TRADE UNDER THE TREATY OF NANKING.
Trade the sole motive in all British and American dealings
with China -- Simplicity of this trade -- Chief staple
imports and exports -- Data for any review of Chinese trade
-- Mutual alarm caused by excess of imports -- Peculiar
conditions of British trade -- Entailing a loss of over 30
per cent, yet steadily maintained -- System of barter --
Consequent impossibility of clear accounts -- And ignorance
of position at any given moment -- Trade also hampered by
traditions of the East India Company -- Such as that of
keeping large stores on hand -- Gradual improvement on
these methods -- Advantages of landed investment in China
-- Perceived and acted on by the Jesuits -- And later by
foreign merchants -- The American trade -- Similarity of
currency -- Excess of Chinese exports met by shipments of
specie -- And later by credits on London banks.
Whatever may be said of that of other nations, the intercourse of
Great Britain and the United States with China, from the earliest
period to the latest, whether in peace or war, has had no other object
than trade between the nations, and therefore all the steps in that
intercourse must be judged in their relation to the promotion of
international commerce. War and diplomacy, geographical exploration
and reforms, even literary researches and mutual instruction, being
all ancillary to the main purpose, it seems fitting to consider as
briefly as may be what manner of thing it was which set, and still
keeps, all these auxiliary forces in motion.
From its first introduction till now one feature has characterised the
Chinese foreign trade, and that is its simplicity. Both on the export
and the import side a few staple commodities have made up its whole
volume, and in this respect the statistics of to-day differ but little
from those of fifty years ago. The leading Chinese imports at the
conclusion of the first war were: From India, opium and raw cotton, to
which has been added, since the development of steam factories, cotton
yarn. From England, plain bleached and unbleached cotton goods, cotton
yarn, some descriptions of woollens, iron and lead, account for nearly
the whole value. The trade from the United States and the continent of
Europe in those days did not greatly affect the general aggregate. The
exports of Chinese produce were at the period in question almost
confined to the one article--tea. Subsequently silk grew into
importance, and soon exceeded in value the great speciality of China.
Rhubarb was a commodity on which, next to tea, the Chinese affected to
lay much stress, on the ground that foreigners were dependent upon it
for the preservation of their health, and that stopping the supply
might offer an easy means of coercing them. But the article never
assumed any important commercial value. Sugar, camphor, and matting
were also among the exports, the last named being much in demand in
the United States. It is only of recent years, however, that anything
like assorted cargoes of produce have been sent away from the Chinese
ports. The trade has passed through many vicissitudes, has had its
periodical ebb and flow, but has on the whole been prosaically
progressive. And this has been especially the case with the imports
of British and other Western produce.
It would be instructive to review the circumstances of the Chinese
trade at successive stages of its progress, and to note the grievances
of merchants and manufacturers at different epochs and the obstacles
to commercial development as they were felt from time to time. It
would be more interesting to do this were it possible to discriminate
between permanent causes and temporary accidents. But it is not always
what is of the most lasting importance that makes the strongest
impression upon those who are actively engaged in the struggle for
life. The trader does not greatly differ from the world at large in
his love of a whipping-boy--that is to say, in the common tendency to
attribute mischances to objective rather than to subjective causes.
Prosperity, like good health, is, to those who enjoy it, its own
sufficient explanation, the normal reward of the merit each one takes
to himself as a matter of course. Adversity, on the other hand, is
assigned to demonic origin, its victims being martyrs to the powers of
nature or the hostile combinations of men. For these reasons it would
be as difficult to gather from their own accounts what were the real
helps and what the real hindrances to the traders' progress, as to
draw general conclusions on the state of agriculture from
conversations with working farmers. The commercial circular is a
familiar product of the modern era of open trade. It undertakes to
record the actual state of markets and to give the reasons why they
are not otherwise. If one were to circumnavigate the globe and compare
the ordinary run of these reports issuing from the great emporia, one
feature would be found common to them all--it is the bogy. Everything
would be for the best--but for certain adverse influences. It may be
the vagaries of some Finance Minister or Tariff Commission, the
restraint of princes, war, pestilence, or famine--inundations here and
droughts there; but a something there must always be to explain away
the moral accountability of the individual traders, manufacturers, or
planters. China and Japan have seldom been without such fatalistic
obstacles to commerce. For many years the rebellion was the _bête
noire_ of merchants, then the mandarins, and smaller rebellions; the
scarcity of specie at one period, at another the superabundance of
cheap silver. In Burma the King of Ava stood for long as the root of
all commercial evil. In Japan the Daimios and the currency served
their turn. India is never without calamities sufficient to account
for perhaps more than ever happens there. All such drawbacks, however,
though real enough as far as they go, are never exhaustive, and seldom
even reach to the core of the problem. They are as atmospheric
phenomena, to be observed, taken advantage of, or provided against,
and are extremely interesting to the individuals immediately affected
by them. But as regards the general course of trade, such incidents
are but as storms on the surface of the deep oceanic currents: it is
the onward sweep of the great volume of traffic that alone possesses
public interest. Of the circumstances which influence the course and
direction of that beneficent current a collation of the utterances of
traders would yield but a refracted account. So that in order to
appreciate the progress of commerce we have to fall back on the
unadorned columns of statistical tables, which themselves leave
something to be desired on the score of completeness.[20]
With regard to certain periods of the China trade we have rather full
data, as, for instance, in the decade following the war, when the
working of the trade exercised the minds both of British merchants and
of their Government in a degree which has scarcely been equalled
since. The same may be predicated of the Chinese Government also, and,
as has been observed in a previous chapter, it was an interesting
coincidence that during that critical period it was the self-same
grievance that pressed on both sides--namely, the insufficiency of the
Chinese exported produce to pay for the goods imported. The effect of
this on the Chinese Government was to excite unfeigned alarm at the
steady drain of silver required to pay for the excess of their
imports. On the British side the grievance came home to the
manufacturers in the form of the incapacity of the Chinese to take off
an adequate quantity of the products of English looms. The remedy
proposed from the two sides was thoroughly characteristic of their
respective traditions. On the Chinese side it was negative,
obstructive, prohibitory, and absolutely vain. On the British side the
proposal was positive, expansive, and in accord with the spirit of
modern commerce. The Chinese remedy was to forbid the export of silver
and the import of opium, which, being the article in most urgent
demand, was usually paid for in bullion or in coined dollars. The
English remedy was to stimulate the export of Chinese produce. But
here a paradox stands in the way of a clear perception of the
position. The British trade was being carried on at a loss, which some
of the merchants estimated at 33 per cent on the round venture. That
is to say, manufactured goods were sold in China at a loss of 15 to 20
per cent, and the proceeds, being invested in Chinese produce,
realised a further loss on sale in England of 17 or 20 per cent.
To account for this unremunerative trade being carried on voluntarily
year after year, it is necessary to remember the great distance of the
two markets in the days before the introduction of steam and the
shortening of the voyage by the piercing of the Suez Canal. We have to
allow also for the gambling or speculative element which animates all
commerce, and the "hope-on-hope-ever" spirit without which no distant
adventure would ever be undertaken. The rationale of the phenomenon
was reduced to a very simple expression by Mr Gregson, who, when asked
by the Committee of the House of Commons if he could explain "the
singular proceeding of continuing the trade for a series of years with
perpetual losses on it," replied: "The manufacturers reason that as
the losses have been considerable the exports will fall off, and
therefore they may export again. They are generally deceived, because
their neighbours taking the same view, the exports are kept up and the
loss continues."
