As the commerce of New Caledonia, which for the past year has been growing very rapidly, is daily assuming much larger proportions, this line, in addition to the regular monthly steamship service referred to in my report of the 24th of June last* between San Francisco and Saigon, via Honolulu, Tahiti, Nouméa, and Manila, is certain to aid largely the development of trade between this colony and the Western States.

United States shipping this year will also be larger than ever before. The second vessel, the Newsboy, from Puget Sound, which arrived here with lumber, is about to return to the United States. A third vessel with a similar cargo, consigned to Messrs. Jouve & Co., of Nouméa, is on the way, and a fourth, with some 400 wooden cottages from Messrs. Renton Holmes & Co., of San Francisco, for the famous nickel mines at Thio, east coast of New Caledonia, is expected.

NOUMÉA, July 28, 1899.

PAUL EUGENE WOLFF,
Commercial Agent.

EXPORT DUTY ON FORMOSA TEAS.

Under date of Shanghai, August 23, 1899, Consul-General Goodnow transmits a printed extract from the Formosan, relative to the export duty now levied on Formosa teas, which, as the United States takes the bulk of such teas, must affect the trade accordingly.

THE NEW TEA DUTY IN FORMOSA.

From the coming into operation of the new treaties, export duties in Japan have been abolished, but not in Formosa. Here the old duties have been taken off, and in their place a new duty of 1.60 yen (80 cents) per picul on Oolongs and 1.20 yen (60 cents) on Pouchongs is imposed on all shipments to places other than ports in Japan, and on shipments to these latter a harbor duty of 1 yen and 0.60 yen (50 cents and 30 cents) per picul, respectively, is payable. These changes were made without any notice being given the general public or the firms interested, and it was first arranged that they should go into effect on July 17, but this was afterwards changed to August 4. The object of these new duties, at first sight, to one unacquainted with the actual circumstances of the case, would appear to be simply to encourage trade between the island and Japan; but the result is really, while observing the letter of the treaties, to set aside their general spirit and intention and effect a very substantial discrimination in favor of a route which happens to be under the control of Japanese steamship companies only, as against one which is not so controlled. The general purpose and intention of the treaties is to put foreigners and Japanese on exactly the same footing as regards both imports and exports, and to allow no discrimination in favor of either one or the other; but here, while obeying the letter of the treaty, the general tenor and spirit is entirely

*See CONSULAR REPORTS No. 229 (October, 1899), P. 339.

cast aside and a state of things inaugurated which amounts to a very practical discrimination against the foreigner. Moreover, as at present there are no sailings direct from Formosa to America—which is far and away the largest consumer of Formosa Oolongs, but only via Amoy and Japan, and as all shipments from Formosa to America must, therefore, go either to Japan or Amoy for transshipment, the effect of this law discriminating in favor of the route to Japan is to place shippers via Amoy at a positive disadvantage in the markets of America as against shippers via Japan, and as such is not only unfair in our opinion, but arbitrary in the extreme. The tea trade of the island has been built up in the past with capital introduced from Amoy, and Amoy houses have large interests here and are amongst the principal purchasers and shippers of the crop, so that discrimination against Amoy is the last thing one would expect from the Government, especially when one considers that trade was in full swing and well established long before the Japanese came to the island. We must say it seems to us a mistake, and, whatever may be their legal rights on the subject, looking at the mere letter of the treaties, we can not but think they are unwise in making any discrimination at all. Furthermore, as a matter of policy, and in their own interests, it seems to us very shortsighted.

Shipments to America during past years have been so heavy that at the present moment the stock of Oolongs in that country amounts to quite eighteen months' supply, at the average rate of consumption for all America, and the trade there is practically at a standstill, except for account of direct consumers; so that it becomes. imperatively necessary, in the interests of the island, to encourage new outlets wherever they can be found, if production is not to be curtailed. Is this the way to encourage the finding of these new markets? We hardly think so. Competition is so keen now-a-days, that the very best thing the Government could do to promote the sale of the island's teas, and to encourage the finding of new outlets, would be to take off all duties altogether, if only revenue interests would permit it. Formosan teas would then be placed in a better position to compete with the teas produced in other countries, and the island's welfare and prosperity promoted accordingly.

TARIFF REGULATIONS OF KYAO-CHAU.

