Europe in China/Chapter 1

Europe in China by Ernst Johann Eitel
I. Commencement of British Trade with China



Commencement of British Trade with China.

A.D. 1625 to 1834.

The history of British Trade with China, which preceded Great Britain's connection with India, is comprised, from its first commencement down to the year 1834, in the history of the Honourable East India Company. Unfortunately, however, the story of the Company's relations with China is one of the darkest blots in the whole history of British commerce. That great and powerful Corporation, which governed successfully Asiatic kings and princes, and covered itself with administrative, financial and even military glory, particularly in India, was entirely nonplussed by China's dogged self-adequacy and persistent assertion of supremacy, and had its glory, its honour, its self-respect rudely trampled under foot by subordinate Chinese Mandarins.

The Court of Directors, having at the instance of Captain J. Sares (since 1613 A.D.) established a factory at Firando, in Japan, under a treaty with the Japanese Government, was induced also (A.D. 1625) to open tentative branch-agencies at Tywan (on the island of Formosa) and next in Amoy (on the opposite mainland of China). This move was made during the last few years of the reign of the Chinese Ming Dynasty which systematically welcomed foreign merchants. Encouraged by the results, the Directors of the East India Company resolved (A.D. 1627) to open trade also with Canton, by way of Macao. But the Portuguese, who had already established themselves there (since 1557 A.D.), strenuously objected to admit such a powerful interloper to a share in the profits of the Chinese trade, and the attempt failed.

Nothing daunted, however, the Court of Directors forthwith (A.D. 1634) negotiated a Treaty with the Portuguese Governor of Goa, under whose control Macao was, and by virtue of this Treaty the British ship London (Captain Weddell) was admitted into the port of Macao and, after bombarding the Bogue Forts at the entrance to the Canton River, her gallant commander was received in friendly audience by the Viceroy, who forthwith granted him (July 1655) full participation in the Canton trade, to the great chagrin of the Macao traders. Thus British trade commenced at Canton, but through petty international jealousies on the part of the Portuguese and other causes it languished, until at last Oliver Cromwell concluded, on express principles of reciprocity, a Treaty (A.D. 1654) with King John IV. of Portugal, giving free access to the ships of both nations to any port of the East Indies.

Ten years later, the East India Company, having at last secured a house at Macao, endeavoured to set up a regular factory at Canton also. But by this time the native Ming Dynasty had been supplanted by the Manchu invaders who established (A.D. 1644) the present Tatsing Dynasty and manifested from first to last a haughty contempt for all persons engaged in trade and an irreconcilable animosity against all foreign intruders.

In conquering Amoy (A.D. 1681), the Manchus destroyed the Company's agency there and at Zelandia (Formosa), but the Portuguese at Macao, having made themselves useful to the new Dynasty by rendering military aid to the invaders, were with haughty contempt tolerated where they were, without any formal concession being made to them. The Manchus, disdaining to make any distinction between Portuguese and English, as being equally barbarians in their eyes, allowed foreign trade at Canton to continue, though thenceforth under galling and vexatious restrictions.

The East India Company's Supercargoes soon found that, so long as they indirectly and humbly acknowledged the supremacy which the Manchu Dynasty now claimed over the whole world, expressly including also all foreign barbarians, the Chinese officials were perfectly ready to accept costly presents and to encourage foreign trade provided that it would quietly submit to their irregular exactions. Thereupon the Company began (A.D. 1681) sending ships direct from England to Macao, and later on (A.D. 1685) they succeeded in re-opening their agency at Amoy and (A.D. 1702) planting a factory also on the island of Chusan.

Up to this time, trade had been conducted in a loose and irregular manner. On the arrival of a ship in the waters of Canton, she was boarded by an officer of the Hoppo (Imperial Superintendent of Native Maritime Customs), who was at once offered a present (called cumshaw) upon the value of which depended the mode of measuring the ship, whereupon followed (in the absence of a fixed tariff) a disgraceful bargaining and haggling over the rates of port charges, linguist's fees and customs duties to be levied. When all these negotiations, hurried on frequently by a threat on the part of the Supercargo to take the ship away or temporarily suspended by sundry practical menaces on the part of the Hoppo's officers, had been concluded, the ship was allowed to proceed to Whampoa (the port of Canton) and there admitted to open trade with any officially recognized native merchant or broker.

