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the same, they would be astonished at the increase in their exports. The Germans are preparing to adopt this method, and, unless checkmated, will make sad inroads on the trade we now have. They are also getting ready to publish a paper in the Chinese language, especially to advertise their products.

Again, our manufactured goods are being constantly counterfeited. Fairbank's scales, Columbia bicycles, and many other standard articles are made in Japan and shipped here for half the price of the genuine article. They are equal to our products in name only. A graphophone is made in Germany and sold here for the genuine Edison. It is, indeed, a very poor imitation.

The number and tonnage of vessels entered and cleared under each flag for the year ended December 31, 1897, is to be found in the following table:

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GERMAN ACQUISITIONS IN SHANTUNG.

I inclose an extract from the Shanghai Gazette of May 30, 1898, purporting to give the terms of the treaty* between China and Germany relating to the commercial control of this province. The railway and mining concession includes practically all of the province of Shantung. I understand that Germany has also obtained the right to build a railroad to the Yangtze.

The region embraced in Paragraph IV of the articles granting the mining concession takes in the copper, gold, iron, coal, and diamond fields, and no other foreigner, and not even the natives themselves, can operate mines without Germany's consent.

From recent information, I am led to believe that the Germans are trying to stop the new concession granted to Dr. Yungwing to build his line outside of the province from Tientsin to Shanghai. I have already reported the action of the Germans in causing the Chinese Government to withdraw its grant to Yung to build in this province. Yung's company is an American syndicate, and he steadfastly held to the point that only American capital, machinery, and mechanics would be employed by it.

CHEFOO, August 9, 1898.

JOHN FOWLER,

Consul.

[Extract from Shanghai Gazette of May 30, 1898.]

The following is a translation of the official memorandum of the Tsungli Yamên with reference to the settlement of the German claims in Shantung:

An amicable arrangement of the missionary troubles at Tsaichow-fu, Shantung, having been arrived at by Germany and China, the two powers immediately interested, China makes the following concessions as a mark of friendly feeling towards Germany, in the hope that the good relations existing between the two countries may always continue, that they may become more intimate, and that their mutual commerce may expand and prosper to their mutual advantage. The first concession is the leasing of Kyao-chau and adjacent territories to Germany, to which the following conditions appertain:

I. His Majesty the Emperor of China, being desirous of preserving the existing good relations with His Majesty the Emperor of Germany and of promoting an increase of German power and influence in the Far East, sanctions the acquirement under lease by Germany of the land extending for 100 li,‡ at high tide (at Kyao-chau). His Majesty the Emperor of China is willing that German troops should take possession of the above-mentioned territory at any time the Emperor of Germany *Noted in CONSULAR REPORTS No. 212 (May, 1898), p. 140.

+ See CONSULAR REPORTS No. 215 (August, 1898), p. 584.

100 li=33% English miles.

chooses. China retains her sovereignty over this territory, and, should she at any time wish to enact laws or carry out plans within the leased area, she shall be at liberty to enter into negotiations with Germany with reference thereto; provided always that such laws or plans shall not be prejudicial to German interests. Germany may engage in works for the public benefit, such as waterworks, within the territory covered by the lease, without reference to China. Should China wish to march troops or establish garrisons therein she can only do so after negotiating with and obtaining the express permission of Germany.

II. His Majesty the Emperor of Germany being desirous, like the rulers of certain other countries, of establishing a naval and coaling station and constructing dockyards on the coast of China, the Emperor of China agrees to lease to him for the purpose all the land on the southern and northern sides of Kyao-chau Bay for a term of ninety-nine years. Germany is to be at liberty to erect forts on this land for the defense of her possessions therein.

III.-During the continuance of the lease, China shall have no voice in the government or administration of the leased territory. It will be governed and administered during the whole term of ninety-nine years solely by Germany, so that the possibility of friction between the two powers may be reduced to the smallest magnitude. The lease covers the following districts:

(a) All the land in the northeast of Lienhan, adjacent to the northeastern mouth of the bay, within a straight line drawn from the northeastern corner of Yintao to Laoshan-wan.

(b) All the land in the southwest of Lienhan, adjacent to the southern mouth of the bay, within a straight line drawn from a point on the shore of the bay bearing southwest by south from Tsi-pe-shan.

(c). Tsi-pe-shan and Yintao.

(d) The whole area of the bay of Kyao-chau covered at high water.

(e) Certain islands at the entrance of the bay, which are ceded for the purpose of erecting forts for the defense of the German possessions.

The boundaries of the leased territory shall hereafter be more exactly defined by a commission appointed jointly by the Chinese and German Governments, and consisting of Chinese and German subjects. Chinese ships of war and merchant ships and ships of war and merchant ships of countries having treaties and in a state of amity with China shall receive equal treatment with German ships of war and merchant ships in Kyao-chau Bay during the continuance of the lease. Germany is at liberty to enact any regulations she desires for the government of the territory and harbor, provided such regulations apply impartially to the ships of all nations, Germany and China included.*

IV.-Germany shall be at liberty to erect whatever light-houses, beacons, and other aids to navigation she chooses within the territory leased and along the islands and coasts approaching the entrance to the harbor. Vessels of China and vessels of other countries entering the harbor shall be liable to special duties for the repair and maintenance of all light-houses, beacons, and other aids to navigation which Germany may erect and establish. Chinese vessels shall be exempt from other special duties.

