Through her occupation of this rich province and through the fact that Germany thus established a naval base opposite Japan's coast, she incurred the ill will of Japan. This ill will was later to be increased through Germany's conduct with regard to commerce regulations. At the time of the occupation Germany declared that Tsingtao was to be a port open to all the world. Subsequent regulations which she had made amounted to very serious discrimination against the commerce of other nations, especially that of the Japanese, which had already attained considerable importance. A plan was evolved in 1906 according to which Chinese customs duties were allowed to be collected in the colony in return for an annual consideration, which amounted to twenty per cent of the entire customs duties of the Tsingtao district. In this way, what she allowed China to collect from German merchants she forced China to pay back to her. Other merchants were, of course, likewise forced to pay the duties, and Germany received a considerable percentage of the toll. The discrimination, if not obvious, was very real, and the feeling of the Japanese distinctly hostile.
Prince Henry was sent out to take command of the increased East Asiatic Squadron on December 16, 1897, and took command in the following March. On the eve of his departure a great farewell dinner was given him in the Royal Palace at Kiel. The Emperor spoke as follows:
As I rode into Kiel to-day I thought of the many times on which I had visited this city joyfully at your side and on my ships, either to be present at the sports or at some one of our military undertakings. On my arrival in the city to-day an earnest and deep feeling moved me, for I am perfectly conscious of the task which I have set before you and of the responsibility which I bear. But I am likewise conscious of the fact that it is my duty to build up and carry farther what my predecessors have bequeathed to me.
The journey which you are to undertake and the task which you are to accomplish indicate nothing new in themselves; it is merely the logical consequence of what my departed grandfather and his great Chancellor inaugurated politically and what our glorious father won with his sword on the field of battle. It is nothing more than the first expression of the newly united and newly arisen German Empire in its tasks beyond the seas. The empire has developed so astonishingly through the extension of its commercial interests that it is my duty to follow up the new German Hansa and to give it the protection which it has a right to expect from the empire and the Emperor.