mines are worth opening. This company is then to consult with the Hua Yi Company to make maps and insert explanations and submit the same to the mining bureau of Szechuan. If these mines are not already being worked by officials, gentry, or merchants, and if they are not injurious to the place, land is to be at once bought; such land is only to be enough for the shafts and the necessary buildings. If the lands belong to the people, the lease or purchase shall be made by the Hua Yi Company by arrangement with the owners for a reasonable price. It can also be taken as a subscription of capital and a proportionate value of shares granted to the owner. If it be public property, such as a monastery, temple, etc., the owners have the option of leasing it, renting it, or subscribing it as capital. The Hui Tung Company must wait till land is properly purchased before starting work, and no compulsory purchase or seizure of the land will be allowed.

(5) After each mining property is bought by the Hua Yi Company it is to be handed over to the Hui Tung Company for working. From the mines worked by the Hui Tung Company, such as coal, iron, petroleum, etc., the Hua Yi Company is allowed to collect rent at the rate of 5 per cent on the value of the output, no matter whether such mines make money or not. To reckon the producing capacity and the prices of products, whether dear or cheap, the rent is to be paid on the real price at which the Hui Tung Company sells the products. The value must not be underestimated and any undue advantage gained. With regard to gold sand obtained from gold mines, a rent of 5 per cent will be charged on the pure gold obtained after the gold sand has been thoroughly washed, but not on the sand before it has been washed.

(6) Of the mines worked by the Hui Tung Company, such as coal, iron, petroleum, etc., there shall be paid to the Chinese Government as producer's tax 5 per cent on the value of the output of the mines. Export duty shall be paid according to the existing rules now in force. The Szechuan mining bureau shall authorize the Hua Yi Company to collect the producer's tax and to compare the same with the rent, and thus there will be no difference or shortage. No officer shall be deputed for this purpose, so as to save unnecessary expense. The export duty is to be collected by the custom-house, and after the export duty is paid no inland likin dues will be required. As regards the taxes to be charged on precious metals of all kinds, they are to be decided by the board of revenue.

(7) The Hui Tung Company is to send engineers to find out all the mines that are to be opened and to consult with the Hua Yi Company, which submits the same for the approval of the mining bureau. Should a mine be found in a Government hill the opening of which will not be injurious to the place, permission will be granted to open it. The ordinary land tax on such land would, however, be too small a sum for the company to pay the Government for its use. In the case of Government land, therefore, the 5 per cent rent and the 5 per cent producer's tax are to be collected at the same time and both paid to the Chinese Government, but 10 per cent of the rent is to be reserved to pay the expenses of the mining bureau and the Hua Yi Company. The Hui Tung Company is to pay the export duty.

(8) The area of Szechuan is very extensive, and all sorts of mines exist. Chinese who work on their own property are only required to obtain the necessary permission, pay the necessary taxes according to the rules in force, and they are in no way restrained. But if foreign merchants undertake to work the mines, their operations must be limited in some way or other. They must confine themselves to certain intendancies, prefectures, or districts, and not take the whole province as their sphere of work. Now, work must be started in the interior first and at the boundaries afterwards. The Hui Tung Company shall then send engineers to find out first where are mines to be opened and what mines they are; if the same be in districts apportioned to savages, the Hui Tung Company must wait till they find

out whether the advantage will be greater than the injury and devise other means to open them. The Hui Tung Company in such event can not compel the Hua Yi Company to buy the land quickly and hand it over for working. Any possible cause of disturbance must be avoided.

(9) When prospecting for mines, if any boring or sinking of shafts be necessary to examine mineral deposits, an arrangement should first be made by the Hua Yi Company with the landowner for the Hui Tung Company to compensate him according to market prices for any crops, etc., injured. After the mines are opened, should there be any damage to life or buildings caused by land slips or subsidence in the mines, the Hui Tung Company shall make charitable compensation. If after mines are opened cemeteries or mortuary shrines are met with, some plan must be devised to avoid them if the owners do not like to remove them for money given; no excavation will be allowed. In excavating, as long as the galleries dug below the ground are not injurious to the soil above, rascals are not to be allowed to obstruct the work, on the ground that it is injurious to "Fêng Shui." Local authorities must be applied to for protection. The Hui Tung Company is not, however, allowed to claim compensation on these grounds in case it can not succeed.

(10) Whenever it may be necessary to make roads, build bridges, open or deepen rivers, erect sheds, make tools, or other necessaries for mining purposes, and land is required for such purposes, the Hua Yi Company is to buy the land and the Hui Tung Company to pay for it. If water power is required for machinery and enormous work is done on it, no other person is allowed to make use of it. If branch railways have to be constructed in order to connect the mines with the usual trade routes, a thorough survey must be made of the proposed lines and maps drawn with explanations attached. These must be submitted to the mining bureau, which will forward them to the Szechuan viceroy and head office at Pekin for record and sanction. Nothing of the kind should be undertaken without such sanction. If telegraphs and telephones are wanted for connecting the various mines, the same are to be submitted to the mining bureau for approval.

