No. 293.
Mr. Bingham to Mr. Evarts.

No. 909.]

Sir: His excellency Mr. Hennessy, Her Britannic Majesty’s governor of Hong-Kong, is at present visiting Tokei, and is the guest of His Japanese Majesty’s ministers. The governor did me the honor a few days since to call upon me, and in conversation took occasion to say that my own official action toward this government, as published in the foreign relations, and the action of our government toward Japan in the matter of treaty revision, met with the hearty approval of the majority of the people of Great Britain as well as his own approval.

The governor made an address before the Tokei Chamber of Commerce on yesterday, a copy of which, as published in the Japan Herald of the 16th instant, I have the honor to inclose, together with the reply thereto of Mr. Fukuchi, the vice-president of the chamber. I note that the governor in his address spoke of the trade of Japan with Great Britain and with the United States and China, and had the courage and justice to say that Japan’s trade with China, as well as that with the United States, “was especially favorable to producers in Japan and to exporters.” His excellency might have said with equal justice that the United States buys more of the domestic productions of Japan than any one of the Western States, while Great Britain sells more largely to Japan, and draws from her almost exclusively the large annual balances against Japan in coin.

It is also worthy of remark that Mr. Hennessy, speaking of the public debt of Japan, took care to say, as the fact is, the debt of this empire is almost exclusively a domestic loan, and that her foreign debt “is quite insignificant”, and that he also warned the Chamber of Commerce of the danger of a foreign debt, wisely citing for the instruction of his auditors, the present deplorable condition of Egypt.

I beg leave to say that the reply of Mr. Fukuchi is significant in this, that it suggests the need of Japan to encourage her own industries, and the obstacles which prevent their encouragement, and that this government is so hampered that it cannot command such revenues [Page 640] from imports “as are essential for the country,” and that “the revenue derived therefrom does not materially benefit our (Japan’s) finances to the extent that revenue of the same kind does in other countries.”

The presence of Governor Hennessy here and his policy in Hong-Kong, have excited unfavorable comment in some of the English journals in this quarter, which do not favor fair play toward either China or Japan.

I have, &c.,

[Inclosure in No. 909.—Extract from the Japan Daily Herald, June 16, 1879.]

Mr. Hennessy’s address to the Tokei Chamber of Commerce.

At the invitation of the chamber, his excellency John Pope Hennessy, C. M. G., governor of Hong-Kong, delivered an address to the Tokei Chamber of Commerce yesterday afternoon on the trade between Japan and China. About one hundred and fifty persons were present, including their excellencies Inouye, Okuma, and Matsugata, and Messrs. Iwasaki, Yataro, Shibusawa, Masuda, Fukuchi (editor of the Nichi Nichi Shimbun), and some foreigners.

Mr. Shibusawa, the chairman of the Chamber of Commerce, in a few words, introduced Mr. Hennessy to the audience, who rose and bowed their acknowledgment.

Mr. Hennessy said:

“Gentlemen, though I speak in a foreign language, yet I believe a good many present understand it. I could not refuse your invitation to address you to-day for several reasons. I am officially connected with the largest depot of commerce in the British Empire abroad. Last year there passed through the colony under my government shipping to the extent of 1,700,090 tons, and the value of that tonnage could not have been far short of $500,000,000. Now the commerce of Hong-Kong is great because it is close to the two Empires of China and Japan; and when I speak of the prosperous condition of commerce between Japan and Hong-Kong, it means, to a great extent, the prosperous state of commerce between Japan and China, and it also means the prosperous state of commerce between my own country—the united countries of Great Britain and Ireland—and Japan. It is well worth your while, as practical men of business, to ascertain what is the amount of Japan’s trade with China; in what way that trade can be developed, and how you can assist in its development. The trade of Japan with Great Britain in one year amounted to $25,650,000; with the United States $7,882,000, and the total trade between France and Japan to $8,412,000; between Japan and Germany, $1,087,000; that is, from June, 1877, to June, 1878. Now, what is your annual trade with China? It amounts to $10,452,000, and is therefore greater than the aggregate trade of France and Germany with Japan. There is another interesting feature in connection with your trade with China. Taking from June, 1878, to December of that year, your trade amounted to $5,151,329. It must be a matter of interest to you all to know how that trade is made up. You exported to China, during the six months I refer to, goods to the value of $3,307,582, while your imports were less than that sum by $1,843,747.

