Russell Young to Frelinghuysen, January 30, 1883

No. 76. Mr. Young to Mr. Frelinghuysen.

Sir: In my dispatch No. 69 I had the honor to send you a copy of a joint note addressed by the representatives of the foreign powers resident in Peking on November 17, 1882, to his imperial highness Prince Kung and the ministers of the yamên. This note was a further chapter in the history of the negotiations which for nearly three years have been pending between the Chinese Government and the foreign representatives as to the construction of certain treaty, stipulations, and more especially the covenant under which foreigners claim the right to manufacture at the open ports.

The Department has been made fully acquainted with every incident arising out of the discussions, and it is now my duty to inclose a translation of the reply of Prince Kung to our joint note.

His imperial highness contends that the text of the treaty, giving foreigners the right to manufacture, does not bear the construction the foreign powers place upon it. We have held that under this covenant American citizens can engage in any lawful industry and enjoy the profits of their labor. His imperial highness argues that there was no intention on the part of Ms Government to grant such a privilege. If Americans chose to become mechanics or laborers, or to perform any kind of work, there was no objection on the part of the Government. It was never intended, however, that the results of that work should find a market in China, or even be exported to foreign markets in competition with Chinese manufacturers.

His imperial highness points out that under existing treaties foreign manufactures would not be within the control of the Chinese authorities, but under the provision of exterritoriality would be irresponsible. The inference is that any manufacturing interest taking root in China, competing with ancient and long-established forms of industry, and independent of any authority except that of diplomatic and consular officers, would be a source of danger to China. The Chinese never contemplated such a contingency when the treaties were made, and do not assent to it now.

His imperial highness refers to the efforts of an American firm in Shanghai to establish a cotton yarn manufactory, and explains the reasons why his Government opposed and destroyed that enterprise: First was the general objection to foreigners engaging in any manufacturing business; second, there was a special objection in this, that the proposed American company was in contravention of a patent or monopoly granted by the throne to a Chinese company, giving them the exclusive right to make cotton cloth in Shanghai for a period of ten years. His imperial highness contends that as China wishes to encourage and nourish a new industry by protecting it under the treaties, no foreigner should be allowed to compete and destroy it. He further claims that the granting a patent or a monopoly by the throne was a proper use of the imperial power and as such should be respected by foreign nations.

His imperial highness insists that the imperial Government has been acting in entire harmony with the spirit of the treaties, and that the foreign powers have no right to claim from China more than the contracting parties have nominated in their bond.

The views of the legation upon these subjects have been so fully expressed to the Department that I shall not trouble you by repeating them. I content myself, therefore, with submitting the latest argument of the Chinese Government. From this you will see that we have really made no progress in coming to a satisfactory understanding. * * *

I do not think that any further steps will be taken by the other representatives, until the question has been considered by the Governments they represent.

I do not see how we can with advantage pursue the discussion beyond this point, until the powers come to an understanding as to how far they will go to secure their undoubted treaty rights; and I am therefore disposed, so far as our legation is concerned, to proceed no farther in the matter, but to submit myself to your guidance as to what the Department feels to be our rights under the treaties and the best means of securing them.

The general questions discussed in the dispatch of his imperial highness, and the special incident affecting Mr. Wetmore and his cotton yarn company, the legation holds to be different and distinct propositions. While I am willing therefore to let these questions rest in abeyance until the Department in its wisdom decides what is best to be done, I shall continue to insist to at whatever maybe the result of our discussions as to the construction of the treaties, even if we granted every point for which his imperial highness contends, the treatment of Mr. Wetmore* * * cannot be overlooked in the interests of that unity and good will which have so long existed between China and the United States.

To this I shall refer in a subsequent dispatch. In the meantime, trusting that the course taken and proposed to be taken by the legation will meet with your approval,

I have, &c.,