present liens or mortgages on property. (6) Statement of present value, supported by statements of two other per¬ sons verifying same with reasons for knowledge of value. (7) Signatures of three persons under oath. Section 10(c). —Certificate of amendment of articles of incorporation or author¬ ization for dissolution or extension 9. The certificate of amendment of articles of incorporation or authorization for dissolution or extension shall contain the following information, signed by a majority of the directors and properly sworn to before a notarial oflicer of the United States or any State by the secretary of the meeting: (1) Date of certificate. (2) Date of meeting authorizing action. (3) Total number of stockholders. (4) Total number empowered to vote. (5) Number of stockholders attending meeting. (6) Number of stockholders voting for action. (7) Signature of above majority of directors and secretary of the meeting. Section 12 (a).— Annual report 10. The annual report of companies operating under this act shall be for the year ending December 31 and shall consist of the following, subscribed to under oath by the secretary of the corporation: (1) The minutes of the stockholders’ meeting approving the balance sheet for such fiscal year. (2) A certified copy of the balance sheet (as per specified form). (3) A detailed statement of profit and loss (as per specified form). (4) A statement of the distribution of profits. (5) Changes in list of stockholders during the year. _$100 f maximum_P»0O (.minimum_ 25 792 COMMERCIAL HANDBOOK OF CHINA Section 12 (b). — Inspection of records 11. Application for inspection of reports, certificates, certified copies of ap¬ plications, etc., may be made to the Secretary or registrar, and upon approval the applicant may inspect the papers specified. Such applications shall con¬ tain the following: (1) Name of company or companies registered. (2) List of titles of papers desired for inspection. (3) Reason for desiring to inspect same. (4) Certificate under oath that information will be held strictly confidential and not for publication or dissemination. (5) Signature of applicant and name of company (if any) which he repre¬ sents. Herbert Hoover, Secretary of Commerce. October 20, 1922. CHINESE WEIGHTS AND MEASURES Early in their treaty relations with China, the foreign powers found it necessary to make definite stipulations regarding the equi¬ valents of China’s weights and measures as they affected foreign trade. It was found that while the units in the various Chinese communities were similar, the measures themselves varied greatly. The traveler in China finds a Chinese “ li ” or mile differing in differ¬ ent sections. The Chinese catty and picul, measures of weight, vary in different sections of the country. Foreigners find it very neces¬ sary in purchasing Chinese commodities from the Chinese, or in selling foreign products to the Chinese, to be certain that the weights and measures are definitely understood. In currency units it is par¬ ticularly necessary that there be no misunderstanding, as every com¬ munity has its own scales for weighing silver, which differ from those of other communities. The section in this handbook on Chinese currency explains in detail the currency standards in use in the country. The regulations drafted in accord with the British treaty of 1842 with China stipulated regarding weights and measures that “ sets of balance yards for the weighing of goods, of money weights, and of measures, prepared in exact conformity to those hitherto in use at the customhouse of Canton, and duly stamped and sealed, in proof thereof, will be kept in possession of the superintendent of customs and also at the British consulate at each of the five ports (opened to trade by the treaty of 1842), and these shall be charged and all sums paid to the Government.” The British treaty of 1858 stipulated the following equivalents of weights and measures for customs purposes: 1 picul of 100 catties=133% pounds avoirdupois. 1 chang of 10 Chinese feet=141 English inches. 1 chuh or Chinese foot=14.1 English inches. The Chinese Government enacted a law in 1914 establishing a system of weights and measures and prescribed provisions for in¬ spections and penalties. This law has not as yet been made effective. It prescribes the following units: Length. —1 ch’ih=32 meters=1.049867 feet. Area. —1 mow or 6.000 square ch’ih=0.06144 hectare=0.15182 acre. Capacity. —1 sheng=10.354688 liters=10.9416 liquid quarts. Weight. — 1 liang=37.301 grams=l,31561 ounces avoirdupois, APPENDIX 793 Other measures in local use are: 10 li (lee)—1 fen (candereen). 10 fen—1 ch’ien. 10 ch’ien=l liang (tael or ounce). 16 liang=l chin (catty). 100 chin (gin)=l tan (picul). However, for purposes of foreign trade, the weights in common use are as follows: 1 liang=583.3 grains—1% ounces avoirdupois=37.7839 grains. 16 liang—1 chin (gin) or catty. 1 chin or catty=1% pounds or 604.53 grams. 100 chin or catties=l tan or picul. 1 tan or picul=133% pounds or 60.453 kilograms. The measures of capacity in common use in China are: 10 ko=l sheng. 10 sheng=l tou. 10 tou=l shih. These measures also differ greatly in different parts of the country. The tou of the imperial granaries contained 5.1341 liters, while the common market tou contains 7.4059 liters. Measures of capacity are generally used only for rice and grains, which are also often sold by weight. Fluids are often weighed like any other merchandise. The American gallon has become an important measure, especially for petroleum. It contains 231 cubic inches. The British imperial gal¬ lon contains 277.462879 inches. An American weight gallon=6.5 pounds. The unit, however, for kerosene is 10 gallons=65 pounds. The units of length in common use are: 10 fen=l t’sun or inch. 10 t’sun=1 ch'ili or foot. 10 ch’ih=l chang. 180 chang—1 li (lee). For purposes of foreign computations for customs use, 1 ch’ih= 14.1 inches, or 0.358 meters. Thus theoretically 1 Chinese li (lee) is equivalent to two-fifths of an English statute mile. Among foreigners in China a “ li ” is generally considered as one-third of a mile, but as the “ li ” differs among different Chinese communities, it is not possible to give its exact equivalent. It must also be borne in mind that each trade in China has its own ch’ih or foot measure, varying from the equivalent of 8.6 inches to 27.8 inches. The units of area in common use are: 25 square cli'ili=l pu or kung. 240 pu=1 mow. 100 mow=l ch’ing. 10 ssii=l hao. 10 hao=l lee. 10 lee^l fen. 10 fen=l mow 100 mow=l cli’ing. Among foreigners the mow has come to be regarded as equivalent to one-sixth of an English acre of 43,560 square feet, but it varies greatly throughout China from one-twelfth to two-fifths of an acre. For ready conversion, the following equivalents are commonly recognized: COMMERCIAL HANDBOOK OF CHINA 794 WEIGHTS 1 short ton=15 piculs. 1 long ton=16 piculs=80 catties. 1 central or liundredweiglit=75 catties. 1 pound avoirdupois=% catty or 12 taels. 4 ounces =3 taels. 1 picul=1.19047 hundredweight. 1 tael=l% ounces=37.783 grams. 1 catty=l% pounds=604.53 grams. LINEAR AND SURFACE MEASURES 1 elvili=14.1 inches. 1 ehang=141 inches or 11.75 feet. 1 li = % of a mile. 1 mow=Ve of an acre, or 7,2G0 square feet. For currency equivalents, see chapter on u Currency, exchange, and banking.’’ INDEX Page Advertising, Amoy district. 564 Antung district. 578 Canton consular district. 427 Changsha district.. 597 Chefoo district... 617 Chungking district. 637 Dairen district-. 652 Foochow district. 666 foreign goods.... 191 Hankow district.. 449 Harbin district. 681 Hongkong.. 465 importance of. 136 Kalgan district.... 704 methods and mediums.. 194 Nanking district.. 721 results in cigarette market... 75 Shanghai district.. 513 Swatow district.. 731 Tientsin district.. 545 Tsinan district. 748 Tsingtao district.. 768 Yunnan district.. 780 Aerated-water factories, Shanghai_ 497 Agreement used in employing comprador_ 388 Agricultural experiment station, Litsun_ 751 Agricultural machinery import trade.. 101 Agriculture, Amoy district. 554 Anhwei Province. 3 Antung district—. 567 Canton district. 408 Changsha district.. 582 Chefoo district.. 601 Chekiang Province. 4 Chihli Province.. 4 Chungking district.. 621 Dairen district..^_ 640 Foochow district.. 656 Fukien Province.. 5 Hankow consular district. 434 Harbin district... 670 Honan Province... 5 Hunan Province.... 6 Hupeh Province. 6 Kalgan district. 689 Kansu Province. 7 Kiangsi Province.. 7 Kiangsu Province. 8 Kiaochow territory. 751 Kwangsi Province.. 8 Kwangtung Province. 9 Kweichow Province. 10 Manchuria. 13 Mongolia. 14 Mukden district.. 469 Nanking district.. 707 Shanghai district.,,,,,,........ 493 Page Agriculture, Shansi Province... 10 Shantung Province. 10 Shensi Province.. 11 Sinkiang. 14 Status of industry. 275 Swatow district.. 724 Szechwan Province.. 12 Tibet. 15 Tientsin district. 524 Tsinan district.. 735 Yunnan Province..12,773 Alaskan Code.. 142,143 Alum, export trade.... 210 American Association of South China_ 429 American citizens, protection in China. 354 American community organizations, Shang- hai.._ 515 American firms in China, number and dis¬ tribution.. 351 regulations for incorporating. 139 American interests, Amoy district. 565 Anhwei Province. 4 Chekiang Province.. 4 Chihli Province.. 5 Fukien Province.. 5 Honan Province.... 6 Hunan Province. 6 Hupeh Province.. 7 Kansu Province. 7 Kiangsi Province. 8 Kiangsu Province... 8 Kwangtung Province. 9 Kweichow Province.. 10 Mongolia.. 14 Shansi Province.. 10 Shantung Province. 11 Shensi Province. 11 Sinkiang... 15 Szechwan Province. 12 Tibet.. 15 Yunnan Province.. 13 American population in China. 350 Ammunition, import trade. 124 Amoy. See Amoy district. Amoy district, advertising. 564 agriculture.. 