Korea (Hamilton)/Chapter 12

The trade returns for 1900 exceeded every previous year. During the period covered by the Boxer disturbances, however, the Korean exports to China decreased, and the importation of foreign goods likewise fell off. The stimulus given to the cereal trade, by the interruption of the Manchurian export bean trade from Niu-chwang, and by the demand for food-supplies for the troops in China, more than counterbalanced this temporary decline in direct native exports and direct foreign imports. Cotton goods, however, show an increase of £14,297 over the figures of previous years; but there is a specific falling off in imports of British manufacture and origin, and a specific advance m the more important lines of Japanese goods. I append a small table revealing the comparative prosperity of British and Japanese trade at this date:

In time, the markets of Japan will produce everything ​which at present comes from America in the shape of canned goods, and from Europe, in the form of textiles or food-stuffs. Japanese woven fabrics, and canned foods of inferior quality are driving the wholesale manufacturing houses of England and America from the markets. At present, therefore, the trade of Korea is limited as much by the capacity of the Japanese markets as by the wants of the Korean. In face of the opposition of the Japanese, their determination to retain the Korean markets for themselves, and the absence of effective attempts by Western houses to beat up such trade as may exist, it is difficult to believe that the future will show any material expansion in the capacity of the foreign trade.

Nevertheless, Korea provides a fair field for capital. It would be quite possible to improve the condition of foreign trade, if merchants could arrange to protect their interests by establishing their own agencies in the country, under competent and energetic European management. When British merchants depart from their apathetic indifference and organise an exhaustive expert inquiry into the capabilities of the Korean trade, their trouble will be quickly rewarded. New markets require new commodities, the demand for which any technical inspection of the requirements of the people will disclose. Until this examination takes place, however, the stagnation in British trade must continue. Korea offers to British interests an interesting field in which the development of new industries must be conducted upon practical lines. Briefly, the imports in demand are those which are necessary to meet the requirements of an agricultural country whose mining resources are in process of development and whose railway system is as yet in its early stages. The increase in the importation ​of mining supplies supports this contention. Bags and ropes for packing, machinery for agricultural and mining purposes, and sewing machines are in greater demand. Railway material is, of course, wanted. The new industries may not be upon a large scale. Primitive methods doubtless will continue for the most part to govern native manufactures such as grass cloth, straw mats, ropes, &c. Excellent paper has been made since the replacement of the use of native lye by caustic soda and soda-ash, while the innovation is one to which the people have taken kindly enough. Again, while the paper industry is capable of expansion, a brisk business in leather could be built up in the country. Hides, which are exported to Japan in their raw state, are abundant, and might be converted into leather so easily on the spot. The straw braid industry contains great possibilities, while the climate of Korea is naturally suited to the growth and treatment of silk.

Many things would be necessary to the success of such enterprises. The work must be based upon a knowledge of the country and its language. The manufacturer or the merchant must take the pains to accommodate a direct import trade to the exigencies of the local market. As an example, smaller bales and shorter lengths are requisite in the piece goods. The establishment of sample warehouses at the treaty ports, and in the more important trade-centres of the interior, where bales of shirting, cotton and woollen goods, cases of farming implements, &c., could be opened and sold for cash, would appeal to the natives. This departure would avoid the increase in the prime cost of the articles necessitated by the existing system of transhipment. At present, goods come from Shanghai to Chi-fu and ​thence to Chemulpo. They pass then from the importer to the Chinese merchants, and from them to the Korean wholesale buyers; these resell them in greatly diminished quantities to the pedlars and agents, who retail the goods. It would also be advisable to create consular agencies in Fusan and Won-san. Official representation at present is confined to an underpaid and understaffed Legation in Seoul, and a vice-consulate in Chemulpo. Additional employés should be interchangeable, undertaking either the vice-consular duties of the ports or the secretarial services of the Legation.