Consul-General Mason sends from Berlin, September 16, 1899, translation of the chief articles of the tariff of Kyao-chau,* as published in the German Export Zeitung, Berlin, September 15, 1899. The article adds:

As German business interests are mainly involved, it appeared desirable that German citizens should be employed as customs officials in the free port and that communication with the business world should be in German. The most important positions are therefore to be taken by Germans, or at least by foreigners who can speak German.

The most important point in the regulation is that the Chinese custom-house is removed to Tsintau. It was necessary that the free port should not be placed at a disadvantage in its through traffic as compared with other ports. The territory that has been leased appears to some extent a great depot within the district controlled by the Chinese customs laws, in which, from reasons of convenience, the customs officials are permitted to reside. As an emporium and place of consumption

* See CONSULAR REPORTS No. 229 (October, 1899), p. 273.

it enjoys free trade, as place of shipment for through traffic it possesses at least the advantages, the privileges and rights of a Chinese port.

A free port is thus founded without troublesome duty restrictions. As emporium and place of manufacture, Tsintau is without rivals on the Chinese coast; it possesses the advantages of both the foreign and the treaty port. Without paying duty, the merchant can gather a large stock of foreign goods which he receives from his native land. Mineral products-coal, iron, and ore-the basis of a new industry, are entered free of duty. The raw products of the Chinese ports-cotton, silk cocoons, hides, wool, etc.—are imported there, consumed, or manufactured and reexported as new manufactures, without paying duty. Food products from the interior-rice and barley, corn and wheat-whose export is otherwise forbidden; hundreds of other products and articles, such as burning and food oils, fruit and eggs-in fact, everything that is necessary for the daily use of the population of Tsintau-straw mats, furs, felt, silk, and tobacco; in short all the indigenous products and goods, can be imported into the German territory without paying duty.

Owing to the special customs advantages granted, the influence that the opening of a German port on the Chinese coast will have on the direct importation of Chinese products to Germany is not to be foreseen at this moment.

CHINESE MINING REGULATIONS.

Minister Conger sends from Pekin, August 12, 1899, copy of amendments to the regulations governing railways and mines in China, sanctioned and promulgated on July 30. The regulations were printed in CONSULAR REPORTS No. 223 (April, 1899), p. 556. The inclosure in the present dispatch is in the form of a memorial drawn up by the bureau of railways and mines in conjunction with the Tsungli Yamên. It reads:

In the matter of railways, on the 13th of December, 1898, the Yamên, conjointly with the mining and railway bureau, memorialized the Throne in reference to a thorough consideration having been given to the management of railways and to the need of making a distinction between those that are urgent and those that can be delayed. The suggestions made received the imperial sanction and were duly promulgated and are a matter of record.

As to mines, however, since permission was given to work them, it has been found necessary to make additions to the regulations which are here explained. The formation of stock companies by Chinese and foreigners and the permission of the Government to work mines show that the Government's desire is to treat all with the same kindly feeling, irrespective of nationality; and that not one merchant alone, but all merchants, may share in the profits of mining. Recently, Chinese and foreigners who have applied for mining concessions have (as the regulations permit all companies to survey and locate mining property) selected and located mines in a reckless manner in the prefectures and districts, without clearly defining the place or places, the district, and the extent or area of the mining property; hence, under this regulation dishonest merchants, in league with others and by false representations, could get the better of others and monopolize the mining lands, while the honest, upright, and worthy gentry and merchants would be at

a disadvantage and not be able to devote themselves to .nining. This would be greatly at variance with the original purpose and intent of the law governing mining operations. It should therefore be explicitly made known that such a system must be regulated and restricted. In future (concessions already granted, which must be carried out according to the terms of agreement, excepted), when mining concessions are applied for, they will only be granted for one place in a district, not several places, and thus prevent mining operations from getting into the hands of greedy persons by their locating mines in whole prefectures and districts. Such a course will give to all a chance to reap benefits from mines.

In the former regulation (article 13) it is stated that "the control of mining companies, irrespective of the foreign capital concerned, must remain in the hands of Chinese merchants," and (article 9) "there must be at least a proportion of threetenths of the shares owned by Chinese." When this proportion is raised, foreigners may be invited to buy shares. Although this rule was for the purpose of encouraging the people to embark in the work of mining and to open up a new line of business, still the difference between the proportion of three-tenths held by Chinese and seven-tenths held by foreigners should be taken into account, as it is to be feared that the control of mining interests would gradually get into the hands of foreigners. It is right, therefore, that the regulation should be modified and regulated in this respect.

