STOCKS CARRIED OVER.

In the latter half of 1895 business at Niuchwang was much restricted by the war with Japan, that port being in Japanese occupation. The estimated number of pieces of all kinds carried on December 31 of the several years named is given as follows:

The Boxer outbreak occurred in June, 1900, and business with Tientsin and Niuchwang was entirely suspended during the rest of that year, and much restricted in 1901. At the present time a normal consumption of approximately 6,000,000 pieces annually is a fair estimate. of the capacity of the market of northern China, so that the result of the enormous importation of this year is that the market is now heavily overstocked with American goods of all descriptions. As many cargoes are on the way and more are contracted for, it will be seen that the outlook for orders from the Shanghai importers in the near future is not particularly encouraging. The same condition obtains with regard to English fabrics.

TOTAL IMPORTS AND DELIVERIES.

An examination of the following comparative table completed down to December 5, 1905, will show the total imports and total deliveries of piece goods, as against those for the corresponding period of last year. It also shows an estimate of the stock now on hand as against December

From the above figures it will be seen that the stock of American piece goods now on hand includes 488,950 pieces of gray shirtings, 718,249 pieces of drills, 107,972 pieces of jeans, 2.030,275 pieces of sheetings, and 404,890 pieces of Canton flannel. This startling showing of the present overstocked condition of the market is doubtless attributable to the great decrease in the last year in the demand from the north because of the war. In the second place the boycott caused a complete stagnation of business, and the enormous quantity of goods ordered for speculative purposes also affected the situation. Extensive orders had been placed, in due time shipments were made, and cargo after cargo of piece goods arrived in Shanghai only to be consigned to the warehouses or godowns, as they are called here, useless assets so far as the possibility of realizing on them was concerned. But all these goods had to be paid for at the time of or shortly after their arrival at this port under the system of credits in operation here, and with business practically at a standstill a financial crisis was for a time freely predicted. The advent of peace, however, averted this trouble, for it permitted the shipment and delivery of goods to the north, thus relieving the money stringency and had a tendency generally to restore business to a more normal condition.

DISTRIBUTION THROUGH GUILDS.

Shanghai, it must be remembered, is the distributing point for northern and central China, and comparatively few of the millions of

dollars worth of goods imported annually into this port are retained here or in the immediate neighborhood. Piece goods are brought from the United States almost exclusively, it might be said, for the northern market, and with one or two unimportant exceptions there is no sale for them south of the Yangtze River. A reference to the Customs Daily Returns shows that the bulk of American goods arriving here are reexported to Tientsin, Chefoo, and Niuchwang, from which cities (with the exception of what is required for local consumption) they find their way still farther north.

In order to be fully in touch with the market, take advantage of exchange, and for other business reasons which make their presence desirable at the center of importation, Chinese agents are maintained. in Shanghai by the various guilds of the territory which draws its supplies from Shanghai. The piece-goods guild, as an illustration, has its representative constantly on the ground, and when there is a demand for certain chops in his home city he is communicated with and makes his purchase from the Shanghai dealer, or what may more properly be termed the Shanghai piece-goods jobber. There are instances where the native dealers of other cities transact their business direct, but these are infrequent and can not be said to have made any great headway as yet.

PIECE-GOODS MERCHANT.

The guild is the dominating influence in all commercial transactions in China, and in maintaining an agent here the native merchants of other cities, who are always members of these organizations, are able at all times to secure the latest market quotation and at the same time make it practically an impossibility for any one Chinese dealer doing business in an outport to obtain and have stock shipped to him at a price which will permit of him underselling the local market. The outside native merchant seldom comes in contact with the Shanghai piece-goods merchants, as the business is usually transacted through the jobber, who also assumes the title of "intermediate broker." It seems a cumbersome and roundabout way of transacting business, but it is the Chinese way and can not be said to work any hardship on the foreign merchant whatever may be the effect on the consumer when the goods reach him loaded down with the profits of the native middlemen and dealers who handle them.

In addition to the large shipments of piece goods made to Tientsin, Niuchwang, and Chefco from Shanghai, a greater or less quantity is with great regularity reexported to Hankow, Kiukiang, Chinkiang, Wuhu, Nanking, Ichang, and Chungking. Sales are frequently reported for Ningpo, and a considerably smaller demand is noticeable from Foochow and Wenchow. The Vladivostok market has opened up strong and the demand is evidently increasing. The American goods more than held their own with the English goods in the competition for the trade of Vladivostok, and it is predicted that with the cessation of war and the return to normal conditions that field may be regarded as especially worthy of cultivation.

WEEKLY AUCTION SALES.

