Supplement to Commerce reports

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Title:
Supplement to Commerce reports daily consular and trade reports issued by the Bureau of Foreign and Domestic Commerce, Department of Commerce
Uniform Title:
Commerce reports
Volume title page for -<1920>:
Supplements to Commerce reports : review of industrial and trade conditions in foreign countries in ... by American consular officers
Portion of title:
Daily consular and trade reports issued by the Bureau of Foreign and Domestic Commerce, Department of Commerce
Physical Description:
6 v. : ; 24-26 cm.
Language:
English
Creator:
United States -- Bureau of Foreign and Domestic Commerce
Publisher:
Bureau of Foreign and Domestic Commerce, Dept. of Commerce
Place of Publication:
Washington, D.C
Publication Date:

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Subjects / Keywords:
Commerce -- Periodicals   ( lcsh )
Foreign economic relations -- Periodicals -- United States   ( lcsh )
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federal government publication   ( marcgt )
periodical   ( marcgt )
serial   ( sobekcm )

Notes

Additional Physical Form:
Also available in electronic format.
Dates or Sequential Designation:
Began with issue for Jan. 8, 1915?; ceased with issue for Dec. 31, 1920?
Numbering Peculiarities:
Each issue covers an individual country and bears a number corresponding to that country. Reports from the various consular districts in a country are distiguished by the addition of a letter (66a, 66b, 66c, etc.), in the order in which they are issued.
Numbering Peculiarities:
Issue no.52f, 1919, contains misprint, November 41.
General Note:
Title from caption.
General Note:
"Annual series."

Record Information

Source Institution:
University of Florida
Rights Management:
All applicable rights reserved by the source institution and holding location.
Resource Identifier:
aleph - 004822593
oclc - 16390134
sobekcm - AA00005307_00017
Classification:
lcc - HC1 .R1981
System ID:
AA00005307:00017

Related Items

Preceded by:
Daily consular and trade reports (Washington, D.C. : 1910)
Succeeded by:
Trade and economic review for ..

Full Text












CHINA.
Ji. i < ,! ..... .i. ..
.: HONGKONG.
i .,. .B Cu enl' GoMenal George E. Auderson.
m~iaej ur-pe has been the chief factor in shaping the course
~iade in 1917. The high exchange value of silver
S p ii g service of coastwise and over-sea shipping,
i a the war, have had much influence upon foreign trade;
h.le tthe year was not a bad one for Hongkong industries
ce. Shipbuilding and sugar refining, which are among
pal industries of the colony, did very well. The shipyards
:to their full capacity, the only limitation being the difficulty
materials for certain purposes.
iui of business was far below normal, not only because of
e oaf shipping and high freight rates but also because of
to Chinese produce in Europe and because -of high
:ier foreign goods everywhere. Political troubles in China, the
~i .buying power of the people, due to a failure to sell their own
At. a advantage, and other elements combined to reduce the
inie Nevertheless, most imports were made upon a rising
and were therefore more than ordinarily profitable, while
of sme :lines of goods needed more-or less directly for war
S, and therefore demanded at almost any price, continued in
every w disadvantage.
t.e ijed States.
WeI htat.ee of trade in 1917 was the predominance of Ameri-
impr and exports. The closing of many European ports to
e- by the war and the strong demand for raw products
~jttelae made heavy exports to the latter in certain lines
The declared exports from Hbngkong to the United States
i valued at $25,548,413 gold, as compared with $9,758,080
W,940 in 191 $4,474,933 in 1914, and $5,203,980 in 1913.
Sfrom HoEngong to all American territory, including
aBd Hawaii, amounted to $32,716,123 in 1917, as com-
3fl. 19138 $8,089,568 in 1914, $10,680,777 in 1915,
This..... immense increase was due largely to
~.h .l tin riar~exports for 1917 being valued at
M a bnd Wtl exports at more than $5,000,000
.......b.. 4bfagt firoim the United States, accord-
Swere vaed at $16,865,650 in 1917, as com-
il916, an 1,928 the year before. These
S': St~~s as much in character as in
ig la .~;eyal :. when 'the chief imports have







SUPPLEMENT TO COMMEBREB REPORTS.


been flour and kerosene. In the past year imports of flour all but dii-
appeared, while petroleum products were far below normal, although
greater than those of 1916. Imports from the United States at the
present time comprise nearly all commodities used in the Far East,
iron and steel products being in particular demand and also prepared
foods, especially those used by foreigners and by foreignized Chleie.
Disturbed Conditions in China.
The import and export trade, in fact, the whole of the colony's
business in every way, was seriously affected during 1917 by political
troubles in China. The revolt of the southern Provinces resulted in
piracy and brigandage throughout great districts of the country, so
that the shipment of valuable goods of any sort into or out of the
ports became difficult and in many districts impossible. The gen-
erally disturbed conditions discouraged new enterprises among both
Chinese and foreigners, and the danger of transporting goods made
even local trade impossible at times. A considerable dislocation of
Chinese native trade resulted, and this is always reflected in the
country's foreign trade. One of the first results of such conditions
was a restriction of credits, which complicated the difficulty of remit-
ting money from one district to another in China, the cost of remit-
tance at times amounting to 25 per cent.
This matter of general credit among the Chinese has been affected
also by the policy adopted by the foreign traders in Hongkong
against the extension of long-time credits on certain imports, notably
cotton piece goods, and this has led to corresponding restriction of
credits among native dealers in the interior. Nevertheless the appli-
cation of this principle has been of benefit in Hongkong trade, for
while it reduced the volume of business in some lines in the imme-
diate interior it made the business more profitable and safer for all
concerned.
The restricted credits both in Hongkong and in the interior of
China and the cost of remittances emphasize the need of an. ade-
quate banking system for China. Until such a system is actually
established ordinary trade in this country can scarcely proceed upon
reasonable, safe, or satisfactory lines.
High Silver Exchange.
During 1917 silver reached its highest value in many years, result-
ing in a contraction, or, rather, a limitation of business; for with
silver at a high value the Chinese producer secures for his exports a
correspondingly low price for his goods when sold on a gold-standard
market in competition with similar goods from gold-standard
countries; while, on the other hand, if he has the money, his silver
goes much farther than usual in the purchase of goods produced
on a gold-standard basis. Theoretically imports into China from
the United States, Europe, and other exporting countries should be
stimulated, and to a certain extent they are stimulated, by the high
exchange value of silver, although this may so depress silver prices
received for Chinese exports that many lines of Chinese goods do not
bring enough return to the producer to justify exportation. Unless
China can sell its own products it can not buy other country's
products at any price. During the past year there has been so strong
a demand in the United States and other countries for certain raw
materials produced by China that they have been taken in spite of







OCHINA-HOi#GKONG. 8

High exchange and at almost any price in gold. These extraor-
Sinarl high prices paid in goldby the United States for its im-
S o rts from China have not benefited the latter, however, for its
turnss in most lines of its exports have not been up to normal prices
in silver, at least they have not been enough above normal to com-
pensate China for extraordinary costs and expenses in other lines.
I Uetuations of Exchange.
:During 1917 exchange ranged from around 57 cents gold to the
iHongkong dollar, as American telegraphic-transfer rate in January,
down to 55 cents in March, thence to around 57 again in April and
L May and the first part of June. It then commenced to rise and
wentt to 60 cents early in July and then rapidly to 70 in August, and
F : September 20 reached 774 for the same rate in Hongkong, al-
Ihough that rate was below parity with New York exchange in every
S other silver market at that time.
SPerhaps the most significant and interesting feature of the entire
upward movement of silver was the fact that by reason of a special
control over the supply in Hongkong, and to some extent in China,
Dominant banking interests were able to hold the exchange value of
the silver dollar far below its actual metal value in the markets of
the world. Realizing that the advance in the price of silver was too
rapid for the commerce of this part of the Far East to adjust itself
Sthereto, the colony's banking interests refused to follow the price
of silver in the markets of the world in their exchange rates. On
September 22, when silver reached its highest point, the telegraphic-
transfer rate of the Hongkong dollar was 774 cents, while the parity
of silver, that is, the actual value of silver in Hongkong as deter-
mined by its cost in the world's markets at 55 pence per ounce in
London, with freight, insurance, etc., added, was estimated at 4s., or
about 96 cents gold. Exchange in Hongkong, therefore, was 171
cents or about 18.5 per cent below the value of the silver it repre-
sented. In Shanghai on the same date the telegraphic-transfer rate
of the tael at $1.17j, with the silver parity of the tael placed at
about $1.30, was 124 cents or about 9 per cent below the value of the
silver the tael represented.
This policy of holding down exchange was followed more or less
closely during the rest of the year. Unquestionably it had a marked
.effect in protecting the commercial interests of the port, for had
there been no prohibition of exports of silver from the colony and
no such control of the exchange situation, the result would probably
Shave been the disappearance of the stock of silver in Hongkong
banks; the whole system of advances and credits to customers of
Hongkong banks would have been destroyed, and the business of
the port would have come to a standstill.
Gradually the import and export trade of the port adjusted itself
to some extent to high exchange conditions, and Chinese producers
in Hongkong's trade territory also met changed conditions accord-
ingly. Notwithstanding this, it is patent that comparatively low
exchange is the foundation for the best average import and export
.trade in China and Hongkong. So long as present exchange condi-
tions' exist the free shipment of Chinese produce is impossible even
'at present high gold prices, and until China can ship its produce
freely to a good market it can and will do comparatively little in the
import line.







