vi-S- America and Asia A Survey of Present Critical Conditions in the Trade of the United States with THE Far East AN ADDRESS Delivered by request before the Trans-Mississippi Congress at Portland, Oregon, August 17, 1905 By John Barrett United States Minister Plenipotentiary Reprinted from Journal of the American Asiatic Association New York America and Asia A Survey of Present Critical Conditions in the Trade of the United States with the Far East. AN ADDRESS* Delivered by request before the Trans-Mississippi Congress at Portland, Oregon, August 17, 1905, by John Barrett, United States Minister Plenipotentiary. IT is a great honor to be asked to address the Trans- Mississippi Congress. No other similar organiza- tion in the United States is more representative of our great material development. It is directly concerned, therefore, with the extension of our foreign commerce. As the Trans-Mississippi States must look even more to the Pacific than to the Atlantic, this Congress has particu- lar reason for discussing the growth of American trade with Trans-Pacific countries. It is specially fitting that the session this year should be held in Portland during the course of the Lewis & Clark Exposition. These intrepid explorers in whose honor the exposition is named and their pioneer journey in 1805 to the great northwest were responsible for securing to the United States its first access to the Pacific ocean. Port- land stands to-day a beautiful and progressive city whose * "Among the addresses delivered before the Trans-Mississippi Congress held at Portland, Oregon, August 16, 17 and 18, 1905, was one by John Barrett, now United states Minister to Colombia and formerly Minister to Panama and Argentina. Mr. Barrett was asked to address the Congress by its Executive Committee because of his extended experience in the Far East, first as United States Minister to Siam (1894-98), and later as Commissioner General to Asia or the Saint Louis Exposition (1902-03). Mr. Barrett spoke without manuscript, and as the stenographic notes taken were incomplete, we are able to reproduce his address only in part." — Journal of the American Asiatic Association, October, 1905. I prosperity is enhanced by her remarkable position upon the navigable tide waters of the Pacific. Two years ago it was my privilege to address the same Congress at its annual meeting in Seattle. This is another metropohs that owes its surprising growth to its location on Pacific waters and to its facilities as a port for Pacific commerce both coastwise and foreign. The address of your able President, Mr. Theodore B. Wilcox who has just preceded me, deserves your closest consideration. It represents the practical, mature, logical views of a successful business man who to-day is the largest individual shipper of the West to Trans- Pacific markets. While all of us may not be able to sub- scribe to his views on the admission of Chinese laborers, we cannot fail to admire the masterly way in which he has handled this subject. \ Character of Discussion. I shall not weary you with a minute discussion of the conditions of Asiatic and Pacific trade or with a multitude of statistics, but shall simply attempt to point out a few general phases of the present situation in which we are all concerned. Ever since I first went to Asia as United States Minis- ter to Siam, nearly twelve years ago, I have taken the deepest interest in the development of American com- merce, influence, and prestige in Trans-Pacific lands. My first convictions, moreover, were fully confirmed by study made in recent years when I revisited the Far East as Commissioner General of the St. Louis Exposition. It is therefore most gratifying to find a Congress of this representative character carefully considering the topic under discussion. In passing, let me give special credit to Mr. John Foord, Secretary of the American Asiatic Asso- ciation, in New York, and to Mr. O. P. Austin, of the 2 Bureau of Statistics at Washington, for providing me with new data and figures that were needed for the preparation of this address. We should all of us, more- over, commend Secretary Arthur F. Francis of the Trans-Mississippi Congress for the success that has crowned his efforts to make this session representative in its attendance and practical in its work and results. Critical Period at Hand. The most critical period in the history of American- Asiatic commerce would seem to be at hand. The devel- opments of the next year may determine the future. They will decide whether the trade of the United States with the Trans-Pacific countries is to expand with legiti- mate and gratifying growth, or to be limited by adverse conditions ; whether Europe or the United States is to be the dominating influence, apart from Japan, in the for- eign commerce of the Far East, We are at the turning of the ways. It will largely rest with the leadership of such organizations as the Trans- Mississippi Congress to determine whether our pathway is to be blazed onward or backward, — whether we shall make progress or simply mark time. I believe that this Congress by debating this question can awaken a realiza- tion all over the United States of the seriousness of the situation, and so prevent permanent injury to our Trans- Pacific trade which is only in the infancy of its develop- ment. Our activities will surely be aroused, if we will only look forward and picture the Pacific ocean becoming the center of events, of trade and commerce, and of political, social, and educational development which will rival the historical record of the Atlantic. This