Papers Relating to the Foreign Relations of the United States, With the Annual Message of the President Transmitted to Congress December 2, 1902
Mr. Fesler to Mr. Hill.
Amoy, China, August 18, 1902.
Sir: * * * I beg to inform the Department that on July 23, under instructions from the minister, I entered a strong protest under Article XIV of the French treaty with China and the favored-nation clause in our treaty, copy of which is herewith inclosed, as well as a copy of the taotai’s reply. I am reporting to the legation for further instructions.
I have, etc.,
Mr. Fesler to Taotai Yen Nien.
Amoy, July 23, 1902.
Sir: Under instructions from the honorable United States minister at Pekin, I have the honor to invite your attention to the fact that the creation of a monopoly of the camphor trade in Fuhkien, as reported in your dispatch dated the 4th day, fifth moon, is against the provisions of Article XIV of the French treaty of 1858.
This article not only prohibits the establishment of monopolies by the Chinese officials, but further requires them to remove all possible restrictions of trade “upon the representation of the consul.”
By the regulations of the camphor board of which you are comptroller, sale of camphor by private persons is prohibited; the board alone buys and sells camphor. Do you not call this monopoly?
Your honor no doubt is aware of the fact that under Article XXX of the treaty with the United States Americans can not be subjected to these limitations. Camphor is specified as an article of import and export in all the treaties. For two years Americans have engaged in the camphor trade here. They are free to purchase camphor, as well as other articles of import or export, from any and all Chinese subjects without distinction, and it shall become the duty of this consulate to safeguard this treaty right.
Awaiting your early reply,
I am, etc.,
United States Consul.
Taotai Yen Nien to Consul Fesler.
Sir: I have the honor to acknowledge receipt on the 19th, sixth moon, the present year (July 23, 1902), of your honor’s dispatch wherein you state that you are instructed by the honorable United States minister in Peking to call my attention that the establishment of the camphor board is contrary to the provisions of Article XIV of the French treaty of 1858.
Prior to the receipt of your dispatch I had received a protest from the English consul and to this protest I have carefully answered, paragraph by paragraph.
In your dispatch you raise the question of monopoly and object to the alleged limitations. These points are identical with those raised by the English consul.
I therefore consider it proper to inclose you a copy of my reply to the said English consul and beg to invite your attention to my observations contained therein.
Copy of Taotai Yen’s dispatch to the English consul.
Yesterday I received a dispatch from your honor stating that the regulations of the camphor board as per copies I sent you are contrary to the provisions of the French treaty. It seems you have made unnecessary comment upon the matter. I now proceed to answer the points you raise in their order and beg to invite your attention to my replies hereunto attached,
[Page 261]In your dispatch you say:
“I have carefully studied the regulations and the agreement. In many places they are contrary to the provisions of the fourteenth article of the French treaty of 1858. A reading of these regulations will show that a monopoly has been established of the trade. For instance, article 5 of the regulations forbids all persons from engaging in the manufacture of camphor unless they first apply to the board and receive a permit. All camphor manufactured, as well as the residuum, are to be sold to the board at the rate it fixes, the manufacturers being forbidden to sell their camphor to other persons.”
These regulations have been approved by his excellency the viceroy and are intended to prevent the unscrupulous Chinese from cladestinely manufacturing or selling camphor. This is within our duty to do and can not be termed a monopoly.
“By article 8 all foreign merchants are required to buy the camphor from the board at its fixed price.”
It is never intended by these regulations approved by the viceroy to prohibit the foreign merchants from purchasing camphor. As prohibited by the treaties, they can not engage in the manufacture of any kind in the interior. If they buy camphor and manufacture it in a treaty port, they are free to do so. Do you call this monopoly?
“Article 4 provides that the expert shall fix the price.
“Under these circumstances foreign merchants can only buy camphor from the officials and have to submit to the exactions of the board and pay the exorbitant price. Thus great inconvenience will be experienced. That this is a Government monopoly, and not an individual, makes no difference.”
As regards the fixing of the price by the expert, it is because the Chinese method of manufacturing camphor has not reached its perfection. To introduce a better method, the expert has to attend to the manufacture, classify the goods, and fix the price of each in order to prevent unscrupulous Chinese from seeking clandestine markets and smuggling, who are unable to tell the quality of their goods. When the price is fixed the foreign merchant can buy or sell camphor accordingly. I can see no inconvenience in this matter and can not see how this will constitute a monopoly.
“British merchants shall be free to purchase camphor.”
This is always permitted, and I do not propose to stop it.
“And they can buy it of the Chinese, like other native produce, without hindrance whatever.”
According to articles 6, 7, and 8 of the French treaty, they are required to pay duty at the custom-house and likin at the station, and “it is expressly forbidden to them to trade elsewhere on the coast in search of clandestine markets under pain of confiscation of both ships and goods used in such operation.”
In short, I establish this board in compliance with the instructions received from the viceroy. The regulations are all made to prevent the unscruplous Chinese from seeking clandestine markets or engaging in smuggling. On what ground do you suppose this to be a monopoly, and what evidence have you to support your allegation?
“According to the provision of the treaty you should take steps to dissolve and prevent the existence of such monopoly. How can the Chinese officials establish a monopoly themselves?”
The French Government in negotiating this clause had no doubt in its mind other people who were thought to be likely to come and control the trade; hence it was provided that in such cases the Chinese officials should take steps to prevent the existence of such companies.
The facts in connection with the establishment of the camphor board do not warrant the application of this theory.
By establishing the camphor board the Chinese Government seeks to educate the Chinese people in its manufacture and such an action can not be termed a monopoly.
There are monopolists in China, and this may account for your apprehension that we are monopolists. Nevertheless, it requires proof to show that we are such as you allege. The article you quote has nothing to do with the camphor board and can not be applied to this case.