554 American interests. 565 banks. 563 cable and telegraph service. 556 chambers of commerce.... 564 cities.... 552 climate. 552 credits. 563 currency. __ 563 electric-light plants. 558 fisheries. 554 foreign concessions. 553 795 796 INDEX Page Amoy district, guilds. 564 harbor facilities...„ 557 labor conditions. 555 living costs..__ 565 location and area. 552 manufacturing.. 555 minerals.. 555 merchandising methods. 563 motor-bus service. 556 population. 552 port charges. 558 postal facilities. 556 railways. 556 roads. 656 schools.... 553 shipping facilities. 557 telephone service. 556 trade.... 559 changes in recent years. 565 warehousing facilities. 557 waterways. 556 waterworks. 559 See also Fukien Province. Amur River. 672 Amusements. 394 See also Recreations. Ancestors, respect for. 392 Anhwei Province, agriculture. 3 American interests. 4 cities. 4 communications.... 3 industries.. 3 language and characteristics of people... 4 minerals. 3 population.. 3 railways. 3 rivers. 3 topography. 3 treaty ports. 4 See also Nanking district. Antimony, Canton district. 412 export trade.... 211 Hunan Province... 582 See also Minerals. Antung. See Antung district. Antung district, advertising. 578 agriculture. 567 banks. 577 chambers of commerce. 579 cities. 566 climate. 566 conservancy and reclamation works_ 574 credits. 577 currency. 577 electric-light plants. 573 forestry. 568 fur industry. 569 guilds. 579 hotels. 578 labor conditions. 570 living costs.. 579 location and area. 566 lumbering.... 568 manufacturing. 569 mines. 568 motor-bus service. 572 Page Autung district, population.... 566 postal service. 573 property values. 579 railways. 572 recreations. 580 rents. 679 roads. 572 schools.. 680 sericulture. 568 shipping. 571 • telegraph service. 672 trade..... 574 recent changes..•... 680 tramways....... 674 travel facilities... 678 waterways. 571 waterworks.. 673 See also Manchuria; Shengking. Antzu Mines. 626 Area.. 1 Amoy district......................._ 552 Changsha district.............. 581 Chefoo district.......—. 599 Chekiang Province.. 3,4 Chihli Province. 3,4 Chungking district. 620 Dairen district. 640 Foochow district. 655 Fukien Province. 3,5 Harbin district. 669 Honan Province. 3, 5 Hunan Province... 3, 6 Hupeh Province. 3,6 Kalgan district. 686 Kansu Province. 7 Kiangsi Province. 3,7 Kiangsu Province. 3,8 Nanking district. 706 Swatow district. 724 Tientsin district. 522 Tsinan district. 733 Tsingtao district. 750 Yunnan Province. 3,12,772 Argun River. 673 Arsenal, Chengtu. 625 Arsenic, export trade. 211 Hunan Province. 584 Asbestos, Antung district. 569 export trade. 211 Manchuria. 473 See also Minerals. Automobiles, Shanghai. 508 body manufacture, Kalgan. 695 See also Motor vehicles. Automotive equipment, import trade. 109 Bamboo, utility of.. 252 Bank comprador. 386 Banking. 172 Banks, Amoy. 563 Antung district..I. 577 Canton district. 426 Changsha district.. 596 Chefoo district. 616 Chungking district. 636 Chinese.173,178 INDEX 797 Page Banks, Dairen district..... 650 financing business through.. 179 Foochow district_ 665 foreign.. 172 Hankow district_ 449 Harbin district. 678 Hongkong__ 462 Kalgan district.__ 703 Mukden district.. 488 Nanking district_ 720 Shanghai._ 508 Swatow district__ 730 Tientsin district_ 543 Tsinan district__ 747 Tsingtao district. 765 Yunnan district_ 780 .Barley, Hankow district_ 434 Bean industry.. 229 C hefoo district___*_ 606 Dairen district_ 641 Harbin district_ 671 Mukden district_ 473 Nanking district_ 707 Bean products, exports_ 229 Beans, exports_ 229 production in Manchuria.. 230 production in Tsinan district__ 736 yield, Hankow district.. 434 Yunnan district__ 773 Bills of exchange, handling of_ 207 Bismuth, Canton district.. 413 Hunan Province. 584 Bobbin-lace industry, Chefoo district_ 604 Books, import trade. 125 Bran, export trade. 250 Brand names, importance in China.. 192 Breweries, Shanghai district. 497 Brick kilns, Canton district.. 411 Shanghai district. 496 Bristles_ 218 Building materials, import trade... 125 Bus lines, Shanghai_ 508 See also Motor-bus service. Business houses, opening of in China_ 130 Cable service, Amoy district.. 556 C hefoo district.. 608 Dairen district_ 643 Foochow district. 660 Harbin district_ 674 Hongkong.... 455 Mukden district... 479 Nanking district_ 715 Shanghai district_ 501 Swatow district_ 726 Tientsin district.. 533 Tsingtao district... 757 Yunnan district_ 776 Calendars in advertising_ 200 Camels, Kalgan district_ 690 Camel’s hair, exports... 228 Camphor industry and export trade.. 230 Canning factories, Amoy district.. 555 Canton, city of ( see Canton district).. 407 Canton district, advertising. 427 agriculture. 408 Page Canton district, banks. 426 brickkilns. 411 Canton Club.. 430 cement plant__ 411 cities. 407 climate... 407 communication..._ 414 conservancy and reclamation works. 420 copper mills_ 410 currency_ 426 electric-light plants.. 420 harbor facilities_ 419 ice-making plants.... 411 living costs.. 430 location and area. 407 manufacturing. 409 marine engine manufacture.. 411 match manufacture. 410 minerals and mining.. 412 population.. 407 postal service__ 418 property values and rents.. 429 public works and utilities_ 420 radio service__ 418 railways. 416 roads.__ 417 rubber-sole manufacture...:.... 410 schools__ 430 shipping facilities_ 418 tanneries._ 410 taxes___ 429 telegraphs. 417 telephones.___ 418 trade.. 421 trade conditions, changes in recent years. 430 trade organizations__ 428 tramways.. 420 transportation_ 414 travel facilities._ 427 warehouse facilities_ 419 water supply. 420 waterways_ 414 See also Kwangtung Province; Kwangsi Province. Canton-Hankow Railway_ 416,440, 589 Canton-Kowloon Railway__ 416,454 Capitals of Provinces___.... 3 Caravan route, Mongolia__ 607 Carpet and rug industry_ 253 Tientsin district.!. 528 Cassia.. 252 Cattle... 219 Kalgan district_ 690 Tsinan district___ 737 See also Livestock. Cement manufacture, Canton district.. 411 Shanghai district. 496 Tientsin district... 528 Ceramic industry. 253 Chahar. See Kalgan district. Chambers of commerce, Amoy... 564 Antung district... 579 Canton consular district. 428 Chefoo.. 617 Chinese. 376 Chungking district. 637 798 INDEX Page Chambers of commerce, Dairen district. 652 Foochow district..._. 666 foreign. 378 Hankow district.. 450 Harbin.. 682 Hongkong.... 466 Kalgan district. 704 Mukden district.. 490 national organizations... 381 Shanghai.... 514 Tientsin district... 546 Tsinan.. 748 Tsingtao_ 768 Changchow, electric-light plant. 559 Changchun-Kirin Railway, mileage and freight rates. 477 Changes accompanying establishing of Re¬ public.. 276 Changsha, city of. See Changsha district. Changsha district, advertising.... 597 agriculture_. 582 banks__ 596 cities... 581 climate. 581 credits.. 597 currency.. 596 electric-light plants_ 590 foreign concessions . . 581 guilds. 597 harbor facilities.. .._■_ 591 hotels... 597 labor conditions. ... 588 living costs.. . 598 location and area . 581 manufacturing_ 587 minerals. 582 population. .. 581 postal facilities. .. 590 property values.. 598 railways.J . .. 589 rents.. 597 roads_ 589 schools... 598 shipping facilities_ 591 telegraph service.. 590 telephone service. 590 trade. 591 trade conditions, changes in recent years. 598 transportation. 589 travel facilities.. 597 warehousing facilities.. 591 waterways.. 589 waterworks.. 591 See also Hunan Province; Kweichow Province. Chaotung.... 773 Chefoo, city of. See Chefoo district. Chefoo district, advertising.. 617 agriculture. 601 banks.. - 616 bean products. 606 chambers of commerce.. 617 bobbin-lace industry. 604 cable service... 608 cities.. 600 climate__- 599 Page Chefoo district, credits.... 616 crops and yields... 601 currency... *. .. 616 electric-light plants. 610 fishing..... 607 grape culture_ 602,606 guilds... 618 hair-net industry_ 603 harbor facilities.. . 609 hotels.... 618 labor conditions.. 607 livestock.._ 602 location and area__ 599 manufacturing_ 603 merchandising methods_ 617 minerals. 603 motor-bus service__ 608, 618 newspapers__ 617 peanuts and peanut oil_ 605 population__ 599 postal facilities_ _ _ 609 property values_... 618 rents___ 618 roads.. 607 ' shipping facilities_ 609 silk industry... 604 telephone service__ 609 topography_ 599 trade___ 611 transportation. .. 607 travel facilities_ 618 . wages. .. 607 warehousing facilities. _ _ 609 water supply. 610 wine industry... 606 wireless service. 608 See also Shantung Province. Chekiang Province, agriculture.. 4 American interests_ 4 area. 4 cities.. 4 industries__ 4 language and characteristics of natives.. 4 minerals.. 4 population-.. 4 railways. 4 topography.. 4 treaty ports-- 4 waterways-- 4 See also Shanghai district. Chemicals, import trade.. 57 utilization in Chinese industries... 58 Chengtu.. 621,637 Chihli Province, agriculture-- 4 American interests- 5 area... 4 cities. 5 climate. 4 coalmines.. 625 communications_ 5 electric-light plants.. 535 industries...-. 4 minerals. 4 population.. 4 railways. 5 topography. 4 INDEX 799 Page Chihli Province, treaty ports._ 5 waterways..,.. 5 See also Tientsin district. Chimingshan Colliery. 526 China grass.. 237 China trade act.... 142,145, 783 China Trade-Mark Bureau.. 346 Chinaware and porcelain_ 253 Chinaware, import trade_ 125 Chinese Eastern Railway__ 673, 684 Chinese students in America. 270 Chinese Turkestan, minerals_ 15 topography_ 14 See also Sinkiang. Ching Hsing Coal Mines_ 526 Chinkiang..._ 706 shipping ini 924_ 716 C hinwangtao.. 523 trade. 542 Chow dynasty. 18 Chowtsun. 735 Chowkiskow-Siangyangfu Railway_ 440 Chungking, city of. See Chungking district. C hungking district, advertising. 637 agriculture. 621 arsenal... 625 banks... 636 chambers of commerce.. 637 cities.... 620 climate.._ 620 conservancy works.__ 631 guilds. 637 harbor facilities. 