is a note of warning inspired by facts known to all students of Oriental trade. It is in no sense a sensa- tional or idle prediction. It ther?for? behooves not only our commercial interests, but the people at large, first to consider and analyze without delay the peculiar condi- tions and the importance of our commerce with Asia, and then to act accordingly. The Vast Field Involved. The moment is opportune to note impartially some remarkable features of the situation which have a direct bearing on the present standing and future growth of American trade with the Orient. To grasp the meaning of our subject it is well to take careful note in passing of a few practical figures. Let us keep in mind the area, population, and commerce of this field of investigation. If the arc of a circle, having a radius of 5,000 miles, were drawn from Melbourne in Australia on the South to Hakodate in Japan on the North, with Honolulu as the center, it would include the vast land area of nine million (9,000,000) square miles, the mighty population of six hundred million human beings, and the great and growing foreign trade of two oillion dollars ($2,000,000,000) per annum. Right in the midst of this potential opportunity is Manila, America's Asiatic capital. Without discussing the moral problems of the Philippines, we must admit the strategic importance of the Islands, whether independent or dependent, in the struggle for control of Asiatic mar- kets. Located half way between Japan and Australia, standing guard over the South China Sea, Europe's water approach to Eastern Asia, and close to Hong Kong, the greatest seaport and commercial entrepot of Asia, Manila certainly should experience a brilliant commercial future. Much depends, however, on the support Congress gives to the wise policies espoused by Secretary Taft for the good of the Islands. 4 The Effect of Peace. The expected conclusion of the war between Russia and Japan will inaugurate a new era in the history of the Far East. It will mark the beginning of new conditions of commerce and trade. It will mean a readjustment of the lines of competition. The commercial forces of Europe, Great Britain, Germany, and France, will then strive harder than ever before to maintain their present hold and to strengthen their future position. Japan, with the impetus that her industrial development will receive from her return to peaceful activities, will become one of the strongest commercial factors in the whole Trans-Pacific field from Siberia to Australia. Such new conditions, however, should in no way discourage American manu- facturers and merchants but rather inspire them to greater eflFort. The actual declaration of peace which is impending will be followed by wonderful activity. All the world will take advantage of the new opportunity in the Far East. There is already much discussion of new steam- ship lines that may be put on between Asia and Europe on the one hand and between Asia and the United States on the other hand. Japan's large fleet of auxiliary steam- ers used in the war will be turned into a mercantile squadron that will carry her products to every part of the world and return with her imports. The coastwise trade of the Orient from the Sea of Japan on the north to the China Sea on the south will be conducted with more vessels and keener competition than heretofore. Japanese, British, German, French, and American firms will establish headquarters in North China and Man- churia, and new business houses will be opened at other points along the coast of Central China, Japan, and Korea in order to gain a share of the commerce that must 5 result from peace. All this should excite American manufacturers to extraordinary effort, despite the feared handicap of the Chinese boycott. The Chinese Boycott. We are face to face with a crisis that has come upon us with startling rapidity, but convincing force. The Chinese Boycott, in the term of its native advocates, is the culmination of influences that have been at work for years, and represents the climax of remonstrance against the failure of our people, in the opinion of the Chinese, to carry out the principle of the Golden Rule in dealing with Asiatics. The defenders and promoters of the boycott have declared in effect that China is asking a "new deal" and a "square deal" in her relations with the foreign world. They say that she is awakening to a sense of her inherent rights and of her latent power ; that she is realiz- ing as never before the value of her markets and the capacity of her vast population directed along advanced lines. While as a Government she can not possibly have any unkind feeling toward our Government and the present administration as such, and should remember with grati- tude how the United States has stood without wavering for the integrity of the Empire and the principle of the Open Door, the Chinese higher classes, including mer- chants, scholars, and travelers, can not understand why they should be treated differently from the corresponding classes of other races and nations who may wish to enter the United States. Mistaken Impressions of China. There is no greater mistake than to think of China as a nation exclusively of coolies. She has millions of men distributed over her empire who possess an intelligence, 6 refinement, and wealth, and who represent a standard of . mental, physical, and moral quality that entitles them to the respect of the foreign world. The average foreigner, who on the one hand visits Chinatown in San Francisco or New York and then on the other hand travels up and down the coast