The Yamên have now decided to allow small steamers, foreign or Chinese, to ply on the inland rivers in the provinces where commercial intercourse with foreign nations is carried on, in the hope that trade will thereby expand and the revenue be increased.

In obedience to instructions, the inspector-general of customs has drawn up and submitted a set of rules, nine in all, to be put in operation. These have been carefully examined and can be put in force experimentally.

The Yamên memoralized the Emperor on the subject and received His Majesty's decree to put the rules into operation. The Yamên have also addressed the ministers superintendent of northern and southern trade, the viceroys, governors, tartar-generals, lieutenant-generals, and have also instructed the inspector-general of customs, the custom taotais, and the superintendent of customs at Canton, to act accordingly.

As in duty bound, the Prince and Ministers send a copy of the rules drawn up by the inspector-general of customs and beg that the minister of the United States will instruct the United States consuls in China to notify American merchants that they must duly observe them. It is to be hoped that, in future, the trade of Chinese and of foreigners will increase and that this source of revenue to China will not be interfered with.

INLAND STEAM NAVIGATION REGULATIONS OF 1898.

A.-Registration.

(1) The inland waters of the treaty-port provinces are hereby opened to small steamers, native or foreign, plying from treaty ports.

(2) Small steamers at treaty ports, whether plying only in the waters of the port or going thence inland, are to be registered at the customs and to take out papers at the customs containing owner's name and residence, name and type of steamer, number, crew, etc., in addition to whatever national papers they are allowed or required by law to carry. Such customs papers are to be renewed annually, and are to be surrendered on change of ownership or when the vessel ceases to ply. The fee for the first issue of customs papers will be 10 taels,* and for each renewal 2 taels.

(3) Small steamers thus registered at the customs may ply freely in the waters of the port without reporting their movements at the customs; but if they go inland, they must report both departure and return. No unregistered steamer will be allowed to proceed inland.

(4) As regards exhibition of lights, prevention of collision, shipping of crews, and inspection of machinery, etc., all such steamers are to observe the rules in force at the ports to which they belong.

B.-Revenue.

(5) Cargo shipped at treaty ports is to be reported to the customs and is to pay such duties as the customs decide to be leviable. Cargo brought to a treaty port from inland is to be summarily dealt with.

(6) Cargo landed or shipped inland is to pay at the place of landing or shipment whatever dues or duties the local regulations call for.

(7) If such steamers have vessels in tow, they must halt at whatever stations the vessels towed are required to stop, in order that the cargoes may be dealt with as local rules prescribe.

* The Director of the United States Mint, April 1, 1898, values the haikwan tael at 67.3 cents.

C.-Judicial.

(8) Offenses inland, whether against revenue laws or affecting persons or property, are to be dealt with by the local authorities of the district in the same way as if there committed by their own people; but, if the vessel concerned is foreign owned, or the person implicated is a Chinese employed on board such foreign-owned vessel, the local authorities are to communicate with the nearest commissioner of customs, and the commissioner in turn with the consul, who may send a deputy to watch the proceedings. If the offender is a foreigner, he is to be sent to the consul at the nearest treaty port, in the manner prescribed by treaties where foreigners without passports are arrested.

(9) If any such steamer passes inland stations where a stop should be made, without stopping, or if the crew, etc., creates trouble inland, the customs may withdraw the customs papers and refuse the vessel permission to proceed inland again. The above rules are for the inauguration of steam traffic on inland waters, and are subject to such changes as may from time to time be found necessary.

WATCH TRADE IN JAPAN.

The following is from a report of the Swiss consul-general at Yokohama, on the export of Swiss and American watches and watch materials to Japan. Great stress is laid on the fact that the United States exporters of watch materials are still getting the lion's share. In 1896, Switzerland exported a sum equal to that of the United States; but, in 1897, our exports gained, the reason given being that either greater push was displayed by the American competitor or that there was a considerable reduction in prices. While the United States takes the lead in the export of watch parts and materials, Switzerland is far ahead in the export of complete watches. The consul-general also reports that the Osaka Watch Company has discharged its American superintendent and all its American workmen. Other facts stated in the report are of great interest to the American watch trade.

REPORT BY CONSUL-GENERAL RITTER, OF SWITZERLAND.

[Translation.]

Imports

The watch trade of the year 1897 was as profitable as that of 1896. gained 2 per cent, and the decrease in number of pieces was 12 per cent less than last year, thereby raising the average price 141⁄2 per cent-the reason for this being obviously that better watches were imported. The kinds of watches imported were: Gold cases, 31⁄2 per cent; gold-plated cases, 2 per cent; silver-plated cases, 711⁄2 per cent; composition cases, 21%1⁄2 per cent; and steel-plated cases, 11⁄2 per cent of the total amount.

Key-winding watches are unsalable. As a general rule, the smaller sizes are desired. In former times, the 21''', 22''', 23'', and a few 24" were the salable sizes; but now only 19''', 20''', 21''', and a very few 22" and 18" are the sizes desired, while 23"" and 24"" find no buyers when offered even at a loss.

The change of fashion has enabled a number of Japanese manufacturers to enter the field who were not equipped to furnish the larger sizes formerly demanded.

The great variety in styles increases the trade and should be of benefit to those Swiss manufacturers who make specialties; but it must be remembered that this market requires a chronograph dial even for the cheapest metal watch, contrary to European style. The trade in ladies' watches is small.

