Journal of the House of Lords: Volume 62, 1830. Originally published by His Majesty's Stationery Office, London.
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Die Martis, 15 Junii 1830.
I have been there in the Situation of Mate and Commander of a Ship, and Agent for the Transaction of Business connected with the Ship I commanded. I have also had other Ships, with their Cargoes, consigned to me in China, whilst I was there.
To a very limited Extent. As Commander of a Ship, and also when Mate of a Ship, I used to trade on my own Account, in a similar Way to that in which the Commanders and Mates of East India Company's Ships trade, though not to such an Extent.
With the Hong Merchants, generally speaking; but there are certain Articles of Merchandize which the Hong Merchants will not supply; and I have dealt very extensively with the Outside Merchants, particularly in the Purchase of Gold and Silver Bullion, which the Hong Merchants would not supply. The Returns I had occasion to make from China to my Constituents in India were sometimes made to a considerable Extent in Bullion, and that I used to purchase exclusively from the Outside Merchants.
If the Purchase is made from an Outside Merchant, he makes an Arrangement with the Hong Merchant, and the Goods are shipped off from the Warehouse of the Hong Merchant, so that it appears to be supplied by the Hong Merchant; that however is an Understanding entirely between the Outside or Shop Merchant and the Hong Merchant, with which the European Purchaser has nothing to do. In purchasing Gold and Silver Bullion from the Outside Merchant, it is generally received at the House of the Purchaser in Canton, and sent on board Ship entirely at his own Risk.
Yes. I of course saw a Sample of the Goods before I settled for the Price, and then I gave an Order for the Quantity, which was prepared accordingly; I might of course superintend the packing of them, if I chose, or depute another to do so; sometimes I did so; at other Times I trusted it to the Hong Merchant.
It would depend on Circumstances. Whatever might be the Amount of Capital, I should consider it necessary to ascertain whether I could purchase Goods on better Terms from the Hong Merchants than from the Outside Merchants. In purchasing a small Quantity of Goods, say from 1,000 to 2,000 Pounds Worth, it would generally be better to deal with the Outside Merchants, for we could go to their Shops and select at once the Goods we wanted; but in purchasing a whole Ship's Cargo, or investing to any large Amount, I should conceive it was more advantageous to deal with the Hong Merchant.
Purchasing a large Quantity at a Time from the Hong Merchants, should you purchase it by Contract, or should you venture to trust the Supply of the Market, if you were desirous of making a very large Purchase?
I have always made Purchases at the Time I have required the Goods, and have never bespoken a Cargo at a distant Period. It would depend on the Fluctuations of the Market how a Purchase by Contract answered; it might be advantageous one Year, and not so another.
If you were called upon to make a Purchase to the Extent The East India Company do, or even a smaller, should you not think it a safer Way to make a previous Contract for the Delivery of the Quantity required?
If the Company adhere to the System of making Contracts rather than purchasing in the Market, it is not to be considered that that is a Proof that they conduct their Trade carelessly, or with Disregard to the Expence, but as a Circumstance connected with the Extent of their Demand?
I should conceive that it would affect the Commerce of this Country beneficially, inasmuch as under the Operation of a perfectly Free Trade to Canton I am of Opinion that there would be a greater Consumption in China of the Staples and Manufactures of this Country, particularly of Woollens and Metals, but Metals more, I think, than any thing else; and China, in its varied Productions, would afford the Means of making Returns direct to this Country, if it were desirable, in Goods, without Loss; whilst Returns to a great Extent might also be made in Bullion, when desirable, there being generally Abundance of Gold and Silver to be obtained at Canton. It would also be the Means of employing an increased Number of Ships and Seamen. The Effect of such a Trade would operate in India on the same Principle, by increasing the Export of the Produce of that Country to China. In connection with that Part of the Question which relates to the Trade from this Country, perhaps the most profitable Mode of carrying on Trade with China, if it were perfectly free, would be circuitously by India-sending a Ship's Cargo out to India, to be sold there, and the Proceeds invested in the Produce of India, to be carried on to China, and the Returns brought Home direct from China, and vice versa. Ships from India would proceed in the first instance to China, from thence to this Country, and then return to India.