of the Far East and takes an occasional run into the center of Chin- ese cities, concludes that China is a nation only of labor- ers, coolies, and petty merchants. The passing traveler, newspaper correspondent, and superficial student write letters and articles to this effect. All these stories tend to excite laboring men in the United States and cause them to believe that China is one vast horde of hungry men waiting to sweep down on the United States. While it must be frankly admitted that the average Chinese coolie and the average Chinese city do not strike the American and European as representing his standards of men and cities, yet it is a fact that the conclusions just mentioned are an injustice to the very large number of educated and well-to-do Chinese throughout the Empire. A man who goes through the narrow streets of Can- ton, Peking, Nanking, and Wuchang does not see the elaborate homes of the upper classes of Chinese hidden by the rows of shops that line the streets. He does not realize that there are a large number of well-kept Com- pounds almost within a stone's throw of the crowded alley through which he is being carried. If he should journey in an air ship over any great city in China he would be astonished to discover the number of capacious private grounds, right in the heart of its cities, owned by wealthy Chinese. Chinese Students and Merchants. If the American, who always regards Chinese as 7 coolies, could attend one of the principal periodical exami- nations, where representative educated Chinese gather from all over the empire, he would marvel at the intelli- gence, refined and pleasing appearance, of its thousands of young men. They will compare most favorably in general demeanor, in stature, in dress, and looks, with a corresponding class of American college men. If an American merchant could be present at the assemblies of Chinese merchants which are held from time to time in different cities throughout China, he would express pro- found surprise at their business-like way of doing things, and their well-bred characteristics. Our missionaries who go all over China have repeatedly emphasized that Europeans and Americans do not seem to be able to com- prehend the real China and to take into consideration that it is only one side of Chinese life that is represented by coolies with whom they come in touch either in San Francisco or Shanghai. We are too prone to think that, because a man does not speak a European language and is not familiar with European or American literature and history he is not educated or even civilized. We overlook the fact that the Chinese language, literature, historical teachings, system of education and social regulations are entirely apart from ours. They are sui generis and are, in the opinion of the Chinese, as well suited for their people as ours are for us. In proportion to the population there is less crime, no more "graft," less immorality, less business dishonesty, and less violation of the law in China than there is in the United States. I do not for a moment suggest that Chinese civilization is in any way superior to that of America, but I do say that we should not hold the sixpence of racial and natural self admiration so near our eyes that we can not see the good qualities of other races and nations. 8 Racial and National Pride. The Chinese have a distinct racial and national pride that we are prone to overlook. They are proud of their own peculiar civilization, of their philosophy and philoso- phers, of their unrivalled antiquity as an independent nation, of their customs, characteristics, social fabric, political homogeneity, vast population, and great potential wealth. The fact that from our standpoint they may not have seemed to possess this pride and knowledge, and to take advantage of it in world-astonishing political and material development like the United States and Japan in no sense proves the lack of its existence. It is only a question of time when China like Japan will startle the world with her onward movement ; and yet it was only a few years ago that foreigners looked upon the Japanese as they do now upon the Chinese. Chinese critics of foreign attitude toward China hold that a cardinal fault in the past dealings of Europe and America with Asia has been their spirit of patronage. Foreign progress toward power and wealth has been so rapid and general that foreigners too often assume the "holier than thou" attitude. Instead of seeming sympa- thetic, co-ordinate and co-operative with the Asiatics, foreigners have almost unconsciously made themselves appear to Asiatics as unsympathetic, superior, and inde- pendent. The average foreign business or professional man, traveler, official, soldier, or sailor, who has made passing visits to Japan, China, Korea, Siam, and the Philippines, has had a marked tendency in both speech and manner to patronize the natives of both high and low degree. This tendency exerted over a considerable period of years has had a cumulative influence that has found ultimate remonstrance in such movements as the Chinese Boycott. 