6
influence and to loosen the British hold upon the trade of the Empire. For some reason or other the Chinese are working in many ways with them in this under- taking.
general manager of the
When I was in Tien-tsin,
Company, with whom I was discussing the situation, showed me his letter file in connection with a certain transaction which well illustrates the above statement. It appears that the Tien-tsin-Pukoe Railway northern section required 30,000 tons of coal to be delivered along the canal for burning bricks for the use of the road. The
Company tendered 6 dol. 70 c. per ton delivered. The German-Chinese Ching Ching Mines tendered & dol. 50 c., and their contract was accepted. The Chinese in their official letter to the
Company, which I saw, stated that they had accepted the higher offer as the coal was 25 per cent. better value.
states that the coal is mined in the same geological field, and that the shafts are practically sunk on the Company's fields. He submitted samples of both coals for analysis. The report stated that both samples were practically the same, but there was a very slight advantage in favour of the
Company's product. It is reported, moreover,
that the Chinese are giving the German-Chinese combination favoured rights on the railway, and are carrying their coals over the same route for cheaper rates than the British company.
Here in Shanghae upon my return I find considerable controversy on the subject of the supplies of railway material for the southern railways which are under the British influence. Tenders were asked for locomotives, and it was subsequently stated that only tenders for German locomotives would be received. One mânufac- turer's agent discovered that the advertised specifications for an engine required that it must be German built, in the works of the firm for which Carlowitz and Co. are the agents. The advertised specifications turned out to be Carlowitz and Co.'s own tender. Finally, after much opposition, the Chinese announced that British specifi- cations might also be put in. It is confidently reported that at the moment the tenders were opened the engine being tendered for was actually through the Canal at Suez, en route to Shanghae, and that the asking for tenders and opening of the same was bluff pure and simple to conceal a transaction already completed.
Another curious phase of the situation seems to be that the Germans are able to obtain contracts where the British fail. Several instances have come to my knowledge where the Germans have tendered in opposition to the British and in order to get the business promise anything the Chinese wish and more than the British dare to do as to output and terms, their object being to get the contract by hook or by crook and put their own interpretation upon it afterwards. The Germans take their chances when the works are complete of being able to get their money, whether the work is according to contract or otherwise. They seem to be backed up by their officials regardless of the conditions of the contract. There are two or three cases now being fought out where the Chinese appear determined that they will not accept anything the Germans like to give them. In the end they are likely to succumb to the German view. This method of doing business would seem under ordinary circum- stances to bring its own punishment, but so far Germans do not seem to suffer from a loss of orders as a consequence.
Discussing this question recently with some British residents they said they were satisfied that the Germans by the use of money made it worth while for many of these contracts to be settled quietly. You will perhaps be led to say upon the above that the two positions are mutually destructive, that if the Germans are forcing the Chinese to pay for contracts only partially carried out that this should lead to a suspicion of German methods, and that it is difficult to account for the fact that in the face of this state of affairs the Chinese are content to work with them as against the British. All I can say is that this is a country of anomalies. it is certain that some of the British disputes over the railway loans have left bad feeling and some orders have been given to Germans or anybody other than British out of pure spite.
In conclusion, there is no doubt that Chinese thoughts and methods are rapidly changing, though there is the same dishonesty and the same hatred of the foreigner. They have lost their fear of the foreigner, whose prestige has been largely reduced. The Chinaman is learning that it is comparatively safe to take his own line of inter- pretation of any contracts entered into much as the Germans as instanced above. I feel sure that a great deal of the supposed commercial integrity and honesty of the Chinaman which has been so much written about, and which has just been repeated in the Earl of Ronaldshay's recent book has been very much exaggerated. The China-
7
man stood by his contract with the foreigners because he was afraid of them. All along he has repudiated with his own countrymen the contracts that do not suit him when he saw any chance of getting out of them. Foreign traders in Shanghae have found in hosts of instances that Chinese contracts are exceedingly dangerous things to enter into. Under present conditions of the country it is doubtful how far a Chinaman can be held to the carrying out of the terms of his contract, if he finds it to his advantage to shirk.
On my visit to Peking this last occasion a high British official confirmed this opinion, and stated that whereas in previous years the word of a Chinese official when it has once been passed could be relied upon, now all that is changed and no promise can be trusted. He agreed with me that a very great change has come over the Chinese people and officials in their relations to foreigners.
Given favourable conditions with an enlightened Government setting trade free in the Empire a magnificent prosperity awaits both the foreign and Chinese merchants and manufacturers. The great problem is how to get the conditions mentioned above into working order. A faithful adherence to the provisions of the treaties would help materially, but this has long since been given up as a vain hope.
636