The most significant change in Canton was not so easily marked as the comings and goings of any given individual. What had changed most since the quiet days when Staunton first arrived was that there was now real competition afoot. By 1830, there were more private traders making their homes in the Canton factories than ever before, asserting their presence far more boldly, and finding far greater financial success. Among this growing community of free traders were Parsis from India, Armenians, a few Europeans, and various Scots and Englishmen who competed as best they could with the East India Company by wielding a range of spurious consulships to protect them from its monopoly on British residence in Canton. Then, of course, there were the Americans like the Forbes brothers. Collectively, the Americans and the private British now outnumbered the Company men more than two to one, and adding in the Parsis made that nearly five to one.11 The rich and highly unified East India Company still presumed to dominate the social and commercial world of the Canton factory district, just as its fleet dominated the anchorage at Whampoa, but increasingly it did so against the competition and resentment of the other westerners and Indians among whom it operated. As one scornful American put it at this time, “by its improper interferences, and assumptions of superiority, [the Company has] earned the same dislike and unpopularity which a despotic and tyrannical government has entitled it to, in all other places where its influence extends.”12
And yet, just as with the mighty fleet at which John Murray Forbes marveled on his arrival, the very size and unity of the East India Company also made it unwieldy and slow to react. Its mammoth strength opened spaces for independent operators like the Americans and private British in the “country” trade between India and Canton to get rich in its wake—buying and selling the goods the Company did not carry on its ships, sailing to the ports it did not supply, moving more quickly and nimbly through the spaces in its laboriously scheduled movements. And it is on this count that we find the very specific reason why John Murray Forbes sailed past the Company’s grand fleet not on his brother’s newly built ship the Lintin, on which he had come all the way from Boston, but instead on a hired Chinese boat—while the Lintin, it should be mentioned, was waiting at anchor some sixty miles away, at the outlying island after which it had been named, not daring to come any closer. It was the very same reason that lay behind the proliferation of private traders at Canton and the surge of competitive energy in the port. It was the reason why so many people were getting so rich, so easily. That reason was opium.
Robert Bennet Forbes, John’s rosy-cheeked older brother, was a middleman in the drug trade. The Lintin he had just fitted out in Massachusetts was destined for use as a “receiving ship”—based off the southwest corner of Lintin Island, far from the reach of the authorities in Canton, he operated it as a floating warehouse for drug shipments. Foreign vessels coming in from India and elsewhere with cargoes of opium would stop first at Lintin, offload their chests of the drug onto Forbes’s ship or another in the harbor, then proceed up to the Whampoa anchorage outside Canton with their holds empty of contraband and clean for inspection. In certain “money-changing shops” in the foreign compound, their captains or supercargoes could meet with the English-speaking agents of Chinese opium wholesalers (some, but not all, of whom were Hong merchants—since the trade was illegal, the Hong merchants’ monopoly on foreign trade did not apply to opium as it did to tea). After agreeing on a price, the foreign merchants took payment for their opium, while the Chinese dealers sent their own men out to Lintin to retrieve the shipment from the holding vessel.13
Robert Bennet Forbes’s job was a simple one. His cargo was not his own; he merely held it on consignment for other traders who had assumed the risk (storms, pirates, market fluctuations) of getting it to south China in the first place. Chinese smugglers took all of the responsibility for moving the drug inland and up the coast—and, eventually, for retailing it within China. They also took responsibility for bribing government officials to ensure that no inspections would be made at Lintin, or at least to make sure that such inspections would be announced well in advance. There were in fact Chinese warships stationed on the opposite side of Lintin Island from Forbes’s ship, off the island’s northeastern shore, but they were under a different county’s jurisdiction than the smuggling anchorage and generally only sailed around the island in order to collect bribes from the smugglers before returning to the northeast again.14 As captain of the Lintin receiving ship, Robert Bennet Forbes thus bore almost no risk at all. All he had to do was stay put and keep the opium safe, earning a commission for each chest he held. The hardest part of the job, for a young New Englander who loved to sail, was having to stay in one place all the time. For suffering that, he brought in an income that in today’s currency was worth more than $800,000 per year.15