629 hotels. 637 industrial methods_ 625 industries__ 623 irrigation works_ 631 labor conditions__ 625 livestock_ 622 living costs. 638 location and area.. 620 minerals. 622 mints... 625 newspapers..__ 637 postal facilities.. 629 railwayprojects. 627 rents. 638 roads. 627 shipping facilities__ 629 telegraph service_ 628 telephone service.i... 629 trade... 631 transportation. 626 travel facilities.... 637 wages.. 626 warehousing facilities. 630 waterways. 626 See also Szechwan Province; Tibet. Cigarette import trade. 71 Cigarette manufacture. 242 Shanghai district. 495 Tsingtao.... 753 See also Tobacco. Cities, Amoy district. 552 Anhwei Province. 4 Antung district. 566 Page Cities, Canton district... Changsha district..... Chefoo district... Chekiang Province..... Chihli Province.... Chungking district__ Foochow district..*_ Fukien Province.... Hankow consular district_ Harbin district... Honan Province__ Hunan Province..... Hupeh Province..... Kalgan district___ Kansu Province____ Kiangsi Province_ Kiangsu Province__ Kwangsi Province.... Kwangtung Province__ Kweichow Province.... Manchuria...... Mongolia.... Mukden district_ Nanking district___ Shanghai district__ Shansi Province__ Shantung Province_ Shensi Province___ Sinkiang____ Swatow district__ Szechwan Province__ Tibet______ Tientsin district_ Tientsin Province___ Tsinan district.... Tsingtao district_ Yunnan district___ Yunnan Province.___ Claims of American citizens in China, adjust¬ ment of... Climate, general___ Amoy district.... Antung district... Canton district___ Changsha district.... Chefoo district... Chihli Province...... Chungking district.... Dairen district..... Foochow district___ Fukien Province____ Hankow district... Harbin district....... nonan Province..... Kalgan district... Kansu Province... Kiangsi Province... Kwangsi Province. Kwangtung Province.. Manchuria.... Mongolia... Mukden district. Shanghai district... .Shansi Province... Swatow district... Szechwan Province. 407 581 600 4 5 620 655 5 433 669 6 6,581 7 688 7, 433 8 8 9 9 10, 581 14 14 468 706 492 10 11 11 15 724 12 15 522 522 734 750 772 12 366 2 552 * 566 407 581 599 4 620 640 655 5 432 669 5 687 7 7 8 9 13 14 468 492 10 724 11 800 INDEX Page Climate, Tientsin district. 522 Tsinan district. 733 Tsingtao district.. 750 Yunnan Province... 12,772 Clocks, import trade. 126 Clothing. See Wearing apparel. Clubs, Canton Club. 430 Hongkong_ 467 international club, Mukden..... 491 Shanghai.. 515 Coal, Antung district_ 569 export trade. 211 Fukien Province. 555 Hankow district. 436 Harbin district_ 670 Hunan Province___ 585 Kalgan district.... 691,694 Manchuria. 471 Mongolia. 692 Mukden district_ 470 Nanking district.. 710 resources and production..^ . 211 Shantung. 737 Swatow district__ 725 Szechwan Province... 623 Tientsin district._ 524 Yunnan district. 774 Commercial treaty of 1903_ 356 Communication, Amoy district... 556 Anhwei Province. 3 Antung district_ 571 Canton district. 414 Changsha district__ 589 Chefoo district__ 607 Chekiang Province. 4 Chihli Province. 5 Chungking district. 626 Dairen district. 642 effect of restricted facilities.. 274 Fukien Province_ 5 Harbin district. 672 Honan Province.... 6 Hunan Province. 6 Hupeh Province.. 7 Kalgan district_ 695 Kansu Province__ 7 Kiangsi Province__ 8 Kiangsu Province_ 8 Kwangsi Province... 9 Kwangtung Province.. 9 Kweichow Province__ 10 Manchuria.. 13 Mongolia.. 14 Nanking district__ 712 Swatow district. 726 Shansi Province..:. 10 Shantung Province. 11 Shensi Province. 11 Szechwan Province.... 12 Tibet. 15 Tientsin district. 529 Tsinan district... 741 Yunnan Province. 12 See also Cable service; Postal service; Telegraphs; Telephones; Transporta¬ tion; Wireless service. Page Comprador, position in Chinese trade. 188,384 Compradors, Kalgan district. 704 Conservancy works, Antung district. 574 Canton district. 420 Chungking district... 63 1 D airen district.. 648 Foochow district_ 661 Hankow district..'.. 445 Mukden district.. 482 Nanking district__ 718 Shanghai district.. 507 Tientsin district. 536 Consortiums, loans floated through.. 297 Consular courts in China. 358 Consular registration.. 149 Consuls,'American.. 357 provisions of treaty of 1844.... 353 relations to American claims.. 366 Coolie migration from Fukien Province. 555 Copper, Antung district... 569 Kalgan district. 693 Manchuria. 472 Mongolia. 693 production and trade_ 212 Yunnan district. 774 Copper mills, Canton district. 410 Copyrights, claims concerning infringe¬ ments. 369 protection in Hongkong.. 348 protection under commercial treaty. 346 provisions of commercial treaty of 1903.. 356 treaties regarding reciprocal protection... 347 Corn, Hankow district...... 435 Nanking district.. 708 See also Maize. Corporate enterprises in China.. 264 Cotton, Hankow district. 434,435 import trade. 80 Manchuria. 470 Nanking district. 708 production and export trade. 231 Tientsin district. 524 Tsinan district.. 735 Cotton goods import trade_ 76,80 Cotton manufacture.. 267 Chungking district. 624 Hunan Province--- 588 Mukden district_ 473 Shanghai district. 493 Tientsin district... 527,528 Tsingtao.--- 753 Courts, American, in China-- 357 extraterritorial. 368 Credit conditions. 185 Credits, Amoy district- 563 Antung district... 577 Changsha district- - 597 Chefoo district. . 616 Dairen district. . 651 Foochow district ... 665 Hankow district . 449 Harbin district- - 079 Kalgan district ... 703 Mukden district. . 489 Shanghai.-. 511 Swatow districts----------.731 INDEX 801 Page Credits, Tientsin district.. 543 Tsinan district. 748 Tsingtao district. 766 Crop production, Changsha district.... 582 C hefoo district.. 601 Kalgan district. 689 Mukden district.. 470 Currency, Amoy district_ 563 Antung district__ 577 C anton district_ 426 C hangsha district.. 596 Chef oo district_ 616 Chungking district_ 636 Dairen district. 651 Foochow district__ 665 Hankow district_ 449 Harbin district_ 678,683 Hongkong_ 464 Kalgan district__ 703 Mukden district_ 489 Nanking district__ 720 Shanghai district_ 510 Swatow district_ 730 Tientsin district_ 545 Tsinan district.. 747 Tsingtao district__ 765 varieties in use..__ 151 Yunnan district. 780 Customs. See Tariffs. Dairen. See Dairen district. Dairen district, advertising... 652 agriculture... 640 banks_ 650 bean-milling industry_ 641 cable service...--- 643 chamber of commerce_ 652 climate-- 640 conservancy works-- 648 credits___- 651 currency-- 651 electric-light plants... 647 fruit growing_ 641 harbor accommodations, port of Dairen.. 644 labor conditions.. r .. 642 living conditions_ 654 location and area_ 640 manufacturing_- 641 merchandising methods_ 651 minerals- 641 population..-- 640 property values-- 653 railways.-- 642 recreational facilities. 654 rents_ 653 roads.-- 643 shipping and shipping facilities. 644 taxes.-- 653. telephone service. 644 trade.. 648 trade conditions, changes in recent years.. 654 tramways. 647 transportation... 642 travel facilities-- 652 warehouse facilities____ 645 100020°—26-52 Page Dairen district, wireless service.. 643 Debt consolidation plans__ 288 Debts, public... 283 recovery of, provisions of treaty of 1844. _ 353 Disease, protection against. 400 Distances from Shanghai. 2 Distilleries, Harbin district... 671 Distribution methods in China__ 193 Donkeys as draft animals_ 223 Dress, customs of_ 395 Dyes and colors, import trade__ 60 Dyes, aniline, imports._ 64 Earthenware, import trade__ 125 Economic structure of China.. 272 Economic development, China and United States.. 268 Educational facilities. See Schools. Egg products, Shanghai district. 496 United States import duties__ 220 Eggs, export trade. 219 prices.. 220 Electric light and power plants, Amoy dis¬ trict. .. 558 Antung-- 573 Canton district—.--- 420 Changsha district__ 590 Chefoo district_•-&- 610 Chungking district... 630 Dairen district_ 647 Foochow district-- 661 Hankow consular district-- 443 Harbin district .^... 676 Hongkong..-- 459 Kalgan district-- 700 Manchuria.. 481 modern installations increasing... 106,267 Mukden district...... 481 Nanking district.. 717 Shanghai district....... 496,507 Swatow district-- 727 Tientsindistrict_ 535 Tsinan district- 744 Tsingtao district_ 761 Yunnan district..._ 777 Electric railways. See Tramways. Electrical equipment industry, Shanghai district.. 497 Electrical machinery and appliances, import trade.. 105 Electrical signs in advertising.. 200 Embroidery industry and exports. 254 Etiquette in China. 392 Exchange brokers, Shanghai. 511 Expenditures, Government. 292 Export products. 206 Extraterritoriality, provisions of commercial treaty of 1903. 357 provisions of treaty of 1844 . 354,358 “Face" in Chinese social system. 278,395 Feasts, social customs. 396 Feathers, export trade. 220 Feldspar, Manchuria.... 473 Fengtein Province. See Shengking Province. Fertilizers, Amoy district. 554 802 INDEX Page Fertilizers, Hankow district..- 436 Tsinan district_ 737 Finances, Government_ 280 Financing export trade from United States to Hongkong.-... 463 Financing import trade, Dairen district- 651 Firecrackers..-- 254 Fishing, Amoy district- 554 Chefoo district- 607 Shanghai district_ 493 Flour, export trade_ 248 import trade_ 63 Flour milling_ 249,267 Harbin district_ 671 Mukden._ 474 Shanghai district_ 495 Tientsin district. 527 Flour-milling machinery, import trade- 101 Flour strings, manufacture of.. 260 Fluorite, Manchuria_ 473 Foochow district, advertising_ 666 agriculture .. 656 banks_ 665 cable service. 660 chambers of commerce_ 666 cities.. 655 climate.. 655 conservancy work.. 661 credits-- 665 currency.. 665 fruit growing.. 656 hotels. .. 667 living costs_'.-- 667 lumber i ndustr y. 657 manufacturing. 658 merchandising methods_ 666 minerals_ 657 mines_ 658 population.. 655 postal facilities_ 660 property values and rents.. 667 roads__ 660 shipping facilities.