(11) The Hua Yi Company is to deal with all matters of negotiation, and the collection of rent and taxes; the Hui Tung Company to superintend and work all mines. Each has its own sphere of work, but each company may inquire into the other's affairs. A Chinese manager and a foreign manager should be appointed for each mining work, whose salaries shall be paid by the Hui Tung Company. The majority of the overseers should be Chinese and all the miners natives of the province. All are to receive adequate wages, and further rules must be made on this subject by the Hua Yi and Hui Tung companies. Later on, the mining bureau should instruct the company to select for important positions any Chinese who may have become proficient in mining engineering. They are to be treated the same as foreigners, to encourage improvement.

(12) On opening the mines the Hui Tung Company shall establish a school of mining and railway engineering in some locality convenient to the mines, and there shall be selected twenty or thirty promising youths by the local officials and gentry to study in this school under foreign instructors, and be thus prepared for future employment on railways and in mines.

(13) At places where mines are opened, the mining bureau should apply to the local authorities for protection. Such mines should also obey their rules and enroll volunteers to guard against thieves, etc. If the natives should enroll themselves of their own accord as volunteers to protect the localities, the Hui Tung Company should also subscribe towards their expenses.

(14) The mining bureau, acting as intermediary between the superiors and subordinates, is to attend to all negotiations between natives and foreigners and matters

of protection. The work involved, as well as the expenses, will be great. The Hui Tung Company should therefore start work within three months after the signing of this agreement, and pay the mining bureau the sum of 100 taels per month for its working expenses for each mine, reckoning from the day when work is started. There will be no other charges besides this. If work be not started after six months, this agreement is considered canceled, and the Hua Yi Company will be at liberty to invite other merchants to take up the work. It will be no concern of the Hui Tung Company.

(15) The Hui Tung Company shall work all the mines according to the existing rules adopted by the head office. After paying the producer's tax and the export duty, if there should be a profit by the annual accounts, there shall first be paid 6 per cent interest on the capital employed, next 10 per cent of the remainder of the profit shall be set aside as a sinking fund for the yearly repayment of capital and consequent reduction of interest, payments to sinking fund ceasing when the invested capital is wholly repaid, and from the remaining net profit, 25 per cent shall be paid to the Chinese Government and the remainder shall go to the Hui Tung Company for its own disposition.

(16) The Hui Tung Company is to open not one mine, but a large number. The accounts and profits of each mine must be kept distinct from the others; the gains of one mine should not be made to offset the losses of another and so cause the Government income to suffer reduction.

(17) At the end of every year, the Hui Tung Company shall make up distinct accounts of the different mines, whether profitable or not, and the same must be audited by the foreign and Chinese managers, and, when found correct, a printed account of profit and loss shall be rendered by each mine to the mining bureau for approval. A general account of profit and loss for all the mines shall then be prepared and submitted to the head office at Pekin, the board of revenue, and the viceroy of Szechuan for audit. Payments due to the Government shall be remitted at the same time. The report shall show the real amount of money due to the Government, in order to avoid all discrepancies in the accounts. The Chinese Government and the Hua Yi Company are not to be held responsible in case of loss.

(18) The Hui Tung Company is to have control of all the mines opened by them for a period of fifty years, reckoning from the date on which each mine is opened, on expiration of which term all the mines, whether profitable or not, shall, with all plant, machinery, materials, buildings, roads, and all property acquired by the capital of the mines, be handed over gratis to the Chinese Government without asking for compensation, and in due time the mining bureau of Szechuan shall report to the head office at Pekin, and the viceroy of Szechuan shall send deputies to take delivery of the same. The land rented by the Hua Yi Company shall be handed back to the original owners.

(19) The Hui Tung Company, being formed of Chinese and foreign shares, shall at its own choice sell and buy its shares according to the fluctuation of the market rates. If the Hua Yi Company or any Chinese gentry or merchants shall within the said term of fifty years acquire three-fourths of all the shares in the Hui Tung Company, the mines may then be taken over from the Hui Tung Company, and the mining bureau shall report upon the same and direct the said shareholders (merchants) to take charge of the mines.

(20) Should any mines opened on land bought by the Hua Yi Company and handed over to the Hui Tung Company be stopped, on account of no profits being made, and the rent cease to be paid, then the Hua Yi Company has the option of adopting other means to open such mines or use the land for any other business. This, of course, is to prevent the money spent on the land from being wasted and consequently has nothing to do with the Hui Tung Company.

(21) If the Hui Tung Company sends out engineers who discover mines in certain places and report the same to be rich, but can not guarantee the same, and it is exceedingly difficult to purchase the necessary land for working such mines, the Hui Tung Company should in such cases pay the purchase money for the land to the Hua Yi Company, who shall have the said land purchased and handed over for working. This will prevent the purchase money being wasted. If a mine is discovered in the land purchased, the price paid for the land will be repaid to the Hui Tung Company by deducting the rent of 5 per cent until the whole purchase money is paid off, when the Hua Yi Company shall again collect the rent of 5 per cent as usual. Should there be no mine in the land purchased, no rent shall be payable to the Hua Yi Company; and the Hui Tung Company, being unable to recover the purchase money, shall not deduct the same with interest from any other mine. This is agreed to by both parties, and a further guaranty will be given at the time.

