No. 394.] JAPAN. No. 731. Mr. Hubbard to Mr. Bayard. [Extract.] LEGATION OF THE UNITED STATES, Tokio, Japan, October 10, 1887. (Received November 2.) SIR: I beg to respectfully call your attention and careful reading of the inclosed leading editorial which I have taken from the August num· ber, 1887, of The Australasian and South American, a representative commercial journal and of marked influence in diplomatic and consular circles (and "devoted to the extension of commerce between the United States and Canada and Australasia, South Africa, South America and India, China and Japan, etc."), under the head of "Our trade with China and Japan." While the present status of that trade is in the main correctly stated, yet it is due to truth and candor to say that the writer of the article misleads, unintentionally, no doubt, as to matters of fact, when speaking of our volume of trade with these countries thatWe are unmeasurably distanced alike by Germany and Great Britain, both of which countries look upon China and Japan as the most important fields for the development of their vast foreign commerce. The statistics of the customs annual return for 1886 show, to use round numbers, that the aggregate export and import trade between the United States and Japan was over twenty-three millions of yen as against twenty one millions between Great Britain and her colonies and Japan, and three millions between Germany and Japan, facts which I had the honor in my dispatch No. 316 to the Department of State to present fully by figures and tables in connection with a review of the annual trade of Japan with all countries for 1886. It is true Great Britain's exports to Japan are largely in excess of the exports from the United States to this country, but the gratifying fact was made manifest in the trade returns for 1886 that the American export trade had increased during that year over 1885 nearly a million dollars in value. As to Germany, the entire sum total of her exports and imports is less than four millions, nearly twenty millions less than that of the United States with Japan. As to the other obstacles and disadvantages to our more enlarged commercial progress in this country, mentioned by the writer of the article inclosed, they are stated with force and fact, and deserve to be earnestly studied and heeded by our countrymen who propose extending our trade in the East with steady steps against all competitors. The hopeful horoscope cast by the same intelligent writer for the future of our trade relations in Japan and China, is not without sound support in reason. I have, etc., RICHARD B. HUBBARD. [Inclosure in No. 394.] OUR TRADE WITH CHINA AND JAPAN. The past few years have witnessed a very material increase in our trade with China and Japan, and present indications would appear to promise that within a reasonable time our commerce with both countries may attain something near the value it ought to possess. The most important feature of the increased trade returns, however, is to be found in the character of our exports to these markets, their variety having been extended in a manner that is particularly gratifying as affording the best proof of the growing extent to which the people of China and Japan are becoming familiar with our productions. After all, however, when we come to compare the volume of our business with the value of the trade other nations enjoy with China and Japan, we have but little cause for satisfaction. We are unmeasurably distanced alike by Germany and Great Britain, both of which countries look upon China and Japan as among the most important fields for the development of their vast foreign commerce. There are two principal causes for the backward state of our trade with China and Japan, and we may profitably devote a little space to their consideration. In the first place, we find the same obstacle to our commercial progress in these countries that we have so often called attention to in speaking of our trade with other markets, viz, far too little attention is bestowed on the introduction of our goods, which are almost expected to sell themselves. In nearly any part of the world, except in China and Japan, we might look for business growing out of the opportunities offered buyers by means of trade, literature, advertising, etc. There is little to be done in either of the above countries through such factors. Chinese and Japanese merchants are notoriously keen buyers; they not only want to know the lowest prices and discounts obtainable on any line of goods, the best terms of credit, etc., obtainable, but in nine cases out of ten they want to satisfy themselves, by personal inspection, of the character of the articles they are purchasing. This is only natural. Their customers, for the most part, cherish deep-rooted preferences for certain forms, patterns, and styles in goods of their own or foreign manufacture, and they will not tolerate any deviation from the often arbitrary standard they have established. It is only the native buyer who thoroughly understands what is needed for the market he supplies, and his orders, as received by the resident representative of the foreign manufacturer or merchant, must be minutely observed. Comparatively few American houses have taken the trouble to establish direct commercial relations with China or Japan through firms located in these countries, and the consequence is that their facilities for meeting the requirements of the market are inadequately realized, even by those who would willingly patronize American productions. England, Germany, and France are represented at the principal ports of entry by numerous mercantile houses and secure in consequence the bulk of a profitable and rapidly increasing trade. The second disadvantage under which we labor in the development of our trade with both China and Japan is the lack of active support our merchants receive from the agents of our Government in these countries. England and Germany have made it their business to adopt every possible means to secure the personal favor and goodwill of Chinese and Japanese officials, and their rivalry in this direction leads them to discredit the efforts of other nations to obtain a footing in these markets. Agents of these Governments resort to every practice in their power, honest and otherwise, to decry competing influences and competition, even to the extent of belittling the business methods and progressive tendencies of the Chinese and Japanese merchants, and the various journals they control render them valuable assistance in this course. The