Page 257 - Merchants and Mandarins China Trade Era

243.

stagnation because of the economic depression of 1837. Com­

bined with the restrictions against opium, the foreign resi­

dents had little business activity in the latter half of the

year. One American predicted: "I should not be surprised if

a few months hence two thirds of the houses in India, China,

57
Java & Manila were to be bankrupt."
Although the American residents did not rejoice over

news of tighter prohibitions on opium and of the decline in

trade, they assumed generally that the situation would sooner

or later improve. If they could wait out the depression, their

trade would again be profitable. As for opium, the drug never
constituted a major share of even Russell & Co.'s overall

business. Although an important source of profit for them,

their actions in the opium market usually followed the lead

of the English. During the 1830 s opium had become for the
1
latter merchants the very foundation of business and profit.

Even the East India Co., which witnessed its trade at Canton

dwindle after 1834, maintained a crucial stake in the opium

trade. The Company controlled the source of the drug in India.

By 1837 in fact only the opium trade kept British commerce in

China from being a deficit trade. Rather, it allowed the

57
The statement is from Letter, A.A. Low to W.H. Low,
Nov. 12, 1837, in "More Canton Letters of Abiel Abbot Low,
William Henry Low, and Edward Allen Low (1837-1844), 11 ed. by
Elna Loines, Essex Institute, Historical Collections, 85 (1949),
226. For the decline of the opium trade and all trade, see
Chinese Repository, VI, 6 (October 1837), 304 and Letter, Russell
& Co. to J.M. Forbes, Dec. 27, 1837, Forbes MSS. Greenberg, in
British Trade and the Opening of China, pp. 198-200, discusses
the stoppage of the opium trade and its effect on English mer­
chants.