Mongolia and the United States: A Diplomatic History

Chapter 5: Building Commercial Ties

“Long ago American merchants had settled in that area.” Early black and white photographs from the beginning of the 1900s give some indication of a United States commercial presence in Mongolia going back more than a century. Two of the more well-known American trading houses at the time were “Andersen and Meyer” and the “Mongolian Trading Company,” the latter based in the Inner Mongolian town of Kalgan but with branch offices in both Urga and the western town of Uliastai. Indeed, one photo dating to 1918 shows a Mr. Holman, one of the more prominent American business executives of the period, posing outside a large ger decorated with wolf skins. He is standing near a sign that describes his trading business as an “American Joint Stock Company.” American silver dollars were legal currency throughout Mongolia at the time, along with Chinese silver ingots, and bank notes and coins from Russia and elsewhere. Documents from the Mongolian National Archives provide tantalizing glimpses into other aspects of the early commercial relationship. For example, one document dated October 9, 1922, includes a request from an American citizen named Franche Menin to dig for gold. Another document, dated January 25, 1923, describes a possible conference on trade issues sponsored by British and American companies. Yet another document from the National Archives, this one dated to 1922, includes a query from the Mongolian Ministry of Foreign Affairs requesting information about the potential purchase of cotton from the United States to make military uniforms. These early commercial ties played out in other ways as well. In the Mongolia Society’s published version of Frans Larson’s short, hand-written Chapter 5 Building Commercial Ties 88 Mongolia and the United States “memoir”—written late in life, long after his better-known first memoir, Duke of Mongolia (1930)––G. Ganbold’s introduction includes a fascinating and almost certainly apocryphal anecdote about “American Denj” (meaning “American hill” or “American terrace”), the place in Ulaanbaatar where many American businesses first established themselves during the early 1900s. “There remains from these years a name for a specific area in present-day Ulaanbaatar, in the eastern district—where I used to roam as a schoolboy—a place called ‘American Hill’,” Gandbold recalls, linking his childhood with the earlier business exploits of Larson and other entrepreneurs from the United States and elsewhere who sought business opportunities in Mongolia. Ganbold writes: Though it was not the official name, it was widely used. It was explained to me by an old man that long ago American merchants had settled in that area. . . . [A]n American trader had asked for a piece of land as big as a cowhide to erect his warehouse. Since he asked for only a cowhide-sized plot of land, city authorities did not bother to refuse, because it seemed so small. When the permission was given, the American merchant sliced up his cowhide to make a huge rope, demarcating his newly given estate, which turned into a pretty big area. It is not entirely certain if Larson—who had ties to both Sweden and the United States—ever set up shop in American Denj. However, he was certainly one of the most intriguing and colorful business characters of that period, standing out among his fellow expatriates for his love and knowledge of Mongolia. “Big business can be done successfully in Mongolia,” Larson claimed in Duke of Mongolia, “but the trader must be possessed of the tact of the diplomat and be of a character which makes him akin to the people of the plateau and able to understand the conditions there.” According to Larson, “a thorough knowledge of the language and a wide Mongolian friendship are the first requisites of success.” Larson had high praise for the early Russian tea traders in Mongolia who, he wrote, did “extremely well,” noting, “They treated the people who freighted for them thoughtfully and generously.” He also recalled prospectors from both Russia and France visiting the northern regions of Mongolia in search of gold. While the engineers involved in subsequent projects largely came from Europe and the United States, most of the labor was Chinese because “digging great quantities of gold out of the earth did not appeal to the Mongol as a profitable way in which to spend his days.” Larson’saccount highlights some of the concerns Building Commercial Ties 89 that still mark discussion about doing business in Mongolia today...