Prince Kung to Russell Young, January 22, 1883

Prince Kung to Mr. Young.

Upon the 24th November I had the honor to receive your dispatch in respect to the contemplated establishment of a cotton-yarn company by foreign merchants at Shanghai. In it you remarked that you could not accept the interpretation put by this office upon the words kung tso as found in the treaties; that the equivalent expression as found in the foreign texts was very broad, and included all the various avocations pursued by the several classes of men; that if this were not conclusive, further evidence existed in the fact that all the treaties contained a stipulation allowing foreigners to employ all classes of Chinese laborers at the open ports, and hence to allow them to engage in manufactures, &c.

In response, I beg to say that as I have addressed the several foreign representatives, expressing at length my views as to the meaning of the phrase kung tso found in the treaties, it is unnecessary to repeat that here. But as in the matter of the cotton-yarn company at Shanghai you hold that this phrase kung tso, as found in the treaties, authorizes the manufacture of native produce by foreigners, I must go further into the argument in order to supplement my earlier dispatch in points not therein touched.

While, then, the phrase kung tso is exceedingly comprehensive in its meaning, it must be understood to refer exclusively to manual labor, and cannot be held to include also the materials to which that labor is applied. In regard to the monopoly granted for a term of ten years to a Chinese company for the manufacture of cotton cloth, this action was taken under a decree from the throne by the northern superintendent of foreign trade, and was not an arbitrary assumption of power by local officials; appropriate regulations were framed to prevent other parties from engaging in such an enterprise, and these regulations included not only foreigners but also Chinese in their application. Hence, there was no discrimination against foreigners.

Your dispatch maintains that the establishment of the cotton-yarn factory would work no detriment to the customs revenues nor to native industries. It is a manifest, well-established fact that the rate of duties levied upon foreign imports in all countries has a close connection with the prosperity of the native industries in such countries. Thus your own Government, in order to develop its manufactures, levies a heavy duty upon all imports from foreign ports, to the end that native manufactured articles may not sutler by the competition in point of price. The tariff of duties as fixed between China and foreign powers is exceedingly light, and having been fixed, a change would be difficult. As foreign profits are very large because of this light tariff, therefore no permission to manufacture was embraced in the treaties, and in view of the interests of the revenue and native industries it would be difficult to grant any such permission now. Suppose, for example, foreigners were allowed to undertake the manufacture by machinery of silk and satin goods at the ports in China, the revenues of the Government would not only suffer, but a serious competition would arise with all Chinese who are exclusively engaged in silk manufactures with manual labor, and who depend upon the profits of this industry for the support of their families; and as a result they would be deprived of all means of support by the destruction of their business.

Your excellency will consider this question with an impartial mind, as though China were your own country, and you cannot fail to agree with me as to the merits of the controversy without further argument on my part; and I must beg you to instruct your consular authorities to notify the parties in interest to cease from the project in contemplation. This will be in conformity with the spirit of the treaties and will not interfere with the means of livelihood of Chinese subjects, and thus Chinese and foreigners, merchants and people, will each be allowed a means of support, which is an end much to be desired.