The treaty of Shimonosaki, signed in 1895 at the close of the war between China and Japan, effected some very important changes in this respect, and in virtue of the most-favoured-nation clause, inserted in the treaties with the Powers, opened out a better prospect for foreigners of every nationality, who were thus able to benefit by the advantages conceded to the Japanese. Article 6 of this important document stipulated the opening of several new ports, and permits steam navigation along the coasts and up the rivers and canals leading thereunto. It goes on to declare that foreigners may visit the interior to purchase or sell merchandise, and that Japanese subjects may establish depots for the same wherever they like without paying any extra tax, and erect factories of all sorts in the Chinese open towns and ports, and import into China all kinds of machinery on payment of a fixed tariff. Goods manufactured by Japanese subjects on Chinese territory should be placed on the same footing with respect to inland and transit duties and other taxes, charges, and facilities for warehousing, etc., in the interior, as goods imported into China by other foreigners, and enjoy the same privileges. This clause is of very great importance, since it permits the combination of highly-perfected European machinery and cheap Chinese labour in the production of articles the raw materials for which, especially silks and cotton, can be obtained in the immediate neighbourhood of the free ports. The clause above cited may appear at first somewhat extraordinary, and in any other country but China it would be superfluous to stipulate that goods manufactured in the country itself should not be treated with less consideration than similar articles imported. But the Japanese negotiators understood their men, and are perfectly aware that if they had not inserted these special clauses, the advantages obtained would have been annulled by the Chinese authorities by a system of arbitrary taxation and other vexatious measures. No very long time elapsed before the advantages of Article 6 of the Shimonosaki Treaty were made strikingly evident. In three years’ time an entire district of Shanghai was occupied by not less than nine large cotton factories, working 290,000 spindles, which in 1898 were increased to 390,000, and close to them presently rose some thirty silk factories, which, in due time, will be considerably increased both in numbers and importance. In the other ports this industrial impulse has not yet been much felt, except at Tien-tsin, where a woollen factory has lately been established. In that great centre of industry, Shanghai, a certain falling-off has been observed in this extreme briskness, due to over-production, and also to a very legitimate desire to watch the results of industries already existing before launching into further speculations. Then, again, there was a fear that wages might presently rise to an exaggerated extent.