The basic fact was that the opium poppy grew very well in British India, which otherwise was a spectacularly unprofitable colonial venture (and which, without the rich profits from the Canton tea trade to offset its losses and debts, would likely have bankrupted the East India Company). European traders learned early on that there was a steady if small market for opium in China even though it was illegal there. As early as 1719 we can find the Chinese demand for the drug making an appearance in The Farther Adventures of Robinson Crusoe, Daniel Defoe’s lesser-known sequel to his novel Robinson Crusoe, where Crusoe, who was rescued from his castaway fate in the previous book, made a run from Siam to China to sell opium, “a Commodity which bears a great Price among the Chinese, and which at that Time, was very much wanted there.” Though Crusoe originally intended to sail north in China to sell it, he was advised to “put in at Macao, where we could not have fail’d of a Market for our Opium.”16
There are more formal records of British traders carrying Indian opium to China by 1733, when the East India Company notified the captains of two of its ships of “the late severe laws enacted by the Emperour of China for the prohibition of Ophium,” admonishing them that “you are neither to carry, nor suffer any of it to be carry’d in your Ship to China, as you will answer the contrary to the Hon’ble Company at your peril.”17 Going forward, the “Honourable Company” refrained from carrying any opium on its own ships, judging that the potential loss of its aboveboard tea trade was not worth the smaller reward to be gained from drug trafficking. That did not end the matter, however, but simply made an opening for independent operators who were more willing to take on the dangers of the illegal trade.
By the time of Macartney’s arrival in 1793, a rogue commerce in Indian opium to China was well under way, established by private traders acting independently of the East India Company. The amounts they sold were relatively small, though, and only incidental to the overall commerce of the region. In any case, the British government had no interest in supporting or protecting them. Macartney’s instructions acknowledged, “It is beyond a doubt that no inconsiderable portion of the Opium raised within our Indian Territories actually finds its way to China,” but those instructions also said that if the emperor should, in the course of negotiating a treaty, ask for Britain’s support in putting down the opium traffic, then Macartney should agree to do so “rather than risk any essential benefit” by trying to preserve it.18 (But then there were, of course, no negotiations between Macartney and Qianlong, and no treaty, so no such request was ever made, let alone granted.)
By the early nineteenth century, the drug had long been established in China as a high-end luxury good, and despite various edicts condemning it, there seemed from the outside to be no social stigma to its purchase or use. When Thomas Manning was traveling in Tibet with “the General”—the half-Manchu military officer who so admired Manning’s beard—Manning asked him what kind of gift he might like from India. The General immediately asked for some nice cloth and “a pound or two of opium.”19 Lord Amherst’s diplomatic mission was openly solicited for the drug by an official during its inland journey back down to Canton in 1816, and his naturalist reported that whil
e opium didn’t seem to be sold openly in Chinese shops, he was told that it was in use, smoked with tobacco, “in all parts of the empire,” and was considered “one of the greatest luxuries.”20
Although the East India Company consistently avoided carrying opium to China on its own ships, that did not mean it did not take part in the trade. Rather, the Company’s strategy was to dominate the supply side of the opium trade in India through a monopoly on production in Bengal, and then avoid risk by staying completely out of the smuggling enterprise at the Chinese end. At auctions in Calcutta, the Company would sell its opium to the country traders, who took responsibility for shipping the drug to Lintin Island and selling it to dealers in Canton. The proceeds from their sales—usually in the form of silver—would then typically be handed over to the East India Company’s treasury at the British factory in Canton, either in return for bills of exchange the country traders could use to remit funds to India or England, or, if they had bought their cargo on credit, to pay back the Company what they owed from the Calcutta auction.