- 660 telegraph service. 660 telephone service__ 660 trade... 662 trade conditions, recent changes_ 667 transportation....^- 659 travel facilities. 666 warehousing facilities.. 660 waterways... 659 wireless service.. 660 See also Fukien Province. Foodstuffs import trade_ 66 Foreign capital in China, problems confront¬ ing_ 300 Foreign concessions, Amoy- 553 Changsha district--- 581 Hankow... 433 Kalgan district..... 688 Tsingtao... 750 Tientsin..... 522,548 Foreign exchange, basis of transactions- 161 Dairen district.. 651 handling of.. 207 problem in Chinese trade... 189 Page Foreigners resident in China, provisions of treaty of 1844._ 354 Forestry, Antung district_ 568 Tsingtao district_ 751 Forests, Harbin district_ 670 Freight rates, railway, Canton-Kowloon Railway.. 455 Changchun-Kirin Railway__ 477 charges per ton kilometer.. 274 Chinese Government railways. 325 Peking-Mukden Railway_ 477 Shanghai district_ 499 South Manchuria Railway_ 476, 642 Tientsin district_ 531 Tientsin-Pukow Railway.. 742 river steamers, between Canton and Hongkong_ 415 steamship, from Shanghai__ 499,502 Yangtze traffic..___ 439,713 Freight traffic, classification on Chinese Gov¬ ernment railways_ 531 Fruits, native.__ 251,554 Fruit growing, Dairen district_ 641 Foochow district_ 656 Fuchiatien__;... 670 Fu Chung Corporation__ 526 Fuel oil, import trade_ 89 Fukien Province, agriculture__ 5 American interests__ 5 area_ 5 cities. 5 climate and topography.. 552 coal__ 555 communications... 5 coolie migration_ 555 industries_ 5 language and people_ 5 minerals_ 5 population_ 5 railways.. 5 treaty ports_ 5 waterways... 5 Fukien Province. See also Amoy dis¬ trict; Foochow district. Fur industry, Antung district-. 569 Mukden district__ 469 Furs, exports_ 221 Furniture, rattan, reed, and sea-grass_ 254 Game, wild__ 220 Gasoline, import trade... 90 Geographical description of Provinces_ 3 Gifts, presentation of... 397 Ginger_ 252 Glass industry, Chungking district.. 625 Tientsin district. 528 Goats_ 223 Gobi region.. 686 Gold, Antung district-- 568 bar, in foreign exchange transactions. 170 Canton district. 412 Harbin district-- 671 Hunan Province..-.- 585 Kalgan district. 693 Manchuria.. 472 Mongolia... 693 position in monetary system... 160 INDEX 803 Page Gold, Shantung. 738 Grape culture, Chefoo district_ 602,606 Graphite, Antung district_ 569 Grass cloth,industry, Chungking district... 624 exports_ 238 Guild, bankers’_ 177 Guilds, Amoy district_:_ 564 Antung district__ 579 Changsha district__ 597 Chefoo district. 618 Chungking district__ 637 prevalence in China_ 370 protective nature of_ 262 provincial_ 374 silk industry, Chefoo district__ 604 Szechwan Province_ 626 trade and craft__ 371 Gutta-percha manufactures, import trade_ 127 Gypsum_ 213 Haifong-Yunnarffu Railway.... 776 HaiHo.... 529,536 Hailar_:... 670 Hairnets_ 255 manufacture in Chefoo_ 603 Han dynasty_ 19 Han River_ 726 Hankow, city of__ 6,433 See also Hankow district. Hankow district, advertising___ 449 agriculture__ 434 banks__ 449 chambers of commerce_ 450 cities_ 433 climate_ 432 conservancy and reclamation work_ 445 credits.__ 449 currency__.__ 449 electric-light plants_ 443 harbor facilities_ 442 guilds__ 450 hotels_...__ 450 industrial plants_ 437 labor conditions_ 438 land leasing_ 451 living costs_ 451 1 ocation and area_ 432 manufacturing_ 437 minerals_ 436 mines_ 437 physical features_ 433 population_ 432 postal service_ 442 prices_ 438 property values_ 450 railways.... 439 recreations_ 451 rents_.__ 450 roads_ 441 schools__ 452 shipping facilities.. 442 taxes.. 451 telegraphs.. 442 telephones_ 442 trade_ 445 trade conditions, changes in recent years. 452 Page Hankow district, tramways__ 444 transportation. 438 travel facilities.. 449 • wages__ 438 warehousing facilities_ 443 waterways_ 438 waterworks_ 444 See also Honan Province; Hupeh Prov¬ ince; Kansu Province; Kiangsi Prov¬ ince; Kokonor; Shensi Province; Sin- kiang. Harbin. See Harbin district. Harbin district, advertising_ 681 agriculture_ 670 banks_ 678 cable service. 674 chambers of commerce.. 682 cities_ 669 climate_ 669 credits- 679 currency- 678,683 electric-light plants_ 676 forests- 670 hotels_ 682 labor conditions_ 672 location and area_ 669 manufacturing_ 671 minerals_ 670 motor-bus service_ 677 newspapers_ 681 population ___ 669 postal facilities_ 675 powers of attorney_ 680 property values_ 682 railways_ 673 rents_ 682 roads- 673 shipping facilities_ 675 stock raising_ 670 taxes- 683 telegraphs_•_ 674 telephone service_ 674 trade- 677 trade conditions, changes in_ 683 transportation_ 672 travel facilities_ 682 wages- 672 warehousing facilities_ 675 waterways- 672 warehousing facilities_ 675 waterways- 672 wireless service_ 674 Harbor control, Shanghai_ 503 Harbor facilities, Canton_ 419 Changsha district__ 591 Chefoo.__ 609 Chungking_ 629 Hankow__ 442 Hongkong_ 457 Mukden district _ 480 Nanking district __ .715 Hardware, import trade _ 93 Hats, rush, manufacture and export trade _ 256 Health, maintenance of_ 399 Heilungkiang, brief geographical description. 13 See also Harbin district. 804 INDEX Page Hemp, Chungking district_ 622 Hankow district_ 435 production and export trade_ 232 Hides and skins, exports_ 221 History of China, brief sketch_ 17 Hogs- 223 Home industries, Canton district_ 409 Honan Province, agriculture__ 5 area_ 5 cities_ 6 climate_ 5 coal mines_ 526 communications_ 6 electric-light plants_ 444 industries__ 6 language and characteristics of people_ 6 minerals.. 6 population. 5 topography.__ 5 treaty ports_ 6 See also Tientsin district; Hankow dis¬ trict. Hong merchants_ 384 Hongkong district, advertising. 465 banks_ 462 chambers of commerce.... 466 climate__ 453 clubs_ 467 currency-- 464 electric-light plants- 459 harbor facilities_ 457 labor conditions- 454 living costs- 467 location and area___ 453 manufacturing. 453 newspapers_ 465 population. 453 postal service_ 456 powers of attorney_ 464 property values.,._ 466 railways_ 454 reclamation projects..... 460 rents_ 466 roads_ 455 shipping_ 462 steamship tonnage entered, 1913 and 1923_ 48 shipping facilities_ 457 taxes_ 466 telegraph and telephone service_ 455 trade- 460 trade conditions, changes in- 461 trade organizations- 466 trade-marks, copyrights, and patents, protection of__ 348 tramways...—.. 459 transportation_ 454 warehousing facilities- 458 waterworks... 459 wireless service..r. 455 Hongkong companies ordinances_142,144 Horses... 223,689 Hosiery, import trade. 126 Hotels, Antung. 578 Changsha.. 597 Chefoo district. 618 Page Hotels, Chungking district.. 637 Foochow. 667 Hankow district. 450 Harbin district.. 682 Kalgan district___ 704 Nanking..._ 721 Peking. 546 Shanghai district...^_ 513 Swatow district. 732 Tientsin.... 546 Tsingtao. 769 Weihaiwei. 618 Yunnan district. 781 Hunan Province, agriculture. 6 American interests. 6 antimony...... 582 area. 6 arsenic. 584 bismuth. 584 cities. 6,581 coal. 585 communications.. 6 electrical development... 590 gold. 585 industries. 6 iron. 584 labor conditions. 588 language and characteristics of people_ 6 lead.. 1 . 583 manganese. 584 manufacturing. 587 mercury... 585 minerals. 6,582 trade in. 586 population.-.. 6 railways... 6 silver. 585 tin___ 583 topography. 6 treaty ports. 6 tungsten. 584 waterways.__ 6,589 zinc. 583 See also Changsha district. Hupeh Province, agriculture. 6 American interests. 7 area. 6 cities. 7 communications. 7 electric-light plants.__ 443 industries_ 6 language__ 7 minerals_ 6 population_ 6 railways.. 7 roads.. 7 topography. 6 treaty ports_ 7 waterways. 7 See also Hankow district. Hwai River conservancy plans-- 718 Hygiene. 399 Ice-making plants, Canton district. 411 Ichang.. 433 Income, Government... 286 INDEX 805 Page India-rubber manufactures, import trade_ 127 Indigo, import trade. 63 Individualistic development of Chinese people. 275 Industrial methods, Chungking district. 625 Industrial development, essential conditions. 263 Swatow district... 725 Industrial plants, Hankow district. 437 Hongkong district. 453 Industries, Anhwei Province. 3 Antung district. 569 Chekiang Province.•. 4 Chihli Province. 4 Chungking district. 623 Foochow district... 658 Fukien Province_,... 5 Honan Province. 6 Hunan Province................ 6 Hupeh Province_.............._ 6 Kalgan district. 694 Kansu Province.. 7 Kiangsi Province. 7 Kiangsu Province.. 8 Kwangsi Province..... 8 Kwangtung Province.... 9 Kweichow Province.. 10 Manchuria_ 13 modern, types represented... 269 Mongolia. 14 Mukden district. 473 Nanking district... 711 Shansi Province. 10 Shantung Province... 11 Shensi Province. 11 Sinkiang.. 15 Swatow district. 725 Szechwan Province. 12 Tibet... 15 Tsinan district. 740 Tsingtao district. 752 Yunnan district. 12,775 Inland steam navigation, provisions of com¬ mercial treaty of 1903.._ 356 Inventions, treaties regarding reciprocal pro¬ tection_ 347 Iron, Antung district-___ 568 Canton district. 413 Hankow district. 436 Hunan Province. 584 Kalgan district.692,694 Manchuria.. 471 manufacture, Mukden. 474 Mongolia...... 692 Nanking district.. 709 resources and production.. 213 Shantung.. 737 Szechwan Province... 623 Tientsin district.......525,527 Iron and steel, consumption as indicitive of economic development. 278 industry in Shanghai.. 497 Irrigation works, Chungking district.. 631 Japanese interests in Chinese industry. 265 Jehol. See Kalgan district. Judicial procedure in China....... 366 Tage Kailan Mining Administration. 525 Kalgan, city of. See Kalgan district. Kalgan district, advertising... 704 agriculture. 689 banks_ 703 chambers of commerce.. 704 cities.. 688 climate.. 687 comprador system less in evidence_ 704 credits..... 703 currency__ 703 electric-light plants. 700 foreign concessions.... 688 hotels-- 704 labor conditions.... 695 lakes.. 686 livestock_ 689 living conditions.. 