A general excitement about such a trivial matter as the relative speed of two ships was only to be accounted for by the awakening consciousness of the significance of the English shipping revival which was then beginning. The interest extended much beyond the circle of those directly concerned. The deck of a mail steamer, to take an instance, became suddenly animated as the signals of a sailing-vessel were read out. Speaking a ship at sea was no such unusual occurrence, but when the name of Challenger was passed round, passengers and crew rushed to the side, gazing intently on the shapely black hull and white sails reflecting the morning sun. She was in the Straits of Malacca, on her way back to China to run her second heat. A young man among the passengers betraying ignorance of the cause of the commotion felt as small as if unable to name the last Derby winner. The world at that time seemed to have grown young. Imagination was directed to a dawn gilded with promise which the sequel has surely not belied!

Thus the China Sea became a principal battle-ground whereon the struggle for ascendancy between the ships of Great Britain and the United States was most strenuously fought out. It was, as Mr Green said, a fair and open contest, alike creditable to both sides, and an unmixed benefit to the world at large. The energy of the English shipping interest was thoroughly aroused, and the shipowners and shipbuilders of Scotland came speedily to the front. In a few years after the issue was joined between the United States and Great Britain, the shipbuilders of the latter country found a potent auxiliary in iron, which began to be used for sailing-ships.[29] The vessel that led the way in this innovation, combining great speed with the other conditions of success, was the Lord of the Isles, Captain Maxton, of Greenock, which distinguished herself by beating two of the fastest American clippers of twice her size in the run from Foochow to London in 1856. The gradual introduction of steam on long voyages, which followed the free use of iron, was also to the advantage of the British competitors; and thus from a combination of favouring circumstances and dogged efforts to turn them to account, the ascendancy of British shipping was finally established.

In sketching the performances of these vessels we have somewhat anticipated the advent of that famous fleet of tea clippers which commanded the traffic of the Far East for something like fifteen years. For the beginnings of that struggle we have to go back to the year 1851, when the Leith clipper Ganges raced two Americans, the Flying Cloud and Bald Eagle, from China to London, finishing up with an interesting tack-and-tack contest up Channel from Weymouth, the English ship passing Dungeness six hours ahead. At that period the odds in mere numbers were so overwhelming against the English vessels that such occasional victories as the above were calculated to inspire the builders with courage to persevere. The Aberdeen clippers, Stornoway, Chrysolite, and Cairngorm, worthily followed the London-built Challenger in disputing the prize of speed with the best of their American contemporaries; and after the race of 1856, won, as has been mentioned, by the iron ship Lord of the Isles of Greenock, the American flag was practically eliminated from the annual contest. Competition, however, by no means slackened on that account, but rather increased in intensity. Past achievements opened the eyes of those interested to the possibilities of indefinite improvement in the build, rig, and equipment of ships, so that the idea took root and became a passion. Each year brought forth something new, giving birth in the following year to something still newer, until a type of ship was evolved which seemed to be the acme of design and execution. British clippers raced against each other for the blue ribbon of the ocean with as great zest as they had ever done when other flags were in the field.

The competition for speed received a great stimulus from the opening of Foochow as a regular tea-shipping port in 1856. The port had been hindered by official restrictions from enjoying its natural advantages at an earlier period, and it was mainly due to the enterprise of the leading American house that these obstacles were at last removed and the produce of the Bohea hills diverted to its proper outlet. The event marked an epoch in the tea trade; for Foochow being so much closer to the plantations than the other two ports, it became possible to put on board there the first growth of the season with a prospect of landing the new teas in London a couple of months earlier than the trade had been accustomed to. It may be mentioned as one of the curiosities of conservatism that this very circumstance was used to the commercial prejudice of shipments from the new port. It was revolutionising the established routine of the trade, would interfere with the summer holidays, and it was gravely argued that October was the very earliest time when the London buyers could be induced to attend to the tea-market. But the fragrance of the new tea was irresistible in dispersing such cobwebs. So far from its coming too early to market, the best shipbuilders in the world were soon engaged in constructing ships that would accelerate the arrival of the new tea by as much as a couple of days. And so hungry was the trade that special arrangements were made to facilitate the brokers obtaining samples to sell by before the vessel passed Gravesend, and he would be an obscure grocer who was not able to display in his shop window a tea-chest bearing the name of the clipper on the day following her arrival in the dock. The annual tea-race from Foochow thus became one of the events of the year. Premiums were paid to the winner, and sliding scales of freight were in course of time introduced, graduated by the number of days on passage.

