by John Keay
Ideally, of course, the revenues of India should have paid for the tea of China. But such were the mounting military and administrative costs of the Company’s Indian establishments that revenue surpluses became a rarity. Instead of Indian revenues financing the China trade, it would soon be a case of the China trade financing the Company’s Indian establishments. On the other hand India did still generate a lot of surplus produce and manufactures, and it did still provide its British residents with sizeable personal fortunes. Both could be mobilized to purchase tea. The system of bills of exchange by which Company servants were repaid in England for fortunes invested with the Company in India has already been noticed. But the issue of such bills in India was strictly limited, the Company much preferring to issue them on Canton. Thus there arose the problem of how first to transfer or transform an Indian fortune into a Chinese one.
An obvious answer was to invest in Indian goods that could be resold in Canton. Unfortunately the Celestial Empire prided itself on being self-sufficient and was therefore notoriously indifferent to foreign imports. There were a few exceptions, like the culinary exotica of the archipelago, the mechanical curios of Europe, and some magical and medicinal items of extraordinary rarity; but cotton piece goods were not amongst them. Towards the turn of the century, however, a shortfall in Chinese agriculture did open the way for considerable imports of raw cotton, mainly from Bombay. This India-China trade, like all that within Asia, was open to the private or ‘country’ trader and spawned a number of Bombay ‘agency houses’ with representatives in Canton/Macao.
Similar activity in Calcutta centred round the purchase, from the Company monopoly recently established by Hastings, of locally grown opium which was then exported to the Far East. In spite of Peking’s prohibition of the drug, some opium was already being shipped direct to China; but it would be another generation before this trade came into its own. In the meantime the country trader and the agency house looked to south-east Asia and the archipelago to buy their opium and furnish in exchange the sharks’ fins, sea slugs, birds’ nests and spices that appealed to the Chinese.
This roundabout trade, occasioned by the problem of financing the Company’s tea imports, was undoubtedly the making of the agency houses. Partnerships like Crofts and Kellican in Calcutta, Jourdain, Sulivan and de Souza in Madras, and Scot, Tate and Adamson, the big cotton shippers in Bombay, absorbed and replaced individual private traders. In addition to their own ships, usually locally built for a specific trade, they freighted cargo on the Company’s ships within the East and even bought up the privilege tonnage allowed by the Company to its captains and officers for their own private trade to and from Europe. It has been estimated that in the 1780s nearly three-quarters of all British and Indian goods reaching Canton were being dispatched by country traders.
Still the insatiable home demand for tea far outstripped the supply of acceptable produce reaching Canton courtesy of the agency houses. The consequent shortfall, estimated at about one-third of the total in the 1780s, was made up, as had once been the case with the Indian trade, by bullion shipments. But most bullion, whether garnered by way of Spain in London or by way of Manila in India, originated in Spanish America; and when, for instance, Spain entered the War of American Independence, this supply dried up. As a source of finance it was neither dependable nor desirable. Hence the importance attached to the existence of gold deposits in both Tibet and Vietnam and hence Chapman’s emphasis on the fact that the Vietnamese paid for Indian imports with specie.
Another obvious and, as ever, ideal solution would have been to discover or create a demand in China for British manufactures. As yet the Chinese showed even less interest in English woollens and Wedgwood than the Indians. Except for clockwork curios and a certain amount of tin and lead, any British goods that reached Canton were invariably sold at a loss. This situation was about to be reviewed and a determined effort made to redress it. But the Company was not optimistic about the outcome and in the meantime the search for commodities that would command a certain sale in China went on. Having scoured the ports of mainland Asia and the archipelago, the more adventurous private traders were about to turn their attention to the Pacific and beyond.
The impetus for such an ambitious and improbable development was provided by the discoveries of James Cook and seconded by the ever passionate advocacy of Cook’s one-time rival for Pacific laurels, Alexander Dalrymple. Now the Company’s hydrographer, Dalrymple was not content simply to collect and publish navigational charts. As befitted a student of the Company’s first voyages, he was as excited by commercial prospects as by geographical discoveries and had come to regard the Pacific as a trading basin with as much potential as the Indian Ocean. Hence his obsession with the existence of a Southern Continent other than Australia; and hence his reports on, and encouragement of, the Alaskan fur trade.