effect of their action on the foreign.commercial and diplomatic relations of both countries is in a high degree detrimental to their advancement, and is plainly proven by the extraordinary favors shown to this or the other nation, according to the influence its representatives are able to exercise in official circles. As an instance, we may refer to the large orders the Japanese Government has recently placed for steel rails in Europe. Half the contract has gone to English firms at £4 118.; the other half has been taken by Germans, not at £4 118., but at £5 68. The rails are to be delivered free on board in London and Antwerp respectively. The difference of 158. per ton represents in this case, says a writer in Iron, a free gift of about £10,000, presented by the Japanese Government to the German manufacturers. Of the motives for this gift, whether gratitude for favors past or to come, the English journal naturally knows nothing, but remarks: "British manufacturers can not be blamed for failing to secure business in the face of favoritism." It adds, somewhat ill-naturedly: "A conviction is fast spreading abroad that the Japanese Government and people are so fickle in their friendship and so unreliable in their commercial dealings that they are not worth taking the trouble to please." It is gratifying to American independence to know that what trade we enjoy with China and Japan has been built up entirely on the merits of our productions, and is not likely to be jeopardized by misrepresentations or such special pleadings as government agents are able to offer. In Japan, especially, the course adopted by our minister has created an excellent feeling in our favor in commercial circles, the most influential papers commenting frequently on the desirability of closer mercantile relations between Japan and the United States. In China much the same feeling prevails, except that the effect of our restrictive legislation against Chinese immigration and the bad treatment Chinese subjects have received in some parts of the country still weigh against us. That these adverse influences, provided their cause is not renewed, will ultimately disappear there is little room to doubt, and, with the progressive tendencies both China and Japan are at present exhibiting, American commercial enterprise, exerted in the right direction, is certain to develop the many and profitable opportunities for trade that these important markets afford. No. 409.J No. 732. Mr. Hubbard to Mr. Bayard. LEGATION OF THE UNITED STATES, Tokio, November 28, 1887. (Received December 22.) SIR: I have the honor and sincere gratification to invite the attention of the Department of State to the inclosed editorial of the leading and most influential native daily journal in Japan, the Jiji Shimpo, upon the present relations of American and Japanese trade. I have had occasion heretofore to forward to your Department the able and friendly exhortations of this influential editor and statesman to his countrymen and Government to encourage, more than is now or has been done, the imports from the United States to Japan. For two years past the columns of this widely-circulated journal have been largely devoted to giving, from official statistics, the status of the Japanese-American trade, and the business reasons, based on immemorial rules of international exchange of products in commerce, why the balance of trade should not remain, as now, against the United States. That these discussions by such a man, who enjoys rightfully the confidence and the great respect of his Government, have awakened the Japanese, especially the Japanese mercantile and commercial public, to an earnest consideration of his views, is admitted on all sides, and by no one more cheerfully than the United States diplomatic representative at this court. Inquiries made at this legation by private native capitalists of Japan, proposing to engage in building railways under Government charters, or merchants engaged in the silk or tea trade and who fear that unless a more friendly return for our nineteen millions of imports which are purchased in Japan is inaugurated that the lex talionis might be invoked and silk and tea be made to pay duty (as they do not now) to American customs-these inquiries, I repeat, often referring to the Jiji Shimpo, and seeking my own views as to their truth in this connection, have convinced me that largely to this native journal we owe the recent increase of exports from the United States to Japan of over $500,000 in 1886 over what it was in 1885, and the aggregate increase of both our exports and imports to twenty-three millions, being three millions more. than Great Britain's exports and imports (from and to Japan) including all her colonies. In my intercourse with this remarkably able and progressive man (Mr. Fukuzana), whose biography may be found in "Lanhan's Leading Men of Japan," I am gratified to recognize a bold and intelligent ally, who, with open hand and earnest integrity and for no mere favoritism of the courtier, but from convictions of justice to Japan and fair dealing with the United States, has seriously and steadily pursued and still pursues the course indicated by the able leader from his pen, to which I have pleasure in inviting the attention of yourself and of our countrymen through the State Department. I have, etc., RICHARD B. HUBBARD. [Inclosure in No. 409-Translation.] IMPORTS FROM THE UNITED STATES SHOULD BE ENCOURAGED. [From the Jiji Shimpo.] The public as a rule generally speak of Western nations as a whole, but if considered from their relations with the East, there must be different degrees in their grade. Germany and France, for instance, are strong continental powers of Europe, but their strength is only limited to Europe and their influence in the affairs of the Orient is not predominant. In the case of England, however, it is entirely different; she is the most influential power in the East with regard to commercial and military affairs. The circumstances being thus, we most strongly dissent from any action which may in any way wound the susceptibilities of that power. Therefore Japan should be careful not to injure the commercial interests of England, but, on the contrary, do all in her power to gain her good-will in diplomatic and other relations so far as is consistent with national honor. The above view is not only held by ourselves but also by those who have the welfare of the country at heart. Although we do not mean by the above that our commercial and other relations with foreign powers should be