No better proof could be adduced of the high excellence of the ships as well as of the good seamanship of their commanders than the exceeding closeness of the running on that long ocean voyage of twelve thousand miles. Several times it happened that vessels starting together would see nothing of each other during the hundred days' passage until the fog lifting in the Downs would reveal them close together, from which point the winning of the race depended on the pilot or the tug. Of the great race of 1866 Mr W. S. Lindsay, from whose valuable work on Merchant Shipping we have drawn freely for these details, says: "This race excited extraordinary interest among all persons engaged in maritime affairs. Five ships started—the Ariel, Taeping, Serica, Fiery Cross, and Taitsing. The three first left Foochow on the same day, but lost sight of each other for the whole voyage until they reached the English Channel, where they again met, arriving in the Thames within a few hours of each other." Very fast passages continued to be made after that time. The Ariel and Spindrift raced in 1868, and the Titania made a quick run in 1871; but Mr Lindsay awards the palm to the Sir Lancelot and Thermopylæ as "the two fastest sailing-ships that ever traversed the ocean." The former vessel, 886 tons register, made the run from Foochow to London in ninety days in 1868, and an interesting fact is recorded by the owners of that fine ship bearing on the propelling power of sails. Many experienced navigators had during the clipper-racing entertained misgivings as to the value of the excessive amount of sail and the heavy rig which were deemed necessary to the equipment of a clipper. The ships, they said, "buried themselves under the press of canvas." Writing seven years after the performance just mentioned, the owner of the Sir Lancelot said: "After the mania for China clipper-sailing I had 8 feet cut off from all the lower masts, and reduced the masts aloft and the yards in proportion. Yet with that (and no doubt a proportionately reduced crew) she maintained her speed undiminished." This was not an uncommon experience.[30]

It is not to be supposed that the produce of China or the imports into the country were all carried by clipper ships. Theirs was a special service reserved for the most valuable produce and for the first few weeks of the season. After that fitful fever the trade of the year settled down to what may be called daily-bread conditions, when ships with moderate speed, large capacity, and frugally sailed, made steady and substantial profits for their owners. It is a commonly accepted maxim that the race—for profits, at all events—is not always to the swift. It was a saying of Mr Green, whose firm owned a large fleet of ships in the Australian and Indian trade, that in his balance-sheet for the year he found that his slow ships had paid for his fast ones. Nor did this economic rule lose its validity when steam came to supersede sail.

The clippers proper had not had a clear run of fifteen years when steamers began to trespass on their preserves. The possibility of a successful steam voyage round the Cape began to be proved in 1864, and was demonstrated in 1866, when Mr Alfred Holt of Liverpool first established his "blue-funnel" line, beginning with the Ajax, Achilles, and Agamemnon. But though sailing clippers were displaced, the sporting element in the China trade was not extinguished. The opening of the Yangtze revived the interest in early arrivals of tea by bringing the "black leafs" of Hunan and Hupeh to the sea nearly as soon as the "red leafs," whose outlet was Foochow. The produce of the central provinces up till 1861 was conveyed by a slow and expensive route, a considerable portion of it on the backs of porters, to Canton. Hankow when opened became at once the entrepot for these teas, and sea-going ships began to load their cargoes in the very heart of the Chinese empire. For some years there had been two sets of races—one from Foochow and one from Hankow—which took the wind out of each other's sails, and the sport became somewhat stale.

It was the opening of the Suez Canal in 1869, and the consequent improvements in the construction of steamships, that gave its full value to the Yangtze as a trade route. For then ocean steamers loaded at Hankow with all the advantages of the short route and convenient coaling-stations, and the old excitement of the Foochow racing was revived under a still higher pressure. Every year witnessed some new design for combining the maximum cargo and coal stowage with the maximum speed, so that new tea, which but a few years before was landed in November, now came to market early in July. The last great race occurred in 1883 between the Glenogle and Stirling Castle. By that time Indian tea was rapidly gaining the ascendant in the great consuming marts, displacing the Chinese article, which could no longer afford the prestige of being carried by steamers built and run regardless of expense. Thenceforth all Far Eastern produce found an everyday level; merchandise was carried to and fro by regular lines, with measured intervals of sailing, all the year round, freights were fixed by common agreement, and the trade assumed a character of an omnibus traffic on a large scale.

The Suez Canal produced an immense lateral extension of trade with China by bringing the Black Sea, Mediterranean, and North Sea ports into direct communication with the ports of the Far East. The Russian volunteer fleet, composed of very large and swift steamers, each capable of conveying 2000 troops, carried tea direct from Hankow to Odessa. Trade with Marseilles and Genoa was developed by British and German enterprise as well as by the Messageries Maritimes of France. Antwerp, Bremen, and Hamburg became the terminal ports for important lines of steamers. The mercantile navy of Japan had not risen into general notice during the earlier time with which we are principally concerned, and it would deserve a treatise by itself.

