The China Mirage Read online

  In the late seventeenth century, the English began to import enormous quantities of Chinese tea to satisfy and stimulate its new factory-worker class. British silver flowed in increasingly alarming amounts from London’s vaults to the Middle Kingdom, but the money went only one way; the Chinese wanted few English products. The constant importation of Chinese tea to the West caused a gargantuan drain of silver from Europe to Asia. China was a rich country in the 1700s, its population tripling over the course of the century from about one hundred million to over three hundred million.

  The imbalance in trade quickly decimated the coffers of many European nations, hitting Britain particularly hard. Deeply concerned, London hit upon a corrective that took advantage of England’s colonial holding of India, its naval might, and its disdain for the Chinese. The Brits’ dependence on tea made them subject to the Chinese, but they saw a way to reverse the situation, and the flow of silver.

  In the Confucian value system, merchants—consumed by thoughts of profit—were near the bottom of the social scale. Those concerned with the people’s welfare—the mandarins who studied the classics and served the emperor—were at the top of the heap. “Barbarian” merchants could access China’s market only by making clear they knew their place in the pecking order and following the tribute system. This required foreign missions to travel to Beijing to pay tribute to the emperor and acknowledge their inferiority by kowtowing—kneeling in front of the Son of Heaven (as he was known) and touching their foreheads to the floor. After the foreign devils acknowledged China’s superiority and offered valuable tribute, the Son of Heaven benevolently allowed them to purchase the riches of the Middle Kingdom.

  Over millennia, barbarians had traveled to China from Korea, Japan, Mongolia, Vietnam, Malaysia, Laos, Cambodia, and many other countries. In the Middle Ages, Europeans ventured in their tiny ships out into the world’s oceans, and a new type of foreign devil arrived in China: the sea barbarians, funny-looking, long-nosed cow-eaters in tight trousers and high hats.

  In the course of becoming a world power, Great Britain grew accustomed to imposing its trade terms on people around the globe. But China’s restrictive tribute system was slow, cumbersome, and devoid of any respect for the British. In 1793, King George III of England sent emissaries to Beijing with impertinent demands. Among these was the unthinkable call for the emperor to cede a piece of land—an island or a coastal strip—where England could establish a permanent trading post.

  King George also insulted the Son of Heaven by suggesting peer-to-peer diplomatic relations. The English did not comprehend that the Son of Heaven could never comply with this. China had no foreign affairs office because it shunned official relationships with barbarian countries. Instead, the emperor managed trading relations with foreign devils through his Barbarian Management Bureau, whose mandarins forwarded this response from the Son of Heaven to the English sovereign:

  Our Celestial Empire possesses all things in prolific abundance and lacks no product within its borders. There is therefore no need to import the manufactures of outside barbarians in exchange for our own produce. But as the tea, silk, and porcelain which the Celestial Empire produces are absolute necessities to European nations and to yourselves, we have permitted, as a signal mark of favor, that foreign hongs [private businessmen who paid the government for the right to trade with barbarians] should be established at Canton, so that your wants might be supplied and your country thus participate in our beneficence.3

  The Barbarian Management Bureau’s mandarins designed the Canton system above all to protect ordinary Chinese from infection by the low character and animal nature of foreign devils like Warren Delano. To begin with, the port of Canton, in China’s hot and humid south, was about as far away as possible from the Son of Heaven’s home in Beijing. The system required the sea barbarians to live and work in whitewashed warehouses located outside Canton’s city wall.4 When the roughly four-month trading season was over, the foreign-devil traders had to leave Canton immediately.

  If sea barbarians wanted to trade with the Middle Kingdom, they could humble themselves and submit to the Canton system. But the English—and, later, the Americans—were not used to humbling themselves. Quite the contrary.