A serious change was introduced with the year 1702. The East India Company having sent out (A.D. 1699) a Chief-Supercargo (Mr. Catchpoole) who was commissioned to act as King's Minister or Consul for the whole empire of China and the adjacent islands, the Chinese officials responded with a counter move. While the Chief-Supercargo's royal commission was studiously ignored and the term tai-pan (chief-manager) applied to the King's Minister, a Chinese merchant, entitled 'the Emperor's Merchant' but among the Company's Supercargoes thenceforth known as 'the Monster in Trade,' was now (A.D. 1702) appointed by the Chinese Government to supervise foreign trade. This Emperor's Merchant had the exclusive monopoly of the foreign trade and, in addition to the Hoppo's officers who had to be plied with presents and fees as before, this Monster in Trade had now to be satisfied in the same way. All imports and exports had to pass through his hands, all commercial transactions of the foreign merchants had to be settled through his agency. He was for some time nominally the sole intermediary between the foreigners and native merchants, and likewise the exclusive channel of communications between the foreign merchants and skippers (including the East India Company's Agents with the King's Minister) on the one hand and the Chinese Government on the other. Thenceforth free trade was at an end and the monopoly of the East India Company was by astute Chinese policy met by an equally powerful combination of Chinese monopolists, who periodically had to disgorge their profits to the Provincial Authorities (the Viceroy and the Governor of Canton), and to the Hoppo, an officer of the Imperial Household. The latter had to purchase by a heavy fee a five years' tenure of the monopoly of collecting the native and foreign customs duties of Canton, and on his return to Peking, he was invariably squeezed like a sponge by the Imperial Household. Thus foreign trade was thenceforth ground down between the upper and nether mill-stones of the Chinese Authorities and the Emperor's Merchant and his successors.

Nevertheless, the East India Company's Supercagoes speedily managed to adapt their policy to the new arrangement. Trade continued to flourish. The ships proceeded thereafter first of all to Macao, then sent up agents to Canton to arrange, in whatever way it could be done, the amount of presents, measuring fees, port charges, duties and brokerage, and then, when everything was satisfactorily arranged, the ship would proceed to the Bogue (the entrance to the Canton River, guarded by two forts, Chuenpi on the East and Taikoktau on the West) and, after paying fees and duties there, a chop (a stamped permit) would be granted to each ship to proceed to Whampoa to trade. By the year 1715, a regular routine had been established and British ships now began to omit the visit to Macao and to proceed, on arrival in Chinese waters, straight to the Bogue, where, after anchoring for some days, everything was settled by the Supercargoes as above.

A new change was made in the conduct of the foreign trade in the year 1720, when an ad valorem duty of 4 per cent. was laid on all imports and exports and a Committee of Chinese merchants, henceforth known as the Co-Hong, was substituted in place of the one Emperor's Merchant. But this Committee was likewise placed under the supervision of the Hoppo, and, as before, made answerable to the Viceroy and Governor for all dues on trade. These Co-Hong Merchants were as a body solidarily responsible for the solvency of each member of the Co-Hong, both as regards indebtedness towards the foreign merchants and as regards the share of the Provincial Authorities in their profits. Moreover they were responsible, as a body, for the payment of all fees and duties by every foreign ship, and even for any offences or crimes committed by the ships' officers or crews. By an Imperial Edict (A.D. 1722) they were also commissioned to levy an import duty on opium, amounting to 3 taels per picul.

This system was nominally improved upon by the introduction (A.D. 1725) of a fixed tariff. Upon this measure the Imperial Authorities at Peking had insisted to enable them better to gauge the proper amount of their own share in the profits of this flourishing foreign trade. Nevertheless, the publication of the tariff failed to do away with the previous system of bribery and corruption, as both the Hoppo's officers and the Co-Hong looked upon the tariff only as the minimum basis of their own accounts with the Provincial and Imperial Governments. Consequently they systematically exacted from the foreign ships as much over and above the tariff charges as they could possibly screw out of them.