I think more generally upon the Outward Cargo. I should say that if the Proceeds of the Outward Cargo were returned to this Country without Loss, there would be generally speaking a fair Mercantile Profit upon the Adventure; the Difficulty is at present, and I believe has been for the last Ten or Twelve Years, in getting Funds Home from China.
I believe of late Years they have never drawn to any Extent on London when they could help it; as when they have required Funds at Canton, they have generally preferred giving Bills on India to drawing on London.
If the Company were disposed to give to a large Extent Bills on England at Canton, do you apprehend that under those Circumstances the opening of the Trade would still produce any considerable Advantage to the English Trader?
It would depend upon the Rate of Exchange at which they gave the Bills; but still under any Circumstances I think that the opening of the Trade would be advantageous, as I think a more favourable Remittance would, generally speaking, be obtained through the Medium of Goods than through the Medium of Bills of Exchange.
The American Merchants having now the Means of sending their British Manufactures to China, and it being your Opinion the British Merchant, in the event of opening the Trade, would not have the Means of exporting those Manufactures at a smaller Cost, what Reason have you for thinking that the opening the Trade would increase the Export of British Manufactures to China?
I believe that in this Country the Shipowner and Merchant are frequently combined in the same Person. If I owned a Ship in the Port of London, I apprehend that I could send my Goods cheaper to China in my own Ship than I could freight them in an American, and I should prefer doing so to trading under a Foreign Flag, even if that were perfectly unobjectionable; besides, Circumstances might occur to interrupt the Transit of Goods by a Foreign Flag, such as a War, which would not prevent our sending the same under a British Flag.
Perhaps not at a smaller Cost, but with greater Facility, - and probably even at a smaller Cost; but that would depend upon the Rate of Freight charged by the one and the other; and the Rate of Freight might be influenced by a Variety of Political Circumstances; a War, or the Prospect of War, might raise the Rate of Freight by the one, and lower it by the other.
Must not a Merchant who exports by his own Ship make Two Profits; the one by his Ship, and the other by his Goods, and thus be in exactly the Situation of a Person who exports on the Ship of another, and pays Freight?
No. It is the Custom of some Merchants to combine the Earnings of the Ship and the Profit on the Goods, making them in fact One Adventure, debiting to that Adventure the Cost and Outfit of the Ship, and the Price of the Goods; and on the Return crediting it for the Proceeds of the Goods or Returns, and for the Value of the Ship at her Return. I believe that other Merchants again do separate the Two, and keep the Earnings of the Ship quite distinct from the Profit or Loss on the Goods.
If the Export of British Manufactures to China direct be profitable, are you of Opinion that the additional Voyage, in which an Expence would be incurred by the Vessel going to India on the Way to China, would so increase the Cost of those Manufactures as to make the Speculation unprofitable?
Certainly, it would have the Effect of making the Speculation less profitable, and in some Instances might make it altogether unprofitable; but I apprehend that British Manufactures would never be sent to China circuitously through India; they might be sent to India, and sold or exchanged for other Commodities there, and the Produce sent on to China; or if the Indian Markets were glutted, the Goods might certainly then be sent on to China.
The State of the Law now allows only Americans to export British Manufactures to China direct; the Law however has allowed British Merchants to export them from India to China. The Question is, whether the Export of British Manufactures from India to China would be an unprofitable Transaction, the Cost of those Manufactures having been so much increased by touching in India on the Way?
I am not aware whether that has been the Case or not; I have had very little Communication with Sincapore myself. The Ships from Bombay have generally had full Cargoes from Bombay to China, and I apprehend have very seldom had any Goods from Sincapore.
I think the Consumption of them in China would increase under such Circumstances, the Importation of them to China being at present very much restricted; whereas, if the Trade were open, considerable Shipments would be made under the British Flag, and which would find their Way into the Interior of the Country, under the Operation of a Free Trade, conducted with all the Commercial Enterprize of British Merchants. The Wants of China, in Metals particularly, are very extensive. China does not produce a sufficient Quantity of Iron or Copper for its own Consumption; and the Exportation of all Metals from Canton, with the Exception, I think, of Lead, is prohibited.