About the latter, Cook was his main source of information. On his Third Voyage (1776-80), which was directed towards the discovery of the Pacific entrance into the supposed North-West Passage, Cook had sailed up the north-west coast of America and through the Bering Strait before conceding defeat. Thereafter he had withdrawn to the Sandwich Islands (Hawaii) only to be clubbed to death. But an account of this voyage was subsequently compiled by James King who gave it as his opinion that small expeditions to anywhere north of the Nootka Sound on what is now Vancouver Island could prove highly profitable. For what made this remote littoral ‘a new gold coast’ (W. Irvine) was its superabundance of small furry otters. Described as ‘the ermine of Asia’ the sea otter’s pelt was literally worth its weight in silver and was much prized by, above all, the Chinese.
King’s account of Cook’s last voyage appeared in 1784. Evidently James Strange, a Company servant heading for an appointment in Madras, bought a copy just before he left London. Certainly by the time his ship called at Bombay he had reached the bit about the sea otters and formed a plan which he communicated to David Scot of Scot, Tate and Adamson. Scot, later a director of the Company and one of Dundas’s allies in urging a more adventurous commercial policy, jumped at the idea. Two ships, now suitably named the Captain Cook and the Experiment, were placed at Strange’s disposal. Manned entirely by Europeans and provisioned for years rather than months, they sailed out of Bombay harbour amid strict secrecy in December 1785.
Meanwhile a copy of the book must also have reached Calcutta. For there, unknown to Strange or Scot, something called ‘The Bengal Fur Society’ had sprung into existence and begun canvassing support for a similar voyage into the unknown. Just three months after the departure of the Strange expedition, two equally well-equipped vessels sailed out of the Hughli. They were commanded by John Meares, a naval lieutenant made redundant by the peace of 1783; and in this case there was less secrecy for they had been renamed the Nootka and the Sea Otter.
Neither of these expeditions was mounted by the Honourable Company itself. In fact to smoothe their reception at Canton and Macao both had elected to sail under Portuguese colours. But both also proclaimed themselves as voyages of discovery in the hope that the Company would look favourably on their promoters’ disinterested zeal. Meares claimed that his scheme had the support of the Governor-General and that Sir John Macpherson, the new incumbent, had actually subscribed towards it. The Scot-Strange venture was authorized by the Bombay council who also gave Strange leave of absence from his Madras posting plus the services of a few Company soldiers. On the other hand no time was wasted seeking approval from London and no secret surrounded the identity of the promoters – private agency houses – nor their real objectives – ‘a new channel of…commercial intercourse between America and China’ (Strange), ‘to supply the Chinese market with furs and ginseng’ (Meares).
But this begged all sorts of questions. Private traders operated under licence from the Company and the Company’s charter granted it a monopoly of all trade east of the Cape of Good Hope. It did not, however, clearly specify where this trading zone ended. There must, though
, have been doubts about whether it was supposed to cover the entire Pacific Ocean as well as the Indian, and large parts of America as well as Asia. If it did not cover these areas, the authorities in India had no right to be authorizing voyages there; and if it did, the question arose as to whether the delegated rights of private traders to engage in the country trade of Asia extended also to America. All in all, and as events soon confirmed, a reference to London would have been a sensible precaution.
Seemingly unconcerned about such niceties, both expeditions took about six months to reach America. Strange worked north from Vancouver Island, ‘discovering’ Queen Charlotte Sound, which he took possession of in the name of the King rather than the Company (another apparent contradiction), and of course buying sea otters. In the autumn he reached Prince William Sound on the south coast of Alaska and there ran into Meares. To Strange the discovery that, in spite of all the secrecy, he was not to have the fur trade all to himself came as a crushing revelation. Although only 600 pelts had been collected, he determined to sail straight for Canton. Possibly he wanted to be sure of getting there ahead of Meares’s Sea Otter and the slump in prices which must result from a sudden over-supply; more probably he just wanted out from a trade which he could not now claim as exclusively his. The pelts sold well and he would later urge the Company itself to assume responsibility for future trade with America and to establish a permanent settlement on Vancouver Island. But his patron, Scot, had returned to England and neither Bombay nor Strange took any further active part in trans-Pacific commerce.