  Like grapes and ginseng, the product that would make Warren Delano a wealthy man grows best in certain parts of the world. The prime opium-producing area was a vast swath stretching five hundred miles across the Bengal region of India. Arab merchants dominated the India-to-China opium trade for hundreds of years, until Portuguese sailors took it over in the sixteenth century. The Portuguese also brought tobacco from their Brazilian colony, and the Chinese especially enjoyed smoking tobacco mixed with opium. Sensing the potential harm to his people, the emperor outlawed the sale and use of opium.

  Opium was big business for the British, one of the critical economic engines of the era. Britain controlled India and oversaw one million Indian opium farmers. By 1850, the drug accounted for a staggering 15 to 20 percent of the British Empire’s revenue, and the India-to-China opium business became, in the words of Frederic Wakeman, a leading historian of the period, the “world’s most valuable single commodity trade of the nineteenth century.”5 Notes Carl Trocki, author of Opium, Empire and the Global Economy, “The entire commercial infrastructure of European trade in Asia was built around opium.”6

  The Chinese emperor had outlawed opium, so some back in England judged that this illegal business had to be immoral. To evade criticism, the British government employed the ruse of selling the opium in Calcutta to a private Crown-chartered enterprise—the East India Company—and pretended that London wasn’t involved with what happened next. East India Company ships sailed the contraband up the Chinese coast and, with the protection of British naval might and expertise, used both offshore islands and anchored ships to stash the drugs. Chinese criminals would row out to the offshore drug warehouses to get the English opium. Massive bribery of local officials made the trade possible.

  The British were breaking Chinese law and pushing back against the restrictive Canton system. Exploiting coves and islands along China’s rocky coast, the sea barbarians opened more areas for their illegal trade, while partnerships with local gangsters allowed further circumvention. One English merchant reflected on his work in Asia:

  No doubt your anticipations of future evil have a certain foundation.… But it is my business to make a fortune with the least possible loss of time.… In two or three years at farthest, I hope to realize a fortune and get away and what can it matter to me, if all Shanghai disappear afterwards, in fire or flood? You must not expect men in my situation to condemn themselves to years of prolonged exile in an unhealthy climate for the benefit of posterity. We are moneymaking, practical men. Our business is to make money, as much and as fast as we can.7

  The India-to-China opium trade was exclusively the domain of the East India Company; no private English merchants were allowed in. The British Parliament forbade America’s colonial merchants to trade directly with China, forcing them to buy tea from British sources and thus generating substantial tax revenue for London. (The Boston Tea Party in 1773 was a protest by American colonists against this British tax on a Chinese product.) In 1784, with the ink barely dry on the Treaty of Paris, which ended the American Revolutionary War, Robert Morris—a wealthy Philadelphian known as “the financier of the Revolution”—dispatched a ship called the Empress of China to Canton. Morris had done his research well and sent off an attractive cargo of ginseng (which grew wild on the shores of the Hudson River), a valuable herb esteemed by the Chinese, along with a variety of other wares. The goods sold quickly in Canton, and with the proceeds, the American sailors bought Chinese tea, which they sold profitably back in the United States. Morris’s venture—the first successful American round-trip trade voyage to China—turned a whopping profit of 35 percent, which spurred more American interest in the China trade.

  A number of East Coast merchants then pooled their resources to send
ginseng, South Pacific sealskins, and Hawaiian sandalwood to Canton. But the American sea merchants encountered the same problem as their British counterparts had: before long, the new nation had its own trade imbalance, thanks to its appetite for Chinese tea. American merchants sourced a supply of opium in Turkey, and because private British merchants weren’t allowed to carry it, the Americans had a virtual monopoly on the Turkey-to-China opium trade. Soon these East Coast families—led by the Perkins clan of Boston—were raking in fortunes. One American opium merchant estimated that the Turkey-to-Canton opium trade turned profits of 37.5 percent.

  Samuel Russell of Middletown, Connecticut, established Russell and Company, which quickly became America’s biggest smuggler of Turkish opium into China.