Do you know that the Demand of the Chinese for British Manufactures has increased in proportion to the Diminution, amounting to about Fifty per Cent. which has taken place in the Price of British Woollens and Cottons in the course of the last Ten Years?
You are probably aware, from the Returns, that the American Trade has amounted in some Years to from Eight to Ten Millions of Dollars, and that out of that Amount not more than Two or Three Millions of Dollars in any one Year have consisted of Goods; do you not think that, having so large a Capital as that disposable for Trade with China, they would have invested a much larger Proportion in British Manufactures, if the Exportation of those Manufactures had proved profitable?
May it not be inferred, from their not having done that to any considerable Extent, but that, on the contrary, their Exports of British Manufactures to China have diminished of late Years, that they have not found it profitable to carry on a Trade with that Country by an Export of Manufactures?
Will you have the goodness to refer to the Article of Tin in the Account Number 29. of the Papers presented to Parliament last Session, and state whether it appears to you from that Return that the Export of Tin to China has been a profitable and is an increasing Transaction?
It appears by this, that the Importation of Tin by Country Ships into China has very considerably fallen off since the Year 1817-18; but it does not follow from this that the Importation may not have increased by other Means, Tin having been an Article of Export from this Country, and it is also procured at different Islands of the Eastern Archipelago, and carried from thence by the Americans and others to China. The Banca Tin, in particular, is the very best.
Will you have the goodness to refer to Page 8, under the Article of Tin, and state whether the Export of Tin by The East India Company appears to have been on the Increase between the Years 1820-21 and 1828-29; does it not appear that there has been none exported since 1822-23?
It seems by this Return to have fluctuated very greatly indeed; and it would be almost impossible to draw any Conclusion as to the State of the Trade in that Article, if this Return included the whole of the Iron that had been imported.
Would it not appear, from the Returns which you have just referred to, that the Export of Iron and of Tin through The East India Company, and all the Country Trade to China, had not, in the Course of the last Ten Years, been a Transaction attended with such Profit as to induce any great Extension of it?
It does not appear, certainly, to have been extended by The East India Company, nor by those engaged in the Country Trade to China; I cannot say for what Reason; but it would follow, I suppose, as a Matter of Course, that they did not find it so profitable as trading in other Articles.
I scarcely know any Country so productive as China, or which contains such a Variety of Articles that would be required for the Consumption of this Country and of Europe. Silk in a manufactured and unmanufactured State might be brought to a very considerable Extent; Drugs are also produced in China; Cotton manufactured into Nankeen would also be an Article of considerable Export; and Sugar, if it were permitted here. The Sugar Cane in China is very extensively cultivated; and there is a great Variety of Qualities, the finest and the coarsest Sugar in the World being, I believe, produced in China.
Have the goodness to refer to Page 42. in that Account, a Return of the Silk Goods exported from Canton by the Americans for European Consumption, and state whether from that Return it would appear that the Exportation of Silk Goods for the Consumption of Europe had been a Transaction of Profit during that Period?
With the Exception of Cassia, which is stated as a separate Article in this Account, all the other Articles to which you have referred must appear under the Head of Sundries, if such have been imported into Europe; will you state whether the Total Amount of all other Articles not specified, imported under the Head of Sundries, appears to have been such as to give the Appearance of a profitable Transaction?
Should you, by looking at this whole Account, and especially for the Three last Years of the Export of Tea, as well as of other Articles specified, by the Americans to Europe, say that the whole Return exhibited the Appearance of an increasing and profitable Trade?
It appears, by the Return I now hold in my Hand, that the Exports of the Manufactures of China Produce for European Consumption by the Americans during the last Three Years has been on the Decline; but I do not conceive that this is a Criterion by which we could judge correctly of the Profits of a Free Trade to China under the British Flag; there are Articles of China Produce brought to the Continent of Europe under other Flags as well as the Americans; certainly, as far as the American Exports are included, they appear to have decreased by this Return.
