Wetmore to Russell Young, September 13, 1882

Mr. Wetmore to Mr. Young.

My Dear Sir: I have communicated with Mr. Cheshire officially and asked him to address you (which I believe he does by this conveyance) with reference to interference on the part of the Chinese authorities at this port with a company which I have organized for the purpose of manufacturing cotton yarn here from the native fiber.

Mr. Cheshire, I believe, sends you copies of the letters which I have addressed to him on the subject, to which I would ask your reference for details of the case, and will only add a few remarks now which, perhaps, may throw further light upon the matter.

Before taking any steps for the formation of my company I consulted fully on the proposed enterprise with Mr. Denny, and was assured by him there was no reason within his knowledge why I should not undertake and carry it out. He mentioned to me casually that some years since a company was formed for the purpose of making cotton cloth, but he was not aware that any actual progress had been made by them; he further informed me he had seen their agreement, but made no mention of any exclusive privileges, which he surely would have done had any such been brought to his notice then or at any other time.

The day before he left, having found a site just outside the settlement which would be more suitable for my purpose than any other, I wrote to ask Mr. Denny if there could be any objection raised to the site, this being the only point on which it occurred to me that any question could arise, and in reply he wrote me:

August 21.

Dear Mr. Wetmore: In reply to your inquiry of to-day, I have to say that in my judgment there can be no valid reason urged against the erection of cotton yarn mills on the site proposed by you.

Sincerely yours,

O. N. DENNY.

P. S.—I should like to write you fully, giving my reasons, &c., if I have the time.

D.

I therefore proceeded to make my arrangements for the formation of a company, and associated with me as director Mr. P. V. Grant, the head of the large engineering firm of Boyd & Co.

We proceeded to raise funds, as usual in the formation of public companies, by the issue and sale of shares, and had the shares all applied for and more than two-thirds of the first call paid up, when all further progress was arrested by the most unexpected appearance in the Shen Pao of an article to the effect that our company was an infringement of a monopoly granted to another company, and warning people not to take shares therein.

This apparently unauthorized intimation has since developed into what appears to be a formidable attack on the company which I have started, and whether the object is to suppress this particular company, or is a blow aimed at all similar organizations, I do not know.

The parties implicated have engaged the services of the three most eminent legal firms here—in fact three out of the four in Shanghai—and are apparently prepared to fight their cause with all the weapons at their command, whether fair or foul. Thus far they have made use chiefly of the latter only, and in addition to the notice in the paper above referred to, the taotai has addressed three of the principal shareholders by way of intimidation. As neither I nor those connected with me have done or contemplated doing anything that we have not, according to the best of my belief, a perfect right to undertake, and as I do not purpose to persist in any action which, on careful consideration by the authorities of the United States Government, it is decided I am not entitled to take, I have in the mean time to ask that you will kindly investigate the questions at issue as soon as it can conveniently be done, and in the mean time secure me and those interested with me from all illegal and improper interference. I have taken no legal advice or opinion on the subject, as it appears to me the questions involved are such as cannot be settled here, but must be referred to the consideration of yourself and the high Chinese authorities at Peking. If necessary I shall be prepared to go on to Peking, but the questions at issue can be setled without the necessity for my doing so.

Should the parties who are opposing us raise any questions as to the rights of foreigners to engage in manufacturing enterprises at Shanghai, of course, the interests of all the nationalities having treaties with China will be involved.

With many apologies for the trouble I am giving,

I remain, &c.,