  Russell put out the word that he would train ambitious young men and that they could score what China traders called a “competence,” a profit of $100,000, by the time they were thirty years old. (This was the equivalent of a young person today amassing millions of dollars within six years of graduating from college.) A fortune of that size in the capital-poor United States would assure its owner a comfortable life of financial independence and social leadership.

  Samuel Russell (CPA Media / Pictures From History)

  Warren Delano’s breeding and education made him one of the lucky few who caught the eye of Samuel Russell. Delano, twenty-four years old, sailed out of New Bedford, Massachusetts, in 1833. He met Russell for the first time in Macao, a small Portuguese enclave on China’s coast where American sea barbarians lived while awaiting the fall-to-winter trading season during which China would allow them entrance into the Middle Kingdom.

  Delano began studying the many items Russell and Company imported to the United States, including tea; he learned its many shades and how to buy, store, and ship it. Silk, chinaware, and other items had to be accounted for in the ledger books, and there was a steady flow of mail to tend to. It was an intense apprenticeship, and Delano was learning from the founder, an ideal position.

  Then came the exciting day when Delano sailed to China for the first time, going north from Macao to the Pearl River Delta, where the Russell and Company warehouse was situated on the riverbank outside Canton’s walls.

  The Russell and Company warehouse—a compact three-story building housing about a dozen partners—would become Delano’s home, but it also functioned as a place of business and recreation, a storeroom, and even a church. The lower floor held the merchandise, kitchen, and servants’ quarters. The upper floors held the offices, dining room, and traders’ personal quarters.

  As a barbarian within the Canton system, Delano was ordered to stay put. Under no circumstances was he to enter Canton or any other city in China. Delano could not travel to the real China, walk through a Chinese village, or see a rural rice paddy. And that’s just how the Chinese wanted it.

  Delano was governed by the Canton system’s rules. Barbarian traders like him never dealt directly with an official of the Chinese government; the odious business of interacting with foreign devils was assigned to the hong merchants. The rules decreed that one of the worst crimes a Chinese person could commit was teaching the Chinese language to a barbarian. As a result, Delano learned a pidgin or business lingua franca that was neither English nor Chinese. He could not carry a gun. He could not gather with others in a group larger than ten. He could not row a boat on the river, and for exercise, he could stroll along only a small strip of land. Once a year, he and other barbarian traders were allowed a walk in the gardens on the opposite shore, but only under the watchful eyes of government-appointed minders. The Russell and Company warehouse had Chinese servants to cook and clean, but these were provided by their hong overseer, who used them as spies.

  The Son of Heaven restricted the sea barbarian traders to a tiny spit of land outside Canton’s borders. (CPA Media / Pictures From History)

  What little of Chinese life Warren was able to glimpse he found downright weird. At the dinner table his Chinese hosts placed Warren at their left as the honored guest and kept their hats on. The food was served in bowls, the wine was warm, and the Chinese ate with sticks instead of knives and forks. Chinese read from up to down and from right to left. Their last names came first and their compasses pointed south. Chinese friends greeted each other by closing their hands and letting them hang limply by their sides. Porters with Warren’s luggage walked ahead of him; Chinese shoes were broad in front and narrow at the heel; the men wore gowns and the women trousers.

  The hong merchant assigned to deal with Russell and Company was named Howqua. He was the emperor’s official minder of Russell’s men, and he would trade with Delano and oversee his warehouse. It is believed that through his dealings with Americans and other barbarians, Howqua became one of the richest men in the world.8

  John Perkins Cushing—also a Russell and Company partner—had preceded Delano and initiated the close American relationship with Howqua. The two men had established an offshore base—an anchored, floating warehouse—where Russell and Company ships would offload their opium contraband before continuing up the Pearl River Delta to Canton with their legal cargo.

  In the dark of night, “scrambling crabs”—long, sleek, heavily armed crafts propelled by as many as sixty oarsmen—rowed out to Russell and Company’s floating warehouse and exchanged silver for opium. The entire transaction happened very quickly and enabled Howqua’s and Cushing’s hands to stay clean. The dirty work—the illegal landing of the drug on Chinese soil, the bribing of officials to look the other way, the wholesaling to opium dens and retailing to street addicts—was performed by Chinese criminal gangs.