Will you have the goodness to refer to No. 26. in Page 41, the Account of Exports from Canton by the Americans intended for American Consumption, and state from an Inspection of that Account whether in the last Three Years that Trade appears to have been a lucrative and increasing Trade?
Mostly Cotton was the principal Article of Produce which used to be imported to my Consignment at Canton; on one Occasion Woollens and Metals to a considerable Extent, purchased from the Bombay Government in the Year 1805 or 1806.
The Metals sent to China were not to so great an Extent as the Woollens. The Metals were mostly resold, I believe, at Bombay; some were sent on to China, but whether they yielded a Profit or not I cannot take upon myself to say; it was during the previous Charter of The East India Company, and we required a special Licence to take them on, the Exportation of Woollens from India to China being at that Time prohibited; and we were permitted to take them on only in consequence of their having been purchased from the Company.
He calculates his Profit on the whole Transaction. I can best answer the Question by stating the Mode of keeping an Account of a Commercial Adventure from Bombay to China. The Prime Cost and Charges of the Goods purchased are debited to the Account, together with the Freight, Insurance and all Charges on to the Port of Canton.
Yes; so far the Account being kept in Rupees at Bombay. Then the Returns are invested in various Ways; perhaps some invested in Goods for Bombay, others in Bullion or in Bills; perhaps sent to Bengal or to England, according to Circumstances; but the whole is realized at Bombay.
Then the Merchant, in keeping his Account of a Commercial Transaction commencing in India and terminating in India, makes it not One Transaction; he does not divide the Profit into Profit on the Export and Profit on the Import Cargo?
Certainly; Commercial Accounts such as I have mentioned will shew at any Time whether the Profit has been on the Export or the Import, because that Account shews on one Side what the Goods cost, and on the other what they sold for at Canton; the Merchant may, by analysing the Account, with very little Trouble ascertain whether the Profit or Loss has been on the one or the other, or on the two combined.
If I were entering into a Commercial Transaction myself, I should keep the Account exactly in the Way I have stated; whether it were a direct Voyage to China, or a circuitous Voyage, I should debit the Accounts with the Investment and Charges, and credit it with the Proceeds as they came in; I should make no Difference in the Mode of keeping the Account.
I apprehend that a British Ship would, in the first place, import her Cargo into this Country at lower Duties and under much more favourable Circumstances than Importations could be made under the American Flag; and I am also of Opinion that we can navigate our Ships fully as cheap as the Americans. I cannot entertain any Doubt that Returns made from any Foreign State to Great Britain could be made more advantageously under the British than under any Foreign Flag.
At present it would be very little indeed; the Rate of Freight outward bound to China by India being so very low, it is almost nominal; it has been as low within the last Two or Three Years as Fifteen to Twenty Shillings per Ton; it is now a little higher; but the Ships of late Years have been going out to India in Ballast- almost without Cargo.
I apprehend there would be no Objection to their carrying on their Cargo without being landed; but that would rest entirely with The East India Company, as a Country Ship cannot go to Canton now without a Licence from the Company's Government in India.
They are very fine Vessels, as fine Merchantmen as any in the World, and I think the Size now varies from Five to Seven hundred Tons; there are a few in the Trade as large as a Thousand Tons; there were formerly Twelve hundred Ton Ships in the Trade.
By the latest Accounts, the Freight from Bombay to China is about Five Pounds per Ton; the Freight back is not generally reckoned by the Ton, but the whole Ship, when not loaded by her Owner, is generally taken for a slump Sum, and which perhaps might be estimated at from Thirty Shillings to Two Pounds a Ton; I should say that for about Seven Pounds per Ton a Ship could now be chartered to go from Canton to Bombay and back.
The Expence of building at Bombay is fully as great, if not more, than the Expence of building in this Country; and there is not much Difference in the Expence of navigating with Europeans, as fewer British Seamen are required in proportion to the Size of the Ship than if she were manned with Asiatics.
