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The New York Times, May 17, 1901, p.5:

JAPAN'S COLONY VENTURE

Features of Her Rule Over the Island of Formosa.
Foreign Enterprise Driven Out and All Trade Resources
Turned to Account of Home Government.

    Foreign Correspondence NEW YORK TIMES.
    ANPING, Formosa, April 6—Japan is learning in Formosa that it is not all fun and profit to run a colony. How well the lesson may have been impressed is probably known only in the imperial councils at Tokio, which may be regarded also as the sole repository of plans for the future.
    The policy of turning to Japanese account all the resources of the Island has so subverted trade conditions previously existing that those who flourished under such conditions naturally view the situation with some bias. Camphor and opium have been taken in hand on Government account, the tea exports are moving toward home channels, there will be little for the foreigners to do in sugar in a few years, and subsidies to a Japanese steamship line have made rivalry in ocean business impossible.

    Foreign houses that could maintain branches here in a open field cannot stand competition with a Government, and more than half of them have moved away. The exodus of Chinese capital has been general, in addition to the emigration of fully 50,000 people, whose places have been taken, but not filled, by 20,000 Japanese at an outside estimate, of whom more than half are women.
    Although never worked as it might be, Formosa under Chinese control was always a profitable possession. There has been no productive development since the Japanese got it, and the annual deficiency has varied from £300,000 to £700,000. No improvement in this respect is in sight.

    Considering all that the Government would do for its people, there is a noteworthy reluctance on the part of Japanese capital to embark in Formosan enterprise. Whether or not faith and investment may come in time, capital seems content just now to let the Government bear all the burdens of development.
    The railroad which is to bring the two ends of the island within easy reach of each other by travel, instead of by the tedious and precarious means so far employed, is in course of construction by money voted by the Imperial Diet. It will not be built with the sum appropriated—28,000,000 yen—but it may cost 45,000,000 yen, or approximately £4,500,000. When completed, it will make accessible 230 miles of territory, most of which is not not to be visited by any expeditious means, and it will afford the largest opportunity for practical tests of the storied fertility of Formosan soil for a great variety of products that can be well marketed.

    It will be necessary for the Government to provide harbors as well as railways, if there is to be any considerable growth of commerce with the outer world. The roadsteads in which ships must lie that come here for trade are not only always inconvenient to land and often hopelessly out of reach of it in the light-draught boats which alone can go in and are to be trusted only in smooth waters, but they are in the track of the high winds that sweep this coast almost continually, and that shipping men dread least when they have plenty of sea room.
    Harbor improvements at Keilung and Tamsui in the north, and at Takow in the south, will cost as much as the railroads.

GOVERNMENT BEHIND A BANK.

    Since the financial condition of Japan must make an end before many years of the distribution of subsidies and the extension of help to commercial ventures which have already drawn heavily on the Chinese indemnity and other general funds, a bank has been organized to perform offices which it may soon be impolitic for the Government to undertake directly. It is called the Bank of Formosa, and its avowed purpose is to exploit Formosa, develop trade, and encourage industry. Formosan bonds, which cannot be placed elsewhere, get into the bank, which seems to flourish so well with that kind of security as to force the inference that the general Government is behind it.

    The bank in its capacity as a private corporation is of course competent to do all sorts of things. A sugar refining company, floated with its help, has developed, through the same encouraging agency, into tn owner of large tracts of sugar lands. It will thus cultivate the cane as well as prepare it for consumers. The buyers had no intention of paying the prices that the Chinese owners asked for these lands, and the owners found so little chance of holding out on appeal that they took what they could get, and many of them have gone away and taken their money with them. On the mainland, to which they have removed, they are not giving the Japanese a reputation for fair dealing.

    Foreign houses that controlled the camphor output in other years established distilling plants at convenient points, which represented to them a charge on capital account amounting to about £50,000. While they are not pretending to have a redressable grievance, when the Government took over the camphor industry, which would entitle them to anything for the loss of good will, which had been a most valuable asset to them in that business, the merchants felt that they had vested rights in the plants which were tangible and obvious and ought not to be ignored. Recognition has not yet come, although the Government is making the 150 per cent. profit on camphor which foreign houses formerly enjoyed.

    In view of the Government's good fortune, some adverse comment is heard on the way it operates its contract. All the camphor is pledged to a London banking house at a price which insures the Government a profit of 54 yen, or more than £3 per picul on an annual output of 40,000 piculs. The Londoner might have supposed he had a monopoly on the camphor market, since seven-eighths of the world's production comes from Formosa, had he not since learned that beneath his ground floor there is a basement for a by-product known as camphor oil, not specified in the contract, but from which a Japanese company headed by Baron Yoshi is said to extract from 6,000,000 to 30,000,000 piculs of camphor every year.