“Your China trade, as well as that of the United States, is therefore not only large but especially favorable to producers in Japan and to exporters. It is also a trade favorable to the Government of Japan, for by means of that trade you get specie imported into the country. And having mentioned these facts, I am reminded of what occurred when I introduced my friend Mr. Matsugata to the viceroy of Canton. The viceroy of Canton, who rules 40,000,000 of people, said that the friendship of China and Japan is more natural and will be of greater benefit to the two empires than the friendship of China and Japan with any other power. And when I reminded the viceroy that the trade of Great Britain with Japan was about double the trade between Japan and China, the viceroy said that in the future China would be the largest market for the produce of Japan. I have estimated the trade of Hong-Kong last year at $500,000,000. It is of interest to look at the authentic records published by your government for the same period. Now what have you exported to China? You have exported large quantities of rice, camphor ($177,000), large quantities of copper ($560,000), ginseng ($161,000), coal, and dried fish. Nearly half a million of dollars’ worth of cuttlefish alone has been exported from Japan; about $410,000 worth of seaweed, and $130,000 worth of beche-de-mer. Now let me tell you that the quantities of those articles consumed in China is enormous, and the demand is so great that it is almost impossible for you to supply it. By far the largest quantity of those articles come through Singapore under the name of straits produce. The dried fins sharks, fish, different kinds of seaweed, and various other articles come from Borneo, and the straits produce [Page 641] travels 2,400 miles before it reaches Hong-Kong. Now you are 1,000 miles nearer to the market than they; you produce the same articles, and why should you not send more, having 1,000 miles in your favor, every practical gentleman present ought to be able to answer. You send in one year 23,700,000 catties of wheat to China, and you send 735,000 catties of dour; so it will be seen that the quantity of wheat greatly exceeded that quantity of flour.

“I may now tell you, for your consideration as men of business, that the Chinamen in Hong-Kong, for some years past, have imported great quantities of flour instead of wheat from California. The great American houses in Hong-Kong no longer import flour; it is imported by native merchants who have the whole of that trade. Some of these merchants are Chinese, born in Hong-Kong; in other words, Chinese British subjects. But the advantage of Chinese importing is this, that they do business so much cheaper, are so frugal and temperate, that they can sell the flour at a cheaper rate than when it was in the hands of the American houses. Now should not the traders in Japan, who send such large quantities of wheat to China, send it in the form of flour? I need not point out to you, there would be a saving of some 4,000 miles in in distance. The British consul for Hakodate told me that Yezo will be able to supply the whole of China—by the way of Hong-Kong or by any other way you please—the whole of that populous empire with as much fruit as they may require. And, he added, the government have done so much to develop the fisheries in that island that the fish supplied to China from other parts of the world will in futue be supplied from Yezo. And I may take this opportunity of mentioning, for the benefit of some present, that when Mr. Eusclen saw the report which was placed in my hands, he said ‘Those papers are perfectly true; there is no exaggeration in the reports of the Japanese Government with regard to Yezo.’