705 location and area_ 686 manufacturing__ 694 minerals...- 691 mines-- 694 population_ 687 postal facilities__ 699 property values_ 705 railways-- 696 recreations.—^- 705 rents- 705 rivers-- 686 roads- 697 tariffs--.--701, 702 taxes-- 698 telegraph service.. 698 telephone service_ 699 trade... 701 transportation.-- 695 travel facilities_ 704 warehousing facilities..- 700 waterways-- 695 wireless service-- 698 See also Chihli Province; Mongolia; Shansi Province. Kansu Province, agriculture.... 7 American interests.. 7 area. 7 cities.7,433 climate. 7 communications.. 7 industries-- 7 language and character of people_ 7 minerals--- 7 population. 7 topography..-- 7 waterways. 7 See also Hankow district. Kaoliang, culture and export trade. 233 Nanking district.. 708 Kaolin deposits.. 215 Kerosene, import trade. 85 Kerulen River. 687 Kiangsi Province, agriculture. 7 American interests. 8 area. 7 Cities.8,434 climate.... 7 communications.__ 8 electric-light plants. 444 806 INDEX Page Kiangsi Province, industries.. 7 language__-.... 8 minerals_ 7 population. 7 railways._.... 8 topography...... 7 treaty port. 8 waterways. 8 See also Hankow district. Kiangsu Province, agriculture- 8 American interests-- 8 area. 8 cities.. 8 communications_ 8 industries__ 8 language- 8 minerals_ 8 population- 8 railways_ 8 topography__- 8 treaty ports_ 8 waterways_ 8 See also Nanking district; Shanghai dis¬ trict. Kiaochow territory. See Tsingtao district... 750 Kiaochow-Tsinan Railway..... 741,754 Kiating.. 621 Kirin Province. See Manchuria; Harbin dis¬ trict; Mukden district. Kiukiang.. 433 Kiungchow. 408 Knitting machines, import trade-- 104 Kochiu.. 773 Kokonor. See Hankow district. Kongmoon. 408 Kopi Railway. 776 Kowloon. See Hongkong district. Kulangsu, electric-light plant__ 559 international settlement_ 553 Kwangsi Province, agriculture.. 8 area_ 8 cities.-- 9 climate. 8 communications-- 9 industries.. 8 minerals.. 8 population.. 8 topography. 8 waterways.... 9 See also Canton district_'__ 407 Kwangtung Province, agriculture. 9 American interests.. 9 area. 9 cities.... 9 climate.....-... 9 communications. 9 industries-- 9 language. 9 minerals... 9 population_ 9 railways.. 9 topography.... 9 treaty ports.. 9 waterways... 9 See also Canton district; Swatow district. Page Kwantung leased territory. See Dairen dis¬ trict. Kweichow Province, agriculture.. 10 American interests. 10 area. 9 cities. 581 communications.."__ 10 industries.___ 10 language and characteristics of people_ 10 minerals. 10,582 population. 9 roads_ 10 topography.__ 10 waterways__ 10 See also Changsha district. Kweihwating. . 688 Labor conditions, Amoy district.... 555 Antung district.. 570 Canton district. 414 Chefoo district... 607 C hungking district.. 625 Dairen district_ 642 Hankow district. 438 Harbin district..... 672 Hongkong district. 454 Hunan Province.. 588 Kalgan district.. 695 Mukden district. 475 Nanking district...*.. 712 Shanghai district.. 497 Swatow district.. 725 Tientsin district. 528 Tsinan district__ 741 Yunnan district_ 775 Lace, handmade, industry and trade_... 256 Lacquer varnish_ 233 Laichow.. . 600 Lakes, Kalgan district... 686 Land, leasing in Hankow district_. 451 transfers restricted in Hankow district_ 450 values and development, Shanghai_ 519 values in Canton district. 429 values in Hongkong.. 466 Land procedure in Shanghai.. 517 Language and people, Anhwei Province_ 4 Chekiang Province- 4 Chihli Province . . 4 Fukien Province.. .... 5 Honan Province- 6 Hunan Province......... 6 Hupeh Province... 7 Kansu Province .. 7 Kiangsi Province_ 8 Kiangsu Province . . 8 Kwangtung Province_ 9 Kweichow Province . . 10 Manchuria.. 14 Mongolia. 14 Shansi Province- 10 Shantung Province--—.- 11 Shensi Province_ 11 Szechwan Province. .. 12 Tibet... 15 INDEX 807 Page Language and people, Yunnan Province- 13 Lawsuits, treaty provisions of 1844- 354 Lead.-..--*.- 215 Antung district--- ----- 569 Canton district..-.-. 413 Chefoo district..-... 603 Hunan Province_^. ----- . 583 Manchuria-- 472 Leather, import trade..-. 127 industry of Chungking district—-. 625 Legal redress under treaty of 1880. . ^- 355 Liao River, conservancy plans_ 482 traffic.....-_ 475 Licorice root__ 234 Lincheng Colliery, Tientsin district_ 526 Linkiang____.- 567 Linseed and linseed oil—-... 235 Liuchang Coal Mining Co. .. 526 Liu-Ho Kou Mining Co.-... 527 Livestock-- 222 Chefoo district_ 602 Chungking district-- 622 Hankow consular district-- 435 Kalgan district_.- 689 Mukden district-- 469 Shanghai district_ 493 Tsinan district...-... 735 Living conditions, Chinese industry.- 269 Dairen district_ 654 Kalgan district_ 705 Living costs, Amoy district_ 565 Antung district_ - 579 Canton consular district_ 430 Changsha district_ 598 Chefoo district_ 618 Chungking district__ 638 Foochow district--.- 667 Hankow district__ 451 Hongkong._ 467 Mukden district__ 491 Nanking district. 722 Shanghai_ 514 Swatow district__ 732 Tientsin __ 549 Tsinan district..._ 749 Tsingtao district--... 770 Lubricating oil, import trade__ 91 Lumber import trade_ 118 Lumbering, Antung district_ . 568 Foochow district. 657 Lung-Hai Railway__ 440,713 Lungkow.. 600 trade_ 615 Lungyen Mining Administration._. 527 Machine belting, import trade.. 125 Machine tools, import trade.. 99 Machinery, import trade. 97 mining, Hankow district. .._._ 437 Magazines as advertising mediums_ 196 Magnesite. 215,473 Mah-jongg sets.. 257 Maize, Chungking district-.. 622 See also Corn. Manchouli..... 670 Manchu dynasty__ 22 Page Manchuria, agriculture_ 13 area_ 13 bean production.-- 230 cities.... . 14 climate.. 13 coal.... 471 communications. 13 copper.. 472 cotton production.. 470 cotton spinning and weaving_ 474 electric light and power plants_ 481 foreign trade.__ 483 industries_ 13 iron mining_ 471 language and people.. 14 mines.. 472 population_ 13 railways.._ 13 taxes, internal_ 488 topography.. 13 waterways_ 13 See also Antung district; Harbin district; Mukden district. Manganese_ 217,473,584 Manufactured products, native_ 252 Manufacturing, Amoy district_ 555 Antung district__ 569 Canton district_ 409 Changsha district_ 587 Chefoo district_ 603 Dairen district_ 641 Foochow district_ 658 foreign-type products_ 265 Hankow district_ 437 Harbin district_ 671 Hongkong district__ 453 Kalgan district_ 694 Mukden district_ 473 Nanking district_ 711 Shanghai district_ 493, 495 Swatow district_ 725 Szechwan Province_ 623 Tientsin district_ 527 Tsinan district_ 740 Tsingtao district_ 752 Marine engines, manufacture in Canton district_ 411 Market development_ 129 Match industry, Canton district.. 410 Chungking district_ 625 Shanghai district_ 496 Swatow district_ 725 Tientsin district.. 528 Mats and matting___ 258 Mentowkow Coal Mines.... 526 Merchandising methods, Amoy district_ 563 Chefoo district.. 617 Dairen district. 651 Foochow district. 666 Tsinan district. 748 Yunnan district.. 781 Mercury. 215,585 See also Minerals. Metallurgical industries. 268 Metals, export from Hankow district. . 436 import trade. 114 808 INDEX Page Metals, utilization in China. 116 See also specific entries and Minerals. Millet, exports. 233 Hankow district.. 435 Min River___ 626, 659, 661 Minerals, Amoy district_ 555 Anhwei Province__ 3 Canton district... 412 C hangsha district_ 582 Chefoo district_ 603 Chekiang Province_ 4 Chihli Province_ 4 Chinese Turkestan_ 15 Chungking district_ 622 Dairen district_ 641 Foochow district__ 657 Fukien Province_ 5 Hankow district__ 436 Harbin district_ 670 Honon Province__ 6 Hunan Province____6, 582 Hupeh Province _ _ 6 Kalgan district__ 691 Kansu Province..__ 7 Kiangsi Province..__ 7 Kiangsu Province_ 8 Kwangsi Province.. 8 Kwangtung Province__ 9 Kweichow Province_ 10,582 Manchuria.. 13 Mongolia—. 14 Mukden district. 470 Nanking district.. .. . 709 Shanghai district.. 493 Shantung Province . . 11 Shansi Province. 10 Shensi Province.. 11 Swatow district. 725 Szechwan Province...12,622 Tibet...... 15 Tientsin district... 524 trade in... 114,209,586 leading ports. 117 Tsinan district.. 737 Tsingtao district... 754 Yunnan Province.12,773 See also specific entries and Metals. Mines, Antung district. 568 Canton district.. 413 Foochow district. 658 Hankow district.... 437 Kalgan district..... 694 Manchuria. 471 Tientsin district. 525 Tsinan district. 737 Ming dynasty... 21 Mining, Canton district. 412 methods in Szechwan Province_ 623 Mukden district.. 470 Shantung.. 738 Tientsin district. 524 Mining regulations, provisions of commercial treaty of 1903.. 356 Mints, Chungking district_ 625 Missionary enterprises, provisions of com¬ mercial treaty of 1903 . 357 Page Molybdenum.217,413 Monetary exchange. See Foreign exchange. Money-order service. 330 Mongol dynasty.. 20 Mongolia, agriculture. 14 American interests.. 14 area__.-... 14 cities._ 14 climate.__ 14 coal__ 692 communications_ 14 ' industries.._ 14 language and people..... 14 livestock_ 689 minerals..__14,691 motor traffic_ 697 population______■ 14 topography- 14 treaty ports_ 14 wireless service. 698 See also Kalgan district. Mongolian Central Cooperative Society. 691 Monopolies, prohibition of, treaty of 1844_ 353 Most-favored-nation treatment, under treaty of 1858.... 355 Motion pictures as means of advancing trade. 201 Motor-bus service, Amoy district. 556 Antung district. 572 Chefoo district.. 608,618 Harbin district.. 677 rates, Kalgan to Urga... 704 Tsinan district. 743 Motor route, Kalgan to Urga... 14 Motor traffic, Mongolia. 697 Motor vehicles, Mukden district... 479 trucks, import trade. H2 load restrictions, Hongkong.. 455 Shanghai. 508 Mukden. See Mukden district. Mukden district, agriculture.. 469 banks. 488 cable service. 479 chambers of commerce.... 490 cities... 468 climate... 468 clubs. 491 coal. 470 cotton industry... 473 credits. 489 crops, average production.. 470 currency.. 489 electric light and power plants.. 