Part 13
The Chinese furniture makers of Ningpo, Yunnan, Shanghai, Hongkong and Canton, are famous. They copy foreign models and also execute the native designs. The artistic cabinet work of Li Kwong Loong can be seen in the Shanghai and Hongkong clubs, in the Hongkong Hotel, and in Watson’s Store at Hongkong. The best effects are in the prized teakwood, which is becoming the rage in San Francisco. Vantine’s and the Metropolitan Museum, New York, exhibit specimens of the careful and strong handwork of these Chippendales of the land of Han. China can take care of herself in furniture making if time is not of the “essence of importance.” Loving art, I would not recommend sending her our machinery for furniture, but if government schools and offices are to be supplied quickly, I suppose we shall be compelled to make esthetics surrender to utility here also!
The Germans plan to meet the leadership of America, Britain and Japan in technical instruction in China. The British and Americans control the Tongshan Engineering School at Tongshan, and the Americans are powerful in the Pei Yang Science College at Tientsin. At Mukden the Japanese are influential. At the mechanical shops at Hongkong, Shanghai and Hankau the British are influential. The Germans plan, with the aid of Krupps, their foreign office and the Deutsche Asiatische Bank, to establish a central engineering college at Tsingtau, Shangtung province, with branches possibly at Hankau and Kaiphong. They believe that the graduates will order German machinery and material for China’s coming prodigious development.
The American government has included in its humanitarian pure food laws a prohibition on the importation of green tea, which is colored in the pot over the fire with Prussian blue, indigo, talc and gypsum. This changes the leaf from its flat state and dull yellow and green color to a ball state, colored lustrous emerald, and increases the aromatic flavor slightly. The Chinese complain of having to pot-dry the green tea longer to preserve it under the new rule, and moreover old custom dies hard in China as far as agriculture is concerned. The American government has done a world service in improving the quality of the ideal beverage, and the Chinese, who do things by wholesale, will insist in time that Australia and England, the champion tea-drinkers per capita, though not in bulk, shall take what the Americans have made “ploper fashion.” There were amusing instances of cousin John’s habit of “bluffing” laws on the maxim followed in more lands than in China, “If laws interfere with your business, why laws?” He heard of the May 1, 1912, law of the Americans, but he sent his crop over just the same, saying, “Surely America won’t put it back on my hands, as I haven’t got used to the law yet; like Mencius’ thief, I can only get used to law gradually!” Had America relented, John would have seen that his firers never got used to our laws.
China formulated a patent and copyright office at Peking in 1905, but it has not yet reached efficiency for various reasons, one being that the states’ rights feeling is stronger than the centralized government movement up to date. In the meantime the district or municipal taotai will, upon application of the foreign consul, issue a proclamation prohibiting all Chinese within his jurisdiction from manufacturing, selling or consuming property which is pirated; and such theft and infringement are considered unpardonable by the great body of highly moral Chinese guild merchants, as compared with the lack of similar honor in the first days of modernized commercial Japan. Prosecutions have been actually carried on in the mixed courts of foreign consuls and Chinese taotais against Chinese dealers for handling goods made in Europe and imported into China under marks similar to American marks registered with the taotai, and the dealers, whether ignorant or not, have been convicted and severely punished. Until China is able to establish an efficient patent department the method that should be followed is to register the mark or patent at the consul’s and taotai’s office in each province and port where the goods are to be sold. This will answer very satisfactorily until the growth of trade, transportation and machinery of government make the central government more familiar with modern business methods and international law. It is important in China and absolutely essential in Japan for the foreigner to register his patent promptly, for a pirate may precede him and cause irrevocable loss, in Japan at least.
I want to portray a Chinese character as a type of one interesting and powerful set of men with whom the West will now come in contact. Ah Chuk (I shall call that his name for present purposes) was a Cantonese about fifty-five years of age, though he looked much older because of his parchment face. He had few of his teeth, because he lived in the days before the advent of foreign-trained dentists. In his youth he did not fear to strike. His race were the men who had set in motion the greatest rebellion ever known, the Taiping scourge. My patriotic and legal duty was to obey the law in spirit and in letter, and in addition, under no circumstances to lose temper, but to treat Chuk with unfailing manners. Chuk was the only Chinese whom I ever knew who disobeyed his Confucian code of flowery courtesy (Li). He hated me, as he bitterly hated all who firmly withstood him, and he showed his feelings on every occasion. His gods were not Buddha, but money and power. On one occasion he said: “I can get you a Chinese slave girl for four hundred dollars.” I replied: “You insult me, Chuk.” He hissed, “I meant to.” He asked me why I could not obey the letter of the law and not the spirit, and I told him that an Occidental corporation employé, like the soldier, was expected to be absolutely loyal to orders. He said I was a fool because I made a god of conscience, instead of expediency; that I had no tact. I replied by quoting their maxim; “Tact is the discounting of principle in the mart of expediency.”
