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Reversing the Trade Deficit
 [During the nineteenth century] the growing
demand in Europe and America for Chinese teas, porcelain, silks, and
decorative goods had not been matched by any growth in Chinese demand
for Western exports such as cotton and woolen goods, furs, clocks and
other mechanical curiosities, tin, and lead. The result was a
serious balance-of-payments problem for the West. Westerners had to pay
for Chinese goods mainly in silver, and this steady flow of silver into
China — one of the causes of the general prosperity in Qianlong’s
reign — became a source of alarm to the British government. ... By the
late eighteenth century, however, the British had developed an
alternative product to exchange in China for Chinese goods: opium. (SMC, 127)
The East India Company established a monopoly for
the purchase of Indian opium and then sold licenses to trade in opium
to selected Western merchants known as the “country traders,”
preferring this indirect means of profit making to getting directly
involved in the shipment of the narcotic. Having sold their opium in
China, the country traders deposited the silver they received in
payment with company agents in Canton in exchange for letters of
credit; the company, in turn, used the silver to buy tea, porcelain,
and other Chinese goods for sale in Britain. Thus a triangle of trade
of goods from Britain to India, India to China, and China to Britain
developed, at each step of which high profits could be made. (SMC, 128)
British Sales of Opium to China
(cf. SMC, 128) |
Year
1729
1750
1773
1790
1800
1810
1816
1823
1828
1832 |
130-160 lb. Chests
200
600 (est.)
1,000
4,054
4,570
4,968
5,106
7,082
13,131
23,570 |
Were the British justified in pursuing
the sale of opium as a solution to their trade deficit?
By 1825, [Emperor] Daoguang [r. 1821-1850] was aware from
censors’ reports that so much Chinese silver was going to pay for
Western opium that the national economy was being damaged. Although
this phenomenon was still mainly restricted to the southeast coastal
regions of China, its effects
were being felt far inland. A scarcity of
silver meant that its price rose in relation to  copper; since peasants
used copper currency in their everyday transactions but still had to
pay their taxes to the state in silver, a rise in the value of silver
meant that the peasants were in fact paying steadily higher taxes, and
that unrest was sure to follow. The situation worsened in 1834 when the
British Parliament ended the East India Company’s monopoly of trade
with Asia. The action threw open the China trade to all comers, with a
predictable rise in opium sales and in the numbers of foreign traders
from elsewhere in Europe and from the United States. The crisis for
China was exacerbated by a worldwide silver shortage that caused
foreigners to use specie less frequently when buying Chinese goods. In
the 1820s, about 2 million taels of silver were flowing out of China
each year; by the early 1830s, the annual figure was 9 million taels. A
string of 1,000 copper cash had been roughly equivalent to 1 tael of
silver in Qianlong’s reign; in Shandong province, 1,500 copper cash was
needed per tael in Jiaqing’s reign, and 2,700 in Daoguang’s. (SMC, 148-149) |
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The War on Drugs!
In 1836 the emperor
Daoguang asked his senior officials to advise him on the opium issue.
The advice was split. Those who advocated legalization of the opium
trade [e.g. DC, 95-7 (7.1)] pointed out that it would end the corruption and blackmailing of
officials and bring in a steady revenue through tariffs. It would also
allow domestically grown Chinese opium — believed to be of better
quality than Indian opium and cheaper to market — gradually to
squeeze out that of the foreigners. Many officials, however, considered
this view pernicious [e.g. DC, 98-102 (7.2)]. They argued that foreigners were cruel and
greedy, and that the Chinese did not need opium, domestic or foreign.
They thought the prohibitions made by Emperor Jiaqing, far from being
abandoned, should be pursued with even greater rigor. (SMC, 149)
Lin Zexu
The Drug Czar
In 1838, after evaluating
the evidence, Emperor Daoguang made his decision. The opium trade must
be stopped. To enforce this decree he chose a Fujian scholar-official
of fifty-four named Lin Zexu, and ordered Lin to proceed to Canton as a
specially appointed imperial commissioner to end the practice of the
opium trade. ... To stamp out opium, Commissioner Lin (as the English
came to call him) tried to mobilize all the traditional forces and
values of the Confucian state. In public proclamations, he emphasized
the health dangers of opium consumption and ordered all smokers to hand
over their opium and pipes to his staff within two months. ... By mid-May
1839, over 1,600 Chinese had been arrested and about 35,000 pounds of
opium and 43,000 opium pipes had been confiscated; in the following two
months, Lin’s forces seized a further 15,000 pounds of the drug
and another 27,500 pipes. (SMC, 149-150)
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Furnace Keepers or Wholesale Dealers
Annexed Laws on Banning Opium, July 1839
Whoever shall hereafter open a
“furnace,” and connive with and secretly buy opium of the
outside barbarians, storing it up for sale, shall, if he be the
principal, be decapitated immediately on conviction.
The royal authority shall be respectfully
produced and the law executed, ere a report is sent to the crown. The
head of the offender shall then be stuck upon a pole, and exposed upon
the seacoast as a warning to all. The accomplices, advisers,
participators, receivers, givers (those who deliver the drug), and
boatmen who knowingly receive opium on board their boats for transport,
shall be sentenced to strangulation and thrown into dungeons to wait
the royal warrant for their execution. The houses and boats of these
parties shall be sequestered. (DC, 103) |
 With the foreigners, Lin used a similar
combination of reason, moral suasion, and coercion, and we know from
numerous statements of his that he did not wish his policies to lead to
armed conflict. ... In a carefully phrased letter to Queen Victoria, Lin
tried to appeal to her moral sense of responsibility. “We have
heard that in your honorable nation, too,” wrote Lin, “the
people are not permitted to smoke the drug, and that offenders in this
particular expose themselves to sure punishment. ...” Opium in
fact was not prohibited in
Britain and was taken — often in the form of laudanum — by
several well-known figures, Samuel Taylor Coleridge among them. Many
Englishmen regarded opium as less harmful than alcohol, and Lin’s
moral exhortations fell on deaf ears.