481 flour milling. 474 freight rates. 476 fur industry. 469 harbor facilities.... 480 industries_ 473 ironworks.. 474 labor conditions. 475 livestock.. 469 living costs_ 491 location and area_ 468 manufacturing __ 473 motor vehicles... 479 minerals.__ 470 mining. . 470 INDEX 809 Page Mukden district, population. 468 postal facilities... 480 property values. 490 reclamation works, Liao River... 482 rents. 490 roads... 478 schools.. 491 shipping. 480 storage charges... 478,481 sugar refining. 474 telegraphs. 479 telephone service_ 479 trade.. 483 tramways.. 482 transportation. 475 wages in industry.. 475 warehousing facilities... 481 waterways. 475 waterworks. 482 wireless service. 479 See also Manchuria. Mules. 223 Music, import trade... 125 Muscial instruments, import trade.. 126 Musk.___ 224 Names, choosing of Chinese equivalents_ 397 Nan-Hsun Railway- 440 Nanking. See Nanking district. Nanking district, advertising_ 721 amusements.. 723 banks___ 720 cable service--- 715 chambers of commerce.... 721 cities..__ 706 coal.. 710 conservancy and reclamation..... 718 cotton_ 708 currency. 720 hotels. 721 industries.- 711 iron.. 709 labor conditions .. 712 living costs.. 722 location and area... 706 manufacturing.. 711 minerals_ 709 peanuts. 708 population.. 706 postal service. 715 property values. 722 railways. 713 roads_ 713 school for American children.. 723 shipping facilities. 715 shipping in 1924. 716 taxes.. 722 telegraph service... 715 telephone service... 715 trade__ 718 Page Nanking district, waterways... 712 wireless service.. 715 See also Anhwei Province; Kiangsu Province. Nanning.. 408 Nantai Island.. 667 Nantungchow.. 707 Newchwang, shipping, 1923. 480 Newspapers, Chefoo___ 617 Chengtu.. 637 Chungking_ 637 Harbin district __ 681 Hongkong_ 465 Shanghai district.. 513 Tientsin district_ 545 value as advertising mediums_ 196 Ningpo. 492 Nonni River.. 673 Nutgalls. 235 Nuts, native. 251 Oil tins, empty, utilization of.. 87 Oilcloth, import trade_ 127 Open ports, provision of commercial treaty of 1903_ 356 Opium trade, restrictions imposed under treaty of 1880_ 355 Orkhon River.. 686 Package goods, marketing in China.. 191 Packing goods for Dairen district_ 645 Packing goods for Szechwan trade_ 630 Pakhoi_ 408 Pao Chin Coal Mining Co_ 527 Paper, import trade_ 121 manufacture in China... 121,258,625 Paper-making materials_ 258 Paraffin wax, import trade_ 92 Passenger rates, railway, Canton-Kowloon Railway...__ 416 Chinese Government railways_ 325 Hongkong_ 455 Shanghai district_ 500 South Manchuria Railway.. 477 Tientsin district... 530 river steamers, Hankow and Shanghai. 439,450 steamship, Shanghai..... 499 Yangtze River traffic. 712 Patents, protection of.. 347,348,356,369 Peanut oil, Chefoo district. 605 ex port trade. 235 Peanuts, Chefoo district. 602,605 export trade. 235 Hankow district.-. 434 Nanking district.. 708 Tsinan district. 736 Peas, Hankow district. 435 Pei Ho. See Hai Ho. Peking. 523 See also Tientsin district. trade conditions, changes in recent years. 723 tramways. 718 transportation. .. 712 travel facilities_ 721 wages.. 712 warehousing facilities........... 715 Peking-Hankow Railway. 439, 532 Peking-Mukden Railway.. 477,532 Peking-Suiyuan Railway... 532,696 Perigpu.i.. 707 Petroleum, import trade . 85 resources... .............. . 21() 810 INDEX Petroleum, Szechwan Province_ Phosphate ___ _ Photographic materials, import trade. Pilferage on Chinese railways_ Pienlo Railway.. ... Population ... American, in China__ Amoy district -- Antung district -- Anhwei Province _ __ Canton district.. - -- Changsha district _ Chefoo district ... . . Chekiang Province.... -- Chihli Province- - - Dairen district --- Foochow district -- Fukien Province . Hankow consular district. . Harbin district -- - Honan Province... - Hongkong district. - Hunan Province -- Hupeh Province - - - Kalgan district.... Kansu Province.--. Kiangsi Province __ Kiangsu Province.-- Mukden district -- Nanking district .. . Shanghai district . . Swatow district .... Szechwan Province. . . Tientsin district. . . Tsinan district .. . . Tsingtao district ... Yunnan district . Porcelain .. Port charges, Amoy -- Postal service --- Amoy district .. Antung district . Canton district .. Changsha district. . . Chefoo district . . Chungking district .. . Foochow district . .. Hankow district.. Hardin district. Hongkong... Kalgan district. Mukden district.. Nanking district . . Shanghai district. . . Swatow district... Tientsin district. Tsingtao district.. Yunnan district__ See also Communications. Potatoes, Hankow district__ Poultry-.. Powers of attorney, Harbin district... Hongkong. Shanghai . Tsingtao district. Page . 623 . 216 . 127 . 325 . 440 1, 3, 272 - 350 . 552 . 566 3 . 407 . 581 . 599 4 4 . 640 . 655 5 . 432 . 669 5 . 453 6 .- 687 7 7 8 .. 468 - 706 .. 492 - 724 .. 620 .. 522 - 733 - 750 .. 772 - 253 .. 558 .. 328 - 556 .. 573 - 418 .. 590 .. 609 .. 629 .- 660 .. 442 .. ' 675 .. 456 .. 699 .. 480 - 715 - 502 - 726 - 534 - 757 - 777 - 435 219, 224 - 680 . 464 . 512 - 776 Page Price index . .. 270 Prices, leading commodities, Hankow dis¬ trict. . 438 Private wealth, increase in China _ 270 Property values, Antung ... 579 Canton district .. 429 Changsha district _ 1 . . 598 Chefoo .. 6 i 8 Dairen district __ 653 Foochow district .. 667 Hankow district... .. 450 Harbin district .. 682 Hongkong -- 466 Kalgan district _ 705 Mukden district _ 490 Nanking district .. 722 Swatow district __ 732 Tientsin . 547 Tsinan ... . ..... 749 Tsingtao - 759 Public works, Amoy district _ 558 Antung district _ 573 Canton district _ 420 Changsha district _ 590 Chefoo district _ 610 Chungking district- _ 630 Dairen district _ 647 Foochow district - 661 Hankow district _ 443 Harbin district—. _ 676 Hongkong - 459 Kalgan district - 700 Mukden district _ 481 Nanking district _ 717 Shanghai district _ 507 Swatow district _ 727 Tientsin district _ 535 Tsinan district - 744 Tsingtao district __ 761 Yunnan district _ 777 See also Electric light and power plants; Telegraphs; Telephones; Railways; Tramways; Waterworks. Quicksilver. See Mercury. Radio telegraphs. See Wireless service. Railway labor union, Kalgan_ 695 Railway materials, purchasing of._ 322 Railway rates. See Freight rates; Passenger rates. Railways_ 309 Amoy district- 556 Anhwei Province_ 3 Antung district__ 572 Canton district_ 416 Changsha district.. 589 Chekiang Province_ 4 Chihli Province_ 5 Chinese Eastern Railway.. 318 Chinese Government lines_ 319 connections with Shanghai harbor_ 506 Dairen district__ 642 finances__ 293,303 Fukien Province_ 5 INDEX 811 Page Railways, Hankow district____ 439 Harbin district- 673 historical survey_ 310 Hongkong district_ 454 Hunan Province_ 6 Hupeh Province_ 7 Kalgan district- 696 Kiangsi Province_ 8 Kiangsu Province- 8 Kwangtung Province_ 9 Manchuria_ 13 mileage in proportion to population.. 274 Nanking district-__713, 723 operating methods_ 324 operating revenues and expenses, 1922- _. 318 projects in Chunking district- 627 property and equipment_ 322 relative importance of lines- 321 Shanghai district_ 499 Shansi Province_ 10 Shantung Province_ 11 South Manchuria Railway_319,476 statistics of leading lines__ 317 Swatow district_ 726 Tientsin district_ 530 transportation methods_ 324 Tsinan district -_ 741 Tsingtao district_ 754 Yunnan Province- 12,776 Rainfall. See Climate. Ramie. See China grass. Rapeseed_ 240,622 Reclamation works, Antung district_ 574 Canton district_ 420 Dairen district_ 648 Hankow district_ 445 Hongkong_ 460 Mukden district__ 382 Nanking district_ 718 Shanghai district- 507 Recreations, Antung district_ 580 Dairen district_ 654 Hankow district_ 451 Kalgan district_ 705 Nanking district_ 723 Shanghai district- 515 Swatow district_ 732 Religious persecution, immunity from, under treaty of 1858- 355 Rents, Antung- 579 Canton district_ 429 Changsha_ 598 Chefoo_ 618 Chunking district__ 638 D airen d istrict_ 653 Foochow district- ' 667 Hankow district_ 450 Harbin district- 682 Hongkong__ 466 Kalgan district. 705 Mukden district. 490 Nanking district... 722 Swatow district.. 732 Tientsin. 547 Tsinan.. 749 Tsingtao district. 770 Page Rents, Yunnan district.. 781 Revenues, Government efforts to centralize control... 282 sources_ 288 Rhubarb_ 238 Rice, Amoy district_ 554 Foochow district.. _ 656 Hankow district..*_ 435 Nanking district__ 707 production and trade_ 239 Chungking district... 621 Yunnan district...__ 773 Rivers, Anhwei Province_ 3 Canton district__ 414 Hai Ho_ 529 Han_ 726 Hankow district_ 438 Kalgan district_ 686 Kerulen_ 686 Liao. 475,482 Min.. 626,659,661 Orkhon__ 687 Selenga_ 686 Sungari_ 672 Whangpoo_ 498 Yalu.. 574 Yangtze_ 438,439,450,498,626,631, 712 Yellow_ 687,741 Yung...__ 726 See also Waterways. Roads, Amoy district... 556 Antung district.. 572 Canton district_ 417 Changsha district_ 589 Chefoo district_ 607 Chungking district_ 627 construction with relief funds_ 532, 713, 743 Dairen district_ 643 Foochow district__ 660 Hankow district_ 441 Harbin district_ 673 Hongkong district_ 455 Hupeh Province__ 7 Kalgan district. 697 Kweichow Province.__ 10 Mukden district_ 478 Nanking district...___ 713 Shanghai district.. 500 Shansi Province... 10 Shantung Province. 11 Shensi Province. 11 Swatow district. 726 Ta-lu, or Great Road.... 628 Tibet... 15 T entsin district. 532 Tsinan district. 742 Tsingtao district. 756 Yunnan district. 776 Rubber-sole factories, Canton district. 410 Salt, revenues from... 290 Szechwan Province. 623 Saltpeter... 216 Samples in advertising... 200 Samshui. 408 Samshui Railway. 416 Santuao. 656 812 TNDEX Page Sausage casings. 225 Schools, Amoy. 553 Antung district. 580 Canton district.?.... 430 Changsha district.. 598 Chungking district. 638 Hankow district... 452 Mukden district. 491 Nanking. 723 Peking. 551 Shanghai. 515 Swatow district. 