This appears to be the canal district of Madu, Suzhou, China. The bridge that Douglass has chosen to feature is very similar to the Pavilion Bridge, with what appears to be the famous Maple Bridge in the distance. Now known as the "Venice of China", this canal city was visited in the 13th century by Marco Polo, who was startled by its uncanny resemblance to his own.
Lucille Douglass traveled to China in 1920 to work as an art and English teacher in in Shanghai. While there, she struck up a friendship with writer Florence Wheelock Ayscough, whose book Waterways of China Douglass would later illustrate. "Long Road Rest House" may have been a study for this publication.