He feared neither the American, British or Chinese governments, nor the rich corporation. He corrupted foreign consulates in the old days when forged citizenship certificates were not unknown. He bullied the Canton viceroy. He was lord over half a dozen valleys and a hundred hamlets of Kwangtung province, whose inhabitants were his slaves, because they had signed bonds of $1,000 each for every Chinese whom he safely got into that Eldorado, America. He did not press the man in America any more than he would attempt to press a man in Mars. He pressed his father, his relatives in Kwangtung, who were on the bond also, for the payment of the $1,000, and it took the son in America twenty years to pay the money and the heavy interest. With his foot on the sacred bones of his grandfather he held the grandson in America in constant fear.
He was lord of the underground routes which ran to South Africa, America, Australia, Mexico, Canada and wherever Chinese laborers are not received free. He seldom dressed well; it did not do in those days to look opulent in China, and besides American inspectors might suspect a well-dressed dealer in contract slaves. His voice, unlike the usual pliable voice of his race, was deep in his raucous throat. He would not fear to take life if he had a chance in the lonely walks of his province, if his opponent was a strong obstacle to his worship of his two gods, money and power. He could not get in as many as he wanted by the direct route, so he determined to institute the first Chinese trans-Pacific steamship company, crossing the Pacific to Mexico. I told him that he never could get the money, as Queen’s Road, Hongkong, was a long way from Wall Street; that he would sink a million of the money of his beloved countrymen. He got the money from the Chinese, intensely conservative as they were, which proved the power of his persuasion, and he sank it all in two years. He could not be drawn into much expression by me, though he could speak English well. I heard him, however, speaking like a Rooseveltian tornado of storm and lightning unto his own, and once to two foreigners in whom he trusted, because they had obeyed him at their risk, and he owned them by the bribes they had accepted. His will was of iron, unyielding. His persistency was as tireless as Napoleon’s, and his swift victories were many. He could live without sleep when he planned his campaigns. He would go anywhere and to anybody to accomplish his aims. He loved whispering. He cast looks which wielded men. He swept like a vulture on lambs. He struck at his opponents like a tiger. He was not a Manchu, but he was Manchuized in his confidence that the Oriental was superior to the foreigner. I shall never forget the time when he told me that he had “a white man working for him.” That white man was descended in the third generation from a brother of a president of America.
Chuk was not uncomfortable when he thus wore the crown. He ruled over his subject races of the West with all the assurance which Xerxes or Kublai Khan did. He could plot; he could bribe; he could threat; he could spend with a lavish hand. One time he would travel in state at home and abroad, and on another occasion incognito like a spy. He felt he was abler than any white man because he added the easier conscience of the Orient, which he called wisdom, to an ability equal to the white man’s, and a will just as imperious. He despised all religions as he said “conscience makes faint-hearts of us all.” He had no pity for his dupes or victims. He was a Cantonese Tippo Tib. I never know, when I am speaking to an American or Cuban Chinese, if he is not a slave of Chuk’s, remitting to his old father in Kwangtung province, who will in turn remit to Chuk or Chuk’s heirs, to pay off that $1,000 and usurious interest added. Chuk is a Cantonese example of the power which may come to a money lord who has decapitalized labor, which will never catch up with the principal. His profits on the real cost were 1,500 per cent. Not even a surveillance of communications could probe Chuk’s underground methods. Three insurmountable barriers interposed, the extent of the territory, the Chinese language, and the changing codes which he used. It would be as difficult as ferreting out a criminal in the Trastevere section of Rome, if for one reason alone, because the Trasteverans will not turn informers. Neither will the Chinese. Therefore, with espionage of communications and informing for bribes eliminated, a secret service on Chinese law breakers, as far as we are concerned, is as yet in many respects ineffective.
IV
FINANCE AND BUDGET IN CHINA
With a reformed system of tax collection the following budget is quite feasible, and will, without any greater pressure on the individual than at present, lift China out of the slough of despond.