    Opium was farmed out under the old Government, so that conditions are not essentially different from what they were. Its importation is restricted to Northern ports, as are the exports of camphor, and an effort is made to control its use by license. About 140,000 persons have paid fees to the Government for the privilege of smoking it, being 5.29 per cent. of the population.

TEA FOR AMERICAN USE.

    Tea exports, nearly all to the United States, amount in value close to £600,000 per year. There is no other article of export of nearly that value, camphor coming next, with an export value quite 60 per cent. less. Tea promises to continue to hold the lead in spite of large possibilities in sugar, hemp, coal, and rice. The movement of trade by way of Japan instead of through Amoy indicates a tendency which may grow into something much stronger whenever Japan may decide that it is hopeless to look for a foothold in Fukien Province, and therefore that the shipments of Formosan tea heretofore prepared at Amoy may better be made from a port in Japan.

    An export duty has already been imposed of 60 sen per picul, equivalent to less than one-quarter cent gold per pound, on all shipments, except in Japanese bottoms, which may carry duty free. Since home subsidies have driven off the only steamship line not Japanese which handled Formosan cargoes, the duty so far is merely nominal.
    The ingenuity that has worked for the Japanese alone so far will doubtless be equal to any demands that the future may make upon it in the furtherance of the same policy. There will be no room for foreigners in Formosa when that policy shall have had time to accomplish its logical purposes. It already includes, in addition to the large operations mentioned, or it is about to extend to, small local enterprises in which foreigners were interested, such as an ice house, a rice mill, and a tugboat company.

    Formosa threatens to be for the Japanese, with all the accessories pertaining thereto, if only native colonists enough can be induced to come in.

THE MAN IN CHARGE.

    The man to whom has been intrusted the administration of the colony, Dr. Goto Shumpei, seems well fitted for his task, both by temperament and ambition. Without previous official experience, he is certainly carrying out what he conceives to be the imperial will with an assiduity betokening a possible willingness to shine at Tokio after he shall have achieved acknowledged greatness at Tamsui. Whatever may have been the possibilities before him in the field of medicine which he originally entered, he is missing no tricks in the game of politics.
    An instance of this versatility was furnished at the opening of the new dockyard at Foo-Chow. That day he had Chinese listeners. He devoted himself to them as if their interests had always appealed to him on grounds both of personal sympathy and of national relationship. His speech, as reported, classed the Chinese and Japanese as natural allies, who should join their energies to preserve the Orient from the contaminationof the white-skinned races. He alluded to the common origin of the two peoples, to similarities in their modes of life, in their religions and their aspirations, and he declared that the great contest of the future would be for the supremacy between the white and yellow races. It was alike, the duty and interest of China and Japan, he argued, as nations of the same blood, to unite against the white peril now approaching both lands and to subdue it and drive it back.
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    The Republic of China (Nationalist China), Asia, is commonly referred to as Taiwan. The Chinese Nationalist Government moved to the large island of Formosa (located about 100 miles off the southeast coast of China) in 1949, leaving the communists in control of the mainland. The capital is Taipei. The area of Taiwan is about 3,900 square miles (36,000 square kilometers), including 85 smaller islands. The estimated population of Taiwan for July, 2009 is 22,974,347. The official language is Chinese.

    In 1895, military defeat forced China to cede Taiwan to Japan. Taiwan reverted to Chinese control after World War II. Following the Communist victory on the mainland in 1949, 2 million Nationalists fled to Taiwan and established a government using the 1946 constitution drawn up for all of China.

    Over the next five decades, the ruling authorities gradually democratized and incorporated the native population within the governing structure. In 2000, Taiwan underwent its first peaceful transfer of power from the Nationalist to the Democratic Progressive Party.

    Throughout this period, the island prospered and became one of East Asia's economic "Tigers." The dominant political issues continue to be the relationship between Taiwan and China - specifically the question of Taiwan's eventual status - as well as domestic political and economic reform.
        CIA World Factbook: Taiwan

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From Far Formosa Mackay 1900
Formosa Clark 1896
An Historical & Geographical Account of Formosa
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    If he had been pleading with China to join Japan in making war upon Europe his language could hardly have been stronger or have sounded more impassioned, according to those who heard it. With every allowance for the occasion which induced the speech, his presumption on the ignorance of the audience he was addressing regarding the Chinese exodous from Formosa, and of his instrumentality in forcing, struck the Chinese in not lacking in audacity, whatever they may have thought of the other qualities of his speech.