By a process of natural selection native shipping in China and Japan has been extensively superseded by foreign, and an immense dislocation of capital has in consequence taken place. The effect of this has been severely felt on the China coast, especially in such large shipping ports as Taku, Shanghai, and Ningpo, where there were in former days large and prosperous shipowning communities. The disturbance has probably been much less marked in Japan, owing to the greater agility of the people in adapting themselves to inevitable changes. Certain it is that in both countries there is still a large junk fleet employed in the coasting trade, being protected against foreign as well as steam competition by their light draught and their privilege of trading at ports not opened to foreign trade.

The temptation to evade the prohibition of foreign flags led in former days to sundry bizarre effects on the coast of China. The natives, finding it to their advantage to employ foreign vessels, exercised their ingenuity in making them look like Chinese craft. This would at first sight appear no easy matter, seeing that the Chinese junks carried no yards and their hulls were of a construction as different from that of a modern ship as was possible for two things to be which were intended for the same purpose. The junks possessed certain qualities conducive to buoyancy and safety, such as water-tight bulkheads, which at once strengthened the hull and minimised the danger of sinking. But their sailing properties, except with the wind "free," were beneath contempt. Their weatherly and seaworthy qualities commended vessels of foreign construction to the Chinese traders, while the talisman of the flag was deemed by them a protection against pirates, and perhaps also, on occasion, against official inquisition. Probably what on the whole the native owner or charterer would have preferred was that his ship should pass for foreign at sea and for native in port. To this end in some cases resort was had to hermaphrodite rigging, and very generally to two projecting boards, one on each side of the figurehead, bearing the staring Chinese eye, such as the junks south of the Yangtze carry. The open eye on the ship's bow was to enable the Chinese port officials to close theirs to the unauthorised presence of strangers, and thus everything was arranged in the manner so dear to the Chinese character.

In the south of China the advantage of the flag was sought without the foreign appearance of the vessel. The foreign flag was hoisted on native-built small craft, a large fleet of which hailed from Macao under Portuguese colours, and were from time to time guilty of great irregularities on the coast. The Chinese of Hongkong, British subjects born and bred, registered their vessels and received colonial sailing letters, renewable at frequent intervals, as a check on bad behaviour. With these papers short trips were made along the south coast, and a local trade was carried on in the estuary of the Canton river. These vessels of about 100 or 200 tons burthen were called "lorchas," of which we shall hear more in subsequent chapters.

CHAPTER XIII.

THE TRADERS.

I. FOREIGN.

Their relations to their official representatives—And to the trading interests of their own countries—Their unity—High character—Liberality—Breadth of view.

In the preceding portions of this narrative it has been shown how much the character of the principal officials on both sides influenced the progress of events. There was, however, yet another factor which contributed in a lesser degree and in a different manner to the general result which ought not to be entirely omitted from consideration, and that was the personal qualities and traditional characteristics of the two trading communities, foreign and Chinese. It was they who created the subject-matter of all foreign relations, and stood in the breach in all the struggles between foreign and native officials. It was their persons and their fortunes which were ever at stake; it was they who first felt the shock of disturbance, and were the first to reap the fruits of peace.

The relation of the foreign mercantile community to their official representatives was not always free from friction, because the same high authority which enjoined on the officials the protection of the persons and the promotion of the interests of the lay community empowered them also to rule over these their protégés, and to apply to them an arbitrary discipline in accordance with what they conceived to be the exigencies of the time. Duty in such circumstances must often have assumed a divided aspect, and rules of action must frequently have been put to a severe strain; nor is it surprising that, owing to these peculiar relationships, the resident communities should not have been able on all occasions to see eye to eye with the agents of their Governments.