SUPPLEMENT TO COMMEROE REPORTS.


During the year Hongkong's subsidiary coinage which for iS.
has been at a discount compared to the corresponding staxdata t si
ver dollar, has been quite steadily fixed at par, being subject at-tijm
only to nominal premium or discount at money changers in the
matter of the temporary demand and supply of small coins. Dur-
ing the past 10 years the colony has been subject to a drain of as
high as $5,000,000 silver and more in a single year to accomplish
this result, having retired a total of $21,407,459 up to the point
where this final result was assured, about half of which was retired
in the last two years of the operation. The past year has demon-
strated the success of the whole undertaking.
The Freight Situation.
High freight rates to and from the United States and Europe
prevented trade in some lines, particularly exports of raw materials
and imports of bulky goods. The high freight rates maintained
along the Asiatic coast added materially to the cost of goods exported
to the United States and Europe. The chief feature of the entire
freight situation was the special service given Japanese shippers and
importers by subsidized Japanese shipping lines. Although trans-
Pacific conditions eased somewhat during the year, the rates steadily
advanced, and in December ranged about 30 per cent higher than at
the beginning of the year.
One factor of importance in local prosperity is the increasing value
of real estate, due to the constant influx of Chinese into the colony.
Each succeeding year of trouble in China means an increase in Hong-
kong's population of wealthy Chinese of the retired or capitalistic
classes, adding wealth to the colony and demanding in increasing
ratio additional housing and residence accommodations.
Hongkong's Industries.
The high price of many commodities in Europe and America and
the increased freight rates for foreign goods combined to stimulate
domestic manufacture of many lines of goods which heretofore have
been imported. Such efforts are indicated in widely varying lines.
All the engines and machinery-main engines and boilers, auxiliary
engines, pumps, motors, dynamos, even the great propellers-of a
new 10,000-ton dead-weight ship built by a local shipyard were made
locally. These large ship and engineering companies now undertake
almost everything in machine building. The Chinese and other
Hongkong foundry and machine men are turning out quite good
internal-combustion engines of fair horsepower, and are doing some-
thing in the manufacture of certain electrical goods. Glass and
paper factories are increasing the scope of their output.
Shipbuilding-Tobacco Industry.
Chief among Hongkong's industries are its shipyards. There are
two large yards, capable of caring for the largest trans-Pacific steam-
ers, and several smaller yards, all of which were running at full
capacity during the year. The two large yards turned out over-sea
vessels to the amount of about 35,000 tons dead-weight capacity dur-
ing the year. Included among such vessels was one of 8,000 gross
tons, the largest ship ever launched in a British shipyard outside of
Great Britain. A sister ship is now under construction. The two
great yards between them also launched four vessels of from:-000 to
3,500 tons dead-weight capacity, as well as other coasting and aaliar







A. :. CInA-oWa-O3G.


lip. In ame their I s important work was the repair
oi :ld d. veselsf The tonnage made. available by them
hing. theyear s very considerable including about 25,000 tons of
Qermn shopping taken over by the united States at the beginning
of the war. Smaller shipyards had a prosperous year in the con-
atrumtio of small coasting vessel, launches, and the like, and in the
rair of vessels.
4=mprts ot tobacco from the United States into Hongkong dur-
... te past year were about $1,500,000 in value and they have gone
iatost entirely to a cigarette factory (that of the Canton Nanyang
Brao. Tobacco Co., Ltd.) which has been described before in reports
ii:: tm this consulate general. This factory is now consuming about
I 00 tierees and hogsheads of American tobacco monthly, besides
i: lit 11,000 pounds of Chinese tobacco per month, and is produc-
: g over 5,000,000 cigarettes a day. It is enlarging its plant, mak-
g it'l own cigarette tins, and is otherwise giving every evidence of
prosperity. A cigar factory of considerable importance, formerly
controlled by German interests, has continued operations on a satis-
Ietory basis.
Other rkong g Industries.
During the past year a modern tannery has been constructed which
is operating on American lines under a foreign tannery expert; and
also a modern biscuit or cracker factory. Both of these establish-
miats were started by Chinese capital and largely with American
machinery and according to American methods. A soap factory of
considerable importance, which was operated by German interests
before the war, was overhauled and partially refitted and is com-
hencing the manufacture of soap on a considerable scale. Other
important industries include several cement factories owned by a
IHngkong company and a large rope works, which has had more
than an ordinary success, although the decrease in shipping coming
tito the port made considerable difference in its local sales.
Chinese industries, including the ginger and other preserve fac-
tories, canning establishments, rice-hulling establishments, small
foundries, glass works, mirror factories, distilleries, and the like, have
done well. There was a setback to the grass and rattan furniture
industry, due to the increased freight rates on such goods for export,
sad furniture making generally has been rather backward because
.-t the high price of teak and other hardwoods. The increased cost
of brass interfered very materially with the work of brass founders
mad curio makers, while workers m other metals, such as lead beat-
er, also found it difficult to stay in business because of the cost and
the shortage of supplies and the restrictions upon the export of their
output. Tin smelting and refining boomed as a result of the strong
demand for the metal in the Umnted States and Europe. The ex-
tension -of the manufacture of jinrickshas and similar commodi-
ties has been prevented also by the high cost of materials. The
scarcity and cost of coal in Japan, North China, and Indo-China,
which at times approached the famine stage, crippled various Hong-
kong industries and materially altered conditions under which they
operate.
The knitting factories in Hongkong had a fair year and greatly
widened the market for their cheap knit goods, particularly hosiery







SUPPLEMENT TO OOMMEBONB EPOBTS.


and singlets. The cheapness of Japanese knitting yarn compared
with American yarns heretofore employed by most of the factories
led to the more general manufacture of a lower grade of goods and an
abandonment, for the time being, of American and British yarns,
which could not be got at any price. In September and the first part
of October a large number of the mills were compelled to shut down
for a time because of a lack of materials at a workable price.
The chief meat, dairy, and produce company in Hongkong is seri-
ously entering upon the packing of meat in tins and otherwise for
export, and promises to become an important, if not a controlling,
factor in the tinned-meat trade in southern Asia. The embroidery
makers have passed from old Chinese designs to the manufacture of
embroidered goods from late European and American models on
order. Local paper makers are undertaking the manufacture of a
higher grade paper; foundrymen are making more and more hard-
ware in foreign style; canning companies are extending their list of
goods packed for export.
Increase in Wage Scale.
There was a distinct tendency to wage increases in this field during
1917, particularly among skilled workmen. Reliable data in this,
matter are difficult to secure because of the prevalence of the patron
system, i. e., the system of boarding and supporting workmen. Vari-
ous local estimates place the advance of wages in the past three years
in the building trade at 15 per cent, in metal workers at 20 per cent,
in public-utility employees at 10 per cent, among dock laborers and
lightermen at 10 per cent, and among common labor generally at
about 10 per cent. These figures are mere estimates, but the ad-
vance in general is beyond question. It is certain that the advance
has not been as great as the average cost of living, which has ad-
vanced fully 50 per cent in three years independent of the exchange
value of silver. The cost of living in Hongkong, figured on a gold
basis, which must be the case with persons receiving their income in
gold, was practically doubled in the past three years.
The Year in Shipping.
While the demands of the war led to a constant and continued
withdrawal of ships serving Hongkong, particularly of British ships
in the Australian, Philippine, and coastal services, these withdrawals
were carefully made; and by taking over the control of practically
all British ships on these runs the British Government eliminated
loss of space and waste in service, and managed so that the colony's
commerce suffered comparatively little from the restrictions.
In the trans-Pacific routes few withdrawals for Government serv-
ice elsewhere were made, but the Governments concerned took over
large cargo space and passenger accommodations on Pacific steamers
for their own purposes. The whole of the steerage-passenger accom-
modations and much of the cargo space of the Canadian Pacific Co.'l
steamers and of the Blue Funnel Line of steamers were requisitioned.
Early in the year the Japanese Government also took certain vessels
of the Nippon Yusen Kaisha and the Osaka Shosen Kaisha, then in
the Hongkong-Pacific coast service, and limited their voyages to the
Japan-Pacific crast run, thus withdrawing considerable steerage-
passenger accommodations from the market in Hongkong. These
changes led to such contraction in accommodations for Chinese re-




