HINDRANCES TO AMERICAN OIL TRADE IN CHINA. A few suggestions as to the protection of trade in American oil in China are respectfully submitted, for the benefit of our industries. The recent discovery of petroleum in the very heart of China, in the rich and populous province of Szechuan, is reported by the Tientsin correspondent of the Hongkong Telegraph as follows: Very rich petroleum wells have been found near Chungking, which suggest endless possibilities in this line alone. These oil wells are said to be far superior to those discovered in Kyao-chau, and more important than any yet worked by native methods; but they need foreign capital and management, with which, it is thought, they will yield colossal quantities of oil. Of course, what would be required to place the product on a sound commercial basis would be a big oil refinery. This discovery is very important, and, in view of the oil wells in the Japanese island of Formosa, and of other oil wells near the German possession of Kyao-chau, in the province of Shantung, our trade in American kerosene is bound to be affected unless prompt efforts are made to control the output and, if possible, the trade in the Chinese product. We have already in this growing district of Canton-which has over three times the area and population it had in 1896, and which comprises the three provinces of Kwangtung, Kwangsi, and Yunan, with more than 80,000,000 of people-two powerful competitors in Russian and Dutch oils, as will be seen by the customs statistics of the trade at Canton. Until 1896, Dutch oil was unknown in China. It comes from Sumatra, and the Royal Dutch Petroleum Company is vigorously pushing it in Hongkong and Chinese coast ports, including the seven treaty ports in this consular district, viz, Swatow, Macao, Hoihow, Pakhoi, Canton, Samshui, and Wuchow. The inland waters of China were opened to the trade of all nations on June 1, 1898, and this extension of markets will afford greater facilities for increasing our commerce in China. In 1896, the German agents for the Dutch oil purchased a site in Hongkong, built a pier for the use of tank steamers, and constructed several large reservoirs to store oil in bulk, as well as warehouses for canning and boxing the same. Our Dutch rivals in kerosene began to develop their enterprise with characteristic energy, and in 1897, after just one year, had such a demand that it was necessary to run several tank steamers between Sumatra and Hongkong to supply the constantly increasing market in China for cheap oil. Previous to the erection of these tanks by the Royal Dutch Petroleum Company, oil was imported in cases of two cans each. In these oil works in Hongkong, there were canned in 1897 upwards of 2,600,000 gallons of oil for the Canton market alone. Customs returns show 2,025,780 gallons of American oil imported into Canton between January, 1894, and January, 1897. Of Russian oil there were imported during the same period 2,703, 320 gallons. The Dutch oil is an inferior article, and much cheaper, of course, than that from America. It is well known that large quantities of Dutch oil are being palmed off on the unsuspecting Chinese as genuine American kerosene. It is canned in Hongkong in old American tins that are bought throughout China for that purpose at 10 cents a tin and are marked with popular American trade-marks of various kinds. The Chinaman is a practical business man, and if he can buy Dutch or Russian oil, or, as is frequently the case, a combination of both these smoky, inflammable, and dangerous oils, made up in a way that will enable him to sell it in China as American "Brilliant," "Comet," "Sunlight," or other popular brands, and at a lower price than the genuine article, he will, of course, jump at the opportunity. At Wuchow (opened to trade in June, 1897), British, German, and other agencies were soon established, and beside "pushing" piece goods, thread, cheap lamps, matches, etc., they introduced Russian and Dutch oil into the innumerable cities, towns, and villages on the great West River and its various branches, where our oil had held the market until last year. The whole of the great West River and all the inland waters of China are now open to the navigation and the trade of all nations. American exporting firms can establish agencies in the great trade centers of this vast district, which has more than 1,000 miles of seacoast, including the large Island of Hainan, and which extends into the interior as far as Thibet, a distance of over 2,000 miles. This territory is larger in area and in population than that of Austria, Germany, France, and Spain combined, and probably will be as important to United States trade. The United States is fully able to supply the demands of this great market, and vigorous efforts should be made to do so. We have active and determined competitors in the field. For many years our oil producers supplied China's millions. We can now send our oil hundreds of miles into the interior under the American flag. We should hasten to avail ourselves of this opportunity. With increased competition should come increased effort. American trade with the Far East in recent years has not, in certain lines, increased as rapidly as has that of other countries. In no branch of commerce is this more evident than in oil. imports into Shanghai in this line were: American oil........... Russian oil........ Dutch oil....... In 1894, Gallons. 36, 241, 924 4,059, 700 Nil. In 1897, our oil remained about the same, while Russian oil rose to over 20,000,000 gallons, and Dutch oil, of which there were no exports in 1894, rose to 1,581,000 gallons in 1896 and to 5,570,400 gallons in 1897. Notwithstanding the great increase in the demand in China during the past four years, we have not received our share of the oil trade. The Dutch product has advantages in freight and difference in exchange. The points whence American oil is shipped to the Far East are thousands of miles away. Would it not be advisable to select some point on the Pacific coast for the export of oil to China? We could ship oil in tank steamers across the Pacific to the Chinese markets quicker and cheaper than is possible by sailing ships as at present. The old methods were good when we monopolized the market; now, however, we must find better ones. EDWARD BEDLOE, CANTON, June 3, 1898. Consul. RAILWAY SUPPLIES FOR CHINA. Consul-General Goodnow writes from Shanghai, under date of June 18, 1898: Eight "Mogul" freight engines have just arrived and are being erected at Tongku for the Northern Railways of China, and Chief Engineer Kinder has to-day ordered four lighter engines for switching purposes. All these are from the Rogers Locomotive Company, of Paterson, N. J. I inclose herewith report of tenders just received for 7,000 tons steel rails and accessories, all to be delivered at Tongku. The appended clipping, which Mr. Goodnow sends with his report, gives the names of the bidders and their price per ton for rails, fish plates, bolts, and spikes. * On May 4 the consul-general forwarded a report giving the * See CONSULAR REPORTS No. 215 (August, 1898), p. 587. names of bidders and the gross amount of their proposals. The present inclosure gives the bids more in detail, as follows: Under date of May 14, Consul-General Goodnow says that the bid of A. S. Fobes & Co. had been accepted. THE PORT OF WOOSUNG. The village of Woosung lies at the junction of the Huangpu and Yangtze rivers, about 14 miles from the mouth of the Yangtze. Under the customs regulations, the port of Shanghai was extended to the mouth of the Huangpu, and anchorage limits were established at Woosung, where ships could unload sufficient cargo into lighters to allow the ship to cross the bar at Woosung and to come to the usual place of unloading opposite the business section of this city.. No goods have been allowed to be landed at Woosung, and the lighters used were bonded to the customs. The bar across the Huangpu (or Whangpoo) River was made shallower at the time of the Franco-Chinese war by sione boats sunk there by the Chinese authorities, but since that time has been gradually deepening from natural causes. In 1895, at high tide, there were from 18 to 20 feet of water on this bar. At the present time, there are from 23 to 25 feet. But the channel of the river between Woosung and Shanghai has not improved; it has rather deteriorated. The larger mail steamers and men-of-war do not attempt to come up to Shanghai, but transfer their passengers and freight for this port to tugs and lighters at Woosung. About a year and a half ago, the imperial Chinese railway administration began the construction of a standard-gauge railway from Woosung to Shanghai. The construction has been very slow, but the promise is now made that trains will run during the coming fall. During April of this year, the Imperial Government announced that Woosung had been opened as a treaty port, and that as soon as possible a branch custom-house would be opened, "so that when the Woosung and Shanghai Railway is finished goods may be transmitted by rail, which will prove an additional convenience to trade." The opening of this new port and the completion of this railway seem to be of the greatest significance to Shanghai. The fact that the contract for the railway from Woosung to Shanghai and thence via Soochow to Nankin and Hankau has been let to Jardine, Matheson & Co. insures its completion in the shortest possible time, and its proper management when completed. While the firm is English, I believe that Americans will have a fair opportunity to compete for furnishing materials, etc. Under the stimulus of the opening of the port and the certainty of the construction of the railway, real estate, not only at Woosung but in all the region between Shanghai and Woosung, has greatly increased in value. The shipping companies have obtained water frontage at Woosung, and plans are being made for docks and warehouses at the new port. The site of the village of Woosung is comparatively high, some parts being 15 feet above high tide, thus securing drainage. The anchorage on the Yangtze River side is not good, as the shallows extend a long way from the shore. On the side of the Huangpu River, while the deep water comes to the shore at the site of the village, the anchorage is narrow, and not many ships can find place at the docks. But apparently there is room for the large boats, which can not pass the bar without lightering all or part of their cargo. The danger to the new port lies in the fact that much of the land has gotten into the hands of speculators, who are anticipating the probable rise in price. I send a map showing the location of the new port.* SHANGHAI, May 31, 1898. JOHN GOODNOW, * Filed for reference in the Bureau of Foreign Commerce, Department of State. |