By such means, the East India Company could enjoy a constant flow of silver into its Canton treasury from the drug trade without ever transporting an ounce of opium to China itself. It had the best of both worlds, profiting enormously from the production and sale of the drug while still being able to present a clean face to the Chinese government for its regular trade. And as a side effect of this arrangement, in contrast to the heavy engagement of the East India Company’s Bengal personnel in regulating and overseeing the production of opium in India, their counterparts in the British factory at Canton were so distant from the actual drug trade in China that a member of the select committee with nearly twenty years’ experience in Canton could, in 1830, claim with a straight face that he had never seen a chest of opium in his life.21
As much as the East India Company wished to monopolize the supply of Indian opium, its control over production was not complete—and that would be the primary factor in a precipitous rise of opium imports into China that began in the 1820s. For the British controlled only a portion of the Indian subcontinent, primarily in the northeast. Farmers in the various states of central and western India outside of the East India Company’s influence were perfectly free to grow poppies and process their own opium as they saw fit, which they transported to the west coast of India for export sale on independent terms. The same British and Parsi merchants of the country trade who bought and sold the Company’s opium from Bengal (which was branded as “Patna”) also, by the early 1800s, had begun to speculate in the rival product from the free territories of India (known as “Malwa” opium), which they shipped from Bombay and other ports on India’s west coast.
Ideally, the East India Company wanted to keep a tight lid on Indian opium production in order to ensure that prices remained high at Canton. But it could only control the supply of Patna opium, and already by the early 1800s the competition from Malwa was beginning to undermine the Company’s efforts to engineer the market. To reassert its control, the Company first tried to block shipments from Bombay (which was under British control), but the Malwa commerce simply moved northward to the Portuguese-controlled ports of Daman and Diu up the coast from Bombay, which were out of the Company’s administrative reach.22 By the late 1810s, growing sales of Malwa opium by the country traders were cutting so far into the overall Canton import market that the members of the East India Company’s board of trade in Calcutta essentially threw up their hands and admitted failure. No longer would they try to choke off the Malwa trade in order to protect their monopoly; instead, fatefully, they decided to compete with Malwa head-on.
With its market share threatened, the Company began ramping up poppy cultivation in Bengal in 1820 and increasing production of its Patna opium in an attempt to drive the Malwa merchants out of business—seeking, in the words of the British governor-general in Calcutta, to furnish “a Supply on so enlarged a scale and on such reasonable terms as shall prevent competition.”23 At the same time, in a wildly misguided attempt to corner the market, the Company also began purchasing large amounts of Malwa opium itself—the main effect of which was to encourage even more production in the free states. The result was a dramatic increase in overall supply and a decline by nearly half in prices per chest for opium at the Calcutta auctions by the mid-1820s. The open field of competition between Patna and Malwa made for a heady and reckless time for the private traders in Canton. It also meant, significantly, that as Indian opium became less expensive to purchase in China, people beyond just the most wealthy could begin indulging in it, so the population of Chinese users expanded.24 Ironically, if the East India Company had had its way, and if it had been able to maintain its failed monopoly in India, that expansion of opium usage in China might never have happened.