a


SCHINA-H-MWGKONG. 7

taring.to the Unit-d States that at times it was impossible for them
to return within the time limit'fixed by law, and all vessels now
carrying Chiiese passengers have large waiting lists.
striettonas of Japanese hipping--uaropean Connections.
Soon after the beginning of the war the Japanese Government be-
I gn to restrict Japanese vessels to Japan-America or Japan-Europe
iFc!: ces to the extent of requiring all space in such vessels to be first
I.ilAdered to Japan ports before offering it to Hongkong or other non-
.i.rapan ports, although rates from Japan under the regulations of
Sth Government were much lower- than those obtainable in the gen-
i eral market in Hongkong or elsewhere. During the early part of
1917, however, freight for the United States accumulated in Japanese
ports to an amount that made further action necessary, and the result
S! s the diversion of some of Japan's largest ships, then on the Japan-
London run, to the Japan-Seattle run. More vessels also were added
to the Japan-American services and finally most of the Nippon
Yasen Kaisha and the Osaka Shosen Kaisha vessels were instructed
to, eliminate non-Japanese port service altogether.
I During the year the service between Hongkong and Europe was
greatly restricted. The French mail line maintained a regular service
most of the time with its large steamers, but these ran to Port Said
6 Iy and there connected with smaller Mediterranean vessels. A
similar service was maintained by the British mail line. The Japa-
i jes mail line, which abandoned the Mediterranean run and sent its
s"ieamers around Africa, still maintains its European service, but
with smaller vessels, the larger ones having been transferred to the
American run. Australian shipping was much reduced and now con-
sits chiefly of a Japanese mail steamer once a month in either direc-
tion and two British steamers on such schedule as they can maintain.
Service to South America was limited somewhat, while that to Sduth
Africa was almost suspended.
Direct Service from San Francisco to Calcutta.
The Pacific Mail Steamship Co. established direct service of Ameri-
can vessels from San Francisco to Calcutta, following the establish-
ment of a direct service between these points by the Andrew Weir
and Bucknall interests. This direct service to the East by the Pacific
Mail Steamship Co. led to the abandonment of Hongkong as its
Principal port in the Orient, since its own headquarters at present are
in Manila. The change will affect very materially and permanently
the transshipment trade in Hongkong, for the importation of gun-
nies and jute products from Calcutta is one of the chief factors in
the Hongkong freight business in peace as well as in war times.
fherease in Dutch Shipping in the East.
Another important factor in South Asian-American trade is the
increase in Dutch shipping from Java to the United States. The
service was inaugurated over a year ago by the Java-China-Japan
Line with four vessels, but since that time eight vessels of the Neder-
land Royal Mail Line and of the Rotterdam Lloyd were added to
the service, until the three companies are now providing at least
three steamers a month in either direction between Batavia and San
Francisco by way of Manila and Hongkong, these steamers ranging
as high as 15,000 tons capacity. While they primarily serve Java,








SUPPLEMENT TO COMMERCE REPORTS.


they have commenced to carry other cargo, and- their presence has
done much to steady the trans-Pacific freight situation.
Increase in Freight and Passenger Rates.
First-class passenger rates on the first-class steamers were increased,
from $225 to $250 gold from Hongkong to Pacific coast ports about
a year ago, rates from other ports being increased in proportion.
Steerage passenger rates were raised by fixing the exchange value of
the silver dollar for such fares at 50 cents gold, substantially an
increase of 50 per cent in gold to the steamship companies, although
the Chinese passengers, as a matter of fact, are still paying less
than normal in silver.
In February it was announced by the conference line steamers that
a flat increase of 25 per cent on rates then obtaining would be made
on all articles but rice and silk on the 15th of that month. In May
a further advance was agreed upon, $40 gold per ton being announced
as the minimum rate on any trans-Pacific cargo by the conference
lines. As a matter of fact, during practically the whole of the year
shipments were made mostly at rates far in advance of the announced
rates, the demand for space exceeding the space available, with the
natural result that a premium was placed upon that to be sold.
Practically all the year, also, space was to be had only for cargo
paying the higher rates, and cheap-rate cargo was simply shut out
unless it could bear the higher rate. There was some slight easing
of the demand for space in the early autumn shipments, but on the
whole the high rates established about the middle of the year ob-
tained throughout the year and are likely to be maintained as mini-
mum charges so long as vessels are allowed to charge them.
Hongkong Shipping Returns.
While the total tonnage of foreign-style over-sea vessels entering
Hongkong fell from 6,855,164 in 1916 to 6,150,334 in 1917, the total
number of vessels increased from 717 to 750 and the number of entries
from 3,761 to 4,023. The average number of entries per ship during
the year increased from 5.24 in 1916 to 5.36 in 1917, about 2.3 per cent
increase in service per ship. The total number of ships entering
and clearing during the year was 621,090, with a total tonnage of
33,827,325, as compared with a total of 642,794 vessels and a total
tonnage of 36,381,457 in 1916. The various classes of vessels and
comparative tonnage appear from the following table:
1915 1916 1917
Class of vessel. Numb Register Number. Redster Numb register
tonnage. tonnage. tonnage.
British ocean-going................ 3,988 7,358,586 3,721 6,868,743 3,004 5.16,06
Foreign ocean-going............... 3,673 7,023,222 3,797 6,859,349 4,140 7121,490
British river steamers............... 6,76 4,022,853 7047 4,127,051 6,666 3, 09,87
Foreign river steamers ............. 1,892 928,147 2,288 1,039,197 1,619 a,696
Steamships under 60 tons (foreign
trade)........................... 6,822 228,510 6,450 212,350 6,531 198, 0
Junks, foreign trade ................. 27,097 2,953,705 25,047 3,201,621 26,067 3, 217,8
Total, foreign trade............ 50,148 22,515,023 48,350 22,308,311 48,026 0,547,119
Steam launches plying in waters of
the colony......................... 446,938 10,022,806 558,988 12,632,776 548,530 12i 43,73
Junks, local trade ................... 34,516 1,347,090 85,456 a 440,370 ,24, 8 85 40
Grand total................... 531,602 33,884,919 642,794 36,881,457 621,090 B,W,.
a Including 10,082 conservancy and dust boats of 503,932 teas.
6 Including 11,988 conservancy and dust boats of 665,548 tonS.









F

r'
i ..i


Imports of Cotton Piece Goods.
The largest single item in the import trade of Hongkong is cotton
piece goods and cotton yarn. With normal exchange and normal
prices for cotton in the markets of the world, the imports of these com-
modities measure the trade condition of China.
The record in piece goods in South China during 1917 was not very
satisfactory, although on the whole traders made a fair profit on a
comparatively small turnover. Prices of cotton in all forms were
so high that the Chinese, as usual when things become too expensive
for them, turned to native substitutes, which in this case were native
cloths made from native cotton and native-spun yarn. However.
silver exchange ranged very high during the year, each rise in ex-
change resulting in a corresponding drop in the silver price of cotton
goods, and this high exchange saved the trade. The constantly
enhancing price of cotton goods in Manchester usually has not been
very promptly followed by prices in Hongkong, and most of the time
sales have been made at prices below replacing costs. Nevertheless
since they were made at a good advance over actual cost, the trade
was profitable for the time being. Toward the close of the year, after
Hongkong had been relieved of most of its stock by sales to other
markets in the Far East, local brokers realized the general position
of the piece-goodi market and commenced to buy for the coming year
at the advanced home prices. Native cloth came into the market in
unusual quantities. Political troubles in South China interfered with
trade greatly. Japanese goods of fancy weaves, as well as the staple
grays, etc., came into the market in material quantities and indicated
a new departure in the trade.
S Imports of American piece goods increased considerably but they
still form a very small portion of the total imports, while dealers
62282-18--2d-2


OHJIA--BOXGKONG. 9

prweigcStle Vesrelo. ;
The record of foreign-style vssels shows a decrease in tonnage,
S above indicated, but an increase in the number of ships and in the
number of entries. The division, according to nationality, was as
follows:

,.. Vessels. emberd im Total tonnage.

1916 1917 1916 1917 1916 1917

Bdl msr........................... 81 257 1,858 1,501 3,424,457 2,582,521
Sveels ............................ 2 .......... 2 ........... 3,205
. Stsmers......................... 271 268 987 1,507 2,104,307 2,110,499
Sallin vessels .................... 1 1 1 75 75
:NwPegan............................ 33 37 164 138 168,156 165,536
ne................................ 45 54 305 328 306,793 335,475
............................... 4 6 4 6 13,440 16,360
h............................... 24 42 135 151 359,713 427,585
ai ............................... 19 24 134 155 269,437 250,831
Psrtuguese............................ 5 15 101 142 48,151 67,972
Bussian............................ 4 2 16 5 16,642 6,721
amee.............................. 1 2 1 2 810 4,072
Swedish............................. 5 2 8 4 24,582 10,825
UnitedStates........................... 24 36 47 74 118,601 164,792
Italia........ ................... .......... I.......... 1 ............ 3,420
No lag................. ....... ......... .......... ............ 1 445
Total............................ 717 750 3,761 4,023 6,855,164 6,150,334







