Minister Rockhill to the Secretary of State.
Peking, October 11, 1906.
Sir: Conditions have been constantly changing in southern Manchuria for the last year, through the gradual withdrawal of the Japanese forces and the resumption of control by the Chinese authorities. Trade has been necessarily dislocated, its volume has perhaps been less than in 1905.
[Page 226]That the competition of the Japanese for a large share in the markets of southern Manchuria will be sharp, I have not the remotest doubt, but I think, from what I can learn from Japanese officials, that we and other nations interested in this trade will be offered every opportunity—I may even say inducement—to take a full share of it. The Japanese need capital to develop either Manchuria or Korea; foreign capital and enterprise are essential to them to insure the success of enterprises they already have there—such as the Southern Manchuria Railway—and to repel foreign assistance or put foreign capital under any disadvantage would be extremely unwise.
I understand from reliable sources that for months past most of the trade of Dalny and Antung has been in American flour and piece goods, handled, of course, by Chinese and very largely by Japanese, and imported from Chefoo and Japan. It would seem possible that the volume of American trade in Manchuria has not in reality been much less than in past normal years, if not, in fact, well up to the average; but the channels of trade have temporarily changed, and local business interests are consequently disturbed.
There will rise up in the near future numerous questions concerning rights and privileges of Japan and its subjects in Manchuria; but I still confidently believe that our people will have equal opportunity for trade there, and will enjoy all the rights of the most favored nation, if they will avail themselves of them. Unfortunately, our people have not conducted their business in China as other nations do, especially the Japanese and Germans, establishing direct relations with their customers. The greater part of all our merchandise, if we exclude petroleum and a few other articles of trade, is handled by foreign or Japanese firms who either import them directly from the United States or get them through commission houses, usually in Shanghai. Our interest in most of our products ceases the day they leave the factory or the port of shipment in the United States. The little brief excursion recently taken by the American Shanghai merchants to Newchwang and adjacent localities was, I think I am right in saying, the first they had made to a market only 800 miles away, and which they rightly consider one of the most important they have in China. This apparent lack of interest, for it can only be apparent, is recognized by American business men with whom I have spoken as deplorably short-sighted and discriminates more against us than any other cause, be it Japanese or Chinese. Let us hope we will finally recognize the absolute necessity of following the lead, to some extent, at least, of the countries which are making such a success in extending their trade interests here and ourselves watch local markets and local requirements and establish local relations.
I have, etc.