In their national and representative character the China merchants were wont at different crises to have moral burdens laid on them which did not properly fit their shoulders. They were little affected by the shallow moralism of the pulpit, which, taken literally, would have counselled general liquidation and the distribution of the proceeds among the poor, leaving the common creditor out of account; but official sermons also were on certain occasions preached to, or at, the merchants, implying some obligation on their part to sacrifice individual advantage to the greater good of the greater number. Were there no other answer to such altruistic monitions, it would be sufficient to plead that under such theories of duty commerce could not exist, and its political accessories would become superfluous. No road to commercial prosperity has been discovered which could dispense with the prime motive for the exertion which makes for progress—to wit, individual ambition, cupidity, or by whatever term we choose to designate the driving power of the complex machine of civilised life. Mammon is, after all, a divinity whose worship is as universal as that of Eros, and is scarcely less essential to the preservation of the race. Nor is it by collective, but by strictly individual, offerings that these deities are propitiated, and the high purposes of humanity subserved. It is no reproach, therefore, to the China merchants that they should have seized every opportunity for gain, totally irrespective of the general policy of their country. It was not for them to construe portents, but to improve the shining hour. And if it should at any time happen that the action of private persons, impelled by the passion for gain, embarrassed a diplomatist in his efforts to bring about some grand international combination, the fault was clearly his who omitted to take account of the ruling factor in all economic problems. The trade was not made for Government policy, but the policy for the trade, whose life-blood was absolute liberty of action and a free course for individual initiative. The success of British trade as a whole could only be the aggregate of the separate successes not otherwise attainable than by each member of the mercantile fraternity performing his own part with singleness of purpose. Nothing certainly could ever justify any trader in foregoing a chance of gain for the sake of an ideal benefit to the community, even if it were likely to be realised. A distinction must be drawn between the tradesman and the statesman. Though their functions may sometimes overlap, their respective duties to the State are of a different though complementary character.

To the charge which from time to time has been levelled at the China merchants, that they were too narrow and too selfish, it may be plausibly replied that, on the contrary, they were if anything too broad; for their individual interests were not so bound up with general progress as are the interests of colonists in a new country, where co-operation is essential. Progress meant, to the China merchants, the admitting of the flood of competition, which they were in no condition to meet. The general interests of the country required the opening of new markets; in a lesser degree the interests of the manufacturing section required the same thing; but the interests of the merchants, albeit they appeared to represent their country and its industries, were in fact opposed to expansion. Yet so strong in them was the race instinct for progress that their private advantage has oftentimes actually given way to it, so that we have seen throughout the developments of foreign intercourse with China the resident merchants placing themselves in the van in helping to let loose the avalanche which overwhelmed them and brought fresh adventurers to occupy the ground.

Nor has the relation of the merchants, even to the operations in which they were engaged, been always clearly understood. Although they personified their national trade in the eyes of the world, the merchants were never anything more than the vehicles for its distribution, having no interest in its general extension, though a powerful interest in the increase of their individual share. The productions which provided the livelihood of many thousands of people in China, and perhaps of a still larger number in Great Britain and other manufacturing countries, did not concern them. A percentage by way of toll on merchandise passing through their warehouses was the limit of their ambition. A clear distinction should therefore be drawn between the merchant and the producer or manufacturer; on which point some observations of Wingrove Cooke[31] are worth quoting:—

"The calculations of the merchants do not extend beyond their own business. Why should they? Fortunately for himself, the merchant's optics are those of the lynx rather than those of the eagle. An extremely far-sighted commercial man must always run risks of bankruptcy, for the most absolutely certain sequences are often the most uncertain in point of time." The same writer, however, comments on the ignorance and narrowness of both British traders and manufacturers, and their failure to avail themselves of the opportunities offered to them of exploiting the trading resources of the Chinese. "There is no spirit of inquiry abroad," he says, "no energy at work, no notion of distracting the eye for a moment from watching those eternal shirtings, no thought whether you cannot make better shift with some other class of goods. Manchester made a great blind effort when the ports were opened, and that effort failed. Since then she has fallen into an apathy, and trusts to the chapter of accidents." As for the merchants on whom manufacturers relied to push the sale of their wares, "they come out here," he says, "to make fortunes in from five to seven years, not to force English calicoes up into remote places. Their work is to buy Chinese produce, but," he goes on, "if the English manufacturer wants extraordinary exertion, carefully collected information, and persevering up-country enterprise—and this is what he does want—he must do it himself. The British export trade will not maintain mercantile houses, but it would pay for travelling agents acting in immediate connection with the home manufacturers, who should keep their principals at home well informed, and who should work their operations through the established houses here. The evil is that British goods are not brought under the eyes of the Chinaman of the interior cities."

The inaccuracies of some of these comments need not obscure the shrewd and prophetic character of the general advice tendered to the British manufacturers. After an interval of forty years they have begun to act upon it, and though their progress has as yet been slow, they are taking to heart another portion of Mr Cooke's advice, that "all dealing with the interior of China is impossible unless your agents speak the language of the people."

