Wetmore to Cheshire, September 12, 1882
Mr. Wetmore to Mr. Cheshire.
Sir: With reference to my letters to you of the 8th and 9th instant and my several consultations with you in regard to the formation, by myself, of a company for the manufacture of cotton yarn at this port, I understand from you that the taotai has received from his superior at Peking instructions to inquire into and prohibit the prosecution of the enterprise, in view of the fact that exclusive permission had already been granted to another company, for a period of ten years, to manufacture cloth from native cotton at this place.
As I previously informed you, I undertook the formation of my company on the assurance of Mr. Denny that he knew of no reason why I should not do so. I have therefore issued shares for more than two-thirds of the required capital, have telegraphed to England in regard to machinery, obtained estimates for building, negotiated for land, and taken other measures involving much risk, expense and labor.
Having now, however, been informed by you that the taotai alleges that he has received instructions to the effect that the enterprise, if carried out, would conflict with certain exclusive privileges accorded to other parties, I shall not of course proceed to the erection of mills unless on an investigation of the question it is found that I am entitled to do so, and I receive the requisite authority from or through our legation at Peking. As it is very important that the question should be decided as speedily as possible, I have to request, therefore, that you will kindly lay the matter before the minister, and on my behalf that he will have the subject carefully investigated, and, if possible, secure for me from the proper Chinese authorities the requisite permission to go on with my company, and erect mills and proceed to manufacture cotton yarn according to the intentions with which this company has been organized.
In the mean time I must most emphatically protest against any interference with me and my plans in connection with the company, and particularly with respect to the intimidations which the local authorities appear to be resorting to.
As you are aware, they have written to those of the native shareholders in the company, requesting them to withdraw from it, their object being in this way, if possible, to intimidate the shareholders, and thus endeavor to break up the company. Having from the first shown no disposition to take any steps that were not authorized, and expressing our willingness to abide by the decision of the proper authorities on a consideration of the facts of the case, we have a right to expect that, on their side, the Chinese officials will refrain from all underhand and unlawful interference with us or those interested with us. I have already stated what I conceive are our rights, which may, in my opinion, he briefly summarized as follows:
First. According to the best of my knowledge and belief there is no law of this country, and nothing in our treaty with China, preventing me from forming a company such as I have formed, of selling shares in such a company, either to foreigners or Chinese, and with the funds derived from this or any other source erecting and carrying on mills and factories here.
The right has been exercised here for years by others of various nationalities, and the establishments working here for the manufacture of silk, of acids, bricks, leather, flour, ironware, matches, and various other articles prove this. I have never heard of any interference with such establishments, and two other companies, one for the making of glass and another of paper, have recently been started without let or hindrance. It is not on this ground that interference is attempted in my case, but solely, as I understand, because another company, formed some time since for the manufacture of cotton cloth, claims to have received exclusive permission for this manufacture, and that it embraces cotton yarn.
Second. With regard to this pretension, I may say that it appears to be placed by the authorities on the same footing as a patent at home, but it is necessary to say that in this the concession lacks the essential element of a patent, and that is of having been “patent.” It has not been patent, but secret—so secret that the United States consul-general knew nothing of it, and I venture to say no foreign consul in China knew of it. Since, in my case, the very object of a patent has been defeated, as I have unwittingly undertaken an enterprise in the same direction apparently as the so-called Chinese patentee, owing to the fact that his so-called exclusive privilege has never been patent. Unless, therefore, the Chinese Government claims and is conceded by foreign Governments the right to grant monopolies and patents without public notice or notice to the officials of foreign Governments, I do not see how this so-called patent can bar me in my enterprise, which was undertaken in good faith without any notice or knowledge that I was infringing any one’s rights, though to make certain there was no obstacle in the way, I took the precaution to make particular inquiries of Mr. Denny on the subject.
Third. Even though the parties claiming a monopoly should establish their right to the exclusive manufacture of cotton cloth, I deny that they have any such exclusive right to make cotton yarn. The right to make cloth no more gives the right to make yarn than that of making shoes gives the right to make leather, that is, exclusively; nor would exclusive right to make bread debar any one from making flour. On the foregoing and other considerations urged, I support my right to go on with the company I have formed, the breaking up of which would cause me serious loss.
I am, &c.,