732 Tientsin. 551 Tsingtao district... 771 Selenga River. 686 Sericulture. See Silk. Sesame. 239 Hankow district. 434,435 Nanking district. 708 Sesame oil. 239 Sewing machines, import trade. 104 Shanghai. 492 American community organizations. 515 distances from. 2 railway connections, Shanghai harbor— 506 steamship services and rates. 503 See also Shanghai district. Shanghai district, advertising. 513 aerated-water factories. 497 agriculture. 493 animal industry. 493 automobiles. 508 banks__ 508 bonded warehouses. 505 breweries. 497 brick works. 496 buslines.. 508 cable service.... 501 cement works. 496 chambers of commerce.. 514 cigarette manufacture. 495 cities. 492 climate. 492 clubs.. 515 cotton industry. 493 credits. 511 currency. 510 egg products. 496 electric light and power plants.. 496, 507 electrical equipment manufacture. 497 engineering works. 495 exchange brokers. 511 fishing. 493 flour milling. 495 hotels..... iron and steel industry... 497 labor conditions. 497 land procedure. 517 land values and development... 519 living costs.. 514 location and area... 492 manufacturing... 493 match factories.. 496 minerals. 493 motor trucks. 508 newspapers. 513 Page Shanghai district, population. 492 port accommodations. 503 postal facilities.. 502 powers of attorney. 612 railways. 499 reclamation works. 507 recreations.^. 515 roads. 500 schools. 515 shipbuilding. 495 shipping facilities. 502 silk manufacture. 495 steamship rates. 499 tanneries. 496 telegraph service. 501 telephone service. 501 theaters. . .. 515 trade.. _ 508 trade, recent changes.."... 516 tramways . 507 transportation. 498 travel facilities.. 513 vegetable-oil industry_ 495 waterways. 498 waterworks . . 507 wireless service. 501 yeast manufacture. 497 See also Chekiang Province; Kiangsu Province. Shanghai-Nanking Railway. 499,713 Shansi Province, agriculture.. Y ._ 10 area. 10 cities. 10 climate. 10 coalmines.... 527 communications. 10 electric-light plants... 535 industries . . 10 language. 10 minerals. 10 population . . 10 railways. 10 roads.. 10 topography. 10 waterways. 10 See also Tientsin district. Shantung Province, agriculture... 10 American interests —. 11 area . ..-. 10 cities. . 11 communications. 11 industries. 11 1 anguage and people.. 11 minerals. 11 mining. - 738 population. 10 railways. 11 roads. . 11 topography... 10 treaty ports . . 11 waterways. 11 See also Chefoo district; Tsinan district. Shasi. . 433 Sheep... . 223,691 Shengking. See Antung district; Manchuria; Mukden district. INDEX 813 Page Shensi Province, agriculture. 11 American interests.. 11 area... 11 cities. 11 communications__ 11 geographical divisions_ 434 industries.. 11 language. 11 minerals. 11 population. .. 11 roads..-. 11 topography. 11 waterways... 11 See also Hankow district. Shipbuilding, Shanghai district. 495 Shipping.... 50 Antung-..-. 571 Hongkong... 462 Mukden district.. 480 Newchwang, 1923. 480 port of Dairen. 644 Tientsin, 1923. 534 Shipping facilities, Amoy district. 557 Canton district. 418 C hangsha district.. 591 Chefoo district... 609 Chungking district.. 629 Dairen district.. 644 Foochow district. 660 Hankow district.. 442 Harbin district... 675 Hongkong. 457 Nanking district. 715 Shanghai district.. 502 Swatow district.. 727 Tientsin district.... 534 Tsingtao district. 758 Yunnan district.. 777 Shipping practice, Tsingtao. .. 760 Silk, Antung district.. 568 C hefoo district.. 604 Chungking district.^.... 624 Hankow district. 435 industry and trade.. 226 pongee.. 259 Shanghai district. 495 . Tsinan district. 740 Silver, bar, in foreign exchange transactions.. 166 Canton district... 412 exchange, relation to prices. 137 Hunan Province. 585 imports.... 216 Kalgan district.. 694 position of in Chinese monetary system.. 153 Sinkiang, agriculture.. 14 American interests-. 15 area. 14 cities... 15 industries.... 15 population.. 14 See also Hankow district. Sino-American postal arrangements. 329 Social customs.. 392 Soda, exports. 216 Manchuria. 473,671 Soochow. 492 Page Soochow Creek. 498 South ManchuriaHtailway__ 572,642 mileages_ 476 passenger fares. 477 storage charges at Mukden.. 481 Sporting arms, import trade. 124 Stationery, import trade... 127 Steamship service, Hankow and Shanghai... 450 Shanghai.. 502 Stock raising, Harbin district__ 670 Storage charges, Mukden. 478,481 Storage facilities. See Warehousing facilities. Straw braid. 259 Sugar, Chungking district...... 622,624 refining, Mukden.... 474 Suiyuan. See Kalgan district. Sulphur.. 216 Sung dynasty.. 20 Sungari River. 672 Sunning Railway.. 416 Swatow district, advertising.. 731 agriculture.. 724 banks. 730 cable service.. 726 cities.. 724 climate..,.. 724 credits.. 731 currency.. 730 hotels .. 732 industries.. 725 labor conditions .. 725 living costs... 732 location and area... 724 manufacturing.. 725 minerals.. 725 population... 724 postal facilities.. 726 property values. 732 railways. 726 recreations. 732 rents... 732 roads. 726 schools. 732 shipping, 1923 . 727 shipping facilities. 727 taxes. 732 telegraph service. 726 telephone service.. 726 trade. 728 trade organizations. 732 transportation... 726 travel facilities. 732 wages.. 725 warehousing facilities. 727 waterways.. 726 waterworks. 727 wireless service. 726 See also Kwangtung Province. Sweet potatoes, Chungking district. 622 Hankow district. 435 Szechwan Province, agriculture. 12 American interests. 12 area. 11 climate. 11 communications. 12 industries. 12 814 INDEX Page Szechwan Province, language.. 12 manufacturing.. 1 .. 623 minerals..12,622 mining methods. 623 petroleum.. 623 population.11, 620 railway projects. 627 topography. 11 treaty ports. 12 waterways.. 12 See also Chungking district. Szechwan-Hankow Railway. 440 Taheiho_ 670 Taian.. 734 Taiyuanfu—. 624 Talc. 215 Manchuria.. 473 Talifu.. 773 Tang dynasty.. 20 Tanneries, Canton district. 410 Shanghai district. 496 Tariffs...... 331 ad valorem, ascertaining values. 335 bonded cargo.... 338 Chinese goods.. 337 Chinese Maritime Customs. 333 customs administration.__ 332 customs practice, Tsingtao. 760 customs procedure in China.. 334 customs valuations___ 333 duty-free articles. 336 exemption of Chinese factory products... 338 export schedule of long standing. 334 filing protests.... 335 foreign administrative assistance. 332 foreign goods imported from Chinese ports.. 336 invoices... 336 Kalgan district... 701,702 privileges granted Tientsin trade with Manchuria_ 339 prohibited articles. 336 provisions of treaty of 1844. 353 rebate on overland or frontier trade.. 334 revisions proposed.... 334 units used in making levies. 334 Yunnan district_ 778, 779 See also Taxes. Tatsienlu....—.. 621 Tatungkow.. 567 Taxes, Canton consular district.... 429 Foochow district. 667 Dairen district.. 653 Hankow district. 451 Harbin district. 683 Hongkong. 466 internal.. 331,339 commodities carried by railways. 341 destination.. 340 levies on boat traffic... 341 levies on foreign imports.__ 342 levies on native goods. 342 likin. 339 lump-sum payment. 340 Manchuria. 488 Page Taxes, internal, monopoly hong. 340 Peking octroi _ 341 production and consumption... 340 provisions of treaty of 1844 . 353 through tax to replace other charges. 340 transit . 339 wine and tobacco . 1.. 340 Kalgan district.. .. 698 Nanking district. 722 Swatow district. 732 Tientsin district__ 548 Tsinan district . .. 749 Tsingtao district .. . 755, 770 Tayeh Iron Mines Railway. __ 440 Tea, cultivation and preparation for market. 242 export trade.. 240 Foochow district. 656 Hankow district..... 434,435 Tehchow. .. 735 Telegraph service, Amoy district. 556 Antung district_ _ 572 Canton district._ 417 Changsha district_ 590 Chungking district _ 628 Dairen district ..^. 643 Foochow district. 660 Hankow d istrict _ _ 442 Harbin district _ _ 674 Hongkong district. 455 Kalgan district. 698 Mukden district. . . 479 Nanking district. 715 Shanghai district. 501 Swatow district. 726 Tientsin district__ 533 Tsinan district. 744 Tsingtao district. 757 Yunnan district . . 776 See also Communication. Telephone service, Amoy district_ 556 Antung district. . 573 Canton district . . . 418 Changsha district_ 590 Chefoo district -- 609 Chungking district._ 629 Dairen district...-- 644 Foochow district. 660 Hankow district.- - 442 Harbin district. 674 Hongkong. _ _ 456 Kalgan district. 699 Mukden district..-- 479 Nanking district_r.- 715 Shanghai district. 501 Swatow district. . 726 Tientsin district _ 533 Tsinan district . 744 Yunnan district.-.- 777 See also Communication. Textile machinery, import trade.. 102 Theaters . 394,515 Three Eastern Provinces. See Manchuria. Three Kingdoms, rule of.. . -. 20 Tibet, agriculture . .. 15 American interests . 15 area . 15 INDEX 815 Page Tibet, cities. 15 communications. 15 industries.- 15 language and people. 15 minerals...-. 15 population.- 15 roads. - 15 trade... 638 treaty ports.. 15 See also Chungking district. Tientsin. See Tientsin district. Tientsin district, advertising. 545 agriculture. 524 banks.. 543 cable service.... 533 chambers of commerce.. 547 cities.. 522 climate....--- 522 coalmining.. 524 conservancy works. 536 credits. 543 currency.. 545 electric-light plants. 535 foreign concessions. 522,548 hotels.. 546 iron mining..- 527 labor conditions.-. 528 living costs.. - 549 location and area. 522 manufacturing.-. 527 mining. 524 newspapers...... 545 population..... 522 postal facilities. 534 property values and rents. 547 railways.. 530 roads.. 532 schools... 551 shipping, 1923.. 534 shipping facilities. 534 taxes_;_ 548 telegraph service _ 533 telephone service.. 533 trade__ 537 changes in recent years.... 551 tramways.. 536 transportation costs. .. 533 travel facilities.. 546 wages. 528 warehousing facilities... 534 waterways.. 529 waterworks.. 536 wireless service.. 533 See also Chihli Province;Honan Province; Shansi Province. Tientsin-Pukow Railway.. 