by Lucy Inglis
The removal of the EIC’s control of the Canton trade did not suddenly open it up in the way that many in Britain had hoped, for the Chinese were still in control, and remained as resistant to foreigners as ever. The British government had also replaced the presence of the EIC with a superintendent to keep the British merchants in order, hardly something Jardine Matheson was in favour of. At this stage there were a dozen British firms trading out of Canton, including Dent & Co. and Jardine Matheson, six Indian companies, and two American firms, Russell & Co. and Perkins & Co. But it was Jardine Matheson which conducted one third of all Canton trade in the run-up to the First Opium War. It flew its own flag, blue with a white cross, based on the flag of its founders’ Scottish homeland, and had the most prominent merchant fleet on the water out of Canton, plying clippers which put the huge old teak ships, some of which were over a century old, to shame.
Jardine had earned himself the nickname ‘The Iron-headed Old Rat’, owing to his business capabilities, and his nonchalance at once being hit over the head with a club by an assailant. No one but him was allowed to sit down in his office, which had only one chair.
Matheson, meanwhile, was in charge of the correspondence for the firm and had developed a straightforward and wry sense of humour, apparent in his letters: ‘The Gazelle was unnecessarily delayed at Hong Kong in consequence of Captain Crocker’s repugnance to receiving opium on the Sabbath. We have every respect for persons entertaining strict religious principles, but we fear that very godly people are not suited for the drug trade. Perhaps it would be better that the Captain should resign.’21
By the late 1830s, British merchants were selling an estimated 1,400 tons of opium into China through Canton.22 Things were not all plain sailing, though: the Chinese authorities and many of the merchants remained resistant, deceitful and keen on extortion when they saw a chance to exact a bribe. This irritated Jardine in particular. In 1835, the attempt to operate the steam clipper the Jardine between Canton and Macau was thwarted by the Chinese authorities.
Part of the problem in Canton was the heavy presence amongst the merchants of members of Chinese secret societies. Now known as Triads, they were then referred to as the Heaven and Earth Society, although there were (and are) many different regional names. Society lore holds that in about 1674 in Fukien province a group of Buddhist monks formed a protest movement against the invading Manchus, the barbarians who had invaded from the north in 1644. They were betrayed in the 1760s, and their numbers were reduced from 128 to just five, who called themselves the Heaven and Earth Society, and set out on an evangelizing mission across China to bring together fellow rebels. As with freemasonry, these societies became popular with business communities, who used them to maintain links with their all important home villages, but also to reach out to others in the same trade or industry. The British, already suspicious of the cabalistic and disdainful Chinese merchants, detested the existence of these secret societies, about which they were powerless to act, because they increased the already chronic lack of transparency in Chinese–Western relationships in Canton, and now further up the coast.
The fortunes to be made in Canton by the Chinese hongs who managed to secure one of the posts surpassed virtually anything that was known in the private hands of an individual. Many of them were from Fujian, such as Puankhequa (Pan Chencheng), Mowkqua (Lu Guangheng), and Howqua (Wu Bingjian). Puankhequa had come from a poor background and worked as a sailor as far as Manila before returning to Canton and building a fortune of millions of dollars. Howqua (1769–1843) was even more successful, and invested his money with Boston merchant banker John Forbes. He worked alongside Mowkqua as the British and Americans became ever more numerous and forceful, but between them, with their vast fortunes, they felt strong enough to resist the troublesome requests and demands of the barbarian foreigners. However, it was by no means universal that the merchants and the hongs did not get on. Most of the trouble was caused by the authorities and civil servants in whose nature it was to be as obstructive as possible to both parties, which caused strife on all sides. Some of the hongs regularly called on the merchants, and extended hospitality to them. William Hunter, an American who spent many years in Canton, remembered the scale on which the thirteen hong merchants lived: ‘Their private residences, of which we visited several, were on a vast scale, comprising curiously laid out gardens, with grottoes and lakes, crossed by carved stone bridges, pathways neatly laid with small stones of various colours forming the designs of birds, or fish, or flowers.’23
To the fury of the Chinese government, but the satisfaction of everyone else involved, Lintin Island was thriving. Opium imports into Canton had risen from 2,000 chests in 1800 to 5,000 in 1820, and stood at 20,000 in 1834, leading one statesman to lament that the opium trade was ‘a subject of deep regret that the vile dirt of foreign countries should be received in exchange for the money and commodities of the Empire’.24 Yet it was still to no avail. Opium was simply pouring in. To put into perspective just how much money firms like Jardine Matheson were making, when their old partner Magniac left in 1827, it took almost six years for them to finalize his liquid assets. They had so much business they could barely keep the books in order, but when his last goods were traded in 1833, Jardine wrote to him, ‘I have the pleasure to enclose your account current (as of June 30), of 403,035 Spanish dollars.’25 So when the Jardine was thwarted on her supposed trip to Macau in 1835, British and American merchants and the British authorities tried to break free of the Chinese hold over them.