10 SUPPLEMENT TO COMMEBOE REPORTS.

do not report much success with the experimental shipments removed
during the war. Dealers say that American mills will not cater to
the market and that the goods they make of a character to meethe
demands here are too good for the trade. A cheaper cloth gets the
business. During the past year British piece-goods exporters adopted
the American bale system of shipping all but the more expensive
cloths, war conditions making the change necessary. The trade has
adhered firmly to its policy of cash dealing established about two
years ago and now undoubtedly firmly fixed in this market.
Trade in Cotton Yarn.
There were extraordinary ups and downs in the import of cotton
yarn during the year, the market naturally following fluctuations
in the cotton markets of the world and also adding some features of
its own. The total imports ilto the Hongkong field for the year
are placed at 142,000 bales, of which 38,000 bales were Japanese and
practically the whole of the rest Indian. The total imports in 1916
were 154,150 bales, of which 25,300 were Japanese and the remainder
mostly Indian: the United States, however, continued to export a
fair amount of knitting yarn to this field. During the year the
Japanese fine-count yarns confirmed their hold upon this large and
increasing knitting yarn trade, shutting out all American and British
yarns except very small quantities for special purposes. At present
American exporters are making no further effort to enter the field,
for orders for American yarn for special purposes are not being
filled. Japanese 30/1 yarns are selling at the opening of the new
year at the equivalent of 62 cents gold, 20/1 at 53 cents gold, and 12/1
at 43 cents gold per pound, as compared with a recent order placed
in the United States for American 60s at about $1.60 gold per pound
and not filled to date.
Prices of ordinary yarn during the year fluctuated extraordinarily.
In January, 1917, 10s were quoted at prices equivalent to $62.70 to
$74.50 gold per bale. In August the price had advanced to the equiv-
alent of about $140 gold per bale, cotton at that time being priced
at $0.42 per pound. With the later decline in cotton there was A
collapse in the yarn market, which all but ruined nearly every dealer
in Hongkong. However, by a combination between importers and
dealers further imports were stopped until the high-priced yarn could
be sold. The recovery in the price of cotton that came a little later in
the year saved the situation and most dealers closed the year with a
fair profit. Sales for the year are placed at 96,000 bales, as com-
pared with 167,100 the previous year. The stock on hand at the close
of the year was about 60,000 bales.
Trade in Woolens.
In spite of an unusually cold winter in China in 1917 the Chinese
did not take to woolen piece goods at the prevailing high prices,
even with favorable exchange, preferring their quilted cotton or
their fur-lined silk garments. The market in Hongkong was con-
fined almost entirely to the comparatively limited local demand and
the demand from the coast ports for suitings and dress materials
used by foreigners and the small number of Chinese people dressing
in foreign-style clothing. The demand for woolen blankets has also
fallen off because only the wealthy Chinese and a few foreigners can








OHINA-HONGKONG.


Saffor1 to buy them at present prices. With export restrictions on
0oolen goods from Great Britain and the great home demand in
1ie United States and other producing countries, there is no pros-
[;eet of any revival of the woolen-goods market.
S etal Imports.
The chief feature of the import trade in metals in Hongkong for
2917 was the almost complete dependence upon the United States for
supplies. The demand for all kinds of metals, particularly for iron
and steel in various forms, was keen most of the year. Hongkong
shipyards have been reaching out for all the materials they could
secure, and there was a strong demand for building hardware,
pails, and similar materials, both for Hongkong and for the interior
of China. The use of ordinary forms of iron and steel was below
normal. Supplies in many lines could not be had at any price, and
Sigh prices in other cases made economy necessary; but even with
.this condition to face the United States had much more trade in
iron and steel than it could care for.
. The strongest demand during the year was for mild plates for
shipbuilding and for bar steel and iron, hoop steel, and all similar
materials. The call for wire nails at the opening of the year was
rather weak, because of a great overstock accumulated early in 1916.
but rising exchange and small imports cleared the market in fair
shape and the trade in nails later became quite brisk, especially for
the smaller sizes.
The trade in other metals was below normal, because of high prices
and war restrictions. Little lead was handled in Hongkong during
the year, although in normal times there is a large trade in lead for
lining tea boxes. American yellow metal sheathing came into the
market in quantities for the first time and proved a success, altlouigh
this is usually a Japanese trade.
Flour market Controlled by Japanese and Chinese Traders.
It was inevitable with the high prices for flour in the United States,
Canada, Australia, and other producing countries that the import
into China during the past year would be at a minimum, but it was
a matter of considerable surprise that the flour that was imported
came chiefly from Japan. As a matter of fact, the market was con-
trolled entirely by Japanese and Chinese flour traders. The total
imports of flour into Hongkong for 1917 are placed at 1,072,089 bags,
as compared with 1,604,033 bags in 1916, 2,075,129 in 1915, 3,939,754
; 1914, 5,176,623 in 1913 and 5,694,554 in 1912. Of the 1,072,089
bags, Japan furnished 922,377, the United States 51,000, Australia
48,682, China 43,230, and Canada 11,850. These figures, however,
do not really indicate the amount of Chinese flour coming into this
field, since flour from North China came freely into Amoy, Foochow.
Swatow, and other coast ports to. the north of Hongkong and even
to Canton and some of the ports to the south that are normally Hong-
kong flour territory. Chinese flour cut into Hongkong trade at times
as far south as the Dutch East Indies and the Malay States. Japan-
ese flour, made largely from Manchurian wheat, also went into t he
Philippines in material quantities.
Quality and all considered, Japanese and North Chinese flour
will probably be a strong competitor of American, Canadian, and
Australian flour even when normal prices have been restored, a nd in







SUPPLEMdNT TO COMMERCE REPORTS.


the meanwhile it is likely that they will have things their own war
in this fiekl. The quality is not up to the American standard, blj
it is improving, and with constant improvement in Manchuria
wheat Japaniee flour is likely to become of very fair grade. Chinese
mills had a hard time during 1917 to secure proper supplies of wheat,
some of them having shut down for a time because of this trouble,
with the result that the average cost of their output was unduly .in-
creased. Nevertheless they have a great advantage in the field both
on account of location and tariff favors and will doubtless be a strong
competitor with Japanese mills in the South China market the
coming year.
The consumption of flour in China fell off immensely as a result
of high prices. While the price of rice advanced to a considerable
extent with the advance in flour, the increase in rice was not so
great, and in any event rice to the Chinese is the cheaper and more
acceptable diet. The consumption of rice in China was also some-
what below normal, the people generally turning to substitutes for
both rice and wheat, such as pea flour, beans, and other native prod-
ucts. The year in flour closed with little animation in the market
and with only about 300,000 bags on hand. Prices during the year
averaged about $2.12 gold per bag for all varieties, as compared
with an average of $1.07 a bag in the banner year of 1912.
Imports of Kerosene and Other Mineral Oils.
In normal years imports of kerosene into the South China field
form the second largest item in Hongkong's imports from the United
States. Imports of kerosene and other mineral oils since the war
commenced have been at a minimum on account of high prices and
high freight rates. There were very large stocks of oil, particu-
larly American oil, on hand in Hongkong and its subsidiary ports
at the beginning of the war, which have been drawn upon since. Im-
ports of oil in 1916 were at the lowest point in years; those in 1917
showed improvement, the total from all countries being placed at
32,500,000 gallons, as compared with 27,500,000 gallons the preceding
year. The imports from the United States in 1917 were 20,000,000
gallons, valued in round numbers at $1,250,000 gold f. o. b. Ameri-
can port. The rest of the supplies of standard quality oil came from
the Sumatra and Borneo fields. A considerable amount of low-grade
oil, generally so low that it can not properly be classified as kero-
sene, has been going from Japan and Taiwan into the Foochow,
Amoy, and Swatow districts and has been often used in adulterating
American and other standard grade oils or for refilling tins marked
with American or other standard grade trade-marks. This matter
of adulteration is one of the most serious features of the illuminating
oil business in China, particularly in South China.
Imports of gasoline amounted to only 90,000 gallons and came en-
tirely from the Sumatra-Borneo fields, American firms handling their
trade from stocks on hand.
Imports of Machinery-Automobiles and Accessories.
One factor of increasing importance to the machinery trade is the
local manufacture of many standard machines, particularly steam
and internal-combustion engines and motors, small power pumps,
and many other machines used aboard ships. The local manufacture







OwINA-HONGKONG. 13

Slrijne motors by the larger shipyards and by Chinese concerns is
i&' tery important factor in the situation. Imports of machinery
ing8 the year were much below normal. In South China internal
itical disorders prevented the undertaking of new enterprises,
Sin Hongkong there was little disposition to start new enter-
iiVies in the face of high freights, high costs of machinery, and
-at difficulty in getting machinery because of embargos.
..:Maehinery was Imported during the year for a modern tannery, a
i.aodern biscuit and cracker factory, and for various small knitting
S-kctories, and there was a fair business in electrical machinery of
small capacity, in pumps, marine motors, and metal-working and
Woodworking machines. Four railway locomotives and 20 miles of
rails for the Sunning Railway were imported, and considerable
Quantities of railway supplies came in for all the railways in this
feld. The trade in sewing machines, knitting machines, and similar
apparatus was below normal. Practically all of the chief items in
the trade came from the United States.
The imports of automobiles increased and will increase in the com-
ing year if certain local facilities in the way of ferriage can be se-
cured. The trade at present is altogether American and will prob-
ably continue so for some time. The trade in automobile accessories
is increasing, the disposition of local car users being to novelties and
improvements.
Paints and Glass.
SMost of the limited imports of paints were from the United States,
and the market lived largely upon local manufactures and upon
stocks of British and other paints on hand. Prices for the imported
materials were too high to permit of a very active demand. Imports
of both ships' bottom and decorative paints from Great Britain and
Europe practically ceased. There is a large local demand for deco-
rative and house paints if they can be had at reasonable prices.
Japanese manufacturers of window glass cut into the trade of the
United States in Hongkong during 1917 as a result of the decrease
-in sailing of ships from the east coast of the United States to the
SFar East and because of freight rates. The freight congestion on
the railways of the United States also seriously affected the trade.
Imports of single-strength window glass are placed at about 30,000
cases, of which Japan furnished about 22,000 cases and the United
States the remainder. Imports of plate glass, largely of mirror
size, one-fourth inch thick, were almost entirely from the United States
and are placed at about 80,000 square feet, while about 30,000 square
Feet of figured rolled glass also was imported from the United States,
Which had no competition in the trade. Imports of double-strength
window glass are placed at 400 cases, of which Japan furnished about
950 and the United States the remainder. It seems likely that Japan
will continue for the present to supply most of the trade in ordinary
window glass andin cheap table glass. The United States will furnish
most of the better-grade stock, some of which, however, still comes
from Great Britain. The stock of all such goods now on hand in the
Far East is very small.
Imperts and Btooks of (lnaeag.
American growers of ginseng were aided very materially during
1lit by the high silver exchange. This enabled them to secure very

.....