  In similar fashion, a procession of American sea merchants made their fortunes smuggling opium. They were aware of its poisonous effects on the Chinese people, but few of them ever mentioned the drug in the thousands of pages of letters and documents they sent back to America. Robert Bennet Forbes—a Russell and Company contemporary of Delano’s—defended his involvement with opium by noting that some of America’s best families were involved, “those to whom I have always been accustomed to look up as exponents of all that was honorable in trade—the Perkins, the Peabodys, the Russells and the Lows.”9

  On a macroeconomic level, the sea barbarians had turned the tables, as Chinese silver now flowed to Europe. But to the Chinese, the opium trade was an unmixed evil, corrupting its officials, demoralizing its people (including, most vexingly, its soldiery), draining its wealth, raising the cost of living, and undermining the Son of Heaven’s authority.

  Most alarming to the mandarins in Beijing was the potential erosion of what they believed to be the Mandate of Heaven. Peace and prosperity meant that Heaven favored the current ruler; if chaos appeared, it was a sign that Heaven was displeased with the emperor and that the Mandate was in play.

  In the West, the divine right of kings granted legitimacy to royal families from generation to generation, guaranteeing that the lowborn would not revolt, for revolution was a sin. In contrast, the Mandate of Heaven gave the Chinese people the right of rebellion. A successful revolt against a sitting emperor was interpreted as evidence that Heaven wanted the Mandate to pass to the next ruler. One of the key indicators that Heaven was displeased was an emperor’s inability to discipline barbarians.

  In their cramped and restricted situation, Delano and his fellows fantasized about having Christianized and westernized enclaves where they could conduct themselves as they wished, under their own rules. The American missionaries who were just beginning to arrive via merchant ships shared these desires and had additional demands. The Barbarian Management Bureau had earlier threatened American churchmen with beheading if they were caught spreading the evil religion of Christianity. By 1838—with their country’s military might supporting them—missionaries insisted on the right not only to preach but also to build schools, hospitals, churches, and cemeteries on Chinese soil, to learn the Chinese language, and in general to be left alone in their quest to change pagans into Americanized an
d Christianized New Chinese.

  In 1839, when Warren Delano was thirty years old and the number-two partner in Russell and Company, the tension between East and West exploded around him. For the previous two years, the governor of Hunan Province—Lin Zexu—had suppressed the sale and use of opium in Hunan. The Son of Heaven now transferred Lin to Canton as an imperial commissioner to stamp out the opium trade there.

  Commissioner Lin demanded that Delano and the other foreign devils come clean and hand over their opium stocks.10 When the sea barbarians coyly replied they had no opium, he tightened the screws by surrounding their warehouses with troops and withdrawing their Chinese servants. Suddenly, Delano found himself cooking his own meals in the Russell and Company kitchen.

  To break out of their hopeless situation, the traders eventually forfeited their valuable opium. (Only the biggest English smugglers turned over more than Delano.) Then, in view of cheering Chinese, Commissioner Lin had three enormous trenches dug. Day after day, workers shoveled the seized opium into the water-filled gullies, mixed it with salt and lime, and flushed the mixture out into the ocean.

  A month later, in July 1839, Commissioner Lin addressed a letter to Queen Victoria, then just twenty years old, only two years on the British throne:

  We have heard that in your own country opium is prohibited… this is a strong proof that you know full well how hurtful it is to mankind. Since then you do not permit it to injure your own country, you ought not to have the injurious drug transferred to another country.… Of the products which China exports to your foreign countries, there is not one which is not beneficial to mankind.… Has China (we should like to ask) ever yet sent forth a noxious article from its soil?… [If] foreigners came from another country, and brought opium into England, and seduced the people of your country to smoke it, would not you, the sovereign of the said country, look upon such a procedure with anger, and in your just indignation endeavor to get rid of it?…