Meanwhile Meares in the Nootka had elected to spend the winter in Alaska. Cold-shouldered by the Russians at what is now Anchorage, he signed trading agreements with some of the local Inuit and built a large cabin in a place ill-named Snug Corner Cove. The ice closed in round the ship. The dark Arctic winter prompted fond thoughts of Calcutta. To an intensity of cold for which the expedition was ill prepared was added the scurge of scurvy. Out of thirty-one men who went ashore in December only ten survived to witness the May thaw; and with the thaw came another unwelcome visitation.
Given his plight, one might have expected Meares to have been overjoyed at the news of a vessel with a red ensign ploughing through the icefloes towards Snug Corner Cove. But it immediately transpired that Captain George Dixon of the Queen Charlotte was only eight months out of London. In other words he and his consort vessel had reached Alaska via Cape Horn, not the Cape of Good Hope; and although he had taken the precaution of obtaining the Honourable Company’s permission, he actually represented the ‘King George Sound Company’, an enterprise also inspired by Cook’s voyage but specifically authorized by the British government to open north Pacific trade, all of which made Meares an interloper. Having given a bond not to trespass any further on the new Company’s preserve, Meares headed west for Canton, whither Dixon soon followed him. Between them they had nearly 3000 pelts.
Evidently the prices obtained from the Chinese lived up to expectations, for further capital and encouragement were immediately forthcoming. Nothing more is heard of ‘The Bengal Fur Company’ but, in association with an up-and-coming Canton agency house then trading as Cox and Beale (and later Magniac and Co and eventually Jardine, Matheson and Co), Meares himself returned to north-west America in 1788 and more ships were sent in 1789. By then the King George Sound Company had also entered into a partnership with Cox and Beale which gave the former an easier entrée to the Canton market and enabled Meares to continue in business. It has been calculated that in all some thirty-five British ships engaged in the trans-Pacific fur trade during the decade 1785-94.
Undoubtedly it would have been more but for increasing competition from American vessels and but for the so-called Nootka crisis of 1789 when three of Meares’s ships were taken by a Spanish squadron. The Spaniards, who regarded the whole American west coast as their exclusive preserve, claimed to be simply dealing with an unauthorized and bellicose incursion. But the Pitt government, egged on by Meares’s often exaggerated account of his establishment on Vancouver Island, took a very different view. A Royal squadron had just been ordered to effect a permanent settlement there collecting en route men and stores from New South Wales. Now the whole fleet was ordered to sea. War was avoided, but only just and only after much diplomatic brinkmanship in London and Madrid.
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The willingness shown by the British government, and particularly by Dundas at the Board of Control, to lend active support to commercial expansion in the East introduced a new element into the Company’s situation. Here surely was one of the bonuses of Pitt’s India Act. Having shouldered responsibility for the government and security of the Company’s territories, it was natural that the Board of Control, i.e. the British government, should now vigorously espouse the trade on which their prosperity depended. And so it did. But that was not good news for the Company. For Dundas, on the advice of David Scot, late of Bombay, had understandably inferred that the most dynamic and elastic sector in the Company’s commerce was that operated not by the Company but by the country traders. Hence the support for Meares and his colleagues. And hence the launch, in spite of the Company’s opposition, of a simultaneous but much more ambitious attempt to tackle the problems of trade at Canton.
