No. 86.
Mr. Young to Mr. Frelinghuysen.

No. 251.]

Sir: As an evidence of the purpose of the Chinese to advance their mercantile and commercial interests in China, in their own way, and under the management of their own people, I inclose the translation of an article from a native journal. From this it will be seen that the viceroy Tso has resolved to establish a line of steamers to run between Shanghai and Tien-Tsin. The value of this announcement may be understood when it is remembered that the largest steamship company in China, namely, the China Merchants’ Steam Navigation Company, is owned by Chinese exclusively. This was organized by Li Hung Chang.

The plant was formed by the purchase of the vessels owned by the American house of Russell & Co. The fleet has been largely increased and new vessels are building. The published statements of its business show a large profit. This comes mainly from the monopoly of carrying what is known as the “tribute rice” to Peking. There is not a foreign steamship line in the China trade which would not carry this rice for one-half or one-third the price paid by the Chinese authorities to the Chinese company. The authorities, however, regard the payment as an indirect subsidy, and prefer to strengthen their own commercial interests even at the expense of the imperial revenue.

It is believed that one of the purposes of the company in adding to the fleet is to open commercial relations with European and American ports.

Now that the viceroy Tso, tempted perhaps by the success of the enterprise under the control of his great rival, Li, enters with a new company, it will be of interest to note the effect of competition in so important a business as navigation by steam. I cannot help but regard it as an evidence of progress, and cherish the hope that this development of domestic rivalry may lead to other and more important ventures, especially in the matter of railways. Now that the Chinese appreciate the use of steam on the water, it is to be hoped they may readily come to see the advantage of steam on land.

I have, &c.,

[Inclosure in No. 251.]

the new chinese steamship company.

The Shen-pao says: “His excellency Tso Tsung T’ang is to establish a new steamship company, with the head office at Tien-Tsin. It is intended to purchase eight steamers to run between Tien-Tsin and Shanghai and the Riverine ports. The ground selected for the company’s premises at Tien-Tsin adjoins the eastern godowns of the China Merchants’ Steam Navigation Company’s property, and extends to a well-known eating-house called Heun Wha Cheun, in Tzo Chao Ling, Tien-Tsin. The ground be longs to the estate of the late Mr. Chu Yunfoo; the property was mortgaged to the China Merchants’ Steam Navigation Company, and now the heirs of Chu Yunfoo have redeemed it for the sum of 20,000 taels, and sold it to the new steamship company. It is said that his excellency Tso has petitioned the Emperor for leave to proceed with this new undertaking. The new company will be under the management of Wu, taotai.”