I think that, except as regards the Port Charges at Canton, a Vessel of Five or Six hundred Tons is better adapted for River Navigation in any Part of the World than a Ship of Twelve hundred Tons; but a Ship of Twelve hundred Tons has a great Advantage in trading to China, as the Port Charges at Canton are much lower in proportion to the Tonnage of a large Vessel than they are on a small Vessel.
Will you have the goodness to refer to Number 18. and Number 41; would it not appear from the Comparison of these Accounts, that the total Charge per Ton is little more than a Pound on a Company's Ship at the Port of Canton?
The Difference is considerable. There is a certain Item of Charge which they call a Cumshaw, or Present, amounting to 1,900 Tales, levied on every Ship, whatever her Size may be, which is more than £600 of itself; and a Ship of 100 Tons Burthen has to pay that Charge, whilst One of 1,200 Tons pays only the same. The Mode in which they determine the Amount of the other Port Charge is, by measuring the Ship from the Centre of the Fore-mast to the Centre of the Mizen-mast, and taking the extreme Breadth on the upper Deck; and it is from this Measurement that they compute the other Part of the Port Charge, and it subjects a small Ship to a much heavier Charge in proportion than it does a large one, and it is consequently in that Point of View much more advantageous to trade to China with a large Ship, as far as the Port Charges are concerned, than with a small one. The Port Charges in any Case are very heavy at Canton; but I would beg to correct the Answer I made when I estimated the Difference of Charge between a large and a small Ship at about Two Pounds per Ton, as I think now that it cannot be so much.
If the Account Number 41. states the whole of the Charges imposed by the Chinese Government on Ships entering the Port of Canton, the Difference of Charges on a small and a large Ship must be less than you at first imagined?
This Statement does not alter the Opinion I gave as to the relative Difference: in stating that there would be a Difference of about Two Pounds a Ton, that I apprehend would, generally speaking, be an over Estimate, but the relative Difference will still be very great; it will probably be One Half in some Ships, One Third in others, and One Fourth in others, according to their relative Tonnage.
Generally speaking, they do; but that depends upon the Period of their Arrival. They arrive at Canton at different Periods of Time, and they begin to load and dispatch them when the new Teas come down, which is generally in October or November; and they continue sailing up to February, Two or Three at a Time, every Fortnight.
Generally speaking, she would; but much depends upon the Formation of the Vessel. Some Ships that measure 1,200 Tons will not carry so much Tea by 100 Tons as others of the same Registered Tonnage, the Measurement being calculated according to the Length, Depth and extreme Breadth; and Ships that do not carry the Breadth low down, but are built sharp like a Wedge, are not burthensome for Cargo.
Sometimes one, sometimes the other. I understand that The East India Company, in engaging Ships, pay a certain Rate of Freight for the Registered Tonnage, and a less Rate for any Surplus the Ship can take beyond the Registered Tonnage. In my own Experience, we have generally engaged Tonnage for the Quantity the Ship can take on board, so as not to overload her, but to leave her sea-worthy.
Are not the Chinese Goods, imported into America by the Americans in return for the British Manufactures they export, exclusively intended for the Markets either of the United States or the Continent of Europe?
Would not the Effect of that be, that the Exports of British Manufactures by Americans would be limited rather by a Chance of profitable Sale of the Return Cargo than by a Demand in China itself for the British Goods?
So that, although the American Exports of British Manufactures may not have been on the Increase, it does not at all follow from that that there would be no Increase of British Manufactures exported to China for that Market if the English Market was open to a Return Cargo of Chinese Produce?
Certainly it does not follow that there would not be an Increase of Export under the British Flag if the Trade were perfectly unrestricted; and I apprehend the Point could not be ascertained, as regards the Americans, unless they were permitted to import on the same Terms.
If the Market for the Produce and Manufactures of China, as exported thence by the Americans, were generally extended, their Exports to China might be extended for the Purpose of meeting that Extension of the Market for Chinese Produce and Manufactures; but does it follow that the Export of any particular Article of Manufacture or of Produce from China by Americans would be extended, because their whole Trade is extended?