14 SUPPLEMENT TO COMMEBOE BEPORTB.

fair prices in gold for their product, which sold at comparatively
low prices in silver in the Hongkong and China market. The stot
of American root on hand at the beginning of the year amounted to
about 40,000 pounds, the arrivals are placed at 120,000 pounds, and
the sales at about 140,000 pounds, leaving a stock of about 9,000
pounds, or considerably below the average, on hand at the end of the
year. Prices ran about $300 local currency, or about $225 gold, per
picul of 1331 pounds lower than last year, but this was made up
largely by the higher level of exchange. The total imports of
American root were valued at about $650,000 gold. Political troubles
in the interior and the tightness of money interfered with the trade
during 1917 and promise little encouragement for the trade in 1918.
Clothing and Haberdashery Imports.
Imports of clothing, haberdashery, and all similar goods were
smaller in volume than usual, but much higher in value and, as a
peculiar turn of the trade, much higher in quality. High silver
exchange made it possible for the higher priced goods to supplant the
ordinary fair to good grades of underclothing, shirts, collars and
cuffs, neckwear, hosiery, hats and caps, fine woolen novelties, etc.
There was a marked increase in the imports of ready-made clothing
for women from the United States, particularly in the way of winter
suits and coats, blouses, separate skirts and morning costumes, and
accessories. A considerable trade also was done in American mil-
linery, while the greater part of the trade in corsets and similar goods
was American. In fine underwear for women Great Britain and the
United States share in the supply of knit goods, while Japan and the
Philippines supply most of the cloth undergarments that are im-
ported. The import trade in women's undergarments normally is *
French and English, but there is every reason to anticipate that after
the war the United States will continue to retain a fair share of the
trade.
American Shoes-British Hats.
There are very few British-made shoes coming into the Hongkong
market at present, and almost the whole of the import trade in both
men's and women's shoes is American. The value of the imports
increased greatly, though the volume of imports decreased because of
the high prices.
Imports of men's hats and caps and similar goods are almost
wholly British, and in a general way follow the ups and downs of
the trade in woolens. It is noticeable that most of the Chinese men
who wore foreign-style headgear a short time ago have turned rather
more freely to Chinese hats. Indeed, in nearly all lines of clothing
at present the disposition of the Chinese people is to use Chinese
garments, as a matter of economy and convenience. A large share of
the cheaper hats and caps used locally are made in Hongkong or in
Canton and other South China cities. A considerable quantity also
comes from Japan.
Countries Supplying Foods and Food Products.
Imports of food products of all sorts into the South China field
under present war conditions represent, in a general way, inm t
from the United States alone. Prior to the war the United ttes
had secured a very fair share of the trade in imported- foods of 1a







iCINA-H i ONG ONG. 15

Ssorls, particularly tinned and dried fruits, tinned meats and. fish,
v pr a'grain'foods, and to some extent jams, preserves, pickles and
q mdhments, sauces, and the like. At present the United States
is i applying almost the whole of the trade in these lines, supplant-
Smg European goods that have been imported into this field for many
ears. That the United States will retain all of this trade after the
war is too much to expect, but importers here generally agree that
the trade will never fully return to its former holders.
Imports of American cheese and dairy products increased con-
siderably in the first half of 1917, but food restriction interfered with
the trade in the latter half. The chief source of the South China
butter supply continues to be Australia, although some tinned Danish
butter is coming into the market Australia at present also is the
chief competitor of the United States in jams and preserves and some
lines of tinned goods. Japan is furnishing a considerable quantity
of tinned fish for the cheaper trade, although there is little in such
lines of a cheap sort at the present time. American condensed milk
has greatly increased its hold upon the market. American. flour has
dropped out of the market almost entirely; while American oatmeal
and corn breakfast foods, such as corn flakes, have come into the field
in much greater volume than ever before. In fact, they :.ot only con-
stitute the supply in that line, but represent an increased use of such
foods of peculiarly American make that were practically unknown in
the market three years ago. Imports of hams and bacon have all brt
ceased, the market being supplied by a local meat-packing and
produce concern. Imports of Australian meats are at a minimum
because of high freights and suspended steamer service.
American confectionery has all but taken over the market, or rather
had done so before American war restrictions went into full effect.
Considerable American candy is still coming into the field on old con-
tracts, and in the meanwhile local manufactures of American-style
candies are developing and will probably secure a permanent hold
upon the trade.
There has been little demand for American wines, even with those
from Europe all but shut off. Some American clarets and light wines
were imported in bulk and sold as European wines, but the trade in
wines and liquors at present is below normal, and indications are
that it will fall still lower in the immediate future, not only because
of the difficulty of securing supplies, but also because of the disposi-
tion of the communities of the East to use less alcohol.
Imports of fresh fruits from the United States have been on the
increase, particularly imports of California oranges and grapefruit
aid of Washington and Oregon apples. The tade is a difficult one to
handl in this field, for it can very easily be overstocked, with only
h tited cold storage available. In the past two years, however, im-
porters have been fairly successful in handling the fruit, and the
trade seems to be in a healthy condition.
I Trade in Bugar.
Imports and exports of sugar were little larger than those of 1916,
Both years being far below normal because of unsettled conditions in
hins that reduced Chinese consumption and because of Japanese
competition in North China, which followed the large crop of sugar
m Taiwn. The year as a whole was not a favorable one to the im-


I Bl l








16 SUPPLEMENT TO COMMERCE REPORTS.

porters, since falling prices and constantly contracting shipplg
facilities made it impossible to import with much safety. -TI e. .
fineries had a fair year, so far as profit on their actual working was
concerned, but the results of their operation were very irregular. One
of the refineries with shipping connections of advantage had a good
output, but another large refinery's output was far below normal.
The larger share of the refined-sugar exports went to Europe and
India.
The total imports for the year, according to official returns,
amounted to 317,674 tons, as compared with 310,196 tons the year
before, while the exports, based on the official returns for the last six
months of the year and commercial data, amounted to about 297,000
tons. The imports, according to commercial data, were apportioned
as follows:
Countries. 1916 1917

Ton. bsm.
Java........................................................................... 220,000 196,000
Philippine Islands.................... .......................................... 79,260 80,000
Lower Asiatic coast................ ...................................... 740 11,000
Taiwan .............................................................. ......... 4,100 30,000
Total...................................................................... 310,100 317,000

The business in Hongkong during 1917 was limited only by its
ability to ship refined sugar to Europe where there was an unlimited
market at prices obtaining here. The North China field was limited
both by shipping conditions and by conditions above noted. Ship-
ments to the United States also would have been much larger if
freights were more reasonable, being valued in 1917 at $51,497, as
compared with $47,298 the year before.
Chemicals Largely from the United States.
The 1917 import trade in chemicals was measured largely by what
the United States was able to furnish. The year opened with large
imports of heavy chemicals and standard goods from the United
States, but export restrictions affected the trade very materially in
the closing months of the year, particularly the trade in caustic soda,
soda ash, glycerin, ammonia, and similar supplies. There was a
steadily increasing trade with the United States in all standard drug
products, such as quinine, castor oil, iodoform, ipecac, sugar of milk,
cyanide of potassium, and various acids, as well as druggists'sundries,
including dental and toilet supplies, rubber manufactures, fine soaps
and lotions, and all si~pilar goods. Export restrictions and high
freights, however, commned to force up prices to a point where con-
sumption was affected. The trade in heavy chemicals will probably
return to Great Britain after the war, but the introduction of many
lines of standard drugs from the United States at prices that com-
pare favorably with prices under similar conditions from Europe
promises permanent improvement in this branch of American trade
in the South China field.
Imports of Coal.
The fuel situation in southern Asia during 1917 kt times was very
serious. Not only did the price of Japanese coal in Japan advance







CHINA-HONGKONG.