A certain divergence between the official and non-official view of affairs had begun to show itself in the period before the war. Before the close of the East India Company's monopoly the independent merchants perceived that their interests, as well as those of the Company itself, were prejudiced by the truckling tactics of its agents, and though few in number, the mercantile community began to give utterance to their grievances and to show they had a mind of their own on public commercial policy. As the whole position of foreigners in China rested on premisses which were essentially false, disappointment, irritation, and alarm were chronic. Every one concerned, official and unofficial, was aggrieved thereby, while no one was disposed to accept blame for the grievance. A tendency to recrimination was the natural consequence. When their representatives failed to protect them against the aggressions of the Chinese the merchants complained, while the officials in their turn were not indisposed to retort by alleging provocative or injudicious conduct on the part of the merchants themselves as contributory to the ever-recurrent difficulties. Through the retrospective vista of two generations it is easy now to see where both parties were at fault—the merchants in making too little account of the difficulties under which their representatives were labouring, and the officials in failing to perceive that the causes of their disagreements with the Chinese lay altogether deeper than the casual imprudence of any private individual, even if that could be established. The despatches of the earlier "superintendents," notably those of Sir George Robinson, betray a certain jealousy of the political influence supposed to be wielded by the mercantile community of Canton working through their associations in England, and the superintendents seemed therefore concerned to cast discredit on mercantile opinion. It would have been strange enough, had it been true, that an isolated community of a hundred individuals should be torn by faction, yet it is a fact that on their assumed disagreements an argument was based for invalidating the representations which they occasionally made to the Home Government. Their views were disparaged, their motives impugned, and their short-sighted selfishness deplored. The note struck in 1835 has been maintained with variations down almost to our own day,—a circumstance which has to be borne in mind by those who aim at a fair appreciation of British relations with China during the last sixty years.

Far, however, from being a disunited flock, the mercantile body in China generally have on the whole been singularly unanimous in their views of the political transactions with which their interests were bound up; while as to the old community of Canton, no epithet could be less appropriate than one which would imply discord. Concord was the enforced effect of their circumstances. Imprisoned within a narrow space, surrounded by a hostile people, exposed to a constant common peril, the foreign residents in Canton were bound to each other by the mere instinct of self-preservation. They became, in fact, what Nelson called his captains, a "band of brothers." The exclusion of females up till 1842, and the deterrent conditions of married life there even under the treaty, made it essentially a bachelor community, living almost like one family, or as comrades in a campaign. Of the disinterested hospitality and good-fellowship which continue to this day, even in the maturity of their domestic development, to characterise the foreign communities in China, the germ is doubtless to be discovered in that primitive society which oscillated between Canton and Macao during the thirty years which ended in 1856, in which year their factories were for the last time destroyed, and the old life finally broken up.

But there is something more to be credited to these early residents than the mutual loyalty prescribed for them by the peculiar conditions of their life. They exemplified in a special degree the true temper and feelings of gentlemen,—a moral product with which local conditions had also, no doubt, something to do. They lived in glass houses, with open doors; they could by no means get away from one another, or evade a mutual observation which was constant and searching. Whatever standards, therefore, were recognised by the community, the individual members were constrained to live up to them in a society where words and deeds lay open to the collective criticism. And the standard was really a high one. Truth, honour, courage, generosity, nobility, were qualities common to the whole body; and those who were not so endowed by birthright could not help assuming the virtue they did not possess, and, through practice, making it eventually their own. Black sheep there were, no doubt, but being never whitewashed, they did not infect the flock, as happens in more advanced communities.

These intimate conditions favouring the formation of character were powerfully reinforced by the one feature of European life in China which was external to the residents, their contact with the surrounding mass of Chinese. The effect of intercourse with so-called inferior races is a question of much complexity, and large generalisations on such subjects are unsafe, each case being best considered on its proper merits. In their intercourse with the Chinese, certain points stood out like pillars of adamant to fix the principles by which the foreign residents were obliged to regulate their bearing towards the natives. In the first place, the strangers formed units hemmed in and pressed upon by thousands; therefore they must magnify themselves by maintaining an invincible prestige, they must in the eyes of that alien world always be heroes, and they must present a united front. Extending the same principles from the material to the moral sphere, the foreigners must maintain the reputation of their caste for probity, liberality, and trustworthiness. Their word must be as good as their bond; they must on no account demean themselves before the heathen, nor tolerate any temptation from a Chinese source to take unfair advantage of their own kind, the Caucasian or Christian, or by whatever term we may indicate the white man. Whatever their private differences, no white man must permit himself to acquiesce in the disparagement of his own people in the view of the people of the country. They must be, one and all, above suspicion. Such were some of the considerations which were effective in maintaining the character of Europeans in China. Although association with a race so alien as the Chinese, with such different moral standards, must have had the usual deteriorating effects of such contact, yet the positive gain in the formation of character from the practice of such maxims of conduct as those above indicated probably left a balance of advantage with the China merchants.