I apprehend that would follow as a Matter of course. I apprehend that, on general Principles, if there was an increased Demand for China Produce all over the World, and that that China Produce could be purchased in China by British Manufactures, exported from this Country under the American or any other Flag, the increased Demand would naturally lead to increased Exports from this Country.
Would not an increased Export take place clearly in that Description of Manufacture which could be exported with the greatest Profit; and would the Export of British Manufactures be increased, unless they could be exported to greater Profit than other Articles of Produce or Manufacture sent to the Chinese Market?
While there is no Reason, from the general Extension of that Trade, to argue that the Export of any one particular Article of Manufacture would be increased, neither is there any Reason to infer that the Export of that Article would be increased; the general Amount of the Exports would be increased, but you cannot say that any one particular Article would be increased?
Have the goodness to refer to the Account No. 25. Page 40, and look at the Years 1821-22 and 1824-25; does it not appear by this Return that the Sale Value of the Merchandize imported into China by the Americans in 1821-22 amounted to 3,074,741 Dollars, and in the Year 1824-5 to 2,437,545; that there had been a very considerable Increase in the Total Value of Exports to China by the Americans, comparing the last of those Years with the first, and therefore a great Extension of general Trade; but that it had not been found advantageous to make that Extension of the Trade by an increased Export of Manufactures, but the contrary, for that there had been a Diminution to the Amount of more than 600,000 Dollars on the Export of Manufactures, while there had been an Increase of nearly 700,000 Dollars in the Total Amount of the Export Trade?
I should say, if I understand the Question rightly, that this Return does not enable me to judge whether there has been an increased or a diminished Export of Manufactures. There appears to have been a diminished Export in Value of Goods, but whether the Quantity has increased or diminished does not appear from this Return. I confess I do not very clearly understand this Return in the Way in which it is framed.
Would it not however appear from the Return, that, notwithstanding the considerable Increase of the Trade which took place in the latter of those Years to which reference has been made, and in the Value of the Produce and Manufactures of China exported in that Year, the Chinese have devoted to the Purchase of Manufactures a much smaller Sum in the latter Year than they did in the former?
If the First Column in the Return refers merely to the Value at which the Goods have sold at Canton, certainly the Chinese have paid less for the Imports by Americans for that Year than they did in the Year 1821-22.
Though a larger Proportion of American Capital was devoted to the exporting from China Chinese Productions and Manufactures, was not a smaller Portion of Chinese Capital devoted to the Purchase of that Part of the American Import into China which consisted of Merchandize?
Have the goodness to refer to No. 37. Page 98. of the Accounts now shewn to you, under the Head of Woollen Manufactures; if it should appear that in the Year 1814 the Declared Value of the Pieces of Woollen Manufacture exported was £215,815, and that in the Year 1828 the Declared Value of the same Species of Articles was £217,454, should you be accurate in inferring that there had been no greater Exports in the latter Year than in the former, than the Difference between the £215,000 and the £217,000?
In the event of opening the Trade with China to all British Subjects, do you think it would be necessary to establish some Public Authority at Canton, which should have the Power of controuling the Conduct of all British Merchants and Subjects trading to that Port?
Yes, I should think that essentially necessary to the Preservation of the Trade; I state that from my own Knowledge of the Peculiarities of the Chinese, and the Necessity of controuling Europeans visiting Canton.
In what Manner would you give to that Public Officer, so established at Canton, an effectual Controul over the Conduct of British Subjects; merely by a Change in the Act of the Legislature, or would you give him some essential Authority?
They have very extensive Powers; they are empowered to remove from Canton, or from any of the Islands on the Coast of China, any British Subject, whenever they think it proper to do so; and they are entitled to call upon the Commander of any British Ship at Canton for physical Force to enable them to carry their Determination into Effect. They can also interdict the whole British Trade at any Time if they think proper. In fact, every British Ship going to Canton may be controuled by the Select Committee, and not only the Ship and Cargo, but the Crew; they are obliged to comply with any Orders the Select Committee may issue to them.