In 1834, when the opium imports hit yet another high with the 20,000 chests, the government sent Lord Napier with two British superintendents for trade with China. It was an attempt to ensure the continuation of the trade that the EIC had overseen, but Napier made the grave mistake of trying to circumvent Chinese bureaucratic etiquette in contacting the viceroy of Canton directly. He was prevented as the viceroy refused to accept the letter, and in a show of rebuttal, closed trade with British merchants. Napier ordered two Royal Navy ships to bombard the forts on the Pearl River Delta and war was only avoided because he fell ill with typhus. The British were ordered to leave Canton for Whampoa or Macau, where Napier died. It had been a complete disaster for all sides, but the need for the British and American merchants to have somewhere independent and safe to trade, operating under the principle of extraterritoriality, was now crystal clear.
In 1836, Jardine Matheson began to propose the founding of a trading colony on Hong Kong island, although this was not the immediate favourite choice of others owing to its rocky geography. Bad feeling escalated between the Chinese authorities and the increasing number of merchants arriving to do business at Canton and down the coast, but the demand for opium was now snowballing throughout China. Perkins & Co. still dominated the Smyrna route, and Lancelot Dent, who had taken over Dent & Co. in 1831, had made it into a powerful force, with strong ties to prominent Calcutta agency houses. Jardine Matheson was, by this stage, unassailable. Or so it thought.
The Incorruptible Lin Zexu and the First Opium War
The Western merchants had, however, not counted on Lin Zexu (1785–1850), a brilliant Chinese bureaucrat who had been appointed by the court in Beijing to scourge Canton and the coast of the trade in opium. There were now estimated to be around 12 million opium addicts on mainland China, and the demand was such that China’s silver reserves were flowing back down the Pearl River at an alarming rate. Lin Zexu arrived in Canton in March 1839 and ordered all trade in opium to be stopped immediately and the stocks surrendered. He wrote a long and eloquent open letter to the young Queen Victoria about the evils of the opium trade, which was printed in Canton, and although the letter itself never reach the queen, it was later reprinted in The Times. Lin Zexu entrusted the letter to Captain Warner of the Thomas Coutts, who returned it to England, but the Foreign Office refused to accept it when they knew what was in it.
Your honorable nation takes away the products of our central land, and not only do you
thereby obtain food and support for yourselves, but moreover, by re-selling these products to other countries you reap a threefold profit. Now if you would only not sell opium, this threefold profit would be secured to you: how can you possibly consent to forgo it for a drug that is hurtful to men, and an unbridled craving after gain that seems to know no bounds!26
Initially Lin Zexu attempted to be fair, offering to compensate the British merchants for their stocks in tea and rhubarb, for it was a well-understood fact in China that Englishmen would die of constipation without a regular supply of rhubarb. This was rejected, Canton was blockaded and the merchants were confined to their homes, some threatened with the deprivation of food and water. Some of the hong were put into prison, and some including Mowkqua and Howqua were put into chains with manacles around their necks. Lin Zexu was also in the process of arresting opium smokers and confiscating and destroying opium pipes in their tens of thousands.