emobitantly, but high freight rates increased the cost, and, worst of
alnat times tonnage for coal was scarcely to be had at any price.
ihe :imports of coal into Hongkong and Canton for 1917 are placed
t 1,174,956 tons, as compared with 1,089,866 tons in 1916, 1,052,869
in 1915, 1,613,111 in 1914, and 1,487,750 in 1913, the latter. year rep-
resenting normal. Of these imports Japan furnished 71 per cent, as
compared with 71.6 per cent in 1916, 69.7 per cent in 1915, and 62.5
per cent in 1914. The increase in the use of Chinese coal noted in
1916 continued, both as a result of fuel conditions in Japan and of the
shipping connections possessed by the North China collieries. The
generally unfavorable conditions affecting the trade during 1917
continue in 1918 and many Hongkong industries and shipping, and
other interests depefiding upon Hongkong's coal supply, continue
to. be seriously embarrassed.
Imports of Sundaies.
During 1917 Europe dropped out of the miscellaneous trade gen-
erally known as "sundries," although in a few of the leading lines
British and continental manufacturers still cling to their old-estab-
lished trade, but the difficulties of trading in the face of necessary
war restrictions, the decreasing shipping facilities for all but the
most necessary trade, and the increased cost of production have
forced them out of the market in many lines in which they held the
trade for years. The higher-class goods in this miscellaneous line
are now coming from the United States, while the cheap goods,
formerly coming from Germany, Belgium, and Austria, are now
coming from Japan. For example, in electrical materials the United
States is now furnishing most of the higher-class lamps and acces-
sories, while Japan is furnishing cheap lamps, insulators, and similar
goods; in hardware the United States is furnishing standard cutlery,
tools, locks, bolts, nuts, chains, and the like, while Japan is furnish-
ing cheap enamel ware and novelties. Leather goods, fine handbags,
and high-grade bags, as well as high-grade boots and shoes, come
from the United States, while Japan furnishes cheap trunks and
cases, cheaper handbags, and the like. In hosiery the United States
has the fine trade, while Japan and local hosiery factories have the
cheap trade. The United States has the better trade in motors and
general machinery, while the Japanese, and to a very large extent
Chinese and local manufacturers, have the trade in less advanced
models.
The United States has had for some time a strong hold on the
trade in dental and toilet articles and certain lines of perfumery.
There has been a marked increase in the imports of medicinal prep-
arations from the United States.
Manufacturers of rubber are almost wholly American at present.
Japan has increased its hold upon the trade in toys, cheap mirrors,
small, cheap tools, and notions and novelties of all sorts that for-
S merly were almost wholly German and Austrian. The decreased
import of watches and clocks noted last year has been further re-
duced, both because of the high prices and the difficulty of securing
such goods. The increasing use of electric light in the outports as
wall as in Hongkong has all but done away with the trade in patent
utn apparatus, and even the trade m cheap lamps has been
Maui



*ii,
:.:. I :




. ... ....... ......... ..w. -1


18 SUPPLEMENT TO COMMERCE REPORTS.

American soap made little advance during the year, chiefly because
of increased costs at home and high freight rates. A limited amount
of standard British soaps that have held the markets for years is
still coming out, but the Chinese are depending more and more upon
local manufacture.
Musical Instruments, Paper, and Hardware.
Musical instruments from the United States have about held their
own, but the trade is not active. American pianos introduced into
this field have been a fair success, and there has been a fair sale of
American mandolins and guitars and similar instruments and in
some lines of band instruments. Imports of phonographs and records
have been below normal because of the difficulty of securing the
goods.
Japan has had almost the whole of the ordinary paper trade.
Some of the finer grades came from the United States, and north
Europe was able to ship a fair amount of news print and similar
papers, but freight conditions made the entire paper trade largely
one of local supply. Leathers and similar materials for binding were
almost unobtainable.
Hardware coming into the Hongkong field was almost altogether
American, but, as a matter of fact, it was all but impossible to
secure it from any source much of the time. Cutlery of special
grades came from England in limited quantities, but the supply was
short at any price. Miscellaneous hardware, locks, bolts, nuts, and
all similar goods are almost wholly American at present, but the
trade is far below normal.
Condition of the Export Trade.
The demand in the United States and Europe for certain food
products and raw materials for war purposes constituted the chief
support of the export trade of South China in 1917. The chief asset
of this district was its supply of tin from Yunnan and of wolfram,
antimony, and other metals from Kwangtung, Kwangsi, and Htuitin
Provinces. Hides and skins, food products, and numerous raw mna-
terials constituted the exports from this field that ranged much
greater in volume than local economic conditions justified.
Chief among the articles that saved the trade situation witw the
United States, and to some extent with Europe, were tin, tungsten,
rice and other foodstuffs, peanuts and other oil seeds, antimony, and
some forms of raw silk. Shipments of mats and matting fell off
about 50 per cent; human hair, 6 per cent; preserves, 35 per cent;
chinaware, 35 per cent; and feathers, 70 per cent. Shipments of
peanuts increased over 100 per cent; essential oils, 8 per cent:; min-
crals, 150 per cent; tin, 25 per cent in volume and 500 per cent'in
gold value.
Production and Exports of Silk.
The production of silk in the South China field in 1917 is placed
at the same figures as that of the previous year, i. e., 48,000 bales,
as compared with 35,000 bales in 1915. However, exports of raw
silk to all markets amounted to only 39,075 bales as compared with
45,703 bales in 1916, while exports of waste silk increased from $8,-
177 bales to 37,192 bales. Demand from the United States was very
irregular and this with the exchange situation caused much of thd








19'


grtat fnutuation. The old season that closed in May was wound up
with practically all silk sold at advancing prices, but advancing
Strange early in the season stopped any higher prices, while only
n unfa vorable result of the first three crops prevented a great fall
in prices.t Later in the season, however, a great boom in silk prices
all over the world set in, and prices in Canton and the producing
districts advanced to a point where buyers would not pay them. The
market reached a deadlock, and finally prices came down and the
calendar year closed with a depressed market. American buyers in
general bought at top prices and lost heavily as a result, closing their
aer with heavy stocks acquired at these high prices and with little
disposition to meet sellers even at marked reduction.
The crops during the past three years have been as follows:

SCrops. 1915 1916 1017

Bales. Bales. Bales.
1lst....................................... ................... ,000 5,000 6,000
Hecond........................... ...........................-.. 5,000 10,000 1,000
Third............................................. ....................... 8,900 8,000 4,000
Fourth................................................................. 2,500 7,000 12,000
Firth......................... ............... .... ........ ............ 4,r50 7,000 7,500
Sixth.................................................................... 5,000 8,000 12,000
th.............................................................. 5,000 3,000 2,500
S Toal ............................................................... 5,000 4,000 48,000

The comparative exports of various kinds of silk during the past
two years have been as follows:

Kind and detination. 1914 1917

as l. Bales. Bales.
................................-.-... ............................... 26,648 20,a15
S Uiitd States................................................................. 19,055 18,260
Europe...... ........................................................ ......... 14,473 17,296
USted St .................................................................. 13,704 18,
........................................ ...... ................ ............... ... 4,5W
...Wstat.. ..... .......................................................... 677 534
S d Sat............ ....................................... ...... .. 677 80,8
'low ......................-----------.. ........85 80R7

Tit1 Trade in Tin.
Exchange value of silver during 1917 prevented Hongkong tin
exporters and the Yunnan tin miners from securing as great a return
in local currency for their exports as the miners and exporters of
the Malay States. However, the year was the greatest in the history
of the South China tin fields, particularly as regards the United
States, which took tin from Hongkong to the amount of 14,17,969
pounds valued at $6,670,074 gold, as compared with $1,401,377 in
1916, $983,885 in 1915, $769,538 in 1914, and $1,632,212 in 1913. The
total exports for the year are placed at 10,500 long tons, of which
China and Japan took about 1,500 tons, Europe about 2,000 tons, and
the United States the remainder. The year opened with a stock of
S .oat 8,600 tons, or. about three times the normal stock, of tin on
iti a nd a rather uncertain prospect. It closed with a stock of
ibdft 1 50Q tons -on,hand and a strong demand from the United
~h alih tin the market could furnish at prices comparing
: l --bly with the rest of the world.s








SUPPLEMENT TO COMMERCE REPORTS.


Prices during the year covered a wide range. Local prices reneha
$120 local currency, or about $69.60 gold, per picul of 1388 poiUds
in June and went down to as low as $93 local currency, or $60.45
gohl, per picul in October. Nevertheless, much of this apparent
fluctuntion is in reality fluctuation in exchange, and while gold prices
of tin have been very high the return of sales to Yunnan producers
and Hongkong refineries have bden little if any above the average.
Exports of Wolfram.
A considerable export trade in wolfram and wolframite -developed
during 1917, the United States coming very strongly into the mar-
ket for the ore in the latter half of the season. During the closing
month of the year wolfram was being shipped out of Hongkong ter-
ritory, including Swatow, to the amount of about 250 tons per
month, valued in round figures at $1,500 gold per ton. The ore is
obtained mostly from pocket deposits over a considerable area in
Kwangtung Province, but it is also being mined successfully in
Hongkong territory. Late developments seem to indicate that the
field is a very notable addition to the world's supply.
Situation in the Rice Trade.
The general turnover of rice in the Hongkong market was con-
siderably less than in 1916 and the year previous, estimates for those
years being 820,000 and 720,000 tons, respectively. The imports are
estimated at about 700,000 tons. Imports during much of the year
were fairly large in spite of the difficulty of securing tonnage, but
as a result of the lack of freight space to consuming points the stock
left on hand at the close of the year was unusually large. Saigon
exported 1,247,570 tons in 1917, as compared with 1,245,203 tons in
1916, but Singapore and the Straits Settlements took a larger share
of the crop than usual. On the other hand, shipments of rce from
Siam and Burma were diverted somewhat in this direction as a result
of lack of tonnage for other markets. The declared exports of rice
to the United States in 1917 were valued at $10,123,819 gold, as com-
pared with $3,716,659 in 1916 and $2,058,203 in 1915. Most of: this
increase was due to shipments of cheap rice by way of the United
States to Central and South America and the West Indies, but in the
closing months of the year the bulk of the exports went to the United
States for American consumption.
Shipments to the Philippines fell from a value of $2,564,040 in
1916 to $1,584,738 in 1917, or about half the value of the exports in
1915. Good Philippine crops as well as high prices account for the
decrease. Prices for all grades of rice ran high even in silver as a
result of high freights, which increased to $10.50 gold per short ton
from Saigon to Hongkong at the close of the year. The new year
opened with large stocks of rice on hand, which disturbed conditions
in China are likely to keep here for some time.
The Spice Trade.
As a result of speculation and exceptionally favorable freight op-
portunities in sailing ships, thb export of cassia to the United States
in 1916 went far above normal, reaching a value of $504,207 gold,
as compared with $172,414 gold the previous year. In 1917 it
reached a value of $349,968 gold. The demand during the year was
very largely for broken grades, but as selected and other hi -grpd








CHINA-HONGKONG.