9 Boycott May Not Last. It is not in accordance with the laws of trade that the Chinese Boycott as a boycott should be lasting. It is even probable that within a few months it will spend its strength. There are already indications that it is weaken- ing. We must not, however, close our eyes and believe that there is no cause for worry if the boycott as an or- ganized movement fails to accomplish its object. Even if it is not lasting, it can not avoid having a depressing ef- fect upon American trade and influence in China. It is through the boycott that millions of Chinese who before knew nothing of the United States have made their first acquaintance, as it were, with us. Vast numbers of Chinese will, unfortunately for the United States, not look with favor upon America and it will require many years to remove the false impression. A boycott of this kind also tends to develop a general anti-foreign feeling throughout China and to engender a sense of resentment that may react upon foreigners in a thousand different ways. It is therefore to be regretted that there should ever have been cause for the feeling against the United States which has reached its consummation in the boycott. Influence Counteracting the Boycott. Three influences should work successfully to counteract the effect of the boycott. The first is the proclamation of the President issued last June in which he specifically stated that the Exclusion Law must be administered fairly and without discrimination against the exempt classes. When it is generally known throughout China that the President has taken this interest and means that every Chinaman shall be treated strictly as the law de- mands there must be a change of sentiment. The second is tne ultimate realization among Chinese in general that the United States Government has invaria- lO bly been more friendly to China and has stood for the protection of Chinese rights in all diplomatic and political questions that have arisen in regard to the welfare of the Empire. It must appear to thinking Chinese that they are not warranted in taking steps that might bring about serious trouble between the United States and China just because the workings of one law in the United States have not been satisfactory to them. The third is the expectation of the Chinese that a new treaty in time will be negotiated, which, while not allow- ing coolies free admission, will so specify the exempt classes and regulate the rules regarding their entry into the United States that there will be no friction or diffi- culty in the future unless it is due to occasional bad ad- ministration of the law as may happen in any country in the practical application of statutes. In all these discussions of the Chinese boycott we should be fair and not indulge in wholesale condemnation of the administration of the Chinese Exclusion Law. It is no doubt true that in the majority of instances the custom officers have undertaken to perform their duty faithfully while the Department of the Treasury and the Department of Commerce at Washington have always intended that perfect justice should characterize the ad- ministration of the law. There has been no intention on the part of the Government itself to offend China or Chinese. Conditions of Asiatic Labor. In considering the possible dangers of Asiatic labor competition and Asiatic immigration, but without in any way debating the merits of the Chinese exclusion law or questioning the sincerity and justice of the arguments for exclusion, it is well to bear in mind that the price of labor along the whole Asiatic coast from Singapore to II Yokohama has increased on an average of 25% (twenty- five per cent.) to 225% (two hundred and twenty-five per cent.), according to quality and skill, during the last decade and bids fair to keep on increasing proportionately during the next ten years. The great demand that will surely follow the end of the war for Japanese laborers in Korea, Manchuria, Sak- halien, and Formosa, together with the losses by death and wounds of able-bodied Japanese needed in Japan proper, and the announced refusal of the Japanese Gov- ernment to grant passports to laborers intending to come direct to the United States, should so limit the numbers who might otherwise seek this country that this problem, now so much discussed on the Pacific coast, will help to settle itself. As for the Chinese, in addition to our having little to fear from the just application of the present exclusion law, it should be borne in mind as a hopeful condition that the number of coolies who might wish to enter our borders or those of other countries is largely regulated by the powerful Chinese Guilds, which for their own interests arrange that the supply shall not exceed the legitimate demand. Furthermore, there is no doubt that, if China inaugurates the material and internal develop- ment that now seems imminent, the home demand of China, supported by the natural preference of the Chinese for their own land as a field of labor or residence, will tend to limit those who would come to the United States. The Yellow Peril. The so-called Yellow Peril viewed in a practical light may be converted into a Yellow Blessing. The more Japan has developed her own industries, resources, and competing capacity with the foreign world, the more has she purchased from it. Japan as a manufacturing or 12 industrial nation has now a total trade with the United States of $100,000,000 (one hundred million) per annum against one-fourth of that amount when she began her new era as a world power. Since China commenced at Shanghai and other Treaty Ports to foster her industrial interests, her trade with the United States has grown until last year it reached, including Hong Kong, the un- precedented total of $92,000,000 (ninety- two million), which is triple what it was fifteen years ago. Now if the experience, influence, and example of Japan can cause China to enter upon progress and development throughout the whole Empire, China's purchasing ca- pacity and her demands for our products will increase in a measure to make