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 additi onal expense of several traushipments 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 since1879; 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 pos sible, 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.

Consul-General.

APPENDIX A.—Table of distances and sections of navigation and of obstructions on the Saint

APPENDIX B.-Table of distances, sections of navigation, and obstructions on the Montreal Ottawa, and Kingston route.

From

APPENDIX C.-Table of distances, sections of navigation, and obstructions on Lake Champlain route.

Montreal

Sorel

Saint Ours.

Saint Ours lock.

Chambly basin
Saint Johns...

APPENDIX D.-Table showing length of each canal, number and dimensions of locks, and dimension and tonnage of vessels which can pass them.

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 THE SEVERAL CONSULS IN CHINA, SHOWING THE CONDITION OF THE PETROLEUM TRADE THROUGHOUT THE EMPIRE IN 1883.

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.-I 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

acceptance by the great mass of the people. Therefore much more is to be learned from the statistics of a small river port like Ching-Kiang than from a commercial emporium like Shanghai. Mr. Bergholz points to the interesting fact that while in 1868 the import was only 90 gallons, in 1883 it was 389,090 gallons. And in looking over the valuable table of figures in which he shows the movement of the trade, you will see that the growth has been steady, the increase in 1883 over 1882 being no less than 131,090 gallons. Mr. Bergholz reports the existence of wells yielding a bituminous product, "an oil that burns in water," and which comes from the salt wells in such a quantity that sometimes as many as four or five jars of a hundred pounds each are collected in a day. This, to be sure, is a modest output, but it suggests the possibility that China in time will mine her own petroleum.

Hankow. The importance I attribute to Ching-Kiang as a port, showing the movement of petroleum towards the interior of China, and its gradual acceptance as essential to daily comfort by the people will also apply to Hankow. Mr. Shepard's report is therefore entitled to careful study.

When we look at the figures the advance is most gratifying. In 1882, 483,974 gallons; in 1883, 1,322,771, an increase of 173 per cent. A part of this Mr. Shepard attributes to the decrease in the supply of native oil, the crop of which was last year a failure. But while a better harvest of the vegetable native oils may limit our hopes for a continued advance, I hold it to be a controlling fact in the development of the trade in China that when once petroleum finds a place, becomes known to the people, and they appreciate its advantages and its economy, no native product will supplant it. Mr. Shepard makes the wise suggestion that "an illustrated popular treatise in Chinese would be of infinite service in making the nature, uses, and proper care of the article known" thus extending the demand.

Foochow.-Foochow has been unfortunate in its relations to the trade, and I regret to learn from the report of Mr. Wingate that there has been a falling off in the import of 44,050 gallons in 1883, as compared with 1882. Even with this, the importation was larger in 1883 than in any year, with the exception of 1882, since petroleum was introduced into China. The causes for this deficit are more to be regretted than the fact itself, for they show a determined opposition to the use of the oil on the part of the authorities. The difficulties attending the growth of the petroleum trade in Foochow will be found at length in the dispatch of Mr. Wingate, which is inclosed herewith. Mr. Wingate refers to the proclamations against petroleum which formed the subject of my dispatch No. 153, dated March 16, 1883. He reports, however, the virtual subsidence of the panic of 1882, and that the proclamations against petroleum had become a dead letter. As a result of this he looked for a still further increase of the trade. It unfortunately happened during summer and fall of 1883 that there were several fires in Foochow to be attributed to petroleum. The most disastrous was caused "by a man filling a kerosene lamp while it was burning. The oil ignited; the man, alarmed, threw the lamp into the open kerosene can, and the loss of a hundred houses and six lives followed." This and other fires less disastrous excited the "gentry" and the "literati," and proclamations were reissued, not to become a dead letter as in 1882, but to be enforced. So strong is this feeling that, although in Foochow as in all other parts of China where petroleum has made its way, the people like the oil for its cheapness and brilliancy, and the shopkeepers because it is a steady source of business profit, the mandates of the authorities have been