The case would be imperfectly stated were mention not made of the process of natural selection which constituted the merchants a body of picked men. China was a remote country. It offered neither the facility of access nor the scope for adventure which in more recent times have attracted such streams of emigration to distant parts of the world. The mercantile body was a close corporation, automatically protected by barriers very difficult to surmount. The voyage itself occupied six months. Letters were rarely answered within a year. Hence all the machinery of business had to be arranged with a large prescience. Even after the opening of the overland route to Suez communication with China was maintained by sailing-ships up till 1845, when the Lady Mary Wood, the first steamer of the P. and O. Company, reached Hongkong, with no accommodation for more than a few passengers, and carrying no more cargo than a good-sized lighter. And later still, when steamers carried the mails fortnightly to China, the expense of the trip was so great that only a chosen few could afford it. It took £150 to £170 to land a single man in Hongkong, and in those days when extensive outfits were thought necessary, probably as much more had to be laid out in that way. The merchants who established themselves in China after the opening of the trade were either themselves men of large means, or they were the confidential representatives of English and American houses of great position. There were no local banks, operations extended over one or two years, an immense outlay of capital was required, and credit had to be maintained at an exceedingly high level, not only as between the merchants in China and their correspondents in London, Liverpool, New York, and Boston, but between both and the financial centre of the world. Through such a winnowing-machine only good grain could pass. It was a natural result that the English and American merchants both in China and India should have been superior as a class to the average of other commercial communities. And what was true of partners and heads of houses was no less so of their "assistants." There were no "clerks," as the term is commonly used in England, except Portuguese hailing from the neighbouring settlement of Macao. The young men sent from England were selected with as much care as it was possible to bestow, for they were precious. Not only were they costly, but it might take a year to make good casualties. Besides, in countries situated as China was then, where contingencies of health were never out of mind, it was not worth while to send out one who was a clerk and nothing more. There must be potential capacity as well, since it could never be foreseen how soon emergencies might arise which would require him to assume the most responsible duties. Hence every new hand engaged must enjoy the fullest confidence both of his immediate employers and of the home firm to which they were affiliated.

As might be expected under such circumstances, family connections played a large part in the selection, and the tendency of the whole system was to minimise the gulf which in advanced societies separates the master from the man. In education and culture they were equals, as a consequence of which the reins of discipline might be held lightly, all service being willingly and intelligently rendered. The system of devolution was so fully developed that the assistant was practically master in his own department, for the success of which he was as zealous as the head. The "mess" régime under which in most houses the whole staff, employers and employees, sat at one table, tended strongly in the direction of a common social level.

What still further contributed much to raise the position of assistants was the tradition which the merchants both in India and China inherited from the East India Company of what may be called pampering their employees. They were permitted to carry on trade on their own account, in the same commodities and with the same buyers and sellers, in which they possessed advantages over their employers in having all the firm's information at command with the privilege of using its machinery free of cost. The abuses to which such a system was liable are too obvious to be dwelt upon; but to be himself a merchant, sometimes more successful than his principal, though without his responsibilities, certainly did not detract from the social status of the assistant.

Sixty years ago the China community was composed of men in the prime of life. The average age was probably not over thirty—a man of forty was a grey-beard. In this respect an evolutionary change has come over the scene, and the average age of the adult residents must have risen by at least ten years. But the China community in all its stages of development has maintained the colonial characteristic of buoyancy and hopefulness. Reverses of fortune never appalled its members. Having been early accustomed to the alternations of fat years and lean, a disastrous season was to them but the presage of a bountiful one to follow; while a succession of bad years made the reaction only the more certain. This wellspring of hope has often helped the China merchants to carry the freshness of spring even into the snows of winter. The nature of their pursuits, moreover, fostered a comprehensive spirit. Trained in the school of wholesale dealing, and habituated to work on large curves, the China merchants have all through felt the blood of the merchant princes in their veins, and it has even been alleged to their disadvantage that, like the scions of decayed families the world over, the pomp and circumstance were maintained after the material basis had in the natural course of affairs vanished. Nay, more, that the grandiose ideas appropriate to the heirs of a protected system have disqualified them for the contest in small things which the latter days have brought upon them.

Of that restricted, protected, quasi-aristocratic, half-socialistic society some of the traditions and spirit remain; but the structure itself could not possibly withstand the aggression of modern progress, and it has been swept away. New elements have entered into the composition of the mercantile and general society of the Far East, its basis has been widened and its relations with the great world multiplied. In innumerable ways there has been improvement, not the least being the development of family life and the more enduring attachment to the soil which is the result of prolonged residence. Living, if less luxurious, is vastly more comfortable, more refined, and more civilised, and men and women without serious sacrifices make their home in a country which in the earlier days was but a scene of temporary exile. Charities abound which were not before needed; the channels of humanity have broadened, though it cannot be said at the cost of depth, for whatever else may have changed, the generosity of the foreign communities remains as princely as in the good old days.