A special tax of 10 per cent. was put on all foreign imports and exports in the year 1727, but after making (A.D. 1728) a strong united appeal to the Throne, in the humblest form of subject suppliants, the Company's Supercargoes were granted, on the occasion of the accession of the Emperor Kienlung (A.D. 1786), exemption from this tax. By this time about four English ships, two French, one Danish and one Swedish ship arrived every year to share in the Canton trade. Portuguese trade was confined to Macao. However, in the year 1754, a new method of extortion was introduced, by requiring each ship, on her arrival, to obtain first of all, by special negotiation, the security of two members of the Co-Hong, before the usual arrangements concerning measuring fee, cumshaw, linguist's fee, and customs duties could be entered upon. Up to this time, the monopoly of the Co-Hong concerned only the disposal of the cargo and the purchase of exports, but from the year 1755 all dealings of foreigners with small merchants and purveyors of ships' provisions were strictly prohibited, and especially all dealings of the ships with native junks and boats, whilst anchoring outside and before entering the river, were visited with severe penalties. Owing to occasional smuggling malpractices on the part of natives, countenanced by foreign skippers, an Imperial Edict prohibited (A.D. 1757) all commercial transactions with foreign ships, whether outside the Bogue or at Whampoa, and confined trade strictly to Canton. As this measure not only tended to hamper trade operations in Canton waters, but threatened the extinction of the flourishing Amoy agency, the Committee of Supercargoes sent Mr. Harrison, together with a very able interpreter, Mr. Flint, to Amoy (A.D. 1759) to arrange with the local Authorities a continuation of the Amoy trade on special terms. When these negotiations failed, Mr. Flint, sharing the opinion of the Supercargoes that the obnoxious Imperial Edict had been obtained by the Cantonese Authorities through false representations, proceeded (with the secret support of the Amoy Authorities) to Tientsin and succeeded in getting his views, involving serious charges against the Hoppo and the Cantonese Authorities, brouglit to the notice of the Throne. An Imperial Commissioner, authorized to remove the Hoppo from his post and to abolish all illegal imposts, was sent to Canton with Mr. Flint to investigate the charges against the Provincial Authorities. The inevitable result followed. The Hoppo and the Cantonese Authorities having made their terms with the Commissioner, Mr. Flint was ordered to appear in the Viceroy's Yamen to answer a charge of having, while at Amoy, set at defiance the Imperial Edict of 1757. Mr. Flint went, accompanied by all the Supercargoes, but as soon as they reached the Viceroy's offices, they were set upon by his underlings, brutally ill-treated, thrown on the ground, forced to perform the official act of homage (kneeling and knocking their foreheads on the ground) called kotow and sent back with ignominy, with the exception of Mr. Flint. He was thrown into prison and, as the virtuous Court of Directors refused to pay the bribe of $1,250 which was demanded by his jailors, he was kept under rigorous confinement at Casa Branca until November 1762, when he was released and deported to England.

The Court of Directors, who had by the action of their servants hitherto stooped sub rosâ to every form of Chinese bribery and corruption, and borne every indignity heaped upon their representatives with equanimity, thought at last, on hearing of the ill-treatment of their Supercargoes, that the Chinese were going rather too far. So they sent a special mission to Canton (A.D. 1760), with a letter to the Viceroy, protesting against the Co-Hong system and asking for Mr. Flint's release. But the mission was treated with contempt by the Manchu Government and failed to have any effect whatever. By giving however increased secret presents, the Supercargoes caused things to go on more smoothly, and ten years later (A.D. 1771) the Company's Supercargoes succeeded in purchasing permission to reside during the winter months (the business season) at Canton, instead of coming and going with their respective ships. The ships used to arrive towards the end of the south-west monsoon (April to September) and leave again for Europe with the north-east monsoon (October to March). But unless special permission to linger a little longer was obtained, the Supercargoes, now at last established in separate factories (allotted to the several nationalities) in Canton, were annually, at the change of the season, furnished with passports and warned to be off to Macao. Thence they had, at the end of summer, to petition for passports again, to enable them to return to Canton the next season.

At last (February 13, 1771), the dissolution of the Co-Hong, which had become the most galling burden of the time, was gained by the Supercargoes resident at Canton, a triumph which previously every form of persuasion and every art of diplomacy had in vain been employed to secure. But the sum paid for this favour amounted to a hundred thousand taels, which sum the Authorities accepted, because the Co-Hong were bankrupt and in arrears with their contributions due to their respective official superiors.