“So much for what you are able to send to China and Hong-Kong for the China market. I estimate that last year there were 50,000 tons of goods transhipped from Hong-Kong to Japan. Now whoever promotes the prosperity of Japan will add to those 50,000 tons of transhipped goods. Therefore, I have, in what I am saying at this moment, a selfish interest. As the governor of that important colony, I am bound to extend the commerce of Great Britain with Japan and China. Therefore I maintain that every subject of Queen Victoria is interested in the prosperity of this empire. The English flag, as you know, flies in every sea, and British ships carry by far the most produce from one country to another. Therefore what I look to is the future prosperity of Japan through the future development of British commerce and British manufactures; and therefore, perhaps, I may be excused if I say one or two words upon what I have seen in the few days I have been here as to the prosperity of this empire. As a British subject I feel proud of the prosperity of Japan, because I remember that at a great crisis in the history of your country the British minister, Sir Harry Parkes, took an active part in the restoration of that government which you now enjoy. Now one remembers the state of this empire at the time when Sir Harry Parkes labored so successfully in the restoration of the government; it is impossible not to admit or see that Japan has made greater progress than any other country in the world in the same space of time. There is much to see, no doubt, and very much to learn of Japan. But I have seen what has impressed me very much. I have seen an empire in which the court and minister forming the government present a great contrast to Oriental countries nearer Europe.

In Egypt, which is a small country when compared with the Empire of Japan, I have noticed three differences between it and your empire. I have seen the Khedive of Egypt and his ministers living in oriental splendor and extravagance. I have seen the ministers of the Khedive living in magnificent palaces, and with enormous and expensive retinues. When I had the honor a few days ago of an interview with His Majesty the Mikado, I saw a court in which true dignity was maintained, but about which there was no extravagance. And you all know how the members of your government, instead of squandering the finances, live the lives of gentlemen, no doubt in proper style, without any extravagant outlay. And another, and in an empire much smaller than yours, they raised a large debt, but it was a foreign debt, a debt raised in foreign countries, whereas I find that your public debt has been raised by your finance minister, nearly all, by an internal loan, in which the people get the interest; and the foreign debt is quite insignificant. I also noticed what, of course, you are all more familiar with than I am, that there is a remarkable difference in the way in which those debts were applied in the two countries. In Egypt the debt was laid out in wild projects of the Khedive, and in defraying the cost of his extravagances and the extravagances of his ministers. Whereas I observe that your debt has been expended in reproductive works, good for you and good for your country.

“And as I have touched upon the foreign debt, I may as well tell you what my observation as a governor has been relative to the difference between the public debts, when compared with their populations, of different countries. Your public debt, I calculate, is about 10 yen per head of the population. Well, I will just mention that an important British colony, that of the Cape of Good Hope, has a debt of £4,068,000, [Page 642] or 30 yen for each head of the population. Another important British colony, the Dominion of Canada, has a public debt of 45 yen for each head of population. And I could tell you of other flourishing British colonies, such as Australia, in which the debt is far larger per head than the public debt of Japan. But in all those British colonies the public debts are perfectly safe, because, like Japan, they have been laid out in the promotion of commerce and in the development of the resources of the colonies.

“And now for a final contrast between Egypt and this empire. At this moment the great powers of England and France tell the Khedive that they must appoint a minister of finance, because the debt is a foreign debt due to Englishmen and Frenchmen; hence the danger of a foreign debt.

“In conclusion, I may tell you this, which makes a still more remarkable contrast between your country and Egypt. It is not long since an Englishman in charge of an eastern bank said, ‘I have entire confidence in the finance minister of Japan and in the future-prospects of the empire.’ But, gentlemen, whatever may be the undoubted financial ability of Mr. O’Kuma, whatever may be the ability of the cabinet, it is really your own enterprise and commercial skill that the ministers will have to rely upon for the financial prosperity of the empire. Therefore, gentlemen, in wishing success to the Tokei chamber of commerce, and in wishing an increasing and profitable business to every merchant present, I am wishing prosperity to the empire at large.”

Mr. Hennessy resumed his seat amid considerable applause, his discourse having lasted about an hour.