Yet is it permissible to regret some of the robuster virtues of the generation that is past. The European solidarity vis-à-vis the Chinese world, which continued practically unbroken into the eighth decade of the century, a tower of moral strength to foreigners and an object of respect to the Chinese, has now been thrown down. Not only in private adventures have foreigners in their heat of competition let themselves down to the level of Chinese tactics, but great financial syndicates have immersed themselves in intrigues which either did not tempt the men of the previous generation or tempted them in vain; and even the Great Powers themselves have descended into the inglorious arena, where decency is discarded like the superfluous garments of the gladiator, and where falsity, ultra-Chinese in quality, masquerades in Christian garb. The moral ascendancy of Christendom has been in a hundred ways shamelessly prostituted, leaving little visible distinction between the West and the East but superior energy and military force.

Take them for all in all, the China merchants have been in their day and generation no unworthy representatives of their country's interests and policy, its manhood and character. Their patriotism has not been toned down but expanded and rationalised by cosmopolitan associations, and by contact with a type of national life differing diametrically from their own. Breadth and moderation have resulted from these conditions, and a habit of tempering the exigencies of the day by the larger consideration of international problems has been characteristic of the mercantile bodies in China from first to last. And though statesmanship lies outside the range of busy men of commerce, it must be said in justice to the merchants of China that they have been consistently loyal to an ideal policy, higher in its aims and more practical in its operation than that which any line of Western statesmen, save those of Russia, has been able to follow. It had been better if the continuous prognostications of such a compact body of opinion had been more heeded.

II. CHINESE.

Business aptitude—High standard of commercial ethics—Circumstances hindering great accumulations.

As it requires two to make a bargain, it would be an imperfect account of the China trade which omitted such an important element as the efficiency of the native trader. To him is due the fact that the foreign commerce of his country, when uninterfered with by the officials of his Government, has been made so easy for the various parties concerned in it. Of all the accomplishments the Chinese nation has acquired during the long millenniums of its history, there is none in which it has attained to such perfect mastery as in the science of buying and selling. The Chinese possess the Jews' passion for exchange. All classes, from the peasant to the prince, think in money, and the instinct of appraisement supplies to them the place of a ready reckoner, continuously converting objects and opportunities into cash. Thus surveying mankind and all its achievements with the eye of an auctioneer, invisible note-book in hand, external impressions translate themselves automatically into the language of the market-place, so that it comes as natural to the Chinaman as to the modern American, or to any other commercial people, to reduce all forms of appreciation to the common measure of the dollar. A people imbued with such habits of mind are traders by intuition. If they have much to learn from foreigners, they have also much to teach them; and the fact that at no spot within the vast empire of China would one fail to find ready-made and eager men of business is a happy augury for the extended intercourse which may be developed in the future, while at the same time it affords the clearest indication of the true avenue to sympathetic relations with the Chinese. In every detail of handling and moving commodities, from the moment they leave the hands of the producer in his garden-patch to the time when they reach the ultimate consumer perhaps a thousand miles away, the Chinese trader is an expert. Times and seasons have been elaborately mapped out, the clue laid unerringly through labyrinthine currencies, weights, and measures which to the stranger seem a hopeless tangle, and elaborate trade customs evolved appropriate to the requirements of a myriad-sided commerce, until the simplest operation has been invested with a kind of ritual observance, the effect of the whole being to cause the complex wheels to run both swiftly and smoothly.

To crown all, there is to be noted, as the highest condition of successful trade, the evolution of commercial probity, which, though no monopoly of the Chinese merchants, is one of their distinguishing characteristics. It is that element which, in the generations before the treaties, enabled so large a commerce to be carried on with foreigners without anxiety, without friction, and almost without precaution. It has also led to the happiest personal relations between foreigners and the native trader.

The Chinese merchant, moreover, has been always noted for what he himself graphically calls his large-heartedness, which is exemplified by liberality in all his dealings, tenacity as to all that is material with comparative disregard of trifles, never letting a transaction fall through on account of punctilio, yielding to the prejudices of others wherever it can be done without substantial disadvantage, a "sweet reasonableness," if the phrase may be borrowed for such a purpose, which obviates disputation, and the manliness which does not repine at the consequences of an unfortunate contract. Judicial procedure being an abomination to respectable Chinese, their security in commercial dealings is based as much upon reason, good faith, and non-repudiation as that of the Western nations is upon verbal finesse in the construction of covenants.

