No. 34.
Mr. Seward
to Mr. Fish.
Sir: In my trade report for last year I mentioned the steps taken by the Chinese government to open a coal mine in the province of Chihli. I spoke also of the prospect that mines would be opened in Formosa. I have now the honor to advise you that the agent sent from Chihli to procure miners and machinery has returned, having, I believe, discharged this part of his duty. I have also to advise you that I learn here that an English engineer has reported favorably upon the Formosa mines, and that an order has been sent for a limited supply of machinery with which to work them.
A third scheme to open a mine or mines near Hankow or Kinkiang is taking form. I have no particulars of a definite sort to communicate in regard to it. Coal-measures occur near the Yangtsze River in various places, and notably near the Poyang and Tongting lakes.
I doubt whether the coal of Chihli, of the Yangtsze, or of Formosa, can be sold for a considerable period yet in the market of Shanghai upon favorable terms as compared with that of Nagasaki. Doubtless, however, the Tientsin steamers will procure some part of their supplies at that port from the Chihli mines. The Yangtsze steamers actually take in large supplies of coal at the river ports, and would take more if [Page 45] the quantities available were greater and the cost less. I have always doubted whether coal occurs in Formosa in a favorable way, but, until the mining has been carried on there in a more efficient way than heretofore, it will be premature to speak positively upon the point.
The coal supply of this part of China comes largely from Australia, but that of Nagasaki is now finding its way into the market.
A very superior steaming-coal is found in Saghalien. An attempt to work it was made some years since by an American house, but failed owing to the lack of a good port at the place of shipment, of suitable machinery at the mines, and to the distance to the China markets. It is said that the Russians will establish a line of steamers shortly to bring down the produce of the Saghalien mines, and to take back to the Siberian ports teas for overland transportation, and other Chinese produce. If they can establish a round trade of the sort, their coals may perhaps find a remunerative sale in China.
The disposition of the government to exclude foreigners from mining enterprises still prevails. It is possible even that an effort will be made to monopolize the coals produced in China for the use of native vessels of war and of native merchant-ships running in competition with foreign vessels. The wide sources of supply and the operation of the laws of supply and demand will, I apprehend, soon break down such attempts, while sooner or later the government must learn that its best policy is to encourage enterprises of foreigners as well as those of natives. But, while learning this lesson, they will make many expensive and losing essays of their own, and fritter away much valuable time.
I have, &c.,