us welcome this alleged " Yellow Peril." It is as illogical and unjust to predict that universal peril and danger will result from the material, social, and political awakening and advancement of Asia as to de- clare that the more mankind is educated, the more civiliza- tion is spread abroad, the more nations and races are lifted up, they correspondingly become the more threaten- ing to the welfare and happiness of the world at large. Along with Japan's growth in military and political prowess, she is bending her energies to the betterment and enlightenment of her people. This condition will be just as characteristic of the Chinese when the movement of progress is fully inaugurated. For example, the United States purchased from foreign nations last year to the extent of $1,117,000,000 (one billion and one hundred and seventeen million) despite the fact that we are the greatest manufacturing and pro- ducing country in the world. Likewise Japan and China will purchase more from abroad as they become greater manufacturing and producing nations. In other words, as our foreign trade has swelled in harmony with internal 13 development, so will that of China and Japan expand, and dispel the nightmare of the Yellow Peril. The Great Need of China. A great need in the development of trade with China is the increase of her purchasing capacity. Her internal resources must be exploited, railroads must gridiron her wide extent, mines of coal, iron, gold, and copper must be opened, rivers and canals must be deepened and dredged, diversified agriculture must be fostered, until her own wealth will enable her to buy in ten times the proportions of the present. Provide the Chinese masses with money and they will purchase as much correspond- ingly as any other people. China's foreign trade now amounts to less than $i per capita ; that of Japan to more than $7, although twenty years ago it was barely more than one dollar. Supposing China's foreign commerce, as a result of her internal progress providing a greater purchasing power, amounts within a score of years to only five dollars per capita and her population then is placed at the limit of 400,000,000, we have a total trade of two billion dollars per annum. Such a prize is certainly worthy of our best present efforts to prepare the way for winning our share of the increase. While many experts claim that China has not this popu- lation, and I am inclined to place it at a lower figure, it may be safe and conservative to use this estimate for twenty years from now in view of the natural increase and of the fact that Chinese official reports place the present population at over four hundred and twenty-five millions. It mi:st be noticed that my estimate is for both exports and imports and represents selling as well as buying capacity. Construction of Railways. If one influence above others is to be named as doing 14 the most for the development of Chinese purchasing capacity, it is the construction of railways. The change that will be brought when China is crossed and recrossed with trunk lines and their feeders can not be easily pictured. Such construction will not only open up the interior to great progress and bring distant markets and points into close touch and easy commercial exchange with the sea coast and foreign trade, but it will do more than any other material factor to improve and strengthen governmental administration. Reform in its legitimate sense will find stronger inspiration in railroads than in mass meetings and pamphlets. There is no more encouraging feature of the new spirit that is awakening China than the desire and intention of the Chinese to build and possess their own railroads. The old prejudice, moreover, among the people against rail- roads which showed itself several years ago in the tearing up of the Shanghai-Woosing line and at times displayed itself along the route of the Tientsin-Peking line is fast disappearing. Transportation is a mighty agent of commerce but it is a mightier agent of civilization. It is the most powerful influence for the successful administration of law and the preservation of order. It is also the best means of distributing wealth and establishing industries and agri- culture. The more railroads China can construct and the sooner she can have them running, the earlier will we see that marvelous commercial, social, and political renais- sance of which the world has been talking for years. Growth of American Trade. The remarkable growth and ptesent value of American Commerce upon the Pacific demonstrates beyond question its importance. The export and import trade of the United States with Asia and Oceania for the twelve IS months ending June 30, 1905, reached the unprecedented and splendid total of approximately $35o,cxx3,ooo (three hundred and fifty million). To comprehend fully what these figures signify, let us make a few cogent compari- sons. Only a decade ago our entire trade with the same countries amounted to $125,000,000. This g^ves a direct increase of $225,000,000, or nearly 200 per cent, in ten years. What better evidence can be desired of the im- mense possibilities and actual value of Pacific Commerce ? A further analysis shows other interesting facts. In 1895 our exports to Asia and Oceania stood at the small sum of $30,000,000. In 1905 they approximate $160,- 000,000, or a marvellous increase of 300 per cent. Our imports ten years ago were valued at $95,000,000, now they reach $188,000,000, or a growth of 100 per cent. It is gratifying to note that the exports have expanded three times more than the imports, although the