Although they were begged to yield by the
panic-stricken Hong merchants, the foreign traders first explained that
they handled opium on consignment for others and so were not empowered
to hand it over, and then offered to give up a token 1,000 chests. Lin,
furious, ordered the arrest of Lancelot Dent, one of the leading
British opium traders. When the foreign community refused to yield up
Dent for trial, on March 24, 1839, Lin ordered the Hoppo to stop
foreign trade completely. ... After six weeks, when the foreigners had
agreed to give up over 20,000 chests of opium and Commissioner Lin had
taken delivery, the blockade was lifted and all but sixteen foreigners
were allowed to leave. ...
[Lin] was now faced with the remarkable challenge
of destroying close to 3 million pounds of raw opium. His solution was
to order the digging of three huge trenches, 7 feet deep and 150 feet
long. Thereafter, five hundred laborers, supervised by sixty officials,
broke up the large balls of raw opium and mixed them with water, salt,
and lime until the opium dissolved. Then, as large crowds of Chinese
and foreigners looked on, the murky mixture was flushed out into a
neighboring creek, and so reached the sea. (SMC, 150-151)
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The First Opium War
| After the seizure of British opium in Canton, Charles Elliot
and the
British community rejected Lin Zexu's demand for a bond pledging that
they would no longer engage in the opium trade. ... On October 18,
1839,
[the head of the Foreign Office, Lord] Palmerston informed Charles Elliot that a British expeditionary
force would reach China in the spring of 1840. Since the structure of
the British constitution provided Parliament with little control over
foreign policy, the decision for war was made without parliamentary
consultation. Indeed, until Palmerston's departure from the government
in 1841, he single-handedly shaped the China policy. ... The following
dispatch from the pen of Lord Palmerston informs the Chinese government
of Britain’s intention to use force to protect the interests of its
subjects. (DC, 106) |
Declaration of War
Lord Palmerston ~ February 20, 1840
 ... It
appeared that the Laws of the Chinese Empire forbid the importation of
Opium into China, and declare that all opium which may be brought into
the Country is liable to confiscation.
The Queen of England desires that Her
Subjects who may go into Foreign Countries should obey the Laws of
those Countries; and Her Majesty does not wish to protect them from the
just consequences of any offenses which they may commit in foreign
parts. But, on the other hand, Her Majesty cannot permit that Her
Subjects residing abroad should be treated with violence, and be
exposed to insult and injustice; and when wrong is done to them, Her
Majesty will see that they obtain redress.
Now, if a Government makes a Law which
applies both to its own Subjects and to Foreigners, such Government
ought to enforce that Law impartially or not at all. If it enforces
that Law on Foreigners, it is bound to enforce it also upon its own
Subjects; and it has no right to permit its own Subjects to violate the
Law with impunity, and then to punish Foreigners for doing the very
same thing.
Neither is it just that such a Law should
for a great length of time be allowed to sleep as a dead letter, and
that both Natives and Foreigners should be taught to consider it as of
no effect, and that then suddenly, and without sufficient warning, it
should be put in force with the utmost rigor and severity.
Now, although the Law of China declared that
the importation of Opium should be forbidden, yet it is notorious that
for many years past, that importation has been connived at and
permitted by the Chinese Authorities at Canton; nay, more, that those
Authorities, from the Governor downwards, have made an annual and
considerable profit by taking money from Foreigners for the permission
to import Opium: and of late the Chinese Authorities have gone so far
in setting this Law at defiance, that Mandarin Boats were employed to
bring opium to Canton from the Foreign Ships lying at Lintin. ...
The British Government fervently hopes
that the wisdom and spirit of Justice for which The Emperor is famed in
all parts of the World, will lead the Chinese Government to see the
equity of the foregoing demands [i.e. reparations for the opium that
was destroyed and for the cost of sending a British fleet to China];
and it is the sincere wish of Her Majesty’s Government that a
prompt and full compliance with those demands may lead to a speedy
re-establishment of that friendly intercourse which has for so great a
period of time subsisted between the British and Chinese Nations, to
the manifest advantage of both. (DC, 107-109)
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Article 2. Determined the opening
of five Chinese cities — Canton, Fuzhou, Xiamen,
Ningbo, and Shanghai — to residence by British
subjects and
their families “for the purpose of carrying on
their
mercantile pursuits, without molestation or restraint.” It also permitted the establishment of consulates in each of those
cities.
Article 3. “The
Island
of Hong Kong to be possessed in perpetuity” by
Victoria and her successors, and ruled as they “shall
see fit.”
Article 4. Payment of Mex$6 million
by the Qing “as the
value of the opium which was delivered up in Canton.”
Article 5. Abolition of the
Canton Cohong monopoly system and permission at the five above-named
ports for British merchants “to
carry on their mercantile transactions with whatever persons they
please.” The Qing
government was also made to pay Mex$3 million in settlement of outstanding
Cohong debts.
Article 6. Payment to the
British of a further Mex$12 million “on
account of
the expenses incurred” in
the
recent fighting, minus any sums already received “as
ransom for cities and towns in China”
since August 1, 1841. (cf. SMC, 158)
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Most-Favored Nation Clause
Supplementary
Treaty of 1843
Article 8: “Should
the Emperor hereafter, from any cause whatever, be pleased to grant
additional
privileges or immunities to any of the subjects or citizens of such
foreign
countries, the same privileges or immunities will be extended to and
enjoyed
by British subjects.” (SMC, 161) |
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