The bulk of the imports and exports, which pass through the Customs, comes from China and Japan. The means of transport are controlled by Japanese; the export trade of the country is entirely in their hands. This fact alone should appeal to British shipping interests and to ship-owners. Unfortunately, many years of prosperity have brought about great changes in the spirit of our nation, and we no longer show the enterprise and initiative which formerly distinguished us. This depreciation in the forces of the nation has promoted a corresponding depression in our trade. We are no longer the pioneers of commerce; nor have we the capacity and courage of our forefathers who fostered those interests of which we are now so neglectful in every quarter of the globe. At the dawn of the twentieth century, it is amazing to find a country, with a total foreign import and export trade exceeding two millions and a half sterling for the year 1901 and two millions and three quarters sterling for the year 1902, whose shores were visited by over ten thousand steam and sailing trading-vessels in the same period, registering an aggregate tonnage of more than two million tons, almost untouched by British merchantmen. ​Deplorable as this may be, statistics which Mr. McLeavy Brown has drawn up show that one steamship, chartered by Chinese and floating the British flag, entered Korean waters in 1900; that four steamers came in each of the years 1901-2, a return which reveals a steady decline upon the previous years. Since Korea was opened to trade in 1880, British shipping has visited the country in the proportion of 1377 tons to every two years. Despite appeals from our Consuls in Korea to British steamship companies improvement has been impossible; since no response was evoked by their efforts, and no service has been established. The consequence of this is that a valuable opportunity has been allowed to escape, the Japanese profiting by our indifference.

The trade of Korea is increasing gradually. A steamer, which could make periodical calls between Shanghai and Won-san, Yokohama and Vladivostock, taking cargo and passengers to the open ports of Korea, and touching at Japan upon the journey back, would return good money upon the venture. British and Chinese merchants would prefer to ship in a British vessel. The old-fashioned traditions of the British mercantile service, as to punctuality and despatch, are not carried out by the steamers of the Nippon Yusen Kaisha and the Osaka Shosen Kaisha, which call at the ports in Korea. It is almost impossible to know when the steamers of these companies will arrive or when they will leave. Little attempt is made to observe their schedule. The condition of the vessels of the latter company accredited to the Korean run is filthy. Moreover, this company is careless of cargo, and quite indifferent to the comforts of its passengers. The Nippon Yusen Kaisha certainly supplies meals in foreign style, but the Osaka Shosen Kaisha provides ​nothing. Plying between Japan, China and Korea, this company declines to make any arrangements for foreigners in the matter of food or accommodation. One experience is enough. Unfortunately, foreigners are compelled to travel in them, as the steamers of one or other of the two companies are usually the sole means of communication between those countries and Korea. There is cargo and passenger traffic for any company that will organise a regular steam-service. The profits might be small at first, since the Japanese prefer to endure their own steamers and to ship under their own flag; but there are signs that the flourishing condition of the trade of the country would bring ultimate success.

The establishment of a steamer-service, if only of one or two steamers, is not the sole hazard by which Japanese competition might be faced. The climate of Korea is peculiarly suited to fruit-culture. If this work were taken in hand, the fruit might be tinned or exported fresh to China, where it would find a ready sale. The fertility of the soil near Won-san and the abundance of fish in the sea off that part of the coast, would make that port a suitable export centre for the creation of a fish and fruit-canning industry under foreign management. Fish and fruit industries of this description in Japan are profitable and very bad. Nevertheless, their output is widely distributed over the Far East. The initiation of these industrial ventures would require some time, for many difficulties oppress foreigners, who are anxious to put capital into Korea. In the end, a modest venture would reap sufficient success to justify the speculation, while the returns would probably permit an immediate expansion of the enterprise. There is no doubt about the fish; there is no doubt about the fruit; but whatever investment of an industrial character is made ​in Korea, close and high-class technical supervision is the necessary accompaniment.

