The price of tin in January, 1898, was $37.12 per picul (1331⁄2 pounds); January, 1899, $50 ($24); to-day it is quoted at $85 ($41). This rise in price allows the low-grade ores and poor alluvial tin that have been lying untouched for years to be worked at a handsome profit, and it is being done. The Straits Company are increasing their plant to cope with the new and heavier demand made on them, and the Penang newspaper is advocating in its columns the establishment of smelting works there, so that town may share in the prosperity or benefits accruing.

Telok Anson, the chief town of Lower Perak, situated about 50 miles up the fine broad Perak River, which is navigable by all coasting craft drawing up to 16 feet, at any state of the tide, lies in the heart of the tin district, is connected by rail with numerous out stations, and within three years the great trunk line connecting the different states railway systems will be completed, bringing Telok Anson in direct railway communication with the whole peninsula.

I may mention that the different native states have already amalgamated their affairs and are known as the "Federated Malay States," with Sir Frank Swettenham as resident-general. Of course, it is known to you that all the different departments of the states have been under British officers for the last twenty to twenty-five years. About 160 miles west of Telok Anson, across the Straits of Malacca, in the Langkat district of Sumatra, are large oil fields. The petroleum refuse is now put to no useful purpose. I propose to use it as fuel in place of coal. The calorific power of ordinary English coal is 14,290 units of heat per pound; the calorific power of petroleum refuse is 17,630 units of heat per pound. Of course, it is well known the coal obtainable here is inferior in quality to that obtainable at home; but, taking it as a standard, you will note that in using petroleum you obtain better results, beside the larger saving in the first cost. As to that cost, I can give you no figures, for I understand at present the refuse is allowed to run away, there being no market for it; but a contract could be made whereby each party might be satisfied and still leave a wide margin between its price and that of coal.

As to the modus operandi, I would erect in Telok Anson a complete plant to crush or wash ores and smelt tin, have one or more expert and reliable men who thoroughly understand their business to travel around the different mines, assay the ore or oxide, buy and pay for it on the field, and send it right down to the plant. To summarize the advantages of Telok Anson over Singapore, fuel has to be brought only 160 miles; while if taken to Singapore, it would mean 380 miles. In bringing ore or oxide from the states to Singapore, you pay freight on from 30 to 40 per cent of sheer waste, and with the double or treble handling your bags burst. The price of land in Singapore is at least treble that in Telok Anson, and, in fact, I doubt if a really advantageous site could be bought in Singapore unless at what is termed a fancy price. Labor is cheap and abundant, as well as articles of food, European and native. The climate is healthy, and there is plenty of good water. As to capital to successfully compete with the Straits Trading Company, I should say a capital of $1,000,000 Straits currency ($481,000) would be required, as a large amount would have to be in hand to pay for the ores and working expenses. The plant to be erected would turn out 50 tons of smelted tin per day; cost, $120,000 ($57,720). I give you details of this expenditure elsewhere.

I inclose copy of the Straits Trading Company's report for the last six months,* and you will note that the quantity of tin delivered from the works during that period was 216,841 piculs (28,912,133 pounds). The total amount of tin and tin ore exported from the three native states during the first six months of this year was 294,801 piculs (39,318,800 pounds), showing that the company have the entire monopoly of the business. You will also note that the company's smelting profit is

* Filed for reference in Bureau of Foreign Commerce.

$116,665 ($56,156); I understand $2 (96 cents) a picul (1331⁄2 pounds) is allowed for covering all working expenses in buying the ore; so if the above number of piculs be taken as the amount smelted, it works out at over 35 per cent profit on smelting alone. Taking into consideration the difference in price and calorific properties between coal and petroleum refuse, I don't think I am putting too high a figure when I say that 50 per cent profit could be made by using the latter.

To show you how we could pay a decent dividend on the capital of $1,000,000 ($481,000), I put down our output in six months at 100,000 piculs (13,333,333% pounds); our smelting profit on that amount would be $100,000 ($48,100), and the tin profit $40,000 ($19,240). Any outside profits which would be made need not be considered, as the showing of a dividend of 14 per cent on six months' work, equal to 28 per cent per year, is ample for our present purpose.

That there is room for such a company as I outline, I think is quite obvious to you. The Straits Trading Company is the only one in the field, and were a new company to commence working on the lines I have sketched, it could more than compete with it.

Any further information which you may require I shall be very pleased to give at any time.

Cost of plant capable of turning out 50 tons of tin per day.

SIR: You point out to me that the introduction of petroleum refuse in place of coal would be somewhat of an "experiment," and a company might be seriously handicapped thereby, and also that it would be as well to outline an alternative scheme where coal would be used as fuel.

With regard to your first point, I can not admit that using petroleum for our purpose would be experimental, for, since writing you last, it has come to my knowledge that the Straits Trading Company have tried it with success; but, having made no contract to start with, the agents of the oil company (Samuels, of London), at whose instance the trial was made, put up the price to such an extent that

it wasn't worth the company's while to convert their furnaces and break their coal contracts; and, having absolutely no opposition or competition to meet, they are quite satisfied to let well enough alone. It has always been my idea to make the putting up a plant in Telok Anson conditional on a contract which should be equitable to both buyer and seller, and yet leave a wide margin between the price of coal and that of petroleum refuse. I do not think it would be a difficult matter to accomplish.

I would not erect works in Telok Anson to burn coal, as it would have to be transshipped in Penang, and the extra freight (even if steamers were available) and handling would cost as much as, if not more than, the freight from home. That and the delay would kill any company. After weighing all the points carefully, I have come to the conclusion that Province Wellesley, the mainland opposite the town and island of Penang, is the best place to erect coal-burning works. The terminus of the Native States Railway is there; deep-sea steamers lie as close to the province as to Penang, and call daily; freights are the same, if not less, between home and Penang and home and Singapore; it is much closer to the whole tin district than Singapore and does not depend on sea communication; the railway is now open to the northern and richer tin district, and very shortly Selangor will be connected. A sea frontage is obtainable at no great cost, and that could not be had at any price in Singapore.

The total cost I gave you for the erection of works in Telok Anson will very well serve for Penang, as the conditions would be very much the same; the land and pier, which would be necessary, would cost a little more than I allowed, but the saving elsewhere would counterbalance that.

As to what a new company could earn, the report of the Straits Trading Company, which I inclosed with my last letter, speaks more eloquently and plainly than I am able to of what one company can do. Of course, you must remember it has no competitors at present; but I fail to see why another company with moneycapital you must have-could not successfully compete with the present one. The Straits Trading Company have had a long reign alone, but, like all monopolies, do not give entire satisfaction, and with tin at its present price-which is likely to holdand tin from Pahang, until lately an unknown place, coming into use, they are bound to have competitors.

I am, etc.,

J. J. ANDERSON, Engineer and Surveyor.

SHIPPING LINES TO NEW CALEDONIA.

I am glad to report that the principal obstacle to United States trade with this district, viz, the lack of direct communication, is about to be removed. In a letter dated June 14, 1899, Messrs. Macondray & Co., merchants of San Francisco, inform me that they. are about to send a sailing vessel of 1,000 tons register every three months direct to Nouméa, which they hope to keep employed regularly in the trade. This line of vessels is to supply this colony mainly with food products from California, which are to be consigned to an American commission house at Nouméa.

Return cargoes of minerals, copra, coffee, vanilla, pearl shell, bêche de mer, and other colonial commodities will be furnished.

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.