latter still lead in the aggregate. Comparison with South America. South America is a fascinating field for the advance- ment of our Commerce, but it does not conduct a trade with the United States that yet rivals that of Asia and Oceania ; our export and import total for the year ending June 30, 1905, with South America was $207,000,000, or not two-thirds of the former. Again, whereas the trade with South America made a gratifying increase of 23 per cent, or from $145,000,000 to $207,000,000 in ten years, it still seems small compared to the 200 per cent, of Asia and Oceania. Making further the special test of exports which particularly appeals to our manu- facturers and merchants, we note that our exports to South America for the year ending June 30, 1905, were only $57,000,000 against $160,000,000 to Pacific coun- tries. I do not minimize the importance of South American markets, but, admitting their great value, I try to prove the present critical importance of the Asiatic markets with reference to the immediate necessity of doing all in our power to enlarge and protect them. A Word for the Latins. Permit me to digress here for a moment in view of the fact that since I left the Far East I have had the honor of serving you as Minister in three different countries of Latin America. South America has a magni- ficent future, but I fear that in our criticism we have regarded too long the mote as being in our own eye while striving to detect the beam in the eye of the South Ameri- can. Possibly we should have first taken the beam out of our own eye ! The more I see of the Latin people, the more I am convinced that we are not appreciative of their stronger and better qualities. Never in South America have I heard of any political or private "graft" to be com- pared with what we are daily disclosing in the United States. In the great city of Buenos Aires, one of the most beautiful capitals of the world, I never discovered municipal maladministration equal to that which Philadel- phia, New York, and Chicago have experienced from time to time. Revolutions may characterize Latin America, but it is doubtful if these produce such moral harm there as the defalcations or peculations among our own government officials produce in the United States. Revolutions there represent in a measure the spirit of patriotic enthusiasm and a desire among the people to have good and honest government where the existing government is bad and prejudicial to their best interests. Some Practical Suggestions. If I were to include in this address any practical sug- 17 gestions of ways and means to bring about direct and immediate benefit to American trade conditions in the Orient through the action of business men, I would recommend that all companies and firms wishing to trade with that part of the world should send thoroughly com- petent, responsible, and trained men to investigate the situation in every detail and then to take steps accord- ingly. Dependence upon circulars, catalogues, and hear- say will not bring satisfactory results. Japanese, Chinese, Koreans, Filipinos, and Siamese, all have peculiar conditions of demand and supply which must be met in accordance with the wishes of the market itself if a considerable trade would be developed. The best evidence that this method should obtain among American firms intending to establish business relations with the Far East is the success which has attended the considerable number of American exporting houses already carrying on trade either directly through their own branches or through competent agents in the princi- pal seaports of Asia. It is not absolutely necessary that an American company should have a branch at different ports, because there are already well-established reliable British, German and Japanese agencies which can handle business for Americans, but there is no doubt that better results will be achieved in the end by keeping as closely hi touch as possible with the actual markets. Diplomatic and Consular Service. If there is any crying need in Asia at present it is the better equipment of our diplomatic and consular officers with larger salaries and more commodious offices and residences. Every American business man or traveler who goes up and down the coast of the Far East is im- pressed with this necessity. The representatives of the United States now in Asia i8 are able, experienced, and earnest men, but they can not be expected with their present limited facilities to do what would be possible if Congress would treat them with that liberality which the importance of the field and the oppor- tunity require. Steamship Facilities. The steamship facilities for the transport of both freight and passengers between the United States and the Far East are good and little or no fault can be found in this respect, but it is a pity that practically the entire carrying trade of the Asiatic coast is in the hands of other countries than the United States. The situation is so completely controlled by England, Germany, and Japan that all of their main steamship lines running from home ports have connections to most points in the Far East, thus providing the lowest through freight rate possible, while the American lines must make the best of these foreign connections. It is surprising to note how both Germany and Japan have developed their coastwise and river steamship ser- vice in the Far East. Fifteen years ago the business was almost entirely in the hands of British companies. Now it is at least proportionately divided among the three countries named. This does not necessarily mean