Gold-plated watches from the United States have as great a sale as ever, and can only be sold in model and style as produced there. Watches in steel cases figure for the first time this year, about 4,000 having been sold during the last fiscal year. If the wearing quality is such that the black case will retain its color for a considerable time, its use, no doubt, will largely increase.

Following are statistics for the past five years, which show that Switzerland has kept its lead above all countries in the export of complete watches to Japan:

+ Reductions to United States currency made in the Bureau of Foreign Commerce.

85 per ct.

It may be remarked that in this table, as in former statistics, Germany is credited with a large number of cheap alarm clocks under the name of watches, which would reduce the average price per watch from $1.05 to about 53 cents. The watch import, as distributed among the different ports of entry, was as follows for the year 1897:

Since last year, the factory at Osaka has imported movements and rough 16" cases from the United States, to be finished here after American models; but experience has shown that this product is higher in cost and lacks the finish of the complete American article. The shares of the company, in consequence of bad business, have fallen steadily. The output in the last fiscal year was about 2,500, and only some 10,000 have been produced since its opening. At present the factory stands idle.

In my former report, I spoke of the new factory at Tokyo, superintended by Japanese who learned their trade in Switzerland. Up to this time, the machines are still incomplete. There is a 5-horsepower engine, a machine for stamping cases, and a few lathes for the production of pivots, wheels, screws, etc. Although it has been in existence for four years, it has not been able to produce a single complete watch, and is to be considered little more than a horological school, with twenty young workmen as scholars. It is said that this factory will follow in the footsteps of the Osaka factory by importing parts, which again will raise the price of watches, as such articles come under the extra duty on luxuries, at 25 per cent ad valorem. I may therefore express the hope that from this side no competition is to be feared by the Swiss manufacturers.

It is of importance to note that both factories employ only Japanese. The Osaka Watch Company has discharged the American superintendent and all its American workmen.

The results of the Japanese watch industry can best be shown by the following table for the last five years, showing the value of the import of materials as compared with the import of complete watches:

This table shows that in the year 1893, when there was no watch factory in Japan, the value of the parts of watches imported was only 3.88 per cent of the value of the import of complete watches. In the year 1894, when the watch factory in Osaka was opened, the percentage of the watch parts imported reached 7.08 per cent of the same and has declined ever since. In the fiscal year 1897, it had fallen to 4.64 per cent, 0.76 per cent more than in 1893. If we assume that the 3.88 per cent of watch parts imported in the year 1893 was sufficient to repair the imported watches of the same period, we find in the increase of 0.76 per cent of the year 1897 the actual consumption of the Japanese watch manufactories.

The United States has the lion's share of the import of watch parts. It furnishes everything used by the Osaka factory, which produces only American watches. In 1897, the United States export to Japan was $25,994, compared with the Swiss export of only $9,663. As the Osaka factory can hardly use one-third of the United States export, these figures show conclusively that the United States furnishes more materials for the repair of Swiss watches than does Switzerland itself. The import of the number of United States watches is only 634 per cent of that of Switzerland, but the value of the same is 13%1⁄2 per cent of the value of the Swiss import. In this connection, it is worthy of note that in the year 1896 the difference between the import from the United States and Switzerland was merely nominal: United States, $24,361; Switzerland, $25,491.

When, therefore, in the year 1896 Switzerland could hold its own against the United States and could no longer do so in 1897, it must be concluded that the manufacturers of the United States sell cheaper, or are more energetic than their Swiss competitors.

BERNE, July 12, 1898.

ADOLPH L. FRANKENTHAL,

Consul.

QUININE IN JAVA.

Although for some years Java has been the principal country for producing cinchona bark, yet the actual manufacture of sulphate of quinine here has only just begun; it nevertheless, I think, deserves a passing notice.

My attention was first called to the matter by an invoice being brought to me on January 18, to be certified for a shipment to the United States, of 10,000 ounces of sulphate of quinine. This is the first shipment on record and marks the beginning of a new and, I hope, very profitable era in the trade relations between Java and the United States.

Since then, there have been other shipments, and up to the present date there have been shipped, or rather invoiced for shipment, to the United States, 48,300 ounces of sulphate of quinine, valued at $11,395.55; and I have every belief that more will follow.

There is at present only one factory for working the cinchona bark in Java, and it has been running a very short time; but, in spite of drawbacks, its owners are full of energy, and the success of the enterprise is probable.

Just now things look especially bright, as the war has resulted in a rise in quinine quotations. Quinine from this factory (Bandoengsche Kinine-fabrick), which the latter part of April was at $6.15 per unit,* had risen by the middle of May to $7.54.

I think I can best describe the industry, its history and its prospects, by inclosing a letter written by Mr. F. W. Sijthoff, the manager of the factory above mentioned, who has been very courteous and has offered me every facility for acquiring information. He describes matters better and more graphically than I could.

As regards the cultivation of the cinchona bark, the result of the Government plantations here does not bear out the common opinion that commercial ventures are better managed by private enterprise. An official report just published shows that the Government in 1896

*The unit of quinine means the percentage of sulphate of quinine in half a kilogram (1.10 pounds) of cinchona bark; thus, bark yielding 1 per cent with the unit price 4 cents would bring 4 cents per half kilogram, while bark yielding 5 per cent of sulphate of quinine would bring 20 cents per half kilogram.