improvements on the Saint Lawrence route, were expected to accom. plish. Just so far as these objects have been or shall be obtained, to the extent to which a fair share of the grain transportation of the continent has been or shall be secured by Canada, so far, to that extent, have the hopes of the men who planned and carried out these enlargements and improvements been realized. and the vast expenditure in capital and yearly outlay for repairs and interest which the country has submitted to been justified by the results. Judged by this standard it cannot be said that the outlook is an encouraging one. The export trade of the continent consists, and must always consist to a large extent, in the carriage of grain. The Montreal Corn Exchange, in a recent memorial, says, "A nominal share of the grain trade of the continent is an essential element in the prosperity of all other business exports, inasmuch as without it the tonnage requisite to accommodate cattle, lumber, provisions, and other between-deck cargoes cannot be obtained," and so far this year the grain export trade is absolutely dormant. Vessel after vessel, indeed all the ocean steamers which have left this port since navigation opened this season, have gone without sufficient freight to pay expenses, and there is little prospect of any improvement for the balance of the summer. As to the cause of this most deplorable and disappointing condition of things there are various opinions among those who have given the matter attention and are most immediately interested. The view most generally entertained is that the Saint Lawrence route is at present handicapped by heavy charges in the form of ship and canal dues, wharfage dues, port-warden charges and pilotage fees, amounting in the aggregate to an almost prohibitive taxation on carriage by this route from the interior to the seaboard. It is asserted that by reason of these charges grain can be carried from Chicago to New York for a cent or a cent and a half a bushel less than to Montreal, and the Saint Lawrence route is placed at a great disadvantage, espe cially in comparison with its chief competitor, the Erie Canal, a disadvantage from which it cannot recover until the Government remit the canal tolls on eastern-bound freight and assume the debt for the improvements in the channel below Montreal. The Montreal Gazette, the leading administration newspaper of this province, says in a recent editorial: The Government has now to determine whether the canal system is to be allowed to fall into disease until it is finally abandoned as the through carrier, or whether it is to be maintained as a useful competitor of the railways. To make the canals an essential regulator of rail rates, as well as a reasonably successful competitor for the transportation trade, three things are requisite: The abolition of tolls on all trade except that passing between American ports. The assumption of the Lake Saint Peter debt. The reduction of charges at the port of Montreal. Strenuous efforts are being made by the boards of trade of the leading cities along the Saint Lawrence route and by the forwarders and shippers of grain and other produce to induce the Government to adopt a policy of free canals at once as the only way of saving to Canada its foreign commerce and of securing from the canals the benefits that are expected to accrue by their enlargement. The Corn Exchange of Montreal say: The Saint Lawrence route has already lost and must continue to lose its normal share of the grain export trade of the continent unless these exceptional and onerous transactions are ameliorated. On the other hand, Mr. Niall, the Dominion commissioner of inland revenue, in a recent report, in which he reviews the subject at some length and presents an interesting array of statistics, takes the ground that the struggle is not between the Saint Lawrence and the New York State canals, but between land and water carriage, and that in this struggle the railways are fast outdistancing the waterways and will in the end absorb the whole of the traffic; and finds in this fact, rather than in any excess of charges, the explanation of the condition of the Saint Lawrence route. Although it can hardly be doubted that the actual cost, taking everything into consideration, of carrying a ton of wheat or grain from any of the lake cities to Montreal is less by water than by rail, yet it is said that at the present time, so keen is the competition between the various railroads, grain can be actually brought from the far west to Montreal by car for something less than by boat. While this condition of things continues traffic will unquestionably be largely diverted to the railways and the effect cannot but be disastrous to the business of the water-ways. The presumption, however, is that the economic laws which govern such matters will eventually assert themselves, and the railways will be compelled to maintain such rates as will make their business, if not actually remunerative, at least self-supporting. When the equilibrium is restored, and when, by an abolition of tolls and a reduction of dues, carriers by the Saint Lawrence route are enabled to compete in rates with those by other routes which are wholly or partially by water, it may be expected that traffic will again seek its natural channel and the country reap a part at least of the beneficial results which were hoped for when the canal commission's scheme was entered upon. It may be mentioned here that there is some opposition to the policy of free canals, on the ground that it will benefit American producers only, and that the loss of revenue resulting from it will increase taxation upon Canadians. One of the purposes had in view by the Government in determining that the least depth on the Saint Lawrence route should be fixed at 14 feet was to enable the largest class of lake craft to carry their cargoes direct to Montreal without breaking bulk, and even to permit ocean-going vessels to go directly to Toronto and the lake ports. Subsequent experience has, I think, modified the views of those who hoped for these results, and the consensus of opinion now is that the grain trade which is, as we have seen, the real trade of the route, cannot be profitably carried on in this way, and that the expense of taking an ocean vessel up through the various canals to Lake Erie and the upper Lakes and bringing it back again, or of sending down to Montreal the large lake steamers, would more than overbalance the additional expense of several transhipments between the point of departure and the ocean. Indeed, the opinion is freely expressed by those whose judgment on the subject is entitled to weight that the enlargements and improvements in the