Mr. Taylor predicts, notwithstanding the great advantage possessed by the British at present, that within ten years the United States will divide equally the tonnage of the Pacific, if indeed it does not float the dominant flag in those waters. But I cannot believe that this will happen under present shipping laws; we shail have to adopt the Continental and English policy of direct legislative aid to bring this about.

In speaking of the importance of the changes likely to come in the competition for the trade of the sea, Mr. Taylor says: "This business of the sea-carrying is without doubt the most important trade in the world. Those who go down to the sea in ships, those who do business on the great waters, those who labor directly and indirectly in association with shipping, and those who are more or less dependent upon it, number three fourths of the world's population."

It is well enough to bear in mind the enormous value of this trade to any country possessing a large share of it, for it has been estimated that British owners receive annually for ocean carriage with foreign ports three hundred and fifty million dollars. This is a very large income, to which must be added the money expended at home in the construction, maintenance, and supply of this great fleet and the stimulus it gives to trade to and from home ports. Every vessel that sails from an English to a foreign port becomes a commercial traveler to buy and sell exclusively, where possible, for the benefit of the English people. This fact has given origin to the expression that "Trade follows the flag"; and this means that patriotism as well as self-interest accompanies commerce. This is demonstrated by Mr. Taylor's table, which shows that of the tonnage entering and clearing from

ports of the United Kingdom, over seventy-one per cent. is carried in English bottoms, while of the tonnage entering and clearing from the other countries named, British bottoms carry something over fifty per cent.

To my mind this is a significant fact, tending strongly to prove the wisdom of enlarging our control of sea-traffic, even though subsidies should become necessary to accomplish it. It seems to me we have only to apply the principle or policy of protection, to which this country is thoroughly committed, in order to justify the growing demand for greater maritime power under governmental patronage. It is a disagreeable commentary upon our statesmanship that, whereas, in 1846 we carried eighty per cent. of the foreign trade and kept at the head pretty well until 1860, we now carry only five or ten per cent. One of the results of the Civil War was that we were driven from the high seas with our merchant marine. In the intervening five years our ships were displaced by those of other nations; shipbuilding in the United States ceased, and by a system of subsidies, subventions, and admiralty pay, adopted in other countries, the revival of ship-building and ship-owning and the running of ships flying our flag was made so unremunerative as to bring our country to a point where it cuts but small figure in the carrying-trade of the world. In lieu of ship-building we turned our attention to internal development by railroad construction.

It is certainly remarkable that with all our natural aptitude and genius for trade and our willingness to be taxed to promote it, we should have been so indifferent to the problem of ocean transportation while we have been making such successful efforts toward reaching the markets of the world with our products. We have been asking our rivals to do our carrying for us. As Senator Edmunds put it before the Senate Committee having the matter in hand, we are like the large farmer some distance from market who has no horses nor wagons, but depends upon his neighbors to get his produce to town. Such a farmer, he said, would be a candidate for the insane asylum. It is little short of a commercial solecism, if I may use the expression, that the leading

nation on the globe in commerce, agriculture, and manufactures, and whose exports alone have reached a billion dollars in one year, should stand at the foot of the list in the shipping business.

I cannot enter upon the argument in favor of encouraging American shipping as proposed by the so-called Hanna-Payne bill now before Congress. But of its importance to the Pacific Coast States, and especially to California, I do desire to express my strong conviction. The magnitude of the trade of the Pacific countries, singularly enough, has but just been discovered. It has been large for many years, but has been shared by few nations. The downfall of Spanish rule in the Philippines and the energies of the great Republic as Spain's successor, together with our acquisition of the Hawaiian Islands, have brought to the attention of the world the stupendous commercial problem involved in the trade of the Orient. A sort of game of commercial hide-and-seek has been going on in the Pacific in which few took part. Suddenly the game was broken up by the strong light of universal knowledge of the countries in the East which began to radiate throughout the earth on May 1, 1898. The reverberating echoes of Dewey's guns swept around the globe and bore with them fresh tidings of commercial conquest for the United States little dreamed of in the midst of the whirl of an internal development which has startled the civilized world. What is fast approaching and is being burned into the public conception was foreseen by some-not many-observant and intelligent Americans. Among these stands out conspicuously Mr. Eli T. Sheppard, of this city, who first spoke. upon this question, through an article contributed by him and widely published throughout the United States. He reminded his readers that the two largest natural divisions of the globe face each other on the eastern and western shores of the Pacific whose trade and commerce must ever flow eastward and westward; and that the widely different productions, industries, and manufactures must form an ever-widening stream of interchanging commodities. He pointed out that the commerce of the Pacific had risen from two hundred million dollars, in 1851, to

two thousand millions, in 1896,—an increase of one thousand per cent. in fortyfive years, against an increase of three hundred per cent. in the commerce of Europe for the same period. He quoted from Prince Henry of Orleans, who gave two years to the study of the Asiatic problem, and who said that "It is in Eastern Asia after all that the commercial activities of the world will finally center." "It is here," he said, "that great empires wili be founded and will increase, and the nation that succeeds best in shaping the new conditions in the Far East will be the nation of the future that will speak in dominating accents to the world."

Mr. Sheppard devoted much attention to the threatened invasion of China and its subjugation by Russia and the consequences to flow from their accomplishment. I cannot enter upon that question, important to us as it is. Suffice it to say, that we cannot from our present advanced point of observation at the Philippines, within a short day's sail from China, look with indifference upon the crisis impending over that great empire. China must be allowed to work out her destiny; and if not entirely in her own way, still China, and not Russia, must be the dominant power in her own dominion.

