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China traded with the outside world only through Canton (Guangzhou), where foreign trade was controlled by a guild of merchants, the Co-Hong. The most famous among them was Wu Ping-chien, known to British and American traders as Houqua (“qua” is a title like “mister”). Houqua was reputed to be the richest man in the world.
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After the arrival of the
Empress of China
at Canton on August 28, a crewmember wrote: “The Chinese had never heard of us, but we introduced ourselves as a new Nation, gave them our history, with a description of our Country, the importance and necessity of a trade here to the advantage to both which they appear perfectly to understand and wish.” To distinguish the Americans from the other
fanqui
(foreign devils), the Chinese, mistaking the stars on the US flag for flowers, called them the “Flowery Flag Devils.” Loaded with tea, silk, porcelain, and a buff-colored Chinese cotton cloth called “nankeen,” the
Empress of China
returned to New York Harbor on May 11, 1785.
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Soon the China trade attracted Americans who dreamed of making a quick fortune and retiring to a rural estate or urban mansion. One of the wealthiest Americans in the early republic was Elias Hasket Derby, a shipowner in Salem, Massachusetts, who himself never went to sea. His ship
Light Horse
in 1784 was the first to trade with Russia. A pioneer of the China trade, he became known as “King” Derby because of the size of his fortune.

The race to beat other ships home inspired the evolution of the “clipper ship,” from the word “to clip,” meaning “to move quickly.” One of the first clipper ships was named
Houqua
.
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Like other Western merchants, the Americans in the China trade had difficulty finding items that the self-sufficient Chinese needed or wanted. Officials in China prized sea otter fur, which they obtained at first from Russian traders in the Pacific Northwest. The American fur trade with China began in 1787, when five Boston merchants, including a son of Elias Derby, financed the
Columbia
and the
Lady Washington
. Their ships stopped on the Northwest Coast of North America, where their crews obtained animal pelts from the local Indians in return for blankets, beads, metal buttons, and fishhooks, among other items, then sailed to Canton and sold the fur. In addition to furs for the garments of affluent Chinese, they sought to sell ginseng and sandalwood, which was made into a paste and burned before Chinese religious images. American merchants even sold rice to China.

Then there was opium. While opium consumption dates back millennia in China, opium smoking is thought to have been introduced by seventeenth-century Dutch traders, who combined opium with tobacco in pipes. Although the Chinese government banned importation of the drug, the British East India Company made large profits by smuggling Indian opium to China. The firm of Jardine, Matheson originated as a British opium-smuggling operation. Britain’s Indian opium was off-limits to American merchants, but in 1804 Benjamin Chew Wilcocks of Philadelphia found a substitute in Turkish opium. American ships bought opium from Smyrna, Turkey, either by sailing to the eastern Mediterranean or purchasing it at Gibraltar.

The leading American drug-smuggling operation in China was J. & T. H. Perkins Company, which brought in more Turkish opium than its rivals.
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One of its principals, Thomas Handasyd Perkins, instructed a captain in 1791 that he had “best sell the furs down the River, to avoid [customs] charges.”
³²
On behalf of the
hong
merchants, Houqua warned the Americans: “Opium, the dirt used in smoking, has long been prohibited by an order received, it is not allowed to come to Canton.”
³³
The Americans, like the British, ignored the law. In 1817–1818, if silver coin is factored out, opium is estimated to have made up 10 to 30 percent of the value of US commodities used to purchase Chinese merchandise, while Americans supplied between 10 percent and a third of the opium consumed in China.
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In 1823, Warren Delano II sailed to Canton and within seven years rose to be a senior partner in the Boston-based firm of Russell and Company. Having made his fortune, Delano retired in 1851 to Newburgh, New York. He wrote: “I do not pretend to justify the prosecution of the opium trade from a moral and philosophical point of view, but as a merchant I insist that it is a fair, honorable, and legitimate trade. I considered it right to follow the example of England, the East India Company, and the merchants to whom I had always been accustomed to look up to—the Perkins, the Peabodys, the Russells, and the Lowes.” Delano’s daughter Sara married James Roosevelt and gave birth to his grandson, Franklin Delano Roosevelt.
³⁵

In the Opium Wars of 1839–1842 and 1856–1860, the British, with assistance from the French, invaded China in response to the government’s attempts to stamp out the foreign opium trade. Britain and other Western powers imposed “unequal treaties” that gave them commercial privileges on the Chinese. In 1844, the Treaty of Wang Hiya guaranteed Americans the same terms that were extorted by the British. Following the example of Britain, the United States imposed trade treaties on Japan beginning on July 8, 1853, when Commodore Matthew Perry’s fleet steamed into Tokyo Bay.

From that point until the Chinese Revolution of 1911, China was a shattered state, riven by warlords and drenched with blood in the catastrophic Taiping Rebellion of 1850–1864. The historian John K. Fairbank called the opium trade in which American merchants took part “the most long continued and systematic international crime of modern times.”
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STEPHEN GRASP-ALL

In January 1805, Stephen Girard wrote instructions to two of his agents in the Mediterranean: “I am very much in favor of investing heavily in opium. While the war lasts, opium will supply a good price in China.”
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When Girard got out of the trading business around 1812, he invested much of the wealth he had made from trade in banking, real estate, Pennsylvania coal lands, and early railroads. He was one of the richest Americans of all time when, after suffering injuries in a street accident, he died in 1831.
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Born under the name of Étienne Girard into a family of merchants in Bordeaux, France, Girard sailed on trading trips to the West Indies. Fearing debtors’ prison after losing money on goods he had purchased on credit, Girard moved to New York and became a mate or captain on ships trading with the West Indies and Louisiana. When war broke out in 1776, Girard brought his ship for safety to Philadelphia and settled there.

His marriage to his American wife produced no children and when she went insane she was confined for the last quarter century of her life to a hospital. When, during her confinement, she gave birth to a daughter, Girard claimed the child was not his; mother and daughter both soon died. Girard lived with several mistresses but never remarried.

The mature Girard