The case thus bluntly stated by Mr Gregson was not such a temporary
phase as might naturally have been concluded. The same remarkable
features continued for many years afterwards more or less
characteristic of the China trade, so that had another commission been
appointed to consider the subject they would have been surprised to
find the old riddle still awaiting solution, Why so regular and simple
a trade should be carried on apparently without profit? The data of
supply and demand being well ascertained, prices remunerative to the
merchant might have been expected to arrange themselves automatically.
Further explanations seem, in fact, required to supplement Mr
Gregson's, and some of these must appear somewhat whimsical and
farfetched to the general reader. The peculiar method in vogue of
stating accounts was not perhaps without its influence in obscuring
the merchants' perceptions of the merits of their current operations.
The trade being virtually conducted by barter, the sale of a
particular parcel of goods did not necessarily close the venture. A
nominal price was agreed upon between buyer and seller for the
convenience of account-keeping, but this almost always had reference
to the return investment in tea or other produce. So that British
goods were regarded as a means of laying down funds in China for the
purchase of tea, while tea was regarded as a return remittance for the
proceeds of manufactured goods, and as a means of laying down funds in
England for further investments in the same commodity for shipment to
China. The trade thus revolving in an eternal circle, having neither
beginning nor end, it was impossible to pronounce definitely at what
particular point of the revolution the profit or loss occurred. A bad
out-turn of goods exported would, it was hoped, be compensated for by
the favourable result of the produce imported, and _vice versâ_, _ad
infinitum_. Thus no transaction stood on its own merits or received
the unbiassed attention of the merchants. Their accounts did not show
the actual amount of loss or gain on a particular invoice, the
formula simply recording the price at which the venture, as an
operation in exchange, "laid down the dollar." The par value of that
coin being taken at 4s. 4d., the out-turn of a sterling invoice which
yielded the dollar at any price below that was of course a gain, or
anything above it a loss. But the gain or loss so registered was
merely provisional. The dollar as such was never realised: it was but
a fiction of the accountant, which acquired its substantial value only
when reinvested in Chinese produce. The final criterion, therefore,
was how much the dollar invoices of Chinese produce would yield back
in sterling money when sold in London, and how that yield compared
with the "laid-down" cost of the dollar in China. But even that
finality was only provisional so long as the circuit of reinvestment
was uninterrupted.
Merchants were not called upon to face their losses as they were made,
nor could they realise their profits as they were earned. Long before
one year's account could be closed, the venture of one or two
subsequent years had been launched beyond recall, and the figures of
the newest balance-sheet related to transactions which, having already
become ancient history, were but a dry study compared with the new
enterprises bearing the promise of the future and absorbing the whole
interest of the merchant. Business was thus carried on very much in
the dark, the eyes of the trader being constantly directed forward,
while past experience was not allowed its legitimate influence in
forming the judgment. A blind reliance on the equalising effect of
averages was perhaps the safest principle on which such a commerce
could be carried on. The merchants themselves were wont to say that
after drawing the clearest inferences from experience, and making the
most careful estimates of probabilities, the wisest man was he who
could act contrary to the obvious deductions therefrom. Business thus
became a kind of concrete fatalism.
The China trade was, moreover, much hampered by certain traditions of
the East India Company which long clung to its skirts. One of these
relics of conservatism, transmitted from the days of the maritime
wars, was the principle of storing up merchandise at both termini. It
was an understood thing that the Company should never keep less than
two years' supply of tea in the London warehouses, and long after the
Company ceased to trade stocks of that commodity often amounted to
nearly twelve months' consumption. Similarly, manufactured goods were
accumulated, whether of set purpose or from the mere force of habit,
in the China depots. The merchant seemed to have inherited the
principle of holding merchandise for some ideal price, locking up his
own or his constituents' capital, incurring cumulative charges on
commodities which were all the while deteriorating in value, and
eventually perhaps selling under some financial or other pressure. A
certain satisfaction seems to have been derived from the contemplation
of a full "go-down," as if the merchandise there stored had been
realised wealth instead of a block to such realisation.
That primitive state of affairs is now a thing of the past, since the
progress of the world during the last thirty years has revolutionised
not the foreign trade of China, but the peculiar system on which it
was carried on. The distribution of capital and the services of
Exchange banks exploded many conservative doctrines. The first
merchants who, perceiving the necessity of reforming the habits of the
trade, boldly resolved to "sell and repent" on the arrival of their
merchandise, were pitied by their more antiquated neighbours, and
thought to be likely to stand much in need of repentance. But in their
case wisdom has been justified of her children.
This bald sketch of the trade customs inherited from the East India
Company, though typical, is by no means exhaustive. There were, both
before and after the treaty of Nanking, many byways and specialities
and exceptions by which the vicious circle was broken with happy
results to the individuals. Indeed at all points there have been
collateral avenues to fortune, contributory enterprises more
profitable than those which were purely commercial. The various ways
of taxing commerce, as by insurance, freightage, storage, lighterage,
packing, financing, &c., have afforded, on the whole, safe and good
returns on capital. In countries where family improvidence is
prevalent, and where capital is scarce and dear, as is the case
generally in the Far East, both the opportunity and the inducement to
invest in real estate are afforded to those who are in a position to
take advantage of them,--for the same conditions which bring property
into the market provide the tenants for the new proprietors. By
following with that singleness of purpose which distinguishes all
their proceedings the line of financial policy so obviously suggested
by this state of things, the Jesuits, Lazarists, and other religious
orders have gradually accumulated in every locality where they have
settled a very large amount of house property in and around populous
centres. By this means they have laid whole communities of natives,
and even foreigners, under permanent tribute to the Church, and have
thereby rendered their missions independent of subventions from
Christian countries. Many of the foreign merchants, following this
worldly-wise example, have in like manner rendered themselves
independent of mercantile business.
The American trade was for the most part exempt from the drawbacks as
well as the advantages of the circuit system. The similarity of
currency helped to simplify American commerce with China, and though
from an early period the United States exported manufactures to that
country, these went but a little way in payment for the products which
they imported from China. Hence large shipments of specie had to be
made to purchase their cargoes. No statistics exist, but Mr Hunter
incidentally mentions one ship carrying amongst other cargo $350,000,
and three other vessels carrying between them $1,100,000, which may be
taken as typical of the course of trade prior to the abolition of the
East India Company's monopoly. This mode of paying for produce was
succeeded in after-years by credits on London banks, drafts under
which supplied the most convenient medium of remittance to shippers of
opium and other produce from India. The circuit was trilateral, and to
a considerable extent remains so.
I. TEA.
Causes of bad state of trade -- Failure of hopes built on
"free" trade -- Efforts for improvement -- Select Committee
of 1847 -- Excessive duties in England -- Irregularities in
valuation -- Annual consumption at this time -- Revenue
from the duties -- Beginnings of the India tea trade -- Mr
Robert Fortune -- Lord William Bentinck, Governor-General,
introduces tea culture, 1834 -- Assam Company founded 1839
-- Fortune's missions to China -- Tea-plant indigenous in
India -- Progress of scientific culture -- Vicissitudes of
the trade -- Ultimate success of the India and Ceylon trade
-- An example of Western as against Eastern methods --
Tea-planting introduced in Ceylon -- Rapid increase there
-- Why China has been supplanted in the market -- Ingenuity
and enterprise of the Indian planters -- A victory of race
and progress -- Obstructive measures of the Chinese
Government.