(22) All machinery, materials, and supplies needed for the mines opened by the Hui Tung Company shall on importation be subject to the rules in force for the Kaiping and other mining companies, and pay one full duty and one-half duty to the maritime customs, and shall be exempt from all inland likin dues.

(23) These mines being under the sovereignty of China, should China ever be at war with another country, the said company shall obey the orders of the Chinese Government and grant no aid to the enemy.

(24) The Hua Yi Company and the Hui Tung Company shall obey all rules and regulations adopted and memorialized by the head office, even if the same be not stipulated in this agreement.

(25) This agreement, with regulations agreed upon, shall be made out both in Chinese and English in eight copies, to be signed by Director Li Tai Ching, of the Hua Yi Company, and Foreign Assistant Director Morgan and Chinese Assistant Director Liu Hsio Shun, of the Hui Tung Company, and to be sealed by the seal of the mining bureau of Szechuan. One copy each of this agreement is to be sent to the mining and railway board at Pekin, the Tsungli Yamên, board of revenue, the viceroy of Szechuan, and the treasurer of Szechuan for reference. Of the remaining three copies, the Szechuan mining bureau, the Hua Yi Company, and the Hui Tung Company are to keep one each as proof. If there be any mistakes in the translation, the Chinese text shall hold good.

UNITED STATES TRADE IN CHINA.

In CONSULAR REPORTS No. 215 (August, 1898), page 575, will be found my review of the annual report on the trade of China for the calendar year 1897 by Mr. Taylor, statistical secretary of customs.

I now submit a review of his report for the calendar year 1898, with the object of emphasizing the importance of American interests in this vast Empire.

Mr. Taylor says:

GENERAL.

Were any proof needed of the vitality of China's foreign trade, the figures for 1898 would supply it. Various parts of the country were disturbed by sporadic rebellions of sufficient gravity to check business; the Yellow River once more burst

its banks and flooded enormous tracts; an ominous war cloud during the greater part of the year made importers cautious; the political situation was full of menace; and in September, the news from Pekin completely disorganized the trade of the northern ports. In spite of these adverse circumstances, the value of the import trade surpassed all previous records, while the value of the export trade exceeded that of every past year with the exception of 1897. The total volume of the trade was valued at 368,616,483 haikwan taels ($255,819,839),* which is the highest on record. It is gratifying to know that on the whole the trade yielded satisfactory results to those interested.

FOREIGN TRADE.

So much foreign capital has been lately invested in China that the condition of the external trade of the country, as an index to the national resources, is watched with a certain anxiety. In every year from 1886 to 1898, the value of the imports has exceeded that of the exports. For the whole period, the imports have amounted to 1,921,769,180 haikwan taels, the exports to 1,484,741,501 haikwan taels, or an excess of imports over exports of 437,027,679 haikwan taels, making an annual average of about 34,000,000 haikwan taels. These figures have given rise in some quarters to the strange belief that China is being gradually denuded of silver to pay for the balance, and it has even been gravely stated that the country is approaching bankruptcy. It is pointed out that China has not only to pay for her imports, but has also to find funds to meet remittances abroad for the service of loans, for the purchase of war material, and for the support of legations, etc. The depressing picture thus presented to the imagination has a tendency to destroy credit and prevents many people from investing in Chinese securities; and it may be well to show that, as far as can be ascertained, the position is one that need cause no anxiety. It must be remembered that the figures which come under the cognizance of the customs do not represent the whole of China's foreign trade. There is a junk traffic to Korea and to the south of which we have no statistics, but which is certainly profitable; and there is considerable trade with Mongolia and Thibet. It is estimated, for instance, that 20,000,000 pounds of tea are sent annually into Thibet. The large income derived from the expenditure of foreign vessels, both mercantile and national, for provisions and other necessaries must not be forgotten; and the sums which are remitted or brought back by emigrants probably reach a total which would be surprising were figures available, and which would alone be sufficient to cover all outgoings for the service of loans. It has been stated, apparently upon good authority, that from California alone the remittances amount to $10,000,000 or $12,000,000 gold annually. The expenditure of foreign legations and consulates, the money spent by travelers, who arrive in increasing numbers, and the preliminary disbursements of syndicates are all sources of income which must be taken into account. In the absence of definite information, the above considerations can only be put forward as presumptive evidence that the nation is well able to pay its way; but the proof is to be found in the fact that the Government remittances to Europe for the service of loans, amounting during 1898, at average rates of exchange, to nearly 18,000,000 haikwan taels ($12,492,000), are made through foreign banks by the medium of bills of exchange against exports. So far from silver being exported abroad, there was a net import during the year of 4,722,025 haikwan taels. Moreover, notwithstanding occasional tightness at the treaty ports, information received from all parts of the country points to no scarcity of silver, and the general course of silver prices indi

Taking the average value of the haikwan tael in 1898, as estimated by the United States Director of the Mint, as 69.4 cents.