The British merchant in the Far East is the first to condemn his own Minister and to abuse his own Consul, and he is the very last to help himself. It may be, however, that the follies of the Imperial Government, the unreasoning prejudices and foolish blundering of the Foreign Office, have created this apathy. The drifting and vacuous policy of Lord Salisbury made it impossible to avert the decay of our prestige and trade which has set in throughout the Far East. Official returns establish only too completely the unhappy predicament in which trade and merchants alike are placed. There is a general decrease in the volume of the one, and there has been no sympathetic activity among those engaged in commercial interests elsewhere to set against it. The deficiency is almost without solution, so long as bounty-fed manufactures, carried in subsidised bottoms, are set against the products of an unassisted trade. Competition is increasing, and foreign manufacturers are themselves now meeting the requirements of the markets of China. There is little prospect in the future of the restoration of our former commercial superiority. Much might be attempted, although it seems almost as if the British merchant were so bent upon his own damnation, that little could be done.

The decline of British trade cannot be attributed in any way to the late disturbances in North China, to the decline in the purchasing power of the dollar, or to the temporary rise in the market prices. Japan has become our most formidable competitor. The decrease in our trade is due entirely to the commercial development and rise of Japan, who, together with America, has successfully taken from us markets in which, prior to their appearance, British ​goods were supreme. The gravity of the situation in which British trade is placed cannot be lightly regarded. We still lay claim to the carrying trade of the Far East; but the figures, which support our pre-eminence in this direction are

totally unreliable. If the true conditions were made manifest, it would be seen that so far from leading the shipping of the world in the Far East, Great Britain could claim but a small proportion of the freights carried. Although we may own the ships, neither our markets nor our manufactures are associated with their cargoes. It would be well if the public could grasp this feature of the China trade. Members of Parliament, ignorant of the deductions which are necessary before claiming the carrying trade of the Far East—much less of the Yang-tse and of the China coast—as an asset in our commercial prosperity, and a sign of vigour of the first magnitude, do not recognise how unsubstantial is the travesty of affluence which they so constantly applaud.

​During 1901, owing to the Boxer disturbance, large numbers of ships owned by natives were transferred to the British flag. The ostensible decrease in the tonnage of British vessels, which entered and cleared affected ports, was therefore less than that of other nationalities. Similarly, there was a small increase in the duties paid under the British flag during the same period, owing to the valuable character of these cargoes. Under ordinary circumstances, the comparatively small decrease in the British tonnage and the increase of more than fifty thousand taels in the payments made to the Imperial Customs at such a moment of unrest, would suggest the stability of our trading interest, and afford no mean standard by which to judge the capacity of the markets. Unfortunately, the two most important counts in the returns, tonnage and duties, are no criterion. It is necessary to inspect closely the individual values of the different articles comprising the total trade. In this way the general depreciation of our manufactures is at once apparent.

A comparison of the American, Japanese, and German returns shows which are the commercial activities that are threatening our existence as a factor in the markets of the Far East. If, in the returns, we were shown the relations between the duties paid under each flag, and the tonnage of any particular country, besides the source and destination of its cargo, the true condition of British trade would be revealed at a glance. As it is, until a table is added to the Maritime Report, which will supply this valuable and interesting demonstration, the system of a separate examination is alone to be relied upon. By this method we find that between the years 1891 and 1901 there was a consistent falling-off in British exports to the Far East in almost ​every commodity in which the competition of America, Japan, and Germany was possible. Since 1895, when Japan began to assert herself in the markets of China, those articles which, pre-eminently among the commercial Powers, she can herself supply, have carried everything before them. Ten years ago the British trade in cloths, drills, shirtings, cottons, yarns, and matches had attained magnificent dimensions. In certain particulars, only, our trade was rivalled by the United States of America, whose propinquity gave to them some little advantage in the markets of the Far East. Now, however, the trade has passed altogether into the hands of the Japanese, or is so equally divided between Japan and America, Japan and Germany, that our pristine supremacy has disappeared.