Remembering the strong ground taken by Mr. Sheppard and the fears he expressed as to the designs of Russia, I have found much satisfaction in the views of Mr. Vladimir Holmstrem, in an article in the July North American Review entitled "Ex Oriente Lux." The writer is in position to reflect the Russian sentiment, and it would be well enough for us not to look at the China situation wholly through British spectacles. The entire article is a strong plea for a Russo-American understanding. He says:

The advance of Russia through the Asiatle continent was a peaceful movement, bearing with it the seeds of culture for barbarous tribes and fulfilling a destiny that has never been lost sight of during three hundred years. In accordance with these historical facts, Prince Ookhtomsky claims for Russia the post of guardian of the East, the peace. ful development of which on strictly natural lines, in accordance with the characteristic individuality of its races, is essential to Russia's welfare. We are an Asiatic power, and as such guard the East, because its consolidation means our own consolidation.

He asks: Who in the nineteenth century has been aggressive in dealing with China?" and answers with much truth: "England, France, Japan, Germany,not Russia!" As to the interpretation to be put upon the Siberian railway he says: "The English are apt to point out that our Siberian railway, passing, as it does, through Manchuria, threatens the independence of China, and implies hostile designs on that Empire." I confess myself to have been strongly influenced by

was Germany's occupation of Kiao-Chao that forced us to make such a move. Nevertheless, even after Germany's raid on China, numerous voices were raised in Russia against the occupation of Port Arthur."

Disclaiming any intention to enter upon the discussion of the question as to where the highest interests of America point in dealing with the political phase of the Eastern question, I will make but one more quotation from this writer:

to her designs. from Russia? How far would not Germany push into the interior of China if we were not at Port Arthur? Which, also, is more pernicious to the interests of the Americans: the Russian railway in Manchuria, facilitating transport and supplying influence of no exclusive character, probably to be exerted for the benefit of America, or the annexation by the British of all the principal elements of the social life of China, of all the branches of her industry, trade, and administration, thus instituting a practical, if not a theoretical, protectorate of Great Britain over the whole of China? This protectorate will become the more real inasmuch as the English are sure to create industries on a vast scale in the Celestial Empire to compete with the labor of the American workmen.

There can be no doubt of the prodigious importance to us of the presence of Russia in Northern China as low down on the seacoast as Port Arthur, with, as I understand, a concession to extend their railroad to the very capital of the Empire. It is reassuring to know that Russia contemplates no such thing as the subjugation and disintegration of China.

And here I may add that there is no reason why we should not do a large business with Russia by the way of the Pacific and this great railway soon to be open to

us.

Russia is a large consumer of wines, brandy, dried and canned fruits, and raisins, most of which now go to her people from the south of Europe. In the commercial awakening which must follow all along the line of this new artery of trade a demand will be made upon us for our manufactures of iron, steel, cotton, and wool. Russia has already bought largely from us for the building and equipment of this road. I had thought that Russia might by means of this road become our competitor in supplying China with flour; but I find that the Chinese are not looking in that direction at all for food supply, and there are reasons why they may not. Statistics now being gathered and events which have crowded thick upon the pages of China's history confirm Mr. Sheppard in some particulars and accentuate the profound importance attaching to the fate. of China in her relation to the United States, and especially to this Coast.

Let me be more specific, and speak for a moment of our more immediate concern in the trade of the Orient and of the rapid

owth of that trade. Mr. Sheppard gave

some statistics; I will supplement these by more recent data. I have before me the proceedings of the Senate Committee. on Commerce, had in January last, upon the pending bill to which I have referred. There were presented to the committee some tables prepared by the Bureau of Statistics of the Treasury Department of imports into Asia and Oceanica from the leading commercial countries. I have my figures from these tables. For China the table is from 1870 to 1896. The total imports (I omit fractions of a hundred. thousand) rose from 65,600,000 taels (in value), in 1870, to 211,600,000, in 1896. Most of this trade went from the United Kingdom, from Hong Kong and British India (which, I take it, means much the same as the United Kingdom). Our trade in 1870 was 374,000 taels, and in 1896 was 11,530,000 taels. (A tael has varied from $1.61 to 81 cents in this time.) From 1881 to 1896 the total imports into Japan went from 31,100,000 yen to 188,600,000 yen. (The yen has varied in value from 85.8 cents to 52.9 cents.) Our trade went from 1,700,000 yen, in the same period, to 16,300,000 yen. Between 1870 and 1896 the total imports into British India and Australasia have about doubled, while we have increased our exports to the latter region (Australasia) fivefold. In the ten years. including 1897 we doubled our annual exports to China and Australasia and qaudrupled them to Japan. The Bureau of Statistics reports a gain in exports to China in 1899 over 1898 of thirty-three per cent. The population of Asia and Oceanica is set down at 852,443,391 (in 1896), and the total imports at $1,066,557,653, of which the United States supplied only 5.32 per cent., or $56,749,167. As indicating the truth that trade follows the flag, we supplied 76.27 per cent. of the demands of the Hawaiian Islands. These islands were practically under our flag some time before annexation was accomplished. Now, I have a fondness for toying with statistics, and in passing I want to call attention to the fact that a billion dollars of imports per anuum by eight hundred and fifty million people is less than one third of a cent a day for each inhabitant. Consider for a moment how bewilderingly trade leaps into big figures