REVENUE GOLD DOLLARS
Land tax, 400,000,000 acres cultivated, at 50c a year $200,000,000
Salt monopoly 10,000,000
Maritime customs 50,000,000
Railway surplus, nationalized trunk lines 10,000,000
Fisheries, tobacco, samshu, mining, steamship, bank, incorporation, telegraph and other fees 50,000,000
Income tax 10,000,000 ------------ $330,000,000
EXPENDITURE
Interest on foreign loans,--past, $200,000,000; and in prospect, $200,000,000; total, $400,000,000, at 4 per cent. $16,000,000
Civil service salaries, etc. 30,000,000
Army, a full division for each province, 100,000 men at $100 a year 10,000,000
Conservation, public works, repairing national architecture, famine relief, etc 50,000,000
Navy for revenue purposes mainly, with one dreadnought a year added 24,000,000
Education and crafts schools 100,000,000
Canals, railways, steamships, telegraph, telephone, etc., extensions 100,000,000 ------------ $330,000,000
This proposes $330,000,000 a year for 400,000,000 people, against Japan’s $350,000,000 a year for only 55,000,000 population. This plan wipes out the obnoxious opium and likin taxes. The taxes proposed are less than half per capita what poorer India is paying, and one-tenth of what Japan is paying, and so China would remain the lowest taxed nation on the earth. The outstanding government debt of China, even including the proposed four-nation loans of $50,000,000 gold for currency reform, and $50,000,000 for new Szechuen and Hunan province railways, is, as I have detailed elsewhere in this article, only £113,000,000, whereas the present government debt of Japan, with infinitely less resources and population, is £300,000,000, not to speak of Japan’s private industrial loans abroad, which would add another £60,000,000. India’s debt is £170,000,000. The tax proposed in China is so small that room is left for each province to charge a door and head tax of 25c each a year, bringing in an additional $100,000,000 gold for provincial revenues to take care of justice, provincial public works, etc. Municipalities could then raise their ordinary taxes in the usual way. All that is wanted in China is an honest audit, the end of nepotism, and a cessation of “shaking the pagoda tree” by peculating officials. The whole central and provincial tax would not amount to much over $1 a head a year, and the municipal taxes would not be any larger than $1 per capita. This would not be a burden to cause complaint or revolution. With the immense sum collected China would almost at once take her place as one of the mightiest of nations. Her credit would be enormous, and her opportunity for good the greatest in the world because of her wider ethnic connections. She would not need to raise her customs much above the present five per cent. ad valorem, and thus oppressive monopolies could not grow up in the land. Free trade would flow to her with its riches, as it flowed to Britain, and every man would have enough, and no man too much; certainly an ideal condition. This budget would provide a splendid army of well-paid men ($8 gold per man per month is abundant); 100,000 strong, able to throw back any invasion at once, and always ready to keep down piracy. Riot and strikes are not unpatriotic piracy; they are the localized suppuration of an economic distress that can be cured or forestalled in a democracy by other means than a soldiery, which we have found a failure in America and Britain. The new Chinese navy could add a new dreadnought battleship each year, and provide crews, yards, and a full revenue marine. Above all, education and transportation would be taken care of lavishly, and China would not need to beg at any one’s door for a loan. She would be a land of peace, because a total tax of $2 gold a year per capita can raise not the slightest discontent in any land.
The debt of the Chinese government, contracted before October 13, 1911, which debt the republicans recognize, is as follows:
AMOUNT AMOUNT LOANS in £ Interest in £ DUE 7% silver loan, ’94 £490,500 1924
6% gold loan, ’95 800,000 1924
6% gold loan, ’95 333,400 1915
5% gold loan, ’96, from France and Russia for Chinese-Eastern Railway 12,397,425 1933
4½% gold, ’98, Britain and Germany for railways 14,022,625 1933
5% gold railway loan 1,955,000 1933
5% gold (Boxer indemnities, etc.) 52,500,000 1940
5% Shanghai-Nanking railway 2,900,000 1915
5% Canton-Kowloon railway 1,500,000 1920
5% Tientsin-Pukow railway (British) 1,850,000 1918
5% Tientsin-Pukow railway (German) 1,100,000 1918
5% Shanghai-Ningpo railway 1,500,000 1918
5% Hukuang railways 1,500,000 1921 ----------
Total gov’t debts-- China £92,848,950 £4,642,000 Japan 300,000,000 12,000,000 India 170,000,000 Italy 1,000,000,000 France 1,200,000,000 Britain 1,000,000,000 United States 200,000,000
If Japan returned to China the £35,000,000 indemnity coerced from her by the Shimonoseki treaty, the Chinese debt would be greatly reduced. This is Japan’s moral duty, especially if she is allowed by the nations to retain Formosa, Korea, and possibly part of Manchuria, all of which she plans to retain. Several of the European nations should follow America’s example and return the excess in the Boxer indemnities. The banking nations, as long as America and Britain retain their present high standard of altruism, will never again permit any power to wheedle an indemnity out of China.