V.-Should Germany desire to give up her interest in the leased territory before the expiration of ninety-nine years, China shall take over the whole area and pay Germany for whatever German property may at the time of surrender be there situated. In case of such surrender taking place, Germany shall be at liberty to lease some other point along the coast. Germany shall not cede the territory leased

* Kyao-chau was declared a free port on September 2. See CONSULAR REPORTS No. 218 (November, 1898), p. 468.

to any other power than China. Germany shall pay a reasonable price to the native proprietors for whatever lands her Government or subjects require.

The second important concession by China to Germany is the railway and mining concession, the principal provisions of which are as follows:

I. The Chinese Government sanctions the construction by Germany of two lines of railway in Shantung. The first will run from Kyao-chau and Tsinan-fu to the boundary of Shantung province, via Wei-hsien, Tsinchow, Pashan, Tsechuen, and Suiping. The second line will connect Kyao-chau with Chinchow, whence an extension will be constructed to Tsinan through Laiwuhsien.

II. In order to carry out the above-mentioned railway works, a Chinese-German company shall be formed, with branches at whatever places may be necessary, and in this company both German and Chinese subjects shall be at liberty to invest money, if they so choose, and appoint directors for the management of the undertaking.

III.-All arrangements in connection with the works specified shall be determined by a future conference of German and Chinese representatives. The Chinese Government shall afford every facility and protection and extend every welcome to representatives of the German Railway Company operating in Chinese territory. Profits derived from the working of these railways shall be justly divided pro rata between the shareholders without regard to nationality. The object of constructing these lines is solely the development of commerce. In inaugurating a railway system in Shantung, Germany entertains no treacherous intention toward China, and undertakes not to unlawfully seize any land in the province.

IV. The Chinese Government shall allow German subjects to hold and develop mining property for a distance of 30 li* from each side of these railways and along the whole extent of the lines. The following places where mining operations may be carried on are particularly specified: Along the northern railway from Kyao-chau to Tsinan, Wei-hsien, Pa-shan-hsien, and various other points, and along the southern Kyao-chau-Tsinan-Chinchau line, Chinchau-fu, Laiwuhsien, etc. In trying to develop mining property in China, Germany is actuated by no treacherous motives against this country, but seeks solely to increase commerce and improve the relations between the two countries.

If at any time the Chinese should form schemes for the development of Shantung, for the execution of which it is necessary to obtain foreign capital, the Chinese Government, or whatever Chinese may be interested in such schemes, shall, in the first instance, apply to German capitalists. Application shall also be made to German manufacturers for the necessary machinery and materials before the manufacturers of any other power are approached. Should German capitalists or manufacturers decline to take up the business, the Chinese shall then be at liberty to obtain money and materials from other nations.

NEW CHINESE MINTS.

Machinery for a mint at Chengtu has just been set up and tested. It was furnished by a machine company of Bridgeton, N. J., and is of sufficient capacity to turn out 5,000 dollars and 18,000 coins smaller than the dollar per hour. It is intended to make dollars, half dollars, twenty-five cent pieces, dimes, and five-cent pieces. This company

* About 12 miles.

also supplied the machinery for a new mint for making copper cash at Wuchang. This mint, with a capacity of 36,000 cash per hour, has been in operation two weeks.

The machinery for the mint at Chengtu was delivered by the company supplying it free on board at Ichang, the head of navigation of the Yangtze River, where it was taken in charge by the Chinese authorities. Its subsequent treatment was characteristic. The machinery was in boxes, as shipped from the factory. It was left on the bank at Ichang for a month, so close to the water that when a slight flood came the boxes were under water, and the muddy water deposited sediment until the boxes were full of mud. In this condition they were taken to Chengtu, being about two months on the way. When the boxes were opened, they were found to be caked up solidly with mud, except where the rats had dug holes and made nests while the boxes lay at the arsenal. The machinery finally was gotten into condition to be put together, but the dies were so badly rusted that they would be condemned in an American mint. The Chinese, however, made no objections to the imperfect places in the coins, apparently thinking them additional safeguards against counterfeiting. Some parts of the machinery were entirely ruined and others were so badly rusted that they can not last long

SHANGHAI, August 16, 1898.

JOHN GOODNOW,

Consul-General.

TRADE OF THE PHILIPPINES IN 1897.

As all details relative to the Philippine Islands are at present of importance, I have thought that the free translation of a recent report made by the Belgian consul at Manila upon the export trade of those islands during 1897 may not be without interest. This report bears date April 21, 1898.

The Belgian consul maintains that during 1897, statistics show a great increase in the export trade, notwithstanding the continuance of the rebellion. The export of abaca, or manila hemp, increased by 314,284 piculs (43,816,903 pounds). Copra likewise was exported to the amount of 200,000 piculs (27,890,000 pounds) more than in 1896. The exportation of this product began only in 1892; prior to that time almost all the copra came from the Caroline Islands. To-day, all the islands of the archipelago produce it. Exports of dyewoods, coffee, indigo, mother-of-pearl, gums, tobacco, leather, and hemp rope also considerably increased.

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