There was an apparent inconsistency in the outcry for larger
quantities of Chinese produce to balance the trade, while the small
quantity that did come forward could only be sold at a loss. The
explanation may partly be found in the "boom" which naturally ensued
on the emancipation of the China trade from the oppressive monopoly of
the East India Company, and in the disappointment which, no less
naturally, succeeded the boom. To some extent also the onerous imposts
laid upon the principal article of export--tea--by the British
Exchequer might be held responsible for the anomaly; for the English
duties were a mechanical dead-weight on the trade, impeding the free
play of the other economic factors. There was a practically unlimited
supply of tea in China, and a growing demand for it in England, and
yet some £2,000,000 in specie was annually sent away from China as the
balance of trade. How to commute that amount of silver into tea for
the benefit of both countries might be said to be the problem before
the merchants and their Governments.
The only means which appeared to them feasible to effect this object
was to lower the British import duty. Among many interesting
particulars concerning the actual state of the Chinese trade at that
time, we get from the report of the Select Committee of the House of
Commons on "Commercial Relations with China," of 1847, an insight into
the difficulties, such as in our day can scarcely be imagined, which
stood in the way of any reduction of the tea duties.
On the opening of what was called free trade with China--"free," that
is to say, of the East India Company's monopoly--the duty was 96 per
cent _ad valorem_ on all teas sold at or under 2s. a pound, or 100 per
cent on all above that price. These _ad valorem_ duties worked
iniquitously for both the Government and the merchants, the Customs
levying the higher rate when the lower was appropriate, and the
merchants redressing the injustice in their own fashion when occasion
served. An attempt was made to remedy this regrettable situation by
the reduction of tea to three classifications, and the conversion of
the _ad valorem_ duties into specific duties ranging from 1s. 6d. to
3s. per pound on these classifications. The arrangement was still
found unworkable, and the most glaring irregularities were common. The
same parcel of tea, absolutely uniform in quality, divided between
London and Liverpool, would be assessed in one port on the lower, and
in the other on the higher, scale of duties, and the Customs would
grant no redress, though the overcharge might be ruinous to the
trader.
This impossible state of things was remedied in 1836, when the duties
were converted to one uniform rate of 2s. per pound on all teas.
Subsequently 5 per cent was added to this, so that the duty in 1847
was 2s. 2¼d. The object to which the Government inquiry was primarily
directed was to gauge the effect on the consumption of tea of the
raising or lowering of the duties, on which depended the ultimate
retail price. The admission of competition in the Chinese trade in
1834 had the immediate effect of reducing the "laid-down" cost of tea,
which promptly reacted upon the consumption of the article in England.
But as the import duty remained unaltered, while the prime cost of the
tea was much lowered, the Exchequer derived the whole benefit from the
increased consumption.
The annual consumption at that time in Great Britain was 1 lb. 10 oz.
per head, or 46,000,000 lb. in total, and it was shown that in every
instance where the duty was lower the consumption was proportionately
greater. In the Isle of Man, where the duty was 1s. per pound, the
consumption quickly rose, when the restriction on the quantity allowed
to be imported there was removed, to 2 lb. 10 oz. per head. In the
Channel Islands it was 4 lb. 4 oz. per head. "In Newfoundland,
Australia, and other colonies the consumption is very much larger per
head than it is in this country." The Australian colonies have
maintained to the present day their pre-eminence as tea-drinkers,
their consumption averaging no less than 10 lb. per head. Consumption
in Russia and the United States is estimated at a little over 1 lb.
per head of the population.
The colonists have always been the most intelligent consumers of the
article. Forty years ago they substituted good black teas for the
pungent green which had supplied the wants of the mining camps and
primitive sheep stations, and within the last few years they have
shown their appreciation of the flavoury Ceylon leaf by taking every
year a larger quantity in relative displacement of the rougher
qualities which come from India. The "geographical distribution" of
the taste for tea presents some rather curious facts. In the United
Kingdom, for example, dealers find that Irish consumers demand the
best quality of tea. The United States remained faithful to their
green tea long after that description was discarded in Australia; and
even when black tea came to be in part substituted, it was not the
Ceylon or Chinese Congou, but the astringent Oolong kinds, such as are
so largely supplied from Japan, which met the taste of American
consumers.
The cost price of tea had been so much reduced by the abolition of the
East India Company's monopoly that the fixed rate of duty, instead of
being equivalent, as it had been when originally fixed, to 100 per
cent on the value, was estimated to average 165 per cent on Congou
tea, which was much beyond what the Legislature intended when the
tariff was decided; for while they reckoned on getting a revenue of
£3,600,000, the increase in the quantity had been so considerable that
the yield of the duty had risen to £5,000,000. The arguments and the
evidence in favour of reducing the duties were unanswerable from every
point of view. Yet the utmost which the advocates in 1847 seem to have
hoped for was that it might be reduced to 1s. per pound, which they
considered would entail a temporary loss to the revenue. But we see in
our day that the Government draws nearly £4,000,000 from the article
on a tariff rate of 4d. per pound, while the consumption per head of
population has risen to 6 lb., or a total of 235,000,000 lb. per
annum.
While the mercantile community were thus straining after means of
developing the tea trade from China there were causes at work, of
which they seemed to have no suspicion, which have completely
revolutionised that trade, reducing China to a quite secondary
position as an exporter. Among the witnesses examined before the
Committee of 1847 there was one who may almost be said to have held
the fate of the Chinese tea trade in his hands, though probably he
himself was unaware of it. This was Mr Robert Fortune, curator of the
Physic Gardens at Chelsea, who had travelled in some of the tea
districts of China as agent of the Horticultural Society of London,
being also commissioned by the East India Company to investigate the
processes of the growth and manufacture of tea in China, and to bring
to India seeds and plants as well as skilled workmen to manipulate the
leaves. The idea of cultivating tea in India had long been entertained
by the Company. The plant itself had been found indigenous in Upper
Assam twenty years before Fortune's day, but no practical notice was
taken of the discovery until 1834, when the Government of India
resolved to attempt the culture of the leaf. The scheme received its
first embodiment in a Minute of Lord William Bentinck, the first
Governor-General of India,[21] in 1834. The plan he laid down was to
"select an intelligent agent, who should go to Penang and Singapore
and in conjunction with authorities and the most intelligent of
Chinese agents should concert measures for obtaining the genuine
plant, and actual cultivators." The state of affairs in China at the
time did not favour the prosecution of such an enterprise. The native
resources of India, however, began at once to be utilised. The Assam
Company, the pioneer of tea-culture, was established in 1839, and
continues its operations to our own day. After the treaty of peace and
the successful establishment of trade at the new ports in China, Lord
William Bentinck's ideas were realised in the two missions of Fortune,
who succeeded in conveying to India nearly 20,000 plants from both the
black and green tea countries of Central China. Although, judging from
subsequent experience, India might by her unaided efforts have
developed this great industry, yet it can hardly be doubted that the
enterprise of the practical Scottish gardener applied the effective
stimulus which raised tea-growing to the rank of a serious national
interest. Hybridisation between the imported Chinese plants and those
of indigenous growth proceeded actively, no less than one hundred
varieties being thus produced. Planters now consider that the native
plant would have served all their purposes without any intermixture,
but probably nothing short of practical experience would have
persuaded them of this.
The vicissitudes of tea-growing in India have been so sharp that they
would form of themselves an interesting episode of industrial history.
Mania and panic alternated during the experimental stages of the
enterprise, with the inevitable result of wholesale transfers of
property, so that of the early pioneers comparatively few were
destined to enjoy the ultimate reward of their sacrifices.
Difficulties of many kinds dogged the steps of the planters, among
these being the unsatisfactory land tenure and the supply of labour.