532, 713, 741 Tin, Canton district. 413 Hunan Province. .. 583 production and exports. 217 Yunnan district.. 773 Tobacco, Amoy district. .. 554 Antung district.. 567 Chungking district.— 622 culture and trade. 242 Hankow district.. 434, 435 import trade. 71 Page Tobacco, Tsinan district. 736 See also Cigarettes. Tonnage dues and dues certificate. 338 Topography, Anhwei Province. 3 Chefoo district... 599 Chekiang Province. 4 Chihli Province. 4 Chinese Turkestan. 14 Fukien Province. 5 Honan Province.. 5 Hunan Province. 6 Hupeh Province. 6 Kansu Province.. 7 Kiangsi Province.. 7 Kiangsu Province.. 8 Kwangsi Province.. 8 Kwangtung Province._. 9 Kweichow Province. 10 Manchuria... 13 Mongolia. 14 Shansi Province... 10 Shantung Province... 10 Shensi Province..11 Szechwan Province... 11 Tibet.. 15 Tsinan district.. 733 Yunnan Province.. 12 Tractors, Mukden district. .. 478 Trade, Amoy district.. 559 Antung district.. 574 by articles, 1923 and 1924.. 36 Canton consular district.. 421 Changsha district.. 591 Chefoo district.. 602,611 Chinwangtao... 542 Chungking district. 631 Dairen district. .. 648 development of.. 28 direct, with foreign countries. 44 export, by ports.. 47 export, financing of from United States to Hongkong.. 463 export, leading articles. 34 Foochow district... 662 Hankow district. .. 445 Harbin district. 677 Hongkong.. 460 import, 1913 and 1923. 52 financing of... 54 leading articles. 30 relative position of countries. 52 tonnage by nationalities.. 48 Kalgan district... 701 Mukden district. .. 483 Nanking district. .. 718 Shanghai district. 508 Swatow district... 728 Tibet.. 638 Tientsin district.. 537 treaty stipulations regarding. 331 Tsinan district. 745 Tsingtao district.._ 762 value of, 1864-1894. 26 with United States.... 42 Yunnan district. 778 Trade centers on Yangtze River.. 439 816 INDEX Page Trade conditions, changes in, Amoy district— 565 Antung district.. 580 Canton district.. 430 Changsha district. 598 Dairen district.. 654 Foochow district. 667 Hankow district. 452 Harbin.. 683 Hongkong.. 461 Nanking district. 723 Shanghai.. 516 Tientsin district. 551 Tsinan district.. 749 Tsingtao... 771 Yunnan district. 781 Trade methods, changes in recent years_ 384 Trade organizations. See Chambers of com¬ merce; Guilds. Traditions, persistence of. 398 Trade-marks.. 137 importance of.. 343 claims concerning infringements. 369 protection in China. 345 protection in Hongkong... 348 provisions of commercial treaty of 1903.. 356 registration, regulations affecting... 345 selection of.... 344 treaties regarding reciprocal protection.. 347 Tramways, Antung district.. 574 Canton... 420 Dairen district. 647 Hankow district. 444 Hongkong. 459 Mukden district. 482 Nanking district. 718 Shanghai district.. 507 Tientsin district. 536 Tsinan district. 745 Transportation, Amoy district. 556 Antung district. 571 Canton district. 414 Changsha district. 589 Chefoo district. 607 Chungking district. 626 Dairen district. 642 Foochow district. 659 Hankow district. 438 Harbin district.. 672 Hongkong district. 454 Kalgan district. 695 modern methods needed. 272 Mongolia. 14 Mukden district. 475 Nanking district. 712 Shanghai district. 498 Swatow district. 726 Tientsin district. 529 Tsinan district. 741 Tsingtao district. 754 Yunnan district...__ 775 See also Railways; Roads; Shipping; Steamship service; Tramways; Water¬ ways. Travel facilities, Antung district. 578 Canton district. 427 Changsha district__ 597 Page Travel facilities, Chefoo district. 618 Chungking district. 637 Dairen district.. 652 Foochow district. 666 Hankow district. 449 Harbin district. 682 Kalgan district. 704 Nanking district.. 721 Shanghai district. 513 Swatow district.. 732 Tientsin district..... 546 Yunnan district. 781 Treaty of 1844, summary. 353 Treaty of 1858, important provisions_ 355 Treaty of 1880, summary of provisions. 355 Treaty ports.. 45 Anhwei Province... 4 Chekiang Province__ 4 Chihli Province....'._ 5 Fukien Province.. 5 Honan Province. 6 Hunan Province. 6 Hupeh Province.. 7 Kiangsi Province. 8 Kiangsu Province.. 8 Kwangtung Province. 9 Mongolia. 14 Shantung Province. ..... ’ 11 Szechwan Province.. 12 Tibet. 15 Yunnan Province. 13 Tsin dynasty. 18 Tsangchow-Chentow Railway. 532 Tsinan. See Tsinan district. Tsinan district, advertising. 748 agriculture... 735 banks. 747 chambers of commerce.. 748 cities. 734 climate. 733 credits. 748 currency... • . 747 industrial development. 740 labor conditions. 741 livestock.. 735 living costs. 749 location and area. 733 manufacturing.. 740 merchandising methods. 748 minerals. 737 mining__ 738 motor-bus service. 743 population. 733 property values. 749 railways. 741 rents.. 749 roads. 742 sericulture. 740 taxes.. 749 telegraph service.- 744 telephone service. 744 topography. 733 trade.. 745 trade conditions, changes. 749 transportation.. 741 waterways. 741 INDEX 817 Page Tsinan district, wireless service- 744 See also Shantung Province. Tsingtao district, advertising. 768 agriculture__._751 banks. 765 cable, telegraph and wireless service. 757 chambers of commerce. 768 cities... 750 climate... 750 cred ts_ 766 currency..... 765 customs practice.. 760 forestry. 751 hotels_ 769 industries. 752 living costs.. 770 location and area. 750 manufacturing... 752 minerals_ 754 population. 750 postal facilities.. 757 powers of attorney. 767 property values. 769 railways. 754 rents.. 770 roads... 756 schools. 771 shipping facilities.. 758 shipping practice. 760 taxes. 755,770 trade... 762 trade conditions, changes. 771 warehousing facilities.. 759 water supply. 753 waterways. 754 Tsining.. 734 Tsitsihar. 670 Tsitsihar Light Railway. 673 Tung oil.. 243 industry in Chungking district. 624 Tungsten... 217 Canton district. 412 Hunan Province. 584 Tzeliutsing.. 621 Umbrellas, Chinese. 260 United States Court for China. 359,368 Urga... 688 Ussuri River. 673 Vaccination... 400 Vegetable-oil industry and trade Shanghai district. 495 Vegetable tallow. 245 Vermicelli.. 260,606 Wages. 269 Antung district. 570 Chefoo district.. 607 Chungking district. 626 Hankow district. 438 Harbin district.. 672 Mukden. 475 - Nanking district. 712 100020°—26 Page Wages, Swatow district. 725 Tientsin district. 528 Yunnan district. 775 Walnuts.... 246 Wanhsien. 621 Warehousing facilities, Amoy district.. 557 Canton. 419 C hangsha district. 591 Chefoo district. 610 Chungking district. 630 Dairen district. 645 Foochow district.. 660 Hankow district. 443 Harbin district. 675 Hongkong.. 458 Kalgan district. 700 Mukden district. 481 Nanking district. 715 Shanghai_ 505 Swatow district.. 727 Tientsin district.. 534 Tsingtao district.. 759 Watches, import trade. 126 Waterways, Amoy district. 556 Antung district... 571 Canton district. 414 C hangsha district.. 589 Chekiang Province. 4 Chihli Province.. 5 Chungking district. 626 Foochow district. 659 Fukien Province__ 5 Hankow district. 438 Harbin district.. 672 Hunan Province. 6 Hupeh Province.. 7 Kalgan district. 695 Kansu Province. 7 Kiangsi Province. 8 Kiangsu Province.. 8 Kwangsi Province.... 9 Kwangtung Province. 9 Kweichow Province. 10 Manchuria. 13 Mukden district. 475 Nanking district. 712 Shanghai district. 498 Shansi Province. 10 Shantung Province. 11 Shensi Province.. 11 Swatow district.. 726 Szechwan Province. 12 Tientsin district. 529 Tsinan district. 741 Tsingtao district__ 754 Yunnan district.. 775 Waterworks, Amoy. 559 Antung.. 573 Canton district__ 420 Changsha district. 591 Chefoo district.. 610 Dairen.. 647 Hankow district.. 444 Hongkong. 459 53 818 INDEX Page Waterworks, Mukden district. 482 Nanking district. 717 Shanghai district__ 507 Swatow.. 727 Tientsin district. 536 Tsinan district...__ 745 Tsingtao district.... 753,762 Y unnan district.. 777 Wearing apparel, import trade.. 125 Weights and measures, Chinese.. 792 Weihaiwei, hotels. 618 Weihsien. 734 Wenchow_ 492 Western ideas, influence of_ 276 Whangpoo Conservancy Board.... 507 Whangpoo River.... 498 Wheat, Chungking district. 621 Hankow district....-. 434 import trade.. 63 Nanking district.. 707 production and trade. 247 production, Tientsin district.. 524 Tsinan district_ 735 Wine industry, Chefoo district_ 606 Wireless service. Canton district. 418 Chefoo district.. 608 Dairen district__ 643 Foochow district... 660 Harbin district.. 674 Hongkong_ 455 Kalgan district- 698 Mukden district-^. 479 Nanking district—. 715 Shanghai district.. 501 Swatow district. 726 Tientsin district_ 533 Tsinan district... 744 Tsingtao district.. 757 Yunnan district. 776 Wood oil. See Tung oil. Wool industry and trade—. 227 Woolen goods, import trade —. 84 Wuchow.. 408 Wuhu. 707 shipping in 1924. 716 Yalu River conservancy plan. 574 Yangchow.. 707 Yangtze River. ___ 438, 498, 712 conservancy work... 631 trading centers on.. 439 Page Yangtze River, traffic a-nd rates... 439, 450, (26 Yeast manufacture, Shanghai district_ 497 Yellow River_ 687 Yenping. -- 656 Yung River_ 726 Yunnan district, advertising_ 780 agriculture-__ 773 banks_ 780 cable, telegraph, and wireless service_ 776 climate_ 772 chambers of commerce_ 781 cities_ 772 currency.. 780 hotels.. 781 industries. .. 775 1 abor conditions_ 775 location and area___'_ 772 merchandising methods__ 781 minerals_ 773 population_ 772 postal service_ 777 railways_ 776 rents_ 781 roads_ 776 shipping facilities_ 777 tariffs_ 778,779 telephone service_ 777 trade __ 778 trade conditions, changes_ 781 travel facilities_ 731 water suppl y.. 777 waterways. 775 See also Yunnan Province. Yunnan Province, agriculture.. 12 American interests. 13 area—. 12 climate.. 12 communications_ 12 industries_ 12 language and people-- 13 minerals__ 12 population.. 12 railways.. 12 topography- 12 treaty ports. .. 13 See also Yunnan district. Yunnanfu.. 772 Zinc__-. 215 Hunan Province. 683 Yunnan district- 774 O % . . t *»