This took the form of the Macartney Mission to Peking of 1793, described as the most elaborate and expensive diplomatic initiative ever undertaken by a British government. Led by someone as jealous of his own dignity as Hastings’s old rival at Madras, and combining the paraphernalia of a trade fair with the pretensions of an academic symposium plus the pomp of a state occasion, the mission was bound to scale new budgetary heights. But the stakes were also high. Had Macartney, as envisaged, ended China’s diplomatic isolation, installed a British ambassador in Peking, opened the country to British imports, secured a British enclave on Chinese territory, won access to China’s northern ports, and obtained a relaxation of the trading restrictions at Canton – not to mention reopening trade with Japan, renewing contacts with the Philippines, and founding sundry settlements in the archipelago – it would indeed have been money sensationally well spent.
In the event the Mission proved no more successful, and made itself no less ridiculous, than those previous interventions by the Court of St James led by Roe, Norris, and Lindsay. But as always, the government’s embarrassment was mitigated by the comforting thought that it was the Company which was to be saddled with the bill, in this case £80,000.
The Company had warned right from the start that such a mission might prove counter-productive. It therefore played a reluctant and minimal part in the affair and benefited from it not at all. In spite of a voluminous and often colourful documentation, the Mission scarcely merits attention in a history of the Company. Yet there surfaced in the long correspondence that preceded it a number of considerations that are highly relevant.
They included a recitation of the notorious handicaps to which all foreign trade at Canton was subject. The trading companies were still obliged to withdraw their entire establishments to Macao during the slack summer months; they were forbidden to bring any guns or any women up to Canton; there were strict rules about the conduct and domicile of ships’ crews while there; and there were heavy penalties for any merchants who strayed outside the waterfront ghetto where the foreign companies had their factories. To some extent the Company’s representatives, or supercargoes, had become resigned to these restrictions. After 1784 their tea purchases quickly came to exceed those of all the other foreign companies combined. Together with their long experience of Chinese methods, it gave them a certain status and leverage.
But it was very different for the country traders and the private agency houses, many of whom were only now establishing themselves in Canton. With no legal status, they either sheltered beneath whatever grudging protection the Company’s Select Committee of Supercargoes might afford them or, like Meares, they opted for Portuguese or some other bogus European accreditation. Either way the arrangement was not calcu
lated to make them other than profoundly resentful of the so-called Select Committee.
Additionally all foreigners fretted at the capricious nature of the various fiscal impositions levied on their trade and at the Co-Hong system whereby a small cartel of Chinese merchants was alone licensed to trade with them. The Co-Hong system invited price fixing; it also concentrated the risk element so that while some Hong merchants accumulated massive fortunes, others ran up equally massive debts. Given rates of interest comparable with those offered by Mohammed Ali in Madras, foreigners – and in particular British country traders – were not averse to becoming their creditors. But whereas the Nawab’s debts were secured by an alliance with the Company and a powerful parliamentary interest, those of the Hongists were virtually unsecured. As a result, when in the 1770s a succession of Hongists defaulted, the creditors had had no redress other than to appeal to the British government. The Company was eventually persuaded to intercede on their behalf and secured a settlement that amounted to about twenty-five per cent of the sums claimed. But it is significant that the idea of an embassy to Peking first surfaced as a result of this appeal to London by the country traders.
It resurfaced in 1784 as a result of the Lady Hughes affair which highlighted another ancient grievance, that of Chinese jurisdictional claims over the foreign community. While firing a salute, the Lady Hughes’s gunner, an old and absent-minded tar, let off a round of shot which killed two Chinese in a passing sampan. The gunner then went into hiding; but, when the Chinese secured the person of the ship’s supercargo by way of hostage, the luckless culprit was found, handed over and, without so much as a hearing, judicially strangled. That a British sailor guilty of nothing worse than absent-mindedness should be subject to China’s summary ideas of justice provoked an outcry even in London. Calls for an appeal direct to the Emperor were renewed and, though opposed by the Court of Directors, won a favourable hearing from the Board of Control. For the Lady Hughes was a private ship; indeed it seems probable that had she been a Company ship, Chinese justice might, as on previous occasions, have proved more lenient. Once again the vulnerability of the private or country traders was represented to Dundas in vivid terms, and within a matter of months he decided to act. As a suitable person to confront the Emperor of China his choice initially fell on Lieutenant-Colonel the Honourable Charles Cathcart.