.e Msia& ust be gathered at the same time as the:lower grades the
result was an accumulation of high-grade stock in Hongkong, which
hI now being worked off at fair prices. Exports of cassia to all
countries in 1917 are placed by shippers at 75,351 cases, of which
41,646 were for the United States and Canada and 23,075 for Great
Britain, compared with exports of 94,296 in 1916, of which 58,225
were for the United States and Canada and 36,071 for Great Britain.
The Continent of Europe took no cassia direct during the past two
yesa. Present indications are that the volume of exports for 1918
will-be comparatively small, but at prices that will range exception-
0Uy high in gold.
The export of Indo-Chinese pepper through Hongkong so increased
in 1917 as to merit separate returns, particularly as regards the
United States. The declared exports of pepper from Hongkong to
the-United States in 1917 were valued at $216,956 gold, as compared
with inconsiderable returns in previous years.
3Z*drts of Essential Oils.
The trade in essential oils was satisfactory, all things considered.
There was a great drop in the value of aniseed oil, but a large
increase in the volume of exports. The total exports df all essential
oils'from the port in 1917 are placed by shippers at 13,158 cases, of
which 5,822 cases were for the United States and Canada, 5,627 for
Great Britain, and 1,709 to the Continent of Europe. In 1916 the
total shipments were placed at 12,431 cases, of which the United
States and Canada took 5,065 cases, Great Britain 2,570 cases, and
Europe 4,796 cases. The increased shipments to the United States
are accouhted for by the larger exports of aniseed oil. The declared
value of aniseed-oil exports to the United States in 1917 was $254,833,
compared with $120,253 in 1916, while the value of cassia oil ship-
ments was $124,503, compared with $126,319 in 1916. The price of
eassia oil held up well during the whole year, while that of aniseed
oil fell to an unusually low level, it being quoted at the opening
months of the new year around $122 local currency per picul, or
about 66 cents gold per pound, as compared with substantially twice
thbet price gold and more than three times that price in silver
previous to the war.
Thd export of tea, peppermint, and similar oils was far below
normal not only because of a falling off in the trade with Europe
but hiso as a result of the difficulty of trading with India. There
was a similar falling off in the trade in Chinese chemical, drug, and
other medicinal or special food products usually shipped to India in
considerable volume. The South China export of camphor has
practically ceased.
kM&t-at cB-drams and Rattan Furniture.
High freight rates seem to have told more seriously upon the
export of mats and matting, sea-grass and rattan furniture, and
similar light bulky goods than upon almost any other line of South
China products. Exports of mats and matting for 1917 are placed
by lcal shippers at 70,996 rolls to the United States and Canada,
3,860rolls to Great Britain, and 3,977 rolls to the Continent of
e, or a total of 98,833 rolls, as compared with shipments of
88,8 tells to the United States and Canada, 66,227 to Great Britain,








22 SUPPLEMENT TO COMMERCE REPORTS.

and 2,232 to the Continent of Europe, or a total of 107,382 in 1916.
Both years are small compared with total shipments of 500,000 or
more rolls in normal years. Prices for matting were wel main-
tained during the year, as the acreage in matting grass was far below
normal. There is no prospect of any material change in the trade
the coining year, the volume of business continuing small but at good
rates.
Exports of sea-grass and rattan furniture fell off in even greater
proportion, and only a strong demand from the United StAtes made
any movement of such furniture possible. Commercial returns show
a decrease in shipments of rattan and rattan ware to the United
States and Canada from 16,419 packages in 1915 to 5,362-in 1916 and
to 3,105 in 1917.
The declared exports of rattan and sea grass, blackwood and other
furniture to the United States in 1917 were valued at $249,298 gold,
compared with $250,487 in 1916 and $217,998 in 1915. There was a
marked decrease in the volume of the goods, the increased value being
largely a matter of exchange. There has been practically no trade
at all in such goods to Europe or South Africa in the past two years.
Australia continues to take a small proportion of its former imports.
The rattan and sea-grass furniture industry in Honkong has come
to be one of great importance, and Hongkong concerns ship their
products all over the Far East as well as to the United States, Europe,
South Africa, and Australia. Local trade has been fairly brisk, but
high freight rates and often a lack of space at any price rendered
export difficult if not impossible. Much of the export business
was in knocked down rattan furniture, the shipment of which was
commenced about two years ago. This form of shipment thus far
has been a success.
Exports of Fans and Canes.
Exports of the common palm-leaf fan have fallen off- in even
greater proportion. Exports of fans by way of the Pacific to
the United States and Canada fell from 14,128 packages in. 1915
to 2.303 packages in 1916 and to 97 packages in 1917. Likewise ex-
ports of canes, which went almost entirely to Europe before the war,
fell from about 23,000 packages in 1915 to 2,515 packages last year.
(n the other hand. the United States is now importing direct a con-
siderable amount of canes, the exports to. the United States and
('annada amounting to 5,667 packages in 1917, as compared with 1,348
pnackages in 1916 and 1,078 in 1915. The exports to all countries in
191 7 were 8,182 packages, compared with 8,224 in 1916. There was an
increase in the value of exports of the finer finished grades of canes
anid f:ns to the United States, indicating that the finishing is being
,',ne in the Orient rather than in Europe, from which the U.'ited
Sti:tits formerly made purchases.
shipments of Embroideries and Novelties.
:Exports of embroideries and novelties increased in the face of war
cr:ndlitinns. Nearly all these goods are made on order for American
lirl.- ;anl according to American models. The exports of cotton and
its manuf'rtures to the United States in 1917 were valued at $41,358,
;as comlipared with $19,280 in 1916. Exports of silk and its manu3
features were valued at $303,243 in 1917, compared with $143,740 in'







OCHETA--HEO KONG. 28

1916. About two-thirds of each item is embroidery of the respective
faries. Neutral countries of north Europe are taking increasing
squatities of such products.
: The export of so-called Chinese curios, as well as genuine curios
and antiques, has been maintained with the United States, though it
&eaied almost entirely with Europe. The declared value of such ex-
pxts to the United States in 1917 was $84,451, as compared with
8,984 the preceding year. The demand in the United States for
Chese garments (mandarin coats, etc.) both for use as garments
ad for decorative purposes was maintained.
teats, Provisions, and Vegetables.
The export of meat and provisions from Hongkong, which has
assumed rather large proportions in the past five or six years, was
interfered with greatly by the high course of silver exchange. The
leading foreign-style meat and provision concern in Hongkong has
started a meat-packing industry, including the tinning of meat upon
a more or less modern basis, and is shipping its products quite
widely. The value of meat and similar products shipped to the
United States in 1917 was $134,931, as compared with $81,439 the
year before, while shipments to the Philippines, one of the chief
outlets for the industry in Hongkong, increased from $257,933 in
1916 to $874,654 in 1917. Exports of fish to the. United States in-
creased from $219,189 in 1916 to $842,394 in 1917, and shipments to
the Philippines from $88,024 in 1916 to $148,676 in 1917. The value
of egg exports to the Philippines in 1917 was $389,244, as compared
with $369,321 in 1916. Meat exports to the United States are largely
Chinese meat specialties for consumption by Chinese residents of
the United States, while the shipments of fish are mostly of Chinese
tinned fish. Exports of meat products to the Philippines are chiefly
fresh chilled beef and they were made in the first half of the season,
exchange shutting off the trade in the latter half. The trade will
revive quickly when exchange becomes normal. There is a consider-
able trade in Chinese meat and game in tins to Australia and various
Central and South American countries. Large quantities of Hong-
konghiams and bacon are being exported to various parts of the
Fat-Est and even to Europe.
SEports of vegetables to the United States amounted to $486,294
in 1917, as compared with $362,243 in 1916; and shipments to the
Philippines were valued at $186,927 in 1917, as compared with $179,-
783 in 1916. Shipments to Australia, the East Indies, and Central
Iand South America also were large and the trade has grown rapidly
when not overcome by unfavorable exchange. Tinned vegetables
form the largest item in such shipments, but there are also ship-
ments of dried and salted vegetables, pickles, and vegetable sauces,
some tinned mushrooms, and a fair quantity of beans.
4se Uxport Trade in Human Hair, Feathers, and Bristles.
SShipments of human hair from Hongkong in 1917 held up fairly
Swel:l as a result of an increased demand from the United States.
bfirtet shipments to the United States are replacing shipments by
iMy of Eiirbe for certain grades of hair. Exporters place the total
E l'si ents during 1917 at 5,916 cases, as compared with 5.523 cases
'the year before, but whereas the United States took 1,247 cases,







SUPPLEMENT TO COMMERCE-REPORTS.


