Page 125 - Chinese SIlver By Adrien Von Ferscht

All this was a product of highly complex corruption. It was chaotic, unpredictable and multi-
layered - yet it was a system of sorts and it worked for all concerned, the Emperor
excluded. Foreign traders had to factor all this in to an ever changing equation. Not only
were there known payments and taxes to be paid, but there were payments that had to be
made in order to turn a blind eye as it were. These were known collectively as cumshaws -
a pidgin phrase derived loosely from the “right to land on Chinese soil” or “come ashore” -
gân xiè in Chinese, meaning “grateful thanks”. The act of requesting cumshaw was known
as ‘squeeze’ - another pidgin expression. In 1807, a ship of 300 tons with 30 crew that
stayed for 3 months on shore paid in the region of $2600 for cumshaw. It was only the
lucrative export trades from China that made the whole system worthwhile for all
concerned. Chinese Export Silver may have been small relative to the tea and silk trades,
but it was immensely profitable. It also filled gaps in the ships’ holds that would otherwise
have returned empty. One could best refer to it as “economic ballast”.

This remained the status quo until the Treaty of Nanking in 1842 threw open the doors to
Canton. This resulted in Shamien Island being leased to the British who in turn auctioned
leases for the valuable parceled trading sites to various nations, America being the largest
second the Britain. The British profited well from this initiative in terms of real estate, but it
also was the beginning of an unequal treaty that was for the first time unfavourable for the
Chinese:

The Government of China having compelled the British Merchants
trading at Canton to deal exclusively with certain Chinese
Merchants called Hong Merchants (or Cohong) who had been
licensed by the Chinese Government for that purpose, the
Emperor of China agrees to abolish that practice in future at all
Ports where British Merchants may reside, and to permit them to
carry on their mercantile transactions with whatever persons they
please, and His Imperial Majesty further agrees to pay to the
British Government the sum of Three Millions of Dollars, on
account of Debts due to British Subjects by some of the said
Hong Merchants (or Cohong), who have become insolvent, and
who owe very large sums of money to Subjects of Her Britannic
Majesty.

The three million dollars were paid in silver trade dollars to compensate keeping the
various Hong Merchants afloat over the years. A further twenty one million dollars was paid
to the British Government over the next 3 years of the Treaty, with 5% interest levied on
late payment.

So ended the Canton System. The new treaty laid down detailed regulations for Sino-
British trade and specified the terms under which Britons could reside in the newly opened
ports of Shanghai, Ningbo, Xiamen, Fuzhou and Canton. While Britons were allowed to
buy property in the treaty ports and reside there with their families, they were still not
allowed to travel to the interior of China or carry out trade there.