The purchase and sale of piece goods on the Shanghai market are not confined exclusively to transactions between native dealers, job

bers, and the importer, for the weekly auctions must be taken into consideration. They are a well oiled, smooth-running part of the trade vehicle which transfers Manchester-made goods to the Chinese dealers. For the last thirty years Maitland & Co. of this city have conducted, every week, an auction of sound cargo comprising practically all classes of piece goods manufactured in England. These goods are purchased by their Manchester agent and are shipped to Shanghai, where they are auctioned off to the Chinese merchants without reserve. This firm adheres strictly to the practice of never disposing of goods at private sale, although frequent applications are received from dealers who wish a few bales or cases in advance of the regular auction sale. Through their method of carrying on business quick returns are secured on the investment. Fourteen days only are allowed in which to clear the goods, so that, in two weeks time, the transaction is complete and the purchaser's money is in the hands of the firm of auctionUnder this system between 400 and 600 packages are disposed of weekly, with weights ranging from 7 pounds to 14.8 pounds.

eers.

Several attempts have been made by Maitland & Co. to dispose of American piece goods in the same manner, but they found the margin of profit so small that they were compelled to discontinue and confine themselves exclusively to English fabrics. It is obviously impossible to obtain anything like an accurate estimate of the profits derived through this system, but they are evidently large enough to make it a paying venture for the English manufacturers as well as the Shanghai auctioneers.

THE NORTHERN MARKET.

As the United States is so largely and so satisfactorily represented in the piece-goods market of northern China, the following information regarding unbleached drills, sheetings, jeans, and cotton calso (called "Canton flannel") may be of importance to the American manufacturer in his effort not only to maintain but to expand the trade. Drills weighing 2.85 and 3 yards per pound are in greatest demand among the Chinese, and they have maintained their popularity in spite of all efforts to dislodge them. There is also a comparatively large demand for goods 34 yards to the pound, while a moderate market has been established for the 3 weight. During the present year there have been sold on this market 2,378,000 pieces of American drills, as against 193,000 pieces of English and Dutch make. This comparison tells the story, indicating that the Chinese fully appreciate the superiority and utility of this class of goods exported from the United States.

Drills are packed in bales of 15 pieces, each piece being 40 yards long and 30 inches wide. It is essential that the dimensions given should be followed strictly, as the goods are marketed by the piece and not by the yard. As the bales are conveyed unopened to their final market in the distant interior, it can readily be seen that the slightest deviation from the rigid enforcement of this rule would create a feeling of distrust and suspicion in the minds of the native dealers which it would be exceedingly difficult to eradicate. It is equally essential that the goods be of uniform weight. These two points can not be too strongly emphasized. The goods should be packed with first a layer of stout hardware paper, covered by a substantial burlap, and roped or strapped with iron hoops. The roping is preferred.

PROPER PACKING.

Several instances may be cited where the American shipper has used an inferior quality of paper-brittle and practically useless for protection in packing. With the rough handling incident to the long voyage from the United States to Shanghai this paper splits in various places, leaving nothing but the burlap to cover the goods. It must be borne in mind, too, that frequently in transshipping piece goods are delayed, and while standing on the wharf may, because of careless and inadequate packing, become soaked through an inopportune fall of rain. The English in packing this class of goods wrap them in stout hardware paper, around which is placed a tar paper, and the bale is then covered with substantial burlap. The more expensive goods shipped to China from England, Italians, prints, etc., are packed in tin-lined boxes, impervious to moisture except in extreme instances. While either of the English methods would be preferable because of the protection of the goods from rough handling, chafing in passage, and inclement weather at transshipping point, the additional expense would have to be taken into consideration if used in packing American goods. Merchants here maintain that if the layer of stout hardware paper covered with strong burlap (to which reference was heretofore made), it would be ample protection against mishaps that might ordinarily be expected in shipment. The difference in the cost of packing in the manner suggied for the American piece goods and the method used by English manufacturers would, in the aggregate, be a formidable. item in a year's importations. Sheetings are shipped in bales of 20 pieces, each piece being 40 yards long and 36 inches wide, and they should be packed in the same careful manner as suggested for the drills, for inferior packing inevitably results in damaged cargo. The chief demand on this market is for the heavier weights of 2.85 and 3 yards to the pound. There has recently been noticeable a slowly growing demand for the American lighter weights of 34 and 4 yards to the pound. These lighter goods are competing on this market with the English shirtings and T-cloths, in which the principal business in English gray goods" consists.

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In the light-weight piece goods market the Americans have already driven an entering wedge, and if manufacturers of the United States will supply the goods required by the Chinese, and their representatives here will push them with their accustomed vigor, the breach in the solid wall of light-weight piece goods erected by the English around southern China may be so widened as to permit the entry of the advance guard of American competition and the gradual encroachment on their hitherto impregnable commercial stronghold.

THE SOUTHERN MARKET.

The Americans with their pure, unsized goods control the market of northern China. They should in time divide the trade of the southern market. The Chinese of that section are now contentedly buying sized goods and sticking to the conservative idea of paying for paste instead of pure cotton. While it is difficult to overcome Chinese prejudices, active competition would probably accomplish it. The development of trade is, after all, largely a matter of education, and it is time that American teachers should be sent south of the Yangtze.