Well, as far as I can tell, the only "racist caricature" in the story is that of recurring character Connie. Here's a representative scene:
As far as I can tell, Connie's offenses are twofold: he speaks in a comic dialect, and he's as homely as sin, with big ears and buck teeth.
Now, I'm not at all a fan of Caniff's character. I think Caniff writes his dialect in an ootsy-cutesy manner I find abominable. However, he's far from the only character who speaks in an affected or stilted manner, and that includes the titular Terry's nominal guardian Pat Ryan. What I take away from Connie's fractured dialect is not that he's part of some racist conspiracy to make Chinese people look stupid, but that Caniff wasn't especially good at rendering English in dialect-form.
As for his ugliness-- well, yes, Connie's not pleasant to look at, but I for one would look for other evidence that proved him to be a racist construct. For instance, Connie would definitely be racist if all other Asians in the strip were similarly depicted. If they're not-- and I think Martin would admit that they are not-- then Connie may be more in the vein of the "funny looking sidekick" than of the "racist caricature."
Most of the funny looking sidekicks of comic strips are forgotten now, but superhero comic books gave the form a new lease on life-- and a fair number of them are Caucasians.
One of the most famous is Doiby Dickles from GREEN LANTERN:
And here's Stretch Skinner from WILDCAT:
Notice the common factors: both sidekicks talk funny, and both are homely. Both function, in essence, to make the main hero look and sound even better than he ordinarily would.
Now, I'm not denying that it's possible for an artist to create a racial caricature that does communicate ill will toward the race depicted, and to do so subtly . It's even possible that an artist might depict most of the characters in his story as relatively normal, yet choose to single one character out to make him the butt of racist jokes. Certainly Connie is the target for sidekick-humor. But is it racist humor?
Here's an interesting scene from TERRY #7:
To fill in some blank spaces: the fellow getting hung up on the dragon by Big Stoop-- a Swedish character very improbably disguised as a Chinese laborer-- is a rich white guy named Sandhurst. Not long after some of the locals disparage him for being an American who puts on airs by talking Brit-style, Sandhurst orders his car's driver to run Connie down. Stoop pulls Connie out of the way. Sandhurst orders the car to stop. Then he attacks Connie, hitting him with his cane-- at which point Stoop introduces him to the dragon. So the sequence ends with Connie the racist caricature having the laugh on the rich WASP. Moreover, when the story was first published readers did not yet know that the silent strongman was not Chinese, and so the original effect is that of two Asians having the laugh on a nasty white guy.
All of which raises two questions:
(1) Is it possible to have a POC sidekick without having him look at least nominally handsome, as with the reboot of THE SPIRIT?
(2) If the only ugly, dialect-using sidekicks out there are white guys like Doiby and Stretch-- does that not constitute a subtle form of racism in itself?