The foreign and local banks operating in China are the following. I use gold dollars for the table:
CAPITAL BANK PAID UP RESERVE
Hongkong and Shanghai Banking Corporation $5,000,000 $15,000,000
International Banking Company of America 3,250,000 3,250,000
Deutsche Asiatische Bank 5,500,000 3,000,000
Yokohama Specie Bank (Japan) 10,000,000 7,000,000
Lloyd’s Bank (British) 20,000,000 15,000,000
Chartered Bank of India, Australia and China (British) 4,000,000 5,000,000
Netherlands Trading Society 18,000,000 2,000,000
Netherlands-India Commercial Bank 6,000,000 700,000
Russo-Asiatic Bank (Russia-France) 19,000,000 4,000,000
National Bank of China 1,500,000 400,000
Banque L’Indo-Chine (French) 6,000,000 3,000,000
Bank of Taiwan (Formosan Japan) 1,800,000 300,000
Mercantile Bank of India (British) 5,500,000 800,000
Eastern Bank (British) 2,000,000
Chino-Belgian Bank (Belgian) 2,000,000
It will be noted that with one exception all of these banks are strong institutions. The hoary patriarch among them, endowed with exhaustless strength still, is the Hongkong and Shanghai Banking Corporation, which has been operating in China since 1865.
There is a movement in Canton to establish an “Industrial Encouragement Bank”. The merchants are anxious for currency reform throughout the kingdom and the establishing of coins of fixed value on the American decimal plan, but going to a lower decimal to accommodate small trade and the lower values of China.
It is also proposed by prominent members of the Nanking Assembly to establish a Sino-American bank, plans for which were laid just before the October, 1911, revolution.
At the height of the revolution in November, 1911, the rebels did a remarkable thing successfully at Shanghai. The loyalists at Peking were unable either with their own imperial Ta-Ching bank, foreign loans, or the immense ramifications of the Shansi Bank guilds, to uphold their credit, and the chief fighter of the Manchus, General Chang Hsun Chung, could not pay his troops. The republicans at Shanghai under Sheng Wan Yung, minister of finance, and Wu Ting Fang, foreign secretary, organized the “Chung Hua” Bank at Shanghai with a capital of 5,000,000 taels. The shops immediately took the money at a high premium, doubtless to give an impetus to confidence. “Chung Hua” is the Chinese name for China. It means “central glory”.
Nothing hampers China’s interprovincial trade more than the absence of a national credit system and commercial paper. Treaty-port China gets long enough loans from the foreign manufacturer. The trouble is that the importer can not collect quickly from his customer, and when he does, the medium is coin, bullion and barter, unnecessarily and clumsily handled, whereas coin, bullion and barter should only be used for the balances. China needs a modern currency system, and a modern credit system as well.
It is in accord with manners and business accuracy when at a fair you are informed that an article will cost you a thousand coins (cash) to say: “I’ll pay you 500 _good_ coins.” If you had a thousand counterfeits you could elect to pay with them, but never be so bucolic as to pay a thousand good coins when a thousand coins are asked. As suggested by America, China’s new coinage will have a silver dollar, half, quarter, dime, nickel, two cents, cent, half a cent, and one-tenth of a cent, all minted in government mints, and alone accepted as legal tender in taxes, telegraph, railway, telephone, customs, likin, stamp and other charges. Very slowly the old system of using provincial coinage of debased value, bullion (sycee) exchange, private bank notes, etc., will pass away. A central bank, like the Ta Ching, helped by a four-nations foreign loan, backed 40 per cent. by the government, and 60 per cent. by private subscriptions, with about $6,000,000 capital, could make a good beginning in taking care of the new system. Although a silver coinage, the government, like Japan’s, stands to guarantee the fixed value of the coinage as equal to half its face in gold; that is to say, the central bank will hold reserves so as to redeem or guarantee a silver dollar at fifty cents gold. The silver is to have a fixed purity standard, like the Philippine peso, or the American dollar. Japan stepped into Korea and refused to accept the old coinage. It immediately became copper bullion, and had no other value. For safety’s sake, the Japanese insisted that the coins, worth nominally one-tenth of a cent, should be broken at the square hole in the center. The steamer _Seneca_, in 1912, brought 1,400 tons of these broken Korean coins to New York, whence they were shipped to Chrome, New Jersey, to be smelted. China can not be so rigid, as she has not the police or army, but if she could safely be rigid, nothing would clear up the coinage question better than copying this Japanese example. Since the adoption of the gold standard in Mexico, the government has to accept the old Mexican dollar as legal tender for one dollar gold, which gives a profit of 100 per cent. to the lucky holders of these silver dollars. There are many of them in China; indeed the Mexican dollar was for many years the monetary standard in China, and the thrifty Chinese are smuggling the unchopped coins into Mexico as fast as they can be gathered up from the Shansi, Kwangtung and other bankers. The Mexican government anticipated this move, and placed a duty on Mexican dollars returned from abroad. The honors are even along the Rio Grande boundary; Mexican dollars are smuggled southward, and Mexican Chinese are smuggled northward! Most of the Mexican dollars in China, however, have been chopped in the banks and fan-tan houses, and the thrifty Chinese shroffs groan when they contemplate that by egotistically sinking their chop into the face of the Aztec eagle and the Texoco snake, they have now lost 100 per cent. profit. Moral: never mutilate the coin of a realm, whether it is your own country or not.