The mortality among the imported coolies was for many years so heavy
that the Government was eventually obliged to interfere with severe
regulations, which were imposed in 1863. These and other difficulties
being successfully grappled with, the prosperity of the industry
flowed as smoothly as the Niagara river below the Falls, until the
supply of tea from India and Ceylon had completely swamped that from
the original home of the trade.
The supplanting of Chinese by Indian tea in the markets of the
world--for even Russia is now an importer of the latter--is an
interesting example of the encroachment of Western enterprise on the
ancient province of Eastern habits. These are of course only general
terms, for from all such comparisons Japan must be either excluded or
classed rather among the foremost of the progressive nations than
among her nearest geographical neighbours. When tea-cultivation was
once shown to be "payable" in British Indian territory the energy of
the Western people was quickly brought to bear on the industry, and
through several cycles of success and failure, and over the dead
bodies, so to speak, of many pioneers, the production available for
and distributed in the English market has steadily grown from nothing
up to 154,000,000 lb. per annum.
The cultivation of tea was introduced at a much later period into
Ceylon, where it most opportunely took the place of coffee, which had
been ruined by disease, and already the deliveries of tea from that
island press hard on that from India itself, having reached 90,000,000
lb., or more than half of the Indian supply. The rate of progress in
Ceylon has been most remarkable. In 1883 the most experienced
residents in the island considered themselves sanguine in predicting
that the export of tea would eventually reach the total of 20,000,000
lb.--it being at that time under 1,000,000 lb. While the products of
India and Ceylon have thus been advancing by leaps and bounds, the
import from China has dwindled down to 29,000,000 lb.,--about
one-tenth part of a trade of which forty years ago she held an easy
monopoly.
How has such a gigantic displacement been brought about? Primarily, no
doubt, from the vigorous following up of the discovery that tea could
be profitably grown in India. But beyond that it is a victory of race
over race, of progress over stagnation, of the spirit of innovation
and experiment over that of conservative contentment. The Indian
planters have made a personal study of all the conditions of
tea-culture, have selected their plants, invented machinery to do all
that the Chinese have done for centuries by manipulation, have put
ample capital into the enterprise, and used the utmost skill in
adapting their product to the taste of their customers. Moreover, they
have by dint of advertising all over the world, attending exhibitions,
and many other devices, forced their commodity into markets which
would never have come to them. There was, on the other hand, no one
interested in the success of Chinese tea-growers, whose plantations
are in the interior of the country, subdivided into garden-plots, with
no cohesion among their owners for aggressive purposes. For though
the Chinese can and do combine, it is usually in a negative sense, to
obstruct and not to promote action, whereas the tea-growers of India
have shown examples of intelligent co-operation of the aggressive and
productive kind, not wasting power in seeking to impede rivals, but
devoting their whole energies to the prosecution of their own
business. And they have their reward.
The short-sightedness of the Government has no doubt contributed to
the decline of the Chinese tea trade, through the excessive duties of
one kind and another which they have continued to levy on the article
from the place of growth to the port of shipment. It is fair to
remember, however, that their exactions bear most heavily on the low
grades, which, notwithstanding, continue to be shipped in quite as
large quantities as is desirable in the interest of consumers; while
the superior qualities, which are quite able to bear the taxes, have
almost ceased to be imported into Great Britain, the whole supply
finding its way to Russia. That country has long been celebrated, and
justly so, for the excellence of its tea, for which fantastical
reasons are wont to be given. The true reason is very simple. Russian
merchants purchase the fine Chinese teas for which no market can now
be found in England, the public taste having run so exclusively on the
product of India and Ceylon that a cup of good Chinese tea has become
a luxury reserved for those who have facilities for obtaining the
article outside the ordinary channels of trade.
II. SILK.
Balance of trade adjusted by Shanghai silk trade -- China
the original silk country -- Silk chiefly exported from
Canton -- Advantages of the new port of Shanghai -- Disease
attacks the silkworm in Europe -- Shanghai supplies the
deficit -- Efforts in Italy and France to obtain healthy
seed from China and Japan -- Disease overcome by M. Pasteur
-- Renewed prosperity of the European producers shared by
the Chinese.
Within six years of the time when the merchants of England were
earnestly seeking a remedy for the crying evil of the balance of trade
against China, the whole difficulty had disappeared through the
operation of natural causes. The great factor in bringing about the
change was the rapid growth of the trade of Shanghai, and more
particularly the large exportation of raw silk from that port. "The
noble article," as the Italians fondly call it, already in 1853
represented a larger value than the tea exported; the turn of the tide
had come; the balance of trade had shifted; and in a very few years
silver flowed into the country more copiously than it had ever flowed
out.
Of all the materials of commerce silk is perhaps the most classical. A
fibre so lustrous, so pure, and so durable, has been the desire of all
nations ancient and modern, and the peculiar interest excited by its
humble origin enveloped the subject in myths and legends during the
earlier intercourse between Europe and Asia. China was known to the
ancients as the cradle of sericulture, deriving, in fact, from its
most famous product the name Serica, by which it was known to the
Greeks and Romans. There is not a silk-producing country in the world
which is not directly or indirectly indebted to China for the seed of
the insect, if not also for the introduction of the white
mulberry-tree, upon the leaves of which the caterpillar is fed. Though
rivals have sprung up in many countries both in Europe and in Asia,
China has not lost its reputation, or even its pre-eminence, as a
producer of the article.
The vicissitudes of the silk trade and cultivation would afford more
varied interest than the comparatively simple annals of the
displacement of tea. Though the subject falls outside the scope of the
present work, the changes that have taken place in Chinese commerce
cannot be intelligently followed without some reference to the
animated competition which has been going on for more than forty years
among the great silk-producing countries. The first in rank among
these was Italy, France following at a considerable distance. The
wants of Europe had been mainly supplied during centuries by the
product of these countries, India and the Levant and some others
contributing also their share. Japan had been growing silk for her own
use during all the time that intercourse with the rest of the world
was prohibited by severe laws, and she came later into the field as an
exporter.
The quantity obtained from China previous to the opening of the five
ports was all derived from the southern provinces, and was exported
from Canton. In nothing was the pre-eminence of the new port of
Shanghai over its older rival destined to be more marked than in the
development of the silk trade. Its position within an easy canal
journey of the richest silk-growing districts in the whole empire gave
to the northern port advantages which were promptly turned to account
in co-operation between the foreign and the native merchants,
resulting before many years in the growth of a healthy and most
satisfactory trade. The supply of the article having up to that time
been regulated by the home demand, the entry of an outside customer
had a very stimulating effect upon the Chinese growers. Some years
elapsed before the product of the newly opened districts could be
fully tested and appreciated by the manufacturers in Europe. This time
was well employed by the Chinese cultivators and traders in maturing
their arrangements for bringing larger supplies to the foreign market,
suited to the requirements of the new purchasers, as far as they were
understood. The supply and demand had progressed evenly, admitting of
good profits to both sides, until a stage was reached when the trade
and cultivation were both ready to respond to a new stimulus, and just
then the new stimulus was applied.
Disease began to attack the silkworms in Europe; the production of
Italian and other silk became precarious, and inadequate to the
demands of the manufacturing trade. Into the vacuum thus created
supplies from China were ready to pour in, and highly remunerative
prices awaited them. The export from Shanghai for the year 1856 was
very large, and the result encouraged growers and native and foreign
merchants to put forth still greater efforts in the following year,
when the shipments from that port reached 90,000 bales, worth probably
£10,000,000 sterling. These shipments, thrown on the market during the
money panic of 1857, resulted disastrously, but the impetus given to
the trade continued to be felt during many subsequent years.