    It seems incredible that any one can delude himself respecting the Chinese aversion to things Japanese here, which are hated not less than they are feared. The exodous represents the general sentiment. Those who remain either cannot afford to get away, or they are putting off departure merely until they can dispose of their property interests. In speeches among themselves they refer to the Japanese as hoana, meaning barbarians, or chihuan, raw barbarians, or less disrespectfully as wojin—little men or dwarfs. In addressing them, they say "taijin," or great man. One is impressed with the refinement of the humor of the Chinese coolie when he hears him hailing a Japanese coolie by that term.

TREATY WITH THE SAVAGES.

    The Japanese have not yet seen fit to disregard what they are pleased to call the interests and rights of the aborigines. These are the people who occupy the uplands and mountains, of which they have had sole possession for centuries. The earliest settlers found them there, and their tenure has never been disturbed. Their territory, indeed, has not even been fully explored. No one can tell how many tribes there may be or their numbers.
    It is known that they prize the heads of Chinese as trophies. Japanese experience with them indicates their disposition to treat intrusion from that quarter in the same way. They are said to regard the whites as friends. A few missionaries have ventured among some of them, and, while they have come back safe, they have not recommended their friends to go among them anticipating a pleasurable visit.

    These savages seem to be of Malayan rather than of Chinese origin, although they have occupied the land so long as to have developed characteristics distinctively their own. Among some of the tribes in the lower hills it is probable that the Dutch had relations in the brief sovereignty of that people over a portion of the coast more than 200 years ago. Traces yet appear occasionally of that strain of blood and cast of feature. The occupants of the mountains, whose peaks gleam with snow at all seasons, have never mingled with foreign settlers.

    Lowland tribes come into more or less contact with the authorities because their territory must be entered or crossed to reach the camphor forests. They also do a little trading. Brigandage, however, is more to their liking, and they are credited also with the usual border vices. The Japanese have found it expedient to make a treaty with them, or an agreement amounting to the same thing, by which in return for a promise by them to commit no outlawry on the civilized side of the border, the authorities will not attempt to interfere with what they may wish to do on the other side.
    Along portions of the border which such agreements cover, the natives observe their obligations, and disturbance rarely occurs. Jurisdiction entirely separate is maintained in the territory thus divided. Within twenty-five miles of this settlement a fine new road ends in a field, because there a boundary line of a of a native line passes. No armed Japanese is permitted to cross that line, and the tribesmen may put any stranger from their land, whether he is armed or not.

    In sections not covered by agreement, troops must always be on watch for raids, which often result in the pillage of a settlement and sometimes in the destruction of property as well as robbery. It is said that 350 houses have been burned in that way in the last year and 35 settlers shot.
    Troops often encounter or overtake the raiders. There have been 12 soldiers killed in the resulting engagements, one of them an officer. The estimated number of bandits killed is 300.

    When colonial affairs shall pass beyond the stage of experiment, the Japanese may be unwilling to submit to a denial of access to any part of territory that they consider their own. But in gathering to their own profit the established resources of the island, and in building railroads, highways, and harbors, in remodeling Chinese settlements to suit a tidier taste, and in bringing about an orderly and well-regulated administration of affairs, they have so large a contract before them that they are content to stand in with the tribes that will agree not to interfere with them, and to respect certain property rights, rather than to attemtp to use at this time authority which they believe to be rightly theirs, but the assertion of which prematurely might throw the entire island into disorder.
FREDERICK W. EDDY

According to Measuring Worth, in 2008, £1 0s 0d from 1901 was worth £80.93 (using the retail price index). One pound was worth $4.87 in 1901; one pound was worth about $2.00 in 2007.

TIME Magazine, July 4, 1949, p. 25:

CHINA: Island Redoubt
    A black Packard with drawn shades stopped before the palatial brick building that once housed Japan's governor general in Taipei, capital of Formosa. Behind it rolled a Buick convertible full of bodyguards. They stood aside watchfully as Generalissimo Chiang Kai-shek hurried inside the building to confer with his old military pupil, now Formosa's Nationalist governor, General Chen Cheng.
    The Gimo looked fit and rested. He had gained eight pounds during "retirement." From his mountain hideout overlooking a black sand beach on Formosa's southern coast, he had come to give counsel and approval to plans for converting the island into a Nationalist redoubt. China's war had entered a phase of last-ditch peripheral resistance. In the far Northwest, Moslem Warlord Ma Pu-fang was using his hard-riding horsemen to harry the Communist inland flank (TIME, June 27). From Formosa, the Gimo's remnant navy and air force, carrying on a blockade of sorts, were needling the Communist coastal flank.
    In Washington, Formosa assumed an increasing prominence in discussions of future U.S. strategy in Asia. With the help of U.S. sea and air power it could be held against Communist attack. It flanked the line of a possible Communist advance across the South China Sea.
    But Formosa had its drawbacks as an anti-Communist redoubt governed by Chinese Nationalists. Mostly these boiled down to the simple fact that 6½ million Formosans did not like the Chinese. Last week, TIME correspondent Wilson Fielder cabled this picture of the island in its new, unwanted role:

