While the foreign trade of Hankow, passing through the maritime customs, makes this port the second in China, in direct foreign trade it stands sixth, although this classification is misleading owing to the fact that of goods shipped to Chinese ports a large share represent shipments for foreign countries.

The reports from Manchuria and ports of Tientsin, Canton, etc., are quite similar to those of Shanghai, and taken as a whole form a mighty argument for increased activity on the part of American firms.

It may be well to briefly point out some of the causes of failure on our part to fully realize our expectations in the volume of business done, and to suggest some improvements in methods. Ignorance and apathy go hand in hand as twin causes of failure to control our rightful share of China's foreign trade, import and export. A systematic study of present conditions and the adoption of methods suitable to meet these conditions is a prerequisite to success.

Ignorance of correct methods and of the fact that business may be successfully conducted without prohibitive expense or great risk, prevents many from entering what would prove a very profitable field, while the fallacy of the sufficiency of the home market for present and future absorption of products blinds many to the great opportunity awaiting them.

Consular reports are of value in furnishing statistics and general information regarding local conditions, but the appointment of special government commercial agents competent to study and report the situation in all its bearings and to make recommendations of real value to the manufacturers of the country, would be a most important and helpful move in the right direction. The great commercial

organizations of the country, its chambers of commerce, boards of trade, etc., should unite in the effort to procure for the business men of the country up-to-date information along these lines. Conditions in China have undergone a rapid and radical change and new conditions call for new methods, and the crying need of today is for a comprehensive study of the situation and the application of methods suitable to present conditions. Another important and advantageous move would be the establishment of an American chamber of commerce in one or more of the leading ports of China. This should be done under the auspices of the Chamber of Commerce of the United States of America, thus insuring the absence of any sectional or personal favoritism and guaranteeing fair and equitable treatment to all. Membership in these should be open to all reputable American business men on lines similar to those obtaining in the American Chamber of Commerce of Paris.

Perhaps in no other country has the development of trade organizations or guilds been brought to so high a point as in China. In all the leading ports her chambers of commerce are serious, helpful bodies. It is interesting to note that during the serious financial depression accompanying and following the boom and collapse in rubber securities and the failures of banks, the provincial authorities with the aid of the local chamber of commerce succeeded in relieving the situation. This indicates a spirit of coöperation highly commendatory and which we may profitably emulate in our efforts to secure our share of the trade of the country.

It must be recognized that there exist today difficulties in the way of the establishment of extensive trade relations with China that are not so marked in our commerce with other countries.

Probably the most important factor in Chinese foreign trade is the fluctuating exchange value of silver with gold, with its consequent bearing on the exports and imports of the country. A perusal of such statistics as are available clearly indicates that the import trade of China increases in ratio to the increase in the exchange value of silver and decreases in ratio to their decreased value. Without ven

turing a positive prediction, it may safely be said that it is the general opinion of trade authorities of the world that the present high value of their coinage is but the beginning of an extended period of high exchange which cannot fail of a stimulating effect on her import trade.

Many factors enter into the exchange situation in China in its relation to imports and exports, but it is not the province of this paper to speak of them in detail. Suffice it to say that the question of a suitable currency system that shall bear such relation to the systems of the great commercial countries of the world as to insure something approaching stability and dependability in rates of exchange is being deeply studied by Chinese authorities in such matters, assisted by foreign advisers of recognized ability, and while it may be too much to hope for the speedy bringing of order out of chaos, it is reasonable to expect a continual advance in the direction of ideal conditions.

A strong effort is being made to establish a uniform system of keeping and auditing public accounts, which is sure to have a good effect in reorganizing, systematizing and bringing into being a uniform system of taxation, which is an essential to the upbuilding of a great interprovincial and international trade. One of the chief obstacles to trade extension in China is the almost absolute lack of anything resembling system in the assessment of taxes and liken or customs duties. In many instances goods in transit are subjected to repeated assessment en route from province to province and sometimes from town to town, in order to furnish "squeeze" for the officials. This, of course, greatly hampers and limits the extension of trade, and while it is too much to expect that this will immediately be done away with, I am in receipt of recent personal communications from high authorities giving assurance that as a result of study of the situation now being made by native and foreign experts, a change for the better is confidently looked for in the near future. I dwell thus at length on this point because of its important bearing on the foreign trade of the country. The fact that such abuses exist should not act as a deterrent to active effort for trade increases, for it is practically cer

tain that under the new form of government, and as a result of the investigations now in progress, existing conditions will eventually give way to modern and equitable methods of taxation.

A demand for our goods must be created and this cannot be done without the expenditure of money, but a small percentage of the amount expended by the average American manufacturer in securing an outlet for his products in the home market would, if wisely applied, secure for him a foothold in the Chinese market that would have a future value far greater than would result from the expenditure of the same amount at home. If ever American exporters and manufacturers were justified in establishing the agencies which are the primary requirement of trade in China, it is at the present time.

For many reasons the ideal method is the maintenance abroad of one's own office and sales force, but excepting in the case of a few of the largest concerns, this involves prohibitive expense. Another method that is much more extensively employed, and with good results, is the sending of salesmen direct from headquarters. This method may be employed where there is a sufficiently large market for the goods offered, but the only practicable method for the average manufacturer is to place his goods before the prospective customers through the medium of some one of the large importing houses of the country.

And right here is where many of our American concerns make the initial mistake that eventually costs them dearly and not infrequently discourages them and causes them to relinquish the field. The mistake referred to is the placing of agencies with foreign individuals or firms. The usual European custom so familiar to American travelers in Europe of decrying everything American, prevails to an even greater extent amongst the foreign houses in China. They have no good word for Americans or their products, and it is a rare exception where an American is employed by any of these concerns. It is a humiliating spectacle to the American business man traveling in China to find the great majority of American concerns represented by foreigners. These for