Captain Charles Elliot was chief superintendent of British trade in Canton when he wrote to the Foreign Secretary, Viscount Palmerston, on 6 April 1839 that although he was ‘mindful of the nature of the trade’, the ‘wanton violence’ shown to the ‘Queen’s officers and subjects, and all the foreign community in China’ meant that ‘There can be neither safety nor honour for either government until Her Majesty’s flag flies on these coasts in a secure position.’27 Frantic communications from Elliot to Palmerston ensued about the increasingly fraught nature of the events in Canton, and the need for Britain to extend protection to her subjects. Elliot himself was of the mind that if the emperor wanted to prevent the import of opium then he was within his rights, but Britain was also within her rights to protect the lives and property of her subjects.
Lancelot Dent, holding a significant amount of opium, was ordered to surrender it but only gave over a small proportion. Lin requested he attend a meeting but Dent refused, aware that he was in danger of being beheaded as an example to the other merchants. Elliot ordered the British to Hong Kong island while he negotiated with Lin. When Elliot arrived, the Union flag was raised and he read out a petition to the effect that all British subjects were henceforth under the protection of the government, and that they would be compensated if they handed over their total opium stocks. By nightfall, the merchants had handed over their stocks, the equivalent of 20,000 chests, for destruction. The total Lin Zexu confiscated from the merchants was put at over 1,300 tons, and took, starting on 3 June 1839, 500 men twenty-three days to mix it with salt and lime in pits, where it ‘boiled like soup’, after which it was sluiced into the sea off Humen Island, at which point Lin wrote a poem apologizing to the gods of the sea for dumping such rubbish.
In May the merchants had received orders to quit China forever, and later that year a flotilla set sail from Canton under Charles Elliot, after the Battle of Kowloon in September, sparked by an incident involving a group of sailors drinking rice liquor who subsequently beat a Chinese villager to death. After the Chinese reacted by stopping all trade in food to the merchant community, Elliot ordered British ships to fire on junks outside Kowloon. The battle was over by nightfall, its only real significance being the death of the villager, and the fact that it marked the beginning of the First Opium War.
Elliot was far from the hero of the hour. His anti-opium sympathies were well known in the British government and the merchant communities, and many suspected that, when he had met Lin Zexu, he had colluded with the Chinese official, or at least taken Lin’s worst terms. It also turned out that Elliot hadn’t quite negotiated the deal as he had imagined it when he spoke under the Union flag on Hong Kong island. The British government had no interest in paying any compensation, regarding it as the business of the Chinese, since they had destroyed the opium stocks. The merchants, led by William Jardine, began a campaign to sway the government to go to war with China, and in spring 1840 an expeditionary fleet left Britain. William Gladstone, the future prime minister, denounced it ‘unjust and iniquitous’; he had tried and failed to cure his sister of an opium addiction.28
Over the course of the next year, a series of sea battles comprised the First Opium War. Lin Zexu was dismissed in late 1840 and exiled to Turkestan, deemed by the authorities to have failed, like Elliot, in his task. Back in Britain and America, reaction from the public was mixed. The war had brought to light many facts about the opium trade that ordinary citizens were not aware of, and as pro-trade as both countries were, there was a rising backlash against forcing opium on the Chinese people, particularly from the religious communities who had missionaries stationed there. The North British Review published a letter to the same effect: ‘No man of any humanity can read without a deep and very painful feeling what has been reported of the grief, the dismay, the indignation of men in authority, and the Emperor, on finding that their utmost efforts to save their people were defeated by the craft and the superior maritime force of the European dealers, and by the venality of their own official persons, on the coast.’29
Now, this precise situation had resulted in a war between Britain and China. The British victory in the First Opium War was decisive, mainly due to highly advanced technology in terms of firepower and steamships such as the Nemesis, the EIC’s first iron warship. The Chinese junks and small ships were no match for the organized might of even a small fleet of the navy, and the Chinese losses were heavy, numbering some 18,000 troops. In contrast, less than seventy British sailors were killed in battle.
