Page 116 - Chinese SIlver By Adrien Von Ferscht

customs and excise agents]. While theoretically the system had a sound basis, it had an
inherent flaw - namely the devious minds of both the Hong and the foreign merchants.It
was not for nothing the Chinese Court called the foreign merchants fan qui [foreign devils;
barbarians].

Certainly for the greater part of the first eighty years of the China Trade, it was the British
who controlled any two-way trade with and from China by way of the British East India
Company referred to as “The Honourable Company”. In that eighty years, the key British
figures in Canton had developed a very keen British version of the Chinese mindset. The
China Trade became one big mind game.

The Cohong were focused on trade in and around Canton, so gradually provincial Chinese
merchants and even the Cohong began to connect with the ‘Country Trade’, which had the
effect of funneling trade between the European merchant and Chinese civilians. This kept
growing and it was to eventually reach proportions that became an Imperial nightmare,
since it undermined the whole purpose of the Canton system.

The ‘country trade’ was a complex system that evolved in India in parallel to the East India
Company. It consisted of ‘free merchants’ who were licensed by the Company to operate
coastal and regional shipping using their own privately-owned ships which were often
obsolete Company ships; most of the free merchants had previously been servants to the
Company in Europe.

The opium trade to China had begun in the late 17th century and the Company had the
monopoly under a charter that was created by Queen Elizabeth I on New Year’s Eve,
1600. 18th and 19th century trade up until 1873 between China and India was governed
by the East India Company simply because the Company was tasked with managing and
ruling colonised India on behalf of the British monarchy. The East India Company had its
own military and navy.

One of several such opium warehouses the British East India operated in Calcutta
Opium balls were sorted packed into chests that then went to the auction house