that British commercial interests are being crowded out. It is perhaps nearer the truth to state that the field is ex- panding and that Germany and Japan are successfully competing for the increased commerce. Co-operation of Nations. I desire to emphasize that I do not share in that con- ception of competition which develops antagonism be- tween different nationalities. I see no reason why American merchants should try to drive out English, the English the Germans, or the Japanese both. 19 There is room for all, and the more they work in a friendly spirit of co-operation the greater and more rapid will be the development of Asiatic trade. In the same way I fail to sympathize with the spirit of criticism which prompts some European and American writers in discussing the methods and policies, for instance, of Rus- sians or the Japanese. There is far more to be said in favor of Russia and Japan in their efforts to develop the Far East than there is against them. Without discussing for a moment the political and international issues involved, it must be admitted that Russia worked marvelous material changes in Manchuria, especially at such points as Harbin and Dalny, and in the construction of the Manchurian railway. Likewise it can not be denied that Japan has begun to accomplish wonders in Korea. By the construction of railways, the opening up of the interior, the exploitation of resources, and the fostering of immigration, Japan is commencing to convert Korea into a prosperous cottntry. In this connection let us in passing do full honor to the distinguished and brilliant Peace Envoys now calmly and sincerely striving for a basis of permanent welfare, and may I say co-operation, for themselves and the Far East. Mr. de Witte, Baron Komura, Baron Rosen and Mr. Takahira are writing their names indelibly on the pages of history in working for a statesmanlike end of their negotiations. It is gratifying at the same time to all Americans that the world at large is pointing to Presi- dent Roosevelt as the one man who is chiefly responsible for the prospective end of the War and the consequent blessing to mankind. What is at Stake. When we remember the amount of capital and the number of laborers that are benefieiaries of our annual 20 trade of $350,000,000 with Pacific countries we must con- sider well and carefully any harsh measures, methods, or policies that may tend to cripple or reduce such a mighty traffic. We must determine soon whether this trade shall advance rapidly and surely to the $1,000,000,000 (one billion) mark with corresponding employment of capital and labor, or remain stationary and sluggish with unfor- tunate eifect on capital and labor alike. The possible results of the latter condition come home to us with special emphasis in view of the fact that our exports to China are nearly twice as great as our imports from that country and the tendency of expansion must be largely in the line of export trade. There is also a local Pacific Coast application in this growth of Pacific Commerce that we should not overlook. Ten years ago the total foreign commerce of the United States that went through and came into Pacific ports, like Portland, Puget Sound, and San Francisco, was valued at $76,000,000. This last year it amounted to $165,000,- 000, or a splendid increase of nearly $90,000,000, much over 100 per cent. When we take into consideration the large trade that New York and Atlantic ports already have with the Orient through the Suez Canal, it is en- couraging to see the increase of the business passing through the Pacific seaports. From all indications this will grow in the future with greater rapidity even than during the past decade. The South's Direct Interest. The direct concern which our Southern States from Virginia to Texas have in the protection and upbuilding of our Asiatic markets must be borne constantly in mind not only by the manufacturers and planters, but by the Congressional representatives of that section. Twelve years ago, in letters to Southern Chambers of Commerce 21 and to their leading newspapers, I humbly emphasized the opportunity for the sale of cotton goods and even raw cotton in the Orient. Repeatedly since then have I called attention to the value of this field to the South, and now again I desire to point out its importance. The consumers of Asia have only begun to utilize cot- ton and cotton fabrics. As their buying capacity and their corresponding tastes and desires develop, so will grow their demand for cotton goods of all kinds. Even though Japan makes ra'pid strides as a cotton manufac- turing country, she not only cannot grow cotton but she will be unable to meet the demand for certain qualities and quantities of cotton goods that can be only success- fully manufactured in the United States. The experi- ments that have been made with cotton mills and cotton growing in China have not brought results which need cause much present fear for the manufacturers and growers of the United States. While it must be admitted that there are possibilities along these lines in China, the real competitive dansrer is so far away that it cannot be considered as a problem of the moment. What the cot- ton men of the United States have to think of is the com- petition from India and Europe and the tendency of the Chinese to place their orders there, if they, in their opin- ion, are not given fair treatment in their relations with the United States. Also it must be borne in mind that the manufacturers and exporters of India and Europe are bending every energy to exploit successfully the Asi- atic