The war ended on 29 August 1842 with the Treaty of Nanking, known by the Chinese as the Unequal Treaty, the first of several that play a large part in their history of relations with the West and Britain in particular. Signed at Nanking aboard HMS Cornwallis, by both British and Qing representatives, it was ratified by Queen Victoria and the Qing Emperor nine months later. Ultimately, the aim of the treaty was the demise of the Canton System, thereby breaking the hold of both the Cohong and the Chinese bureaucrats over free trade. But the British didn’t stop there. In addition, they wanted four more treaty ports, at Amoy, Foochow, Ningpo and Shanghai, where the principle of extraterritoriality would be enforced, and a fixed tariff system for duties and taxes imposed, subject to negotiation. The Qing government would pay 6 million silver dollars for the opium Lin Zexu had destroyed, 3 million for the accounts the hong still had open with the exiled British merchants and 12 million for the cost of the war. They would also cede Hong Kong to the British Crown in perpetuity. The treaty was a terrible blow for the Chinese, although they did not fully appreciate the repercussions it would have.
The emperor’s views on the British and their trade remained clear, even in defeat: ‘It is true I cannot prevent the introduction of the flowing poison; gainseeking and corrupt men will, for profit and sensuality, defeat my wishes; but nothing will induce me to derive a revenue from the vice and misery of my people.’30
The young Queen Victoria, however, wrote to her uncle, the King of Belgium, like a spoiled child: ‘The Chinese business vexes us much, and Palmerston is deeply mortified at it. All we wanted might have been got, if it had not been for the unaccountably strange conduct of Charles Elliot . . . who completely disobeyed his instructions and tried to get the lowest terms he could . . . Albert is so much amused at my having got the Island of Hong Kong.’31
The Making of Hong Kong
‘Viewed as a place of trade, I fear Hong-kong will be a failure’32
The steep, rocky island of Hong Kong was still only sparsely settled when the British decided to take it for its excellent deep harbour, which the British botanical collector Robert Fortune, collector to the Royal Horticultural Society of London, who came to Hong Kong in 1843, described as ‘one of the finest I have ever seen: it is eight or ten miles in length, and irregular in breadth; in some places two, and in other places six miles wide, having excellent anchorage all over it, and perfectly free from hidden dangers’.33 At its widest point east to west, it measures eleven miles and between two and five north to south. Jardine Matheson was, naturally, the fi
rst to purchase plots at East Point, for £565, in the Land Sale held by Charles Elliot on 14 June 1841.34 Alexander Matheson would later admit somewhat sheepishly to a Select Committee that perhaps the firm had begun building ‘to a certain extent’ before the sale.35
When George Pottinger, first governor of Hong Kong, saw the building works of huge godowns and administrative buildings in 1842, he described it as ‘one chaos of immense masses of granite and other rocks, that . . . by the application of science and extraordinary labour and by an expenditure of about £100,000, have not only made it available for their vast mercantile concerns, but have rendered it a credit and an ornament to the colony’.36 Jardine Matheson did not move to Hong Kong until 1844, by which time their site covered 3.5 acres, and by 1845, when the botanist Robert Fortune left China again through Hong Kong, he was impressed with the rate of growth, and that Governor Davis had changed the names of the Chinese towns on the south side, which ‘used to be called Little Hong-kong and Chuckehew . . . into Stanley and Aberdeen’.37
Jardine Matheson was by no means the first business to move to Hong Kong, though, and by the end of 1843 there were twelve substantial British firms operating there, various smaller British merchants and six Indian companies. And by the time Jardine returned the following year, there were around a hundred firms in business, of which half were British and a quarter Indian and Parsee. The Americans Russell & Co. had also moved to the island by then, a company of note for their huge success in opium trading but also for employing Warren Delano Jr, the grandfather of Franklin D. Roosevelt.