As for the progress of that expansion, in the years immediately following the Amherst mission the demand for foreign opium held steady at about four or five thousand chests per year (each chest holding about 133 pounds). However, sales of cotton from India, which had traditionally been the most important commodity at Canton on the British side, started to decline in the face of increased Chinese domestic production. By the early 1820s opium imports were rising sharply due to the Patna-Malwa competition even as cotton continued to slump, and in 1823 for the first time opium surpassed cotton as the largest Indian export to China. By the summer of 1828, opium was starting to seem like the only commodity left that could reliably secure a profit for the country traders. The flow of opium to Canton that year exceeded ten thousand chests, making up slightly more than half the value of all British imports into China—and, importantly, exceeding in value all of the tea the East India Company shipped back to England that year. Thanks to opium, the trade imbalance that had always operated in China’s favor was starting to tip in the other direction.25
Yet the rise continued. By the 1830–31 season when John Murray Forbes arrived in Canton, opium imports reached 18,956 chests total—the size of the trade having nearly quadrupled in the course of a decade.26 And that figure, it should be noted, represented only the opium imported from abroad: from India, mostly, with a small additional amount—about 8 percent of the whole—being Turkish opium imported by Americans (who trafficked in the cheaper variety from Turkey mainly because they faced no British competition for it). Those 18,956 chests did not include the much smaller but still meaningful amounts of opium grown and processed within China, or smuggled across China’s western land borders in Central Asia. Nevertheless, they alone were enough to satisfy the annual needs of more than 150,000 habitual users.27 In monetary terms, even accounting for the falling prices for opium—which were generally offset by the expansion of the Chinese consumer base—those 18,956 chests were worth nearly $13 million at the time, making for one of the most lucrative commodity trades in the world.28
The independent traders who did the real work of moving all the opium from India to China formed a community of their own in Canton to rival the Company’s factory. Their leader was William Jardine, a hardheaded Scot with a degree in medicine from Edinburgh. Jardine got his start as a surgeon’s mate for the East India Company, first sailing for India in 1802 just after his eighteenth birthday. When he eventually earned promotion from surgeon’s mate to surgeon, he gained the privilege of a small space in the ship’s hold to carry cargo on his own account, which he filled with badger-hair shaving brushes, lavender water, and macaroons. In time, he found that the strategies of trade were better suited to the workings of his mind than medicine, and its prospects more alluring than those of a ship’s surgeon, so in 1817, after fifteen years in the East India Company’s service, he quit to become a free merchant and throw his hat into the India-Canton country trade.29
The country trade, carried out in the shadow of the East India Company, was a highly restricted but profitable area of commerce. As the Company’s monopoly applied to all British traffic between China and Europe, country traders like Jardine were only allowed to bring Indian products t
o Canton, and could only unload in India what they acquired from Canton—they were not allowed to trade in any European products at Canton, and were especially forbidden from ship ping any Chinese tea or other commodities back to England. But the fact that India’s produce included opium and cotton meant that they could still make a good living within those narrow limitations. Not that they were grateful to the Company for allowing the openings in which they worked, however. Generally speaking, they despised it.
Three years into his new life of commerce, Jardine met his lifelong partner, a fellow Scot of higher birth named James Matheson who had likewise been drawn into the country trade by the prospect of cotton and opium profits. The two men complemented each other’s strengths—Matheson, who was twelve years younger than Jardine, was more temperamental and outspoken, more compelling as a writer. He also had money and better social connections back home. Jardine, by contrast, was more reserved and private but serious and purposeful, with a better head for business. Of the two, Matheson was the more willing to take big risks—in 1823 he tried unsuccessfully to corner the opium market at Canton, resulting in a glut and depression of prices—but then he, unlike Jardine, had family money to back him up if things went wrong. Jardine came from a more humble background and was a provider for his relatives back in Scotland, so he was the more conservative of the pair.30
In Canton, the two partners worked separately at first for firms founded by others, then together from 1828 onward, taking control of a firm called Magniac & Co., which they would in 1832 rename as Jardine, Matheson & Co. (It endures to this day as a major multinational conglomerate headquartered in Hong Kong, with more than four hundred thousand employees.)31 Jardine and Matheson did much of their business as agents for Parsi and British opium merchants in Bombay and elsewhere in India, whose cargoes they would sell at Canton, where both of them eventually settled down to live in the “Creek factory” (named for its proximity to a creek at the edge of the compound), two doors down from the British factory where the East India Company was based. They were a hub for the community of British free traders, and in 1825 James Matheson even took upon himself the expense of importing a printing press to Canton, the first since the Company brought one for Morrison’s dictionary, in order to publish the factory compound’s first newspaper. Called the Canton Register, its purpose was to share shipping news and, more subtly, to advocate for the doctrine of free trade. To ward off the Company’s monopoly on British residence at Canton, Matheson had an appointment as Danish consul, while Jardine (and their company as a whole) operated under protection of the Prussian flag, the consulship of which they inherited from old Beale, whose son came to work for them.32
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