The Italians in the meanwhile, driven to their wits' end to save so
valuable an industry, tried first to obtain healthy seed from China
and Japan. The first experiments being unsuccessful, the eggs having
hatched during the voyage, steamers were specially chartered and
carefully fitted up with conveniences for preserving the precious
commodity. Experiment was also made of sending the seed by the caravan
route through Siberia to save the risk of premature incubation. In
fact, Jason's quest of the Golden Fleece was scarcely characterised by
more varied adventures than that of the Italians--the French also
joining to a certain extent--after a healthy breed of silkworm. After
many years of anxious and almost desperate efforts, some success was
obtained in introducing Chinese and Japanese seed into Europe; but the
produce of the exotic seed also in time became liable to attacks of
the parasite, and it was not till science came to the aid of the
cultivators that the true remedy was finally applied, and an important
item in the national wealth of Southern Europe was saved. It was M.
Pasteur who eventually furnished the means of detecting in the egg the
germ of the destructive parasite; so that by sorting out the infected
eggs and destroying them the race was purified. Thus the way was
opened for the restoration of European culture to more than its
pristine prosperity; for the many valuable lessons which the
cultivators learnt in the school of their adversity have stood them in
good stead now that fortune has again smiled upon them.
Notwithstanding the revival of European silk-culture, the silks of
China and Japan and other Eastern countries still hold their own in
the Western markets, and continue to form an important constituent of
the export trade of the Far East.[22] The European markets to which
they are consigned are no longer indeed English, but French, German,
American, and others, the last forty years having witnessed a
revolution in the silk industries of Great Britain, and a virtual
transference of the old industries of Spitalfields, Norwich,
Macclesfield, and other districts to her manufacturing rivals.
III. OPIUM.
The largest and most interesting Chinese import --
Peculiarities of the trade -- Nominally contraband -- But
openly dealt in -- Ships anchored in the Canton river -- Or
near the trading-ports -- Wusung -- Opium cargoes
discharged into old hulks before entering Shanghai port --
Importance of the opium traffic as a factor in foreign
intercourse -- The opium clippers -- The opium market
liable to much variation -- Piracy -- The clippers were
armed -- Occasionally attacked -- Anomalous position --
Alcock's aversion to the opium traffic -- His reasons --
Experience at Shanghai modifies his opinion -- The trade
being bound up with our Indian and Chinese commerce -- No
attempt to stop it could do other than aggravate the
mischief -- Still wishes to see the trade modified or
abolished -- Despatch to Sir J. Bowring -- His desire to
devise some scheme -- His last proposal of 1870 --
Ambiguous attitude of the British Government -- Inheritors
of the East India Company's traditions -- These forbad the
carrying of opium in their ships -- Question of legalising
the traffic -- 1885 Chinese Government trebles the import
duty and asks the help of the Hongkong Government for its
collection.
The most interesting constituent of trade in China has always been
opium, especially since the product of British India was so much
improved and stimulated by the Government as practically to supersede
in the China market the demand for the production of other countries.
The value of the opium imported exceeded that of all other articles,
the figures being returned at $23,000,000 and $20,000,000 respectively
for the year 1845. As the exports of Chinese produce were at that time
estimated at $37,000,000, it is evident that opium played a most
important part in the adjustment of the balance of trade; and as it
came from India and the returns from it had to go thither, opium and
raw cotton, which also came from India, formed the pivot of exchange.
As the opium was paid for in silver and not by the barter of produce,
it was natural to charge it with the loss of the silver which was
annually shipped away from China, and which was assumed to reach the
amount of £2,000,000 sterling, though that seems to be an
exaggeration.
The trade in this commodity differs from all ordinary commerce in the
conditions under which it has been carried on, and in the sentiments
which have grown up concerning it. Until the treaty made by Lord Elgin
in 1858 the importation of opium had been for many years nominally
contraband, while yet the trade in it was as open as that in any other
commodity and was as little interfered with by the Government. Laxity
and connivance being the characteristics of Chinese officialdom, there
would be nothing extraordinary even in the official patronage of a
traffic which was forbidden by the State, so that it would not be safe
to infer from the outward show what the real mind of the responsible
Government was on that or any other subject. The necessity of saving
appearances, an object always so dear to the Chinese heart,
necessitated a special machinery for conducting the trade in opium.
Before the war, as has been already said, the ships carrying the drug
anchored at certain rendezvous in the estuary of the Canton river,
where they delivered their goods on the order of the merchants who
were located in Canton or Macao. The vessels also made excursions up
the coast, where they had direct dealings with the Chinese, the master
acting as agent for the owners. And when the northern ports were
opened, after the treaty of Nanking, the opium depot ships were
stationed at convenient points on the coast in the vicinity of the
trading-ports. The most important of these stations was at Wusung, on
the Hwangpu river, nine miles by road from Shanghai. There were
sometimes a dozen, and never less than half-a-dozen, hulks moored
there, dismantled, housed-in, and unfit for sea. The supply was kept
up in the earlier days by fast schooners and latterly by steamers,
which in the period before the treaty of 1858 discharged their opium
into these hulks without surveillance of any kind, and then proceeded
up the river to Shanghai with the rest of their cargo, which, though
often consisting of but a few odd packages, was taken charge of by the
custom-house with the utmost punctilio, while the valuable cargo of
opium was ignored as if it did not exist.
The opium trade was a ruling factor in the general scheme of foreign
intercourse and residence in China. The postal communication, for
example, on the coast and between India and China was practically
dependent on it; for, being a precious commodity, it could afford to
pay very high charges for freight, and the opium clippers could be run
regardless of expense, as will be more fully described in the Chapter
on "Shipping."
The high value of the article influenced the conduct of the trade in a
variety of ways, one in particular being that the vessels carrying it
had to go heavily armed. The coast of China before the war and after
swarmed with pirates, to whom so portable an article as opium offered
an irresistible temptation. The clippers on the coast were usually
small schooners from 100 to 200 tons burthen, and though with their
superior sailing powers they could always take care of themselves in a
breeze, they would have been helpless in a calm unless prepared to
stand to their guns. It was sometimes alleged by those opposed to the
traffic that these vessels were little better than pirates themselves,
inasmuch as they were forcing a trade prohibited by the laws of the
empire, and were armed to resist the authorities. The opium-carriers
were not unfrequently attacked by pirates, sometimes captured and
destroyed by them; but there never seems to have been any interference
or complaint on the part of the Government, even when prompted thereto
by British consuls. Nevertheless it was an anomalous state of things,
though one far from unusual in the first third of the century, that
European vessels should ply their trade armed like privateers.
The attitude of Consul Alcock towards the opium trade was, from the
earliest days of his consulship in Foochow until his final departure
from China in 1870, one of consistent aversion, so decided, indeed,
that in some of the arguments adduced in his Foochow reports against
the trade the conclusion somewhat outran the premisses, as he in after
years acknowledged by marginal notes on those earlier despatches:--
A trade prohibited and denounced alike as illegal and
injurious by the Chinese authority constitutes a very
anomalous position both for British subjects and British
authorities, giving to the latter an appearance of
collusion or connivance at the infraction of the laws of
China, which must be held to reflect upon their integrity
and good faith by the Chinese.
No small portion of the odium attaching to the illicit
traffic in China falls upon the consular authorities under
whose jurisdiction the sales take place, and upon the whole
nation whose subjects are engaged in the trade; and the
foundations of the largest smuggling trade in the world are
largely extended, carrying with them a habit of violating
the laws of another country.
The opium is of necessity inimical and opposed to the
enlargement of our manufacturing trade.
That which has been said of war may with still greater
force apply to the illicit traffic in opium, "It is the
loss of the many that is the gain of the few."