Mr. Fukuchi, the vice-president, replied as follows:

“On behalf of the Tokei chamber of commerce, I have the honor to thank your excellency for complying with our invitation. And we beg to express our obligations for the valuable remarks and suggestions your excellency has made with the object of promoting still more the commercial relations between Japan, Hong-Kong, and Southern China. With your excellency’s permission, I beg to say a few words in reply. Our country is the immediate neighbor of China, separated only by a narrow channel of sea, and its commerce is, as your excellency remarked, of special interest and value to Japan. Hong-Kong occupies an important position geographically and commercially, with respect to the two empires, and, moreover, is, so to speak, a gateway of commerce also between Japan and Great Britain, which latter country is the greatest nation engaged in Oriental commerce. We, therefore, would ask your excellency to closely observe the real position of commerce in Japan. Japan has two neighbors, on the east the United States of America, on the west China; in the commerce with both these neighbors, the balance of trade, as your excellency pointed out, is in our favor, but I regret to say the balance of trade between Japan and other foreign countries, in the aggregate, is seriously against Japan, and, notwithstanding the gradual progress and development of our industries, at present I cannot say our foreign commerce is as advantageous or profitable to the nation as it should be, and the revenue derived therefrom does not materially benefit our finances to the extent that revenue of the same kind does in other countries. This state of things continually causes the mercantile community of Japan the greatest concern.

“Your excellency has rightly impressed upon us that we are ruled by a good, patriotic emperor and most thoughtful and able ministers. Our government supervise our finances, encourage our industries, and promote, so far as it is in their power to do so, the commercial development of the country; in short, they endeavor to leave nothing undone to increase our welfare, and I believe the time is not far distant when we shall occupy a commercial position second to none in the East, if the efforts of the government are not thwarted. If, however, the balance of trade continues against us in the future, then this time will be almost indefinitely prolonged, not only to the detriment of Japan, but to the detriment of the true commercial interests of foreign nations. Still more, if our government is hampered in securing that just and rational incidence of taxation, and that full measure of revenue that we feel to be essential for the country and for facilitating internal transit, by which the consumer and foreign producer may be brought into closer commercial contact.

“There is no nation in the world which is sufficiently wealthy to supply its wants entirely from foreign markets, and also no nation that can entirely supply its own wants independently of foreign markets. So commerce is nothing more than a barter of the products of each nation; so it is in Japan; and, undoubtedly, your excellency is wise enough to comprehend this far better than we can. Your excellency acknowledged to be selfish in your desire to do the best you could for British commerce, and if your excellency sincerely wishes to promote the real interests of the great manufacturing and shipping industries of England, then they must recognize the necessity of encouraging the industries and promoting the exports of Japan’s products; in a word, must hope that the Japanese may be prosperous enough to purchase in quantities the industries of England. If Japanese industries are allowed to prosper, it follows the import trade will increase in proportion; on the contrary, if the industries of Japan [Page 643] are repressed, the English manufacturers cannot expect to find a satisfactory market for their goods in Japan. So it is that, either in the immediate present or in the future, encouragement of our industries and increase in the export of our products is not only the individual interests of the people of Japan, hut the real advantage also of the British manufacturers and ship-owners—more so, perhaps, than any other foreign power, your excellency’s country having the greatest mercantile marine in the world. There is an old Japanese maxim, that ‘if men wish to profit themselves, they must allow others to profit;’ and I believe the selfish object your excellency claims is no other than what is contained in the moral of this maxim and is in reality unselfish.

“In conclusion, as regards the present commercial position of Japan, I believe we are now approaching a point of development. I regret much there are certain obstacles in the way—obstacles the removal of which I maintain to be of vital national importance—they obstruct the development of our finances, our commerce, and our industries, and it is only natural for your excellency, interested as you are as the governor of one of England’s most important commercial colonies, to distinguish and to discern the nature of these obstacles and the course to adopt to remove them. If these impediments are removed it is palpable that all foreign commerce, but especially’s British commerce and shipping, in the future will be promoted, and I think that no time should now be lost in allowing full, fair play to the commercial development of this empire. We have not failed to observe a depression in British shipping interests of late—a depression due, we believe, not to any defect inherent in the trade of England, but to the condition of the markets throughout the world. That condition, as far as this empire is concerned, would be reversed by our own legitimate development—a development which would soon be traced in the increase of trade with your excellency’s government and with Great Britain herself. I have only to add that we gratefully appreciate the interest you have shown in the commercial concerns of Japan with regard to the important British colony whose government you administer so impartially and successfully.”—[Daily Advertiser.]