Nevertheless, this privilege was not enjoyed very long, for ten years later (A.D. 1782) the previous Co-Hong system was, under a new name, re-established by the appointment of twelve (subsequently increased to thirteen) 'Mandarins,' who were however simply native brokers, thenceforth known as Hong merchants. These had, like the former Co-Hong, the monopoly of the foreign trade, subject to the supervision of the Hoppo and of the Provincial Authorities, to whom they were responsible for the payments due by, and for the personal conduct of, all foreigners. These Hong merchants held the same position, and had the same privileges and responsibilities as the Co-Hong. The only differences were that they bore another title and that for their previous solidary responsibility in financial matters was now substituted a guarantee fund, known as the Consoo (Association or Guild) fund. But this fund was created at the expense of the foreign trade, on which thenceforth a special tax was levied for the purpose. As the East India Company and the merchants of other nationalities quietly submitted to this change in the system, trade continued to proceed as before. Thereupon the Chinese imposed (A.D. 1805) a further special tax, like the modern Li-kin, to provide for the necessities of coast defence and other warlike preparations against the foreign ships. This measure was taken by the Chinese because they had observed that the foreign ships had, owing to the steady increase of the value of their cargoes, gradually increased their armaments.

Trade, however, continued increasing from year to year. But soon a hand's breadth of a cloud, destined to develop into a tempest, arose on the commercial horizon in the shape of the 'exportation of bullion' question and the altered attitude of foreigners generally. With the gradual increase of the opium trade, the Chinese observed with dismay that the balance of trade, though still in favour of China, was steadily diminishing from year to year as foreign commerce expanded. In the year 1818 a rule was therefore made to restrict the exportation of silver by any vessel to three-tenths of the excess of imports over exports by that vessel. The tea trade, indeed, increased very rapidly, to the great satisfaction of the Chinese officials, especially since teas began (A.D. 1824) to be shipped direct from China to the Australian Colonies. But however fast the export of tea increased, the imports of opium out-stripped it in the race. Accordingly in the year 1831 the Chinese Authorities, in their dread of the increasing outflow of silver from China, imposed upon foreign merchants such severe additional restrictions, that the Select Committee of the East India Company's Supercargoes, headed by Mr. H. H. Lindsay, threatened to suspend all commercial intercourse. Eventually, however, when matters came to a crisis (May 27, 1831), the Select Committee yielded and in token of their submission, handed the keys of the British Factory to the Brigadier in charge of the Provincial Constabulary (Kwong-hip).

Though victorious for the moment, the Chinese officials could not help noticing on this occasion more than ever before, that a considerable change had come over the demeanour of the foreign merchants. The East India Company's chiefs seemed to have lost somehow their former control over the foreign community, and the latter would not submit now, as formerly, to all the caprices of the Chinese Authorities; they were talking now of international and reciprocal responsibilities, and murmured seditiously against trade monopolies as commercial iniquities.

Moreover the restrictions placed on the opium ships, from which the Provincial Authorities were reaping their richest harvests, were persistently evaded by the ships anchoring at the island of Lintin or in the Kapsingmoon channel, outside the Bogue, where, with the connivance of the Authorities, the foreign merchants had established stationary receiving ships, serving the purpose of floating warehouses for all sorts of goods. This measure encouraged a great deal of smuggling on the part of Chinese private traders, and the consequent infringement of the official trade monopoly curtailed the share which the Provincial Authorities had in the whole trade.

The Chinese officials now saw clearly that a different spirit had crept in among the foreigners at Canton, that even the servile attitude of the former East India Company's officers was rapidly giving way to claims of national self-respect, a most preposterous thing, as it appeared to the Chinese, on the part of outer barbarians, and finally that the most intelligent private merchants freely expressed their conviction that, owing to the approaching dissolution of the East India Company's Chinese monopoly, the whole foreign trade with China would have to be placed on a distinctly international basis by the year 1834. The Viceroy now perceived and reported to Peking that a serious crisis was approaching. Accordingly an Imperial Edict was issued (September 19, 1832) ordering all the maritime provinces to put their forts and ships of war in repair 'in order to scour the seas and drive off any European vessels (of war) that might make their appearance on the coast.' Thus prepared, the Chinese calmly awaited the year 1834, continuing meanwhile to encourage foreign trade and to levy on it as many charges, regular and irregular, as it would bear. What the British Government failed to discern, the Emperor of China foresaw clearly, viz. that a war was bound to arise from the denial of China's supremacy.