    Good Old Days. Cool breezes drifted gently across the golden grain of rice paddies that step up the lush green tropical mountains ringing Formosa's capital. Farther south, water buffaloes dragged plows for peak-capped farmers turning soil for one of their three yearly rice crops. Nearby lay fields thick with sugar cane and vegetables. At night, electric lights--rare in rural Asia--twinkled from the modest huts of tiny villages. By day, many villagers not needed in the fields worked in the small industrial plants that dot the island. Compared to mainland Chinese, the Formosans were well off. Nevertheless they were grumbling. In guarded whispers they spoke of the "good old days" of Japanese rule. The years since V-J day had taken with them much of the sting of iron-fisted totalitarianism. The islanders now remembered how Japan had given order to their lives, while China had brought them to the brink of chaos. The reason for their discontent was easy to see.
    Along Taipei's broad, palm-shaded streets, sleek automobiles rushed rich mainland occupants to recently acquired business and government offices. Well-groomed Chinese women cluttered restaurants and shops, jammed sidewalk money-exchange booths, displaying rolls of crisp U.S. dollar notes. Thousands of Chinese soldiers, with the defeat of Shanghai just behind them, camped in the cavernous railroad station or roamed the streets. Civilian and soldiers (1,500,000 in number) were refugees from the communism now flooding south across China. There were also a troublesome burden to a people who wanted the island home for themselves.
    The Japanese colonial masters had harnessed Formosa's rivers to produce light and power. They opened coal mines, built industrial plants (sugar, cement, aluminum, etc.), developed fertilizers and irrigation so that the farmer could produce more rice. Today the island's industrial output is only 60% of prewar. Cement, necessary for reconstruction of cities gutted and leveled by U.S. warplanes, brings outrageous prices on the black market; manufacturers refuse to produce because the government has pegged prices below production costs. Other industries are shut down because replacement parts are not available. Formosa's railroads are still on time, mostly because their Japanese-trained crews are still in charge. But last week, when rail workers complained about wages below the starvation level, they were told: "Start growing victory gardens."
    Rice acreage is bigger than ever, but yields are down because fertilizer, which used to cost $40 a ton, now costs $140. By year's end, because of the influx of refugees and army demands, the island, once self-sustaining, may be short of food. Government monopolies (inheirited from the Japanese) and fixed prices for island products make it next to impossible for anyone but the government to export. Imported consumer goods are priced beyond reach of the average Formosan. "The Chinese are squeezing us," complain the islanders. "They put everything into their pockets. They act like people who don't plan to be around very long. The Japanese at least furnished us with the cloth and consumer goods we needed."

    Pigs Just Eat. This resentment is grounded partly in the psychology of a colonial people whose standards of living, general educational level and technical proficiency were raised well above the standards of their mainland Chinese brethren. The Japanese, for example, trained 30,000 Formosan doctors, more than the number in all the rest of China. But when the mainland Chinese took over the island, they did not even treat the Formosans as equals, but as "liberated" inferiors. The result is that even thoughtful Formosans now say: "We think of the Japanese as dogs and the Chinese as pigs. A dog eats, but he protects. A pig just eats."

    ...Last Chance. The island has two good armies totaling 40,000 men. Their commander is handsome General Sun Li-jen. A V.M.I. graduate, veteran of Burma and Manchuria, General Sun has been in charge of Nationalist ground forces training at a base on the southern tip of the island. After Shanghai's fall three additional armies were transferred to Formosa. Including naval and air units, upwards of 350,000 Nationalist troops are living on the island. Many are quartered in village schools and local folk are called upon to contribute to their support. The new troops have behaved badly. Their vehicles, racing madly through the streets, have killed civilians. There are reports of rape and other crimes.
    General Sun spoke frankly last week of his problems. "The behavior of incoming troops is defeating our patient previous work in gradually winning the confidence of the people by enforcing Western standards of discipline." Governor Chen Cheng has come to Sun's support. Recently he ordered the execution of one army truckdriver on the spot where the driver had killed a pedestrian. He dismissed the driver's regimental commander...
    If Formosans, Chinese Nationalists and the U.S. cannot find a solution for Formosa, the Communists certainly will...

Time Correspondent Wilson Fielder, born in China of missionary parents, was killed in Korea 27 days after the start of the conflict there.

TIME People of the Year 1937: Generalissimo and Madame Chiang Kai-Shek
Time Cover Photo: Chiang Kai-Shek, Dec. 11, 1933
Time Cover Photo: Chiang Kai-Shek, Sept. 3, 1945

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