Hereafter (existing concessions exempted), Chinese and foreigners should have equal proportions of the shares in mining companies-i. e., each to hold one-half of the shares-before mining operations are commenced, thus avoiding partiality. The direction of mining companies must rest, however, in the hands of the Chinese merchants. If foreigners object to this system and ask that the direction be placed in their hands, the request will not be entertained.

Further, in the former regulation (article 6) it states:

"When applications are made by Chinese gentry or merchants to the local officials for permission to engage in mining enterprises, if their applications are not in opposition to the regulations, they may be submitted to the Government board. The local officials have no power to grant such applications. If such applications are made to the board direct, inquiries must be made through the local officials of the applicant's district, and only such applications will be granted in which the report of the local authorities is of a favorable nature."

The object of this regulation is, that Chinese merchants making application for mining concessions must first wait until a thorough investigation has been made and permission granted them before inviting foreigners to take shares in mining companies. If, before application has been made, or if application has been made and refused, they issue shares to foreigners and join them in mining operations, and on investigation being made it is found that there are difficulties in the way of carrying out the work, a useless expenditure of money for surveying, etc., will have been incurred, and a disturbance will inevitably result. It is deemed right, therefore, that this regulation should be revised as follows: In future, when Chinese merchants make application to work mines, they must wait until an investigation has been made by the officials, and if there is nothing to hinder work being carried on, and permission has been granted, they may invite foreigners to take shares and draw up a mining contract. The contract, however, must be submitted for the approval of the Government bureau before operations are commenced. Permission will not be granted to companies to work mines if they are formed before making application to the bureau to carry on mining operations.

Again, by regulation (article 8) "all enterprises sanctioned by the board must be commenced within six months of the date of the sanction, otherwise the sanction will be withdrawn, unless it can be shown that the delay was unavoidable." Under

this regulation, delays may occur on trivial excuses being brought forward, and in that case the working of the mine is done in name only, and not in reality. The time has now been fixed at ten months from the date of sanction, within which period, if operations are not commenced, the sanction will be canceled, and no excuses whatever will be considered. The local authorities will then find some other parties to undertake the enterprise, and no disputes will be allowed.

The other regulations (excepting the changes here made) are to remain in force. The mining concessions already granted will be carried out under the old regulations, in order to avoid confusion and trouble.

SILKWORMS IN CHINA.

In reply to a California correspondent,* the interpreter for the consulate-general at Shanghai, Mr. Barchet, on August 30, 1899,

writes:

The domesticated silkworm (Bombyx mori) is extensively reared in the provinces of Chekiang, Keang-su, Szechuan, and Shantung, and to a small extent in Hu-peh, Keang-si, and Honan.

The silk industry is carried on profitably in Chekiang and Keang-su, where soil and climate are adapted to the silkworm, though even in these provinces there are localities where the silkworm does not thrive and the cocoons do not attain the size or weight they have in Ningpo, Shao-hying, Hang-chow, Hu-chow, and Wusich-regions which are famous for their silk.

The cause of this difference is hard to explain, as the careful selection of eggs, the food, climate, and treatment are to all appearance the same.

Mulberry leaves form the staple food for the silkworm, and only when the supply gives out are the leaves of Cudrania iriloba resorted to, which the silkworms will eat, but not so greedily; and the silk produced is inferior in quality to that from worms fed on mulberry leaves.

Though the domesticated silkworm is liable to disease, the Chinese variety is worthy of repeated trials, as it is fairly hardy when raised from healthy eggs and is decidedly superior to that of India or Japan; but sound and well-selected eggs are of paramount importance to success in such an industry. It would pay to have the eggs examined microscopically by an expert to insure that none but healthy ones be hatched. It would also be well to secure eggs from different localities (Chekiang, Keang-su, and other provinces) to find out which will thrive best under new conditions.

The wild silkworm of China and Japan is larger and is said to yield a greater amount of silk; but this is coarse and yellowish in

To whom Advance Sheets have been sent.