Two systems so diametrically opposed can hardly admit of real amalgamation without sacrifice of the saving principle of both. And if, in the period immediately succeeding the retirement of the East India Company, perfect harmony prevailed between the Chinese and the foreign merchant, the result was apparently attained by the foreigners practically falling in with the principles and the commercial ethics of the Chinese, to which nothing has yet been found superior. The Chinese aptitude for business, indeed, exerted a peculiar influence over their foreign colleagues. The efficiency and alacrity of the native merchants and their staff were such that the foreigners fell into the way of leaving to them the principal share in managing the details of the business. When the venerable, but unnatural, Co-hong system of Old Canton was superseded by the compradoric, the connection between the foreign firm and their native staff became so intimate that it was scarcely possible to distinguish between the two, and misunderstandings have not unfrequently arisen through third parties mistaking the principal for the agent and the agent for the principal.

Such a relationship could not but foster in some cases a certain lordly abstraction on the part of the foreign merchant, to which climatic conditions powerfully contributed. The factotum, in short, became a minister of luxury, everywhere a demoralising influence, and thus there was a constant tendency for the Chinese to gain the upper hand,—to be the master in effect though the servant in name. The comprador was always consulted, and if the employer ventured to omit this formality the resulting transaction would almost certainly come to grief through inexplicable causes. Seldom, however, was his advice rejected, while many of the largest operations were of his initiation. Unlimited confidence was the rule on both sides, which often took the concrete form of considerable indebtedness, now on the one side now on the other, and was regularly shown in the despatch of large amounts of specie into the far interior of the country for the purchase of tea and silk in the districts of their growth. For many years the old practice was followed of contracting for produce as soon as marketable, and sometimes even before. During three or four months, in the case of tea, large funds belonging to foreign merchants were in the hands of native agents far beyond the reach of the owners, who could exercise no sort of supervision over the proceedings of their agents. The funds were in every case safely returned in the form of produce purchased, which was entered to the foreign merchant at a price arbitrarily fixed by the comprador to cover all expenses. Under such a régime it would have needed no great perspicacity, one would imagine, to foretell in which pocket the profits of trading would eventually lodge. As a matter of fact, the comprador generally grew rich at the expense of his employer. All the while the sincerest friendship existed between them, often descending to the second or third generation.[33]

It would be natural to suppose that in such an extensive commercial field as the empire of China, exploited by such competent traders, large accumulations of wealth would be the result. Yet after making due allowance for inducements to concealment, the wealth even of the richest families probably falls far short of that which is not uncommon in Western countries. Several reasons might be adduced for the limitation, chiefly the family system, which necessitates constant redistribution, and which subjects every successful man to the attentions of a swarm of parasites, who, besides devouring his substance with riotous living, have the further opportunity of ruining his enterprises by their malfeasance. Yet although individual wealth may, from these and other causes, be confined within very moderate limits, the control of capital for legitimate business is ample. Owing to the co-operative system under which the financiers of the country support and guarantee each other, credit stands very high, enabling the widely ramified commerce of the empire to be carried on upon a very small nucleus of cash capital. The banking organisation of China is wonderfully complete, bills of exchange being currently negotiable between the most distant points of the empire, the circulation of merchandise maintaining the equilibrium with comparatively little assistance from the precious metals.

The true characteristics of a people probably stand out in a clearer light when they are segregated from the conventionalities of their home and forced to accommodate themselves to unaccustomed conditions. Following the Chinese to the various commercial colonies which they have done so much to develop, it will be found that they have carried with them into their voluntary exile the best elements of their commercial success in their mother country. The great emporium of Maimaichên, on the Siberian frontier near Kiachta, is an old commercial settlement mostly composed of natives of the province of Shansi, occupying positions of the highest respect both financially and socially. The streets of the town are regular, wide, and moderately clean. The houses are solid, tidy, and tasteful, with pretty little courtyards, ornamental door-screens, and so forth, the style of the whole being described as superior to what is seen in the large cities within China proper. The very conditions of exile seem favourable to a higher scale of living, free alike from the incubus of thriftless relations and from the malign espionage of Government officials.

In the Philippine Islands and in Java the Chinese emigrants from the southern provinces have been the life and soul of the trade and industry of these places. So also in the British dominions, as at Singapore and Penang, which are practically Chinese Colonies under the British flag. Hongkong and the Burmese ports are of course no exceptions.

The description given by Mr Thomson[34] of the Chinese in Penang would apply equally to every part of the world in which the Chinese have been permitted to settle:—