unheeded, yet we are of opinion that England should be placed in the foremost position in diplomacy as well as commerce in the affairs of Oriental nations. Without any reference to political relations, there is one other country which is in no way inferior to England from a commercial point of view, the United States of America. The present foreign trade of Japan is 80,000,000 yen, of which 48,000,000 yen consists of exports. Out of this amount 19,000,000 yen are exported to the United States. Though a portion should be deducted from this amount which is forwarded for sale and consumption in Canada, yet the United States must be considered as the foremost of our customers. The commercial relations existing between England and Japan are only due to the large amount of imports from that country. The demand for yarns and shirtings is very great, and these, taken in connection with other manufactures, make the total value of imports from England 12,000,000 yen. She is the largest importer to Japan, but as a customer she is far inferior to the United States and even China and France. If a comparison be made between England and the United States on the basis of which country benefits Japan the more, we think we must decide in favor of the United States. Leaving the question of importance aside, what is most strikingly observable by the Japanese is, that the United States is a new country where everything is also new. It is not only observable in the increase of population and advancement of commerce, but also in the less cut and dried working way of things, through which Japan may be enabled to make substantial profits. In England and other European countries it is different, everything being carried on under a regular system, and although the commerce of those countries is prosperous, there is not much opening for Japanese enterprise. In the United States, however, Japanese may freely enter into commerce with a fair prospect of success, as will be seen on reference to the success of some of our most enterprising merchants. Japan is at present very busy in studying which of her productions will be the most suitable for export and also of most benefit to the country. Our most suitable exports seem to have been those accepted by the United States, and we would do well to stimulate as much as possible our present commerce with her in tea and silk. On careful examination it will be seen that the United States will in the future become the chief consumer of the productions of Japan. No one can deny the fact that it would be better for us to seek trade in the United States than to seek it in Europe. If the country is to be benefited in the future, the United States must in no wise be slighted. One question-and that an important one-is the inequality of the balance of trade between the two countries. Our exports to the United States last year were 19,000,000 yen, while the imports from that country amounted to only 3,400,000 yen, which is only one-sixth of the export. This inequality was not noticed only last year, but it has been so for some years past, owing to the large increase in the export of raw silk. Unless some means are discovered to encourage imports from the United States, the difference will become still greater year by year, as there is a prospect of our exports to that country being increased in the future, but it is also clear that this disproportioned state of trade is not causing loss to the United States. For instance, the import of raw silk from Japan is necessary to repel the import of European silks, which are high in price, owing to little competition, and as for tea and other articles which we forward, they stand outside the sphere of American productions. As they do not injure or interfere with American interests, it will be thought that it is best to leave it to take its own course, but in the trade of the civilized world it is incumbent that all the means in a nation's power should be brought to bear on trade for mutual benefit. It follows, therefore, that it is a moral obligation on the part of commercial men to order goods from their customers rather than from others if there is no difference in the price. The United States is just such a customer, so Japan must do her very utmost to oblige her and gain her esteem; therefore it is necessary that Japan should, in view of the moral obligation above mentioned, purchase from the United States instead of Europe. In addition to this there are many articles manufactured in the United States which are far superior to those of other countries, both in quality and cheapness. We will now mention a case in point. The entire capital to be invested in the railway industry is estimated at 50,000,000 yen; of this amount 25,000,000 yen will be paid for the importation of rails, locomotives, etc., from abroad. Although we consider that England stands foremost in the manufacture of rails, it is beyond all question that in the manufacture of locomotives and passenger cars none can equal the United States, and it would be well for us to purchase from her if only or the purpose of balancing trade. Other articles, if there is no perceptible difference in the price, should also be purchased from the United States. This is important, as it will be the means of greatly increasing the exports of Japan in the future. No. 419.] No. 733. Mr. Hubbard to Mr. Bayard. [Extract.] LEGATION OF THE UNITED STATES, Tokio, December 28, 1887. (Received January 21, 1888.) SIR: I have the honor to inclose for the information of the State Department two copies of a late Imperial rescript promulgated on the 25th instant, intended, as expressed by the Government, to secure "the maintenance of public tranquility and to prevent disturbances opposed to the welfare of the people and to the nation's political reforms." I have, etc., RICHARD B. HUBBARD. [Inclosure in No. 419.-Translation.] IMPERIAL ORDINANCE, NO. 67. I hereby sanction the following ordinance and order it to be duly proclaimed, deeming it necessary at the present juncture to the maintenance of public tranquility and to the prevention of disturbances opposed to the public weal and to the improvement of the administration and the progress of the nation. [PRIVY SEAL.] HIS IMPERIAL MAJESTY'S SIGN-MANUAL. December 25, 1887. . Countersigned: ITO HIROBUMI, President of the Cabinet. Minister of State for Home Affairs. Minister of State for Justice. ART. I. Secret societies and secret assemblies are hereby forbidden. Those violating this regulation are liable to be punished with minor imprisonment for a period of |