Saint Lawrence canals, not including the Welland, have not been of as much benefit to the grain trade as was expected. Transportation by vessels small enough to pass the canals as they were in 1871, before these enlargments were made, being quite as cheap and in some respects much more convenient than by large vessels. In submitting this report I desire to express my indebtedness for most of the facts stated in it to the General Report of the Commissioner of Public Works of the United Provinces for the year ending June 30, 1867; the General Report of the Minister of Public Works of the Dominion for the period between June 30, 1867, and June 30, 1882; the annual reports of the Commissioner of Railways and Canals sincé 1879; the Report of the Chief Engineer of Canals, submitted in 1880, and a large number of other papers and documents. I have endeavored to seek out all the sources of information to which access could be obtained and to verify my statements in every way possible, and a large part of the time occupied in compiling this report has been devoted to efforts in these two directions. I could wish the results had been more satisfactory, but I submit them with the hope that they may not be altogether useless. SEARGENT P. STEARNS, UNITED STATES CONSULATE GENERAL, Montreal, June 1, 1884. APPENDIX A.-Table of distances and sections of navigation and of obstructions on the Saint From Lawrence route. APPENDIX B.--Table of distances, sections of navigation, and obstructions on the Montreal Ottawa, and Kingston route. APPENDIX C.-Table of distances, sections of navigation, and obstructions on Lake Champlain route. APPENDIX D.-Table showing length of each canal, number and dimensions of locks, and dimension and tonnage of vessels which can pass them. * Rise, 2821; fall, 164; 4461. NOTE.-The depth given is the average depth at low water. When the water is unusually low this depth cannot be maintained, and the capacity of the canals is reduced. PETROLEUM TRADE IN CHINA. REPORT BY MINISTER YOUNG, OF PEKING, EMBRACING COMMUNICATIONS FROM In my dispatch No. 207, dated November 30, 1883, I informed the Department that I had on that date sent a circular note to the gentlemen in our consular service, asking them to send me certain information in reference to the petroleum trade in China during the year 1883, and more especially as to whether there was any renewal of efforts on the part of the authorities to suppress the trade by repressive proclamation. I have received reports from all the consulates. These I forward as inclosures. Certain facts appear which I may venture to summarize : Shanghai.-Mr. Cheshire sends a valuable table, showing as a part of the movement of petroleum in Shanghai the import of oils into open ports chiefly supplied from Shanghai during the year 1883. From this it appears that there has been an increase at Tientsin, Kiu-Kiang, Hankow, Wuhu, and Ching-Kiang, a decrease at Newchwang, Chefoo, Ning-Po, Wênchow, and the country around Shanghai. The increase amounts to 101,944 gallons, the decrease to 62,997, showing a net increase of 38,947 These figures can hardly be accepted as a test, although, as Shanghai is an important distributing point, they have value. Mr. Cheshire has not had occasion to complain of the proclamations against the use of petroleum in Shanghai which gave Consul-General Denny so much annoyance. The authorities have learned to welcome the oil in a liberal spirit. But by the Lekin system, which adds so many embarrassments to internal trade, the sale has been diminished. The local authorities in the country around Shanghai levy a tax of 5 cents upon each case passing into the interior, a tax which until recently has never been imposed. In spite of this temporary interruption, Mr. Cheshire notes the gratifying fact that the trade during the past six years shows a steady advance. Tientsin.-From Tientsin, the most important city in Northern China, and in which might be included Peking, we learn that in 1883 398,340 gallons were received. This is a large gain over the import of 1882, namely, 284,130. In 1882 Tientsin showed a falling trade, in 1883 a rising trade. Mr. Pitcher notes a large import in native junks, the amount of which does not appear in the customs returns. He estimates it, however, as in value about one-fifth of the whole. In Tientsin the oil is mainly a re-exportation. from Shanghai. I think it would be an advantage to the petroleum interest if the oil could be sent in bulk direct to Tientsin. It would save the cost of transshipment in Shanghai and enable the people to buy at a cheaper rate. I note also that the retail trade is largely in the hands of the Chinese shopkeepers. This I regard as an advantage. Mr. Pitcher points out the fact that, while the native candles made from mutton and beef tallow can only be manufactured at a cost of 15 cents per catty, kerosene is sold at 6 cents per catty. There is an economy in this fact which cannot fail to make a deep impression upon the thrifty Chinese mind. Newchwang.-From Newchwang, a small northern port, the legation learns that although Shanghai reports a decrease in the shipment, there has really been an increase in the trade of 1,715 gallons. This is a modest advance, but the Department will see that it arises from commercial apathy, and not because of the opposition of the authorities or any indisposition on the part of the people to use the oil. This is seen in the fact that while during last summer oil could be purchased at $2 a case there is none now in stock, and the last retail price was $5.50 a case. Ning-Po.-1 regret to note that in Ning-Po there has been a falling off of 188,470 gallons as compared with the return for 1882, which showed an import of 1,505,470 gallons; an increase of 49,279 gallons over the preceding year. When I wrote you in regard to petroleum in my dispatch No. 133, dated February 20, 1883, I alluded to the evil effect upon the trade of the antagonism of the authorities at Ning-Po. As this antagonism, or at least any apparent evidence of it, in the way of unfriendly proclamations or governmental intervention had passed away, I was in hopes to hear of a large increase in the importations for 1883. Mr. Stevens does not explain this disproportion except upon the theory of commercial fluctuations. As he proposes to write you fully on the subject, any speculations of mine would have a negative value. Ching-Kiang.-Mr. Bergholz, the vice-consul at Ching-Kiang, sends a lucid report as to the trade. I attach much importance to the condition of the business at these interior river ports, as thus we can measure its movement towards the central divisions of the empire. Petroleum must depend for its stability and growth upon its general |