Whichever way we turn, evil of some kind connected with
this monstrous trade and monopoly of large houses meets our
eye.
In order to do justice to the agents in the traffic, he adds in the
same report on the trade for 1845--
While the cultivation and sale of opium are sanctioned and
encouraged for the purposes of revenue in India, and those
who purchase the drug deriving wealth and importance from
the disposal of it in China are free from blame, it is vain
to attempt to throw exclusive opprobrium upon the last
agents in the transaction.
These were the impressions of a fresh and presumably unprejudiced mind
taking its first survey of the state of our commercial intercourse
with China. They were reflections necessarily of a somewhat abstract
character, formed on a very limited acquaintance with the actualities
of a trade which did not yet exist in Foochow. A few years' experience
at the great commercial mart of Shanghai widened the views of the
consul materially, and showed him that there was more in this opium
question than meets the eye of the mere philosopher. A confidential
report on the subject made in 1852 treats the matter from a more
statesman-like as well as a more businesslike point of view. In that
paper he does more than deplore the evil, and while seeking earnestly
for a remedy, fully recognises the practical difficulties and the
danger of curing that which is bad by something which is worse.
The opium trade [he observes in a despatch to Sir John
Bowring] is not simply a question of commerce but first and
chiefly one of revenue--or, in other words, of finance, of
national government and taxation--in which a ninth of the
whole income of Great Britain and a seventh of that of
British India is engaged.
The trade of Great Britain with India in the year 1850
showed by the official returns an export of manufactures to
the value of £8,000,000, leaving a large balance of trade
against that country. A portion of the revenue of India has
also to be annually remitted to England in addition, for
payment of the dividends on Indian stock and a portion of
the Government expenses. These remittances are now
profitably made _viâ_ China, by means of the opium sold
there; and failing this, serious charges would have to be
incurred which must curtail both the trade and the
resources of the Indian Exchequer.
In China, again, scarcely a million and a half of
manufactured goods can find a market; yet we buy of tea and
silk for shipment to Great Britain not less than five
millions, and the difference is paid by opium.
A trade of £10,000,000 in British manufactures is therefore
at stake, and a revenue of £9,000,000--six to the British
and three to the Indian Treasury.
Which of these is the more important in a national point of
view,--the commerce, or the revenue derived from it? Both
are, however, so essential to our interests, imperial and
commercial, that any risk to either has long been regarded
with distrust and alarm, and tends to give a character of
timidity to our policy and measures for the maintenance of
our relations with China--the more disastrous in its
results, that to the oriental mind it is a sure indication
of weakness, and to the weak the Chinese are both
inexorable and faithless.
That the opium trade, illegal as it is, forms an _essential
element_, interference with which would derange the whole
circle of operations, must be too apparent to require
further demonstration.
Reference to the practical details of the colossal trade in
which it plays so prominent a part shows that it is
inextricably mixed up with every trading operation between
the three countries, and that to recognise the one and
ignore the other is about as difficult in any practical
sense as to accept the acquaintance of one of the Siamese
twins and deny all knowledge of his brother.
_No attempt of the British Government to stop or materially
diminish the consumption could possibly avail_, or be
otherwise than productive of aggravated mischief to India,
to China, and to the whole world, by giving a motive for
its forced production where it is now unknown, and throwing
the trade into hands less scrupulous, and relieved of all
those checks which under the British flag prevent the trade
from taking the worst characters of smuggling, and being
confounded with other acts of a lawless and piratical
nature affecting life and property, to the destruction of
all friendly or commercial relations between the two races.
It is also sufficient to bear in mind that it is a traffic,
as has been shown, which _vitalises_ the whole of our
commerce in the East; that without such means of laying
down funds _the whole trade_ would languish, and its
present proportions, colossal as they are, soon shrink into
other and insignificant dimensions; that the two branches
of trade are otherwise so _inextricably interwoven_, that
no means could be devised (were they less essential to each
other) of separating them. And finally, although Great
Britain has much to _lose_, China in such a quixotic
enterprise has little or nothing to _gain_.
Notwithstanding all these weighty considerations, Mr Alcock never
swerved in his desire to see "the opium trade, with all its train of
contradictions, anomalies, and falsifying conditions," modified, if
not done away with. In a careful despatch to Sir John Bowring dated
May 6, 1854, reviewing our whole position in China, he thus expresses
himself:--
Any modification for the better in our relations must, I
believe, begin here. We must either find means of inducing
the Chinese Government to diminish the evil by legalising
the trade, or enter the field of discussion ... with a
stone wall before us.... The legalisation would go far to
diminish the obstacle such an outrider to our treaty
creates; but far better would it be, and more profitable in
the end in view of what China might become commercially to
Europe, America, and to Great Britain specially, if the
Indian Government abandoned their three million sterling
revenue from the cultivation of opium, and our merchants
submitted to the temporary prejudice or inconvenience of
importing silver for the balance of trade.
Nearly twenty years afterwards we find Mr Alcock still engaged on the
problem how to diminish the trade in opium without dislocating both
the trade and finance of India, his last act on retiring from China in
1870 having been to propose a fiscal scheme of rearrangement by which
the opium trade might undergo a process of slow and painless
extinction.[23]
The attitude of the British Government towards the opium trade has
always been ambiguous. Succeeding to the inheritance of the East India
Company as the great growers of opium, they had to carry on its
traditions. These had led the Company in its trading days into some
striking inconsistencies, for though they cultivated the poppy
expressly for the China market, employing all the intelligence at
their command to adapt their product to the special tastes of the
Chinese, they yet refused to carry a single chest of it in their own
ships which traded to China. By this policy they thought they could
exonerate themselves in face of the Chinese authorities from
participation in a trade which was under the ban of that Government.
The importation of the drug was thus thrown upon private adventurers,
and whenever the subject was agitated in Canton and Macao, none were
so warm in their denunciations of the trade as the servants of the
East India Company. This was notably the case with Captain Elliot,
who, after leaving the Company's service and becoming representative
of the Crown, never wearied in his strictures on the opium traffic.
The question of legalising the traffic had frequently before been
considered by the Chinese Government,[24] and it was fully expected
that this was the policy which would prevail in Peking in 1837. The
pendulum swung to the opposite side, namely, that of prohibition, and
legalisation was not adopted until 1858. But once adopted, the idea
made such progress that in 1885 the Chinese Government made a
successful appeal to the British Government to be allowed to treble
the import duty authorised in 1858, and that the Colonial Government
of Hongkong should render them special assistance in collecting it.
IV. CHINESE EXPORTS.
Efforts of the consuls to stimulate trade -- Alcock's work
at Foochow -- His despatches -- Exhibition of 1851 --
Exhibits of Chinese produce sent by Alcock.
[Illustration: VILLAGE ON THE CANALS.]
The continuous efforts made by the consuls in the first decade after
the treaty to stimulate the action of foreign merchants in laying hold
of all the opportunities offered to them for extending their
connections with the Chinese trade ought not to be passed over without
notice. It was the burden of Consul Alcock's labours while in Foochow
to gather information from every source, to digest it as well as he
was able, and to lay it before his countrymen; and if he, in his
despatches to the plenipotentiary, sometimes reflected on what seemed
to him the apathy and want of enterprise of the merchants, that must
be set down to a laudable zeal to make his office fruitful of benefit
to his country. The same spirit animated his proceedings in Shanghai.