markets, and that, therefore, the exporters of the United States must be up and doing and ready to meet them in all phases of the trade. Fortunately America now has the lead in North China and Manchuria, where exists the best demand and oppor- tunity, but no stone should be left unturned to maintain 22 and extend our hold in that section of Asia. If the South will unite with the West and East in the protection and advancement of American trade in Asia, there will be no occasion in the eventual future for the Southern cotton growers to limit their crops. On the contrary there will be a demand for every pound of cotton that can be grown on Southern soil. A Personal Reference. At this point I may be pardoned for making a personal reference. When, some ten years ago as United States Minister to Siam, I made extended reports on the oppor- tunities for American commercial expansion in the Pacific and prophesied a wonderful increase in our trade if we would take advantage of the opportunities, I was criti- cised and even ridiculed in many parts of the United States. It is gratifying now to find not only that all my predictions and prophesies have come true but that the United States is taking an interest in the Orient which in those days it was almost impossible to awaken. During the six or seven years that I spent in both official and private capacity in the Far East I became convinced that the commercial development of the Pacific Ocean was only in its very infancy and recent events have confirmed this conviction. By the time the Panama Canal is completed it is not im- probable that the foreign trade of the United States with countries bordering on the Pacific will amount to over .$1,000,000,000 per annum. The present trans-continental railway systems are adequate to the present needs and are bending their energies to the development of Asiatic commerce. Mr. J. J. Hill, the head of the Great North- ern Railway System, has shown his confidence in the opportunity by placing great steamships to connect with 23 his railway on the route between Seattle and the Orient. Mr. E. H. Harriman, the president of the Southern and Union Pacific Railway Systems, is now making a special trip to Asia to study the field, and is equipping his steamship lines with newer and larger vessels. I want it to be understood that I am not in any way reflecting upon the honesty and fairness of judgment of those who may not agree with me as to my views of China and the importance of our trade with Asia. There is in this country the undeniable right of holding opinions just as one chooses and expressing them freely as one wishes. That principle is the strength of our institutions. I stand as strongly as any man for the just and honest execution of our laws; but I believe those laws should not be strained until a great nation is vexed. There is no more reason why we should bend backward in the admin- istration of a law than that we should bend forward and close our eyes. Let us stand simply straight and give everybody a "square deal." That is all we want and that is all China wants. The Golden Rule. As one of your Ministers to foreign countries, let me say that the great influence which should work for our success as a nation in dealing with other nations is the practical application of the principle of the Golden Rule. The Golden Rule applies to nations just as much as it applies to men and women. The same laws and rules that govern the relationship of yourselves to your neigh- bors, the same principles and methods of intercourse that control one city in its dealings with another city, one State with another State, should direct the United States in its relations with the nations of Europe, Asia, and South America. We have had within the last seven or eight years a man who has stood unfalteringly for this 24 new idea in diplomacy. I refer to Secretary John Hay of lamented memory. He has passed away, but we still have in our President a man who tells every Ambassador and Minister — and there are some thirty-six or seven of us — that wherever we go we can understand that, just as long as we tell the truth and give everybody a "square deal," we will be backed up by him. The selection of Elihu Root as Mr. Hay's successor and the President's premier means the continuance of these methods and the exercise of these principles of the "new diplomacy." Influence of American Example. Let us exhibit to the world a white race that can stand on a safe pedestal and be white and true in the real mean- ing of the terms. Let us present such an example to Asia as is worthy of our splendid citizenship and civiliza- tion. Let us remember that whether China and Japan develop a "yellow peril" or a "yellow blessing" may de- pend largely upon the example which the United States sets to all the world. In other words whether Japan with her forty millions of people and China with her four hundred millions shall go onward and become mighty influences for good throughout the world may be deter- mined by the American people. It is a sign of promise that we can gather here to-day so many thoughtful men and women from all parts of the United States to consider carefully these questions. Therefore let us look forward with confidence to master these great problems. Let us look beyond ourselves, and, in the same way that we are meeting grave social and political issues in our own States, cities, and towns, let us go out to the four corners of the world to do our share in solving world problems, and find everywhere a welcoming hand for the true American. I thank you. 25 THE WINTHROP PREM,