Commercial Intercourse with the Chinese.

The foreign trade with China is restricted to the port of Canton by the Chinese government. It is a source of considerable revenue to the government of China, and of the most valuable patronage, which is sold by the government to the highest bidder. Hence it follows that the local authorities are greatly interested in maintaining the trade, which, from the same cause, is subjected to heavy taxes and extortions. The inhabitants, also, of Canton and its neighbourhood, as well as the numerous classes employed in the culture and manufacture of tea, have a deep interest in the trade; every interruption of which causes great individual distress.

Foreigners are interdicted by Chinese regulations from going within the walls of Canton. The place of their abode is a small suburb, and their residence there is authorized only for the period of the shipping season; but these limitations are not rigorously enforced, the Company’s servants going when they please to Canton, and some private merchants residing there throughout the whole year. Security must be given for the payment of the custom-duties before a ship is permitted to trade, and this security also includes responsibility for the good conduct and submission to the laws of the ship’s company. The only persons whom the Chinese government accepts as security is a sort of mercantile corporation or fraternity, called the “Hong merchants,” formerly ten in number, but reduced by bankruptcies to seven. These become security for the Company’s ships in rotation; the whole of the Company’s trade being apportioned among the seven Hong in shares.

Besides the members of the Hong, other persons, designated as “Outside merchants” and “Shopmen,” are allowed to trade with foreigners; their traffic is chiefly with the officers of the Company’s ships, private traders, and the Americans. They are not allowed to trade in certain articles, as tea, raw silk, cloths and woollens, all of which are, by Chinese edicts, reserved exclusively to the Hong.

The Hong merchants are by law mutually responsible to each other for a limited amount, but this regulation is not invariably enforced. They are stated to be fair and liberal in their conduct. A similar opinion, though with less confidence, has been expressed respecting the outside merchants. No one is responsible for the debts of the latter, and foreigners are warned of this by official notifications.

The Company’s trade at Canton is managed by an establishment of supercargoes and writers, twenty in all, with two inspectors, whose duty it is to examine into and report upon the qualities of all teas offered for sale to the Company. Three or four of the senior supercargoes are annually formed into a Select Committee, who, under the orders of the Court of Directors, conduct the whole of the Company’s affairs in China.

Most of the witnesses examined by Parliamentary committees concur in stating that business at Canton may be conducted with greater facility and expedition than in almost any other part of the world; much of which is said to be owing to the transactions connected with each ship being all managed by the same person, the security merchant. It was further stated that the Hong had occasionally aided the operations of commerce by advancing money on loan to foreigners.