The demand made for exhibits for the Great Exhibition of 1851 found Mr
Alcock and his lieutenant Parkes eager to supply samples of Chinese
products of every kind likely to be of commercial interest. On
applying to the mercantile community of Shanghai for their
co-operation in collecting materials, he found them not over-sanguine
as to the results of such an effort, and in his despatch of December
1850 to the plenipotentiary he remarks that "the British and foreign
residents in Shanghai appeared to feel that the impossibility of
gaining access to the great seats of manufacture or the producing
districts for raw material placed them in too disadvantageous a
position to do justice either to themselves or the resources of the
empire, which could only be very inadequately represented, and in a
way more calculated to mislead than instruct." "The conclusion," he
goes on to say, "at which the mercantile community has arrived has
gone far to paralyse all exertion on my part." Nevertheless, with the
restricted means at his disposal, he set to work to collect specimens
of Chinese produce and industry and to transmit them to the Board of
Trade for the use of the Commissioners. Of objects of art he sent a
great variety in bronze, inlaid wood, porcelain, soapstone, and
enamels, and the fancy articles which have since acquired such great
reputation in the world that dealers in European and American capitals
send out commissions every year to make extensive purchases. Colours
used by the Chinese for dyeing purposes in twenty shades of blue, silk
brocades, and many valuable products of the Chinese looms, were well
represented, and the commoner utensils, such as scissors, needles, and
razors, some of which were within the last few years specially
recommended in consular reports to the notice of English
manufacturers, as if the suggestion were made for the first time. Of
raw material, samples were sent of hemp, indigo, and many other
natural products; and when it is considered how eager the British
mercantile community appeared to be to increase their importation of
Chinese produce--be it tea, silk, or any other commodity--in order to
balance the export trade, it is interesting to observe that in those
early days a number of articles of export were described and
classified, with an account of the districts of their origin, which
have only taken their place in the list of exports from China within
the last twenty years or so. These were sheep's wool of six different
descriptions, and camels' hair, which are now so extensively dealt in
at the northern ports of China. Perhaps these articles were not seen
in bulk by foreigners until after the opening of the new ports in
1861, and it is worthy of remark that even after this discovery, and
sundry experimental shipments, many years elapsed before the special
products of Northern China became recognised articles of foreign
trade. These now include straw plait, sheep's wool, goats' wools,
goats' skins, dogs' skins, camels' hair, horses' tails, pigs'
bristles, and a number of other articles of export which might
perfectly well have been brought to the foreign market of Shanghai
even before the opening of the northern ports. What was wanted was the
knowledge that such products were procurable and the organisation of a
market for their disposal in China, in Europe, and the United States.
To stimulate inquiry into these matters was an object of the consular
reports of the early days, and the fact that the seed then sown seemed
to have been buried in sterile soil for thirty years affords a
reasonable prospect that from the more advantageous basis on which
commercial men now stand still larger developments of international
commerce may be reserved to future adventurers.
V. BRITISH EXPORTS.
Slow increase -- Turn of the scale by the Shanghai silk
trade -- Consequent inflow of silver to China -- Alcock's
comment on the Report of Select Committee -- His grasp of
the true state of affairs.
This department of trade presents little else but a record of very
slow improvement, with some rather violent fluctuations due to obvious
and temporary causes. In the first year after the treaty of Nanking
the value of shipments to China from the United Kingdom was
£1,500,000; in 1852, £2,500,000; in 1861, £4,500,000, decreasing in
1862 to £2,300,000, and rising in 1863 to £3,000,000; after which
period it steadily increased to £7,000,000, at which it has
practically remained, with the exception of two or three years between
1885 and 1891, when it rose to £9,000,000.
The theory of the merchants who gave evidence before the Committee of
1847, that an increase in the exports from China was all that was
needed to enable the Chinese to purchase larger quantities of
manufactured goods, has by no means been borne out by the subsequent
course of trade. For although the Chinese exports have been greatly
extended since then, that of silk alone having more than sufficed to
pay for the whole of the imports from abroad, there has been no
corresponding increase in the volume of these importations. What
happened was merely this, that the drain of silver from China, which
was deplored on all sides up till about 1853, was converted into a
steady annual inflow of silver to China.[25] Consul Alcock, having
been requested by her Majesty's chief superintendent of trade to make
his comments on the Report of the Select Committee, dealt
comprehensively with the whole question of the trade between Europe,
India, and China, and evinced a wider grasp of the true state of the
case than the London merchants had done. In a despatch dated March 23,
1848, the following passages occur:--
Nearly the whole of the evidence furnished by the witnesses
on our trade is calculated to mislead those imperfectly
acquainted with the details. The existence of this relation
[the importation of opium and raw cotton from India] is
kept out of sight, and conclusions are suggested which
could only be maintained if the Indian imports into China
did not form a part of our commerce, and did not come in
direct competition with the import of staple manufactures.
To counteract as far as may be in my power the erroneous
tendency of the partial evidence which the Blue-Book
contains on this part of the subject, I have ventured for
the information of her Majesty's Government to bring
forward such facts and inferences as seem to me to place in
the strongest light the fallacy of the argument mainly
insisted upon before the Committee--viz., that we have only
our own consumption of tea to look to as indicating the
extent to which we can exchange our manufactures--that this
is the only limit of our imports into China. But imports of
what? Not certainly of cotton and woollen goods, for we
already export of tea and silk from China to the value of
some four millions sterling, and cannot find a profitable
market for manufactured goods to the amount of two
millions; and a somewhat similar proportion, or
disproportion rather, may be traced during the monopoly of
the East India Company, during the free-trade period prior
to the commencement of hostilities, and since the treaty.
Say that from a reduction of the tea duties or any other
cause we _double_ our _exports_ from China as we have
already done since 1833, from what data are we to infer
that in this same proportion the export into China of
British manufactures will increase; or in other words, that
for every additional million of tea there will be an
equivalent value expended upon our cotton fabrics?
The anticipated result is contradicted by all past
experience in China, and a moment's reflection must show
that the essential elements have been overlooked. 1st, That
there is a balance of trade against the Chinese of some
$10,000,000, which must adjust itself before any increase
of our exclusively British imports into China can be safely
or reasonably expected, for which an additional export of
20,000,000 lb. of tea and 10,000 bales of silk is required.
2ndly, That if such increase of our exports hence restored
the balance of trade to-morrow, the proportion in which an
increased import of our goods would take place must depend
upon the result of a competition of cotton goods against
opium and raw cotton--all three objects in demand among the
Chinese; and the proportion of each that may be taken under
the assumed improvement depends upon the relative degree of
preference exhibited by our customers for the different
articles. The two latter have proved formidable rivals to
our manufactures, nor is there any reason to anticipate
beneficial change in that respect.
The argument, therefore, that the only limit to our imports
into China is the consumption of tea and silk in Great
Britain, if meant to be applied, as it appears to be in the
evidence, exclusively to British imports--that is, to
cotton and woollens--is fallacious, and can only be
sustained by dropping the most important features of the
import trade, by treating opium and raw cotton as though
they had neither existence nor influence upon our British
staple trade.
The influence of this mode of reasoning is calculated to be
the more mischievous that it comes from gentlemen of
practical mercantile information, and purports to suggest a
remedy for an evil which is, in truth, of our own creating,
and must recur as often and as certainly as the same causes
are in operation. The trade in China during the last three
years has been a losing, and in many instances a ruinous,
trade, not because the English do not drink more tea, or
the Chinese do not find it convenient to wear more cotton
of our manufacture, but simply because in such market the
supply has not been carefully regulated by an accurate
estimate of the probable demand. Our merchants at home have
unfortunately been led by such reasoning as I have quoted
to assume that in proportion as we purchase more tea the
Chinese would lay out more money in cotton goods, and that
the one might be taken as a true estimate of the other.