Great Britain 2,328 cases, and continental Europe 1,948 cases in 191l,
Great Britain fell to 2,180 cases and continental Europe to 6502ecsip
in 1917, and the United States increased its imports to 2,80 cases.
The vicissitudes of the trade may be shown from the fact that the
declared exports to the United States were valued at $250,978.in
1917, as compared with $89,010 in 1916, $31,845 in 1915, $18,892 in
1914, $128,137 in 1913, $328,972 in 1912, and $292,758 in 1911. The
actual shipments from Hongkong into the United States in tho
earlier years were much larger but were credited to Europe, through
which they proceeded. At present the trade seems to rest very
largely on American demands, which is for selected long-length
qualities only.
Continental Europe has dropped entirely out of the feather market
in Hongkong, though formerly it was the heaviest buyer. The total
exports in 1917 are estimated at only 6,719 packages, As compared
with 24,443 cases in 1916. In 1917 the United States took 6,200 and
Great Britain 519 packages, as compared with 18,023 and 6,420
packages, respectively, the year before. High freights and high ex-
change account for the collapse of the trade. Considerable quantities
of pheasant, duck, and other ornamental feathers are still going to
the United States.
The trade in bristles is still struggling with adulteration and false
packing, but there was some improvement during the past year, the
total shipments being placed at 5,076 cases, as compared with 3,964
cases the year before. In 1917 the United States and Canada took
1,209 cases, as compared with 831 cases in 1916. Great Britain took
3,467 cases, as compared with 2,273 cases in 1916, while continental
Europe took 319 cases, as compared with 860 cases in 1916.
Shipments of Hides.
The chief feature of the export trade in hides from South China
since the beginning of the war has been the increase in shipments to
the United States. During the past season the difficulty of securing
freight accommodations to Europe increased the tendency to ship to
the United States, the result being that an item in exports to
America which did not merit separate statement in 1915 and
amounted to a value of only $72,606 in 1916 increased to $838,800 in
1917. One factor in this increase was a readjustment of American
quarantine restrictions in such a way as to permit shipment with
safety while at the same time allowing some of the quarantine work
to be done in the United States. The high exchange value of silver
told heavily against the trade during 1917, but the demand for the
material was so strong that most offerings were taken with compara-
tively little regard for price.
Miscellaneous Exports.
It is difficult to secure data as to the general export trade in-Hong-
kong, since in the smaller items few export firms attempt to secure
and collate any information. Reports to the Hongkong General
Chamber of Commerce from exporting firms show, in general, a
considerable decrease in the volume of miscellaneous exports, although
there are some notable exceptions. The figures given in the reports
from such commercial sources are not to be relied upon, for the







O...HiA--NOIGONG. 25

Ibasl thait they are necessaily incomplete, but in general they indi-
natbth. trend'of the trade.
Ihe gaineral chlasification of Chinese merchandise of the returns
Fibias a small decrease only, the total packages declared for 1917
biiFg' placed at 248,048 as compared with 246,725 in 1916, the United
SSt.iB and Canada taking all but 1,900 packages. Chinaware de-
eed from 2,885 packages in 1916 to 1,858 packages in 1917, the
Suited. States and Canada taking all in 1917 and all but 578 pack-
I agNlsi 1916. In preserves, largely ginger, the exports decreased
froi 37,859 packages to 24,785 packages in 1917. The United States
took 8,158 packages in 1917, as compared with 2,521 in 1916; Great
Britain took 19,627 packages, as compared with 84,838 the previous
1 eir, while the rest of Europe took none, as compared with 500 cases

S Exp ts of tea fell from 10,345 cases to 7,645 cases, the share of
the United States increasing from 4,875 cases to 7,441 cases, while
Sthat of Great Britain fell from 5,237 to 39 cases. Shipments of tea
!' frong Hongong now are usually shipments outside of the general tea
trade, Exports of peanuts increased from 55,024 bags to 190,585
bags. The whole of the increase is accounted for by larger ship-
ments to the United States
S The item of miscellaneous and sundries shows a big increase from
817,086 to 573,831 packages. The United States and Canada took
186,709, Great Britain 97,867, and continental Europe 32,510 in
1916, while in 1917 the United States and Canada took 358,871 pack-
ages, Great Britain 164,930, and continental Europe 50,030. This
tride is largely in native goods and raw materials needed in the
United States and Europe for war purposes.
SShipments of bamboos, firecrackers, and camphor to Europe
ceased altogether, and there were decreases in the trade with the
United States and Canada. The trade in gunny bags from Calcutta
Sto:the.United States and Canada decreased from 14,384 bales to
1 ,988 bales. The transit trade in hemp to Great Britain fell from
27,899 bales in 1916 to 5,032 bales in 1917; that to the Continent of
Europe increased from 2,186 bales to 2,830 bales, while shipments to
the United States and Canada increased from 1,501 packages to
1,761 packages.
['Te tables of declared exports from Hongkong to the United States and
posetsions during 1917 were published in Supplement to COMMERCE REPORTS
No. 5fa, Mar. 25, 1918.]
t: ten na of American Trade.
While in some lines the United States has had a considerable trade
in the far East for many years, its general trade has been compara-
tively limited. At times it has drawn fairly heavily upon China's
reports of raw materials, and it has usually sold China considerable
aa' titles of certain American products, like flour, kerosene, cotton
Goods, and various lines of machinery and railway supplies.
Extension of American trade in China and this part of the
world generally, however, has been a matter of introducing American
goods into a field in which they were not known or not liked; of
titiaptig to establish trade in competition with or opposition to
tilde of other countries which, through firms of their own nation-
""'' i**^








SUPPLEMENT TO COMMERCE REPORT.


ality or otherwise, have built up a trade in their special prodita
after many years of effort, expense, and experience. After the dote
of the war, however, American goods in nearly all lines will oeoiiy
an entirely different position in the trade of the Far East. As a
result of the war, the Far East has been demanding in the past
three years that the United States furnish it with goods which it
has been accustomed to import from Europe, but which it can not
now obtain there, and this demand has been so strong that it has
disregarded peculiarities of American trading methods and has
overcome the prejudice against unknown goods. The Far East has,
in short, reached out for American products, whether the American
manufacturer was looking for an extension of his trade or not. After
the war American manufacturers working in this field will therefore
compete upon much more equal terms with European exporters.
American goods have been given a chance to demonstrate their merit,
and they have secured a large and widening market.
The permanency of the new trade of the United States in the Far
East very largely rests upon broad trade policies that will be deter-
mined in a large measure by the war. Assuming that American
manufacturers can and will produce goods of substantially the same
merit at substantially the same price they will cost in Europe, and
assuming that these goods are as acceptable as European goods, there
are several things to be noted that will have a determining effect
upon the course of eastern trade.
Shipping and Use of Chinese Raw Materials.
The first of these is doubtless that of a satisfactory service of
American shipping. It is essential, too, for the increase of trade in
both directions between the United States and the Far East that
freight rates be lowered so as to permit the movement of cheap prod-
ucts from the United States like flour, lumber, kerosene, metals and
the like, and of raw materials from China such as hides, beans and
nuts, vegetable oils, and all the articles going to make up China's
export trade.
A second factor of controlling importance in the American trade
with China is the need of an increase in America's use of Chinese
raw materials. The nation that buys from China is best in position
to sell to China, both as a matter of reciprocal freights and of recip-
rocal finance. Unquestionably Germany's strongest hold upon the
trade of China before the war was in its use of Chinese raw mate-
rials. Moreover, China has produced and continues to produce large
quantities of very valuable raw materials at very favorable prices,
and its production in this line can be immensely increased if it has
a satisfactory market for its goods. The United States has used
very large quantities of Chinese materials, which it has imported by
way of Europe at increased expense over direct importation, at the
expense of its own prestige, and in a way to aid European financial
operations. One reason for this has been the lack of direct repre-
sentation of American concerns in China and another the greater
convenience and economy of financing imports through London.
Finance and Representation.
What can be done in the way of commercial discount market in the
United States after the war remains a matter to be settled by develop-







CHINA-HONGKONG.


ments in international and war finance and the comparative course
of rates of interest in the United States and Europe. American
traders interested in the Far East, however, need to devise some
means of offsetting the disadvantage they have had in financing their
foreign trade if they are to compete successfully in the Orient in the
future.
The matter of representation has been arranging itself in a large
measure. The experience of American exporters at the outbreak of
the war, when most of their principal agencies in the Inrger centers
of the Far East were in the hands of belligerents, and when, as in the
case of agencies in Hongkong held by German firms, their entire
business was liquidated, taught its lesson well, and the number of
'Americans in this and other ports representing American houses has
steadily increased. This direct representation of American houses
by American agents or by branch houses has paid the American ex-
porting and importing interests in every instance known to the writer.
Not only does such representation mean a community of interest be-
tween agent and principal but it means a better understanding of the
field on the one hand and a better understanding of the capacity
of the house on the other.
Unquestionably American trade in the Far East, in both import
and export lines, is in a far better position than it ever has been not
only in volume and profit but in its relations to the future. American
exporters are commencing to understand the eastern field, and the
eastern importers are beginning to realize that trade with the United
States is both profitable and easy in many lines independent of war
conditions and independent of war's influence.


WASlINGTON: GOVERNMENT PAINTING OTFIC : 1918







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