Hence came shipments after the treaty so disproportioned to
the actual wants or state of demand in the Chinese market
that an immediate glut, with the consequent and necessary
depreciation in price, followed. Nor did the evil end here:
a return was of necessity to be made for this enormous
over-supply of goods, hence more tea was shipped than the
legitimate demand of the English markets would have
suggested or justified, and at the other end of the chain
the same depreciation and ruinous loss was experienced....
I have submitted in this and the preceding Reports my
strong conviction that other conditions than a mere
increase in our exports hence are essential. Of these I
have endeavoured to show the principal and most important
are access to the first markets, the removal of or
efficient control over all fiscal pretexts for restricting
the free circulation of our goods in the interior and the
transit of Chinese produce thence to the ports, and,
finally, the abolition of all humiliating travelling limits
in the interior, which more than anything else tends to
give the Chinese rulers a power of keeping up a hostile and
arrogant spirit against foreigners, and of fettering our
commerce by exactions and delays of the most injurious
character.
The conditions of the trade were, in fact, simpler than the merchants
had imagined. The Chinese entered into no nice estimates of the
balance of imports and exports, but purchased the goods which were
offered to them so far as they were adapted to their requirements--and
there is no other rule for the guidance of foreign manufacturers in
catering for the great Chinese market.
VI. NATIVE TRADE.
Inter-provincial trade -- Advantages of the employment of
foreign shipping -- China exports surplus of tea and silk
-- Coasting-trade -- Salt.
The great reservoir of all foreign commerce in China is the
old-established local inter-provincial trade of the country itself,
which lies for the most part outside of the sphere of foreign interest
excepting so far as it has come within the last forty years to supply
the cargoes for an ever-increasing fleet of coasting sailing-ships and
steamers. This great development of Chinese commerce carried on in
foreign bottoms was thus foreshadowed by Mr Alcock as early as 1848:--
The disadvantages under which the native trade is now
carried on have become so burdensome as manifestly to
curtail it, greatly to the loss and injury of the Chinese
population, enhancing the price of all the common articles
of consumption: any measures calculated, therefore, to
exempt their commerce from the danger, delay, and loss
attending the transport of valuable produce by junks must
ultimately prove a great boon of permanent value, though at
first it may seem the reverse.
In a political point of view the transfer of the more
valuable portion of their junk trade to foreign bottoms is
highly desirable, as tending more than any measures of
Government to improve our position by impressing the
Chinese people and rulers with a sense of dependence upon
the nations of the West for great and material advantages,
and thus rebuking effectually the pride and arrogance which
lie at the root of all their hostility to foreigners.
In a commercial sense the direct advantage would consist in
the profitable employment of foreign shipping to a greater
extent: it would also assist the development of the
resources of the five ports--more especially those which
hitherto have done little foreign trade. I have entered
into some details to show how the carrying trade may work
such results, particularly in reference to sugar, which
promises to pave the way at this port to large shipments in
this and other articles for the Chinese.
A more effective blow will be given to piracy on the coast
by a partial transfer of the more valuable freights to
foreign vessels than by any measures of repression which
either Government can carry out, for piracy will, in fact,
cease to be profitable....
A further extension of the trade between our Australian
settlements and China, and our colonies in the Straits with
both, may follow as a natural result of any successful
efforts in this direction,--the addition of a large bulky
article of regular consumption like sugar alone sufficing
to remove a great difficulty in the way of a Straits
trade....
If this can be counted upon, I think it may safely be
predicated that at no distant period a large and profitable
employment for foreign shipping will be found here totally
exclusive of the trade with Europe.
It has been said with regard to tea that the quantity sold for export
is but the overflow of what is produced for native consumption, and to
silk the same observation would apply. Essentially a consuming
country, it is the surplus of these two articles that China has been
able to afford which has constituted the staple of export trade from
first to last. It is an interesting question whether there may not be
surpluses of some other Chinese products to be similarly drawn upon.
If the foreign trade has been distinguished by its simplicity, being
confined to a very few standard commodities, such cannot be predicated
of the native trade, which is of a most miscellaneous character. It is
impossible to give any statistical account of the coast and inland
traffic of China. Any estimate of it would be scarcely more
satisfactory than those which are so loosely made of the population.
In the early days, when the ports opened by the treaty of 1842 were
still new ports, great pains were taken by the consuls to collect all
the information they could respecting purely Chinese commerce, which
they not unnaturally regarded as the source whence the material of an
expanded foreign trade might in future be drawn. Especially was this
the case at Foochow under the consulship of Mr Alcock and the
assistantship of his energetic interpreter, Parkes. We find, for
instance, among the returns compiled by that industrious officer of
three months' trading in 1846, the quantities and valuations of over
fifty articles of import and as many of export given in great detail:
imports in 592 junks of 55,000 tons, and of exports in 238 junks of
22,000 tons. Of the sea-going junks he gives an interesting summary,
distinguishing the ports with which they traded and their tonnage,
with short abstracts of the cargoes carried. These amounted for the
year to 1678 arrivals from twenty different places, and 1310
departures for twenty-four places; and this at a port of which the
consul wrote in 1847, "No prospect of a British or other foreign trade
at this port is apparent in the very remotest degree." Every traveller
in every part of China is astonished at the quantity and variety of
the merchandise which is constantly on the move. It is this that
inspires confidence in the boundless potentialities of Chinese
commerce, which seems only waiting for the link of connection between
the resources of the empire and the enterprise of the Western world.
Besides the sea-borne trade of which it was possible to make these
approximate estimates, there is always in China an immense inland
trade; and at the time when piracy was rampant on the coast, and
before the aid of foreign ships and steamers was obtained, all the
goods whose value enabled them to pay the cost of carriage were
conveyed by the inland routes, often indeed from one seaport to
another, as, for instance, between Canton and Foochow, Ningpo,
Shanghai, &c.; and it is still by the interior channels that much of
the trade is done between Shanghai and the provinces to the north of
it, which would appear, geographically speaking, to be more accessible
from their own seaports.
The relation of the Government to the inter-provincial trade is, in
general terms, that of a capricious tax-gatherer, laying such burdens
on merchandise as it is found able and willing to bear. The arbitrary
impositions of the officials are, however, tempered by the genius of
evasion on the part of the Chinese merchant, and by mutual concession
a _modus vivendi_ is easily maintained between them.
The item of trade in which Government comes into most direct relation
with the trader is the article salt, which is produced all along the
sea-coast, and is likewise obtained from wells in the western
provinces. Like many other Governments, the Chinese have long treated
salt as a Government monopoly. As the manner in which this is carried
out illustrates in several points the ideas that lie at the root of
Chinese administration, some notes on the subject made by Parkes at
Foochow in 1846, and printed in an appendix to this volume, may still
be of interest.[26]
FOOTNOTES:
[20] The annual value of the whole foreign trade with China, imports
and exports, is now about £70,000,000.
[21] His predecessors had been governors of Fort William in Bengal.
[22] Eastern countries send to Europe half of the whole consumption of
the West--China yielding 35 per cent to 40 per cent of the entire
supply, Japan 12 per cent.
[23] It is worth notice that this consistent opponent of the opium
trade during fifty active years should have come under the ban of the
Anti-Opium Society in England when the discussion of this important
question degenerated into a mere polemic.
[24] Import duty had been regularly levied on opium for a hundred
years, the prohibition of importation having been decreed after 1796
(Eitel).
[25] During the last two decades important factors--such as foreign
loans, armaments, and the like--have so influenced the movements of
gold and silver that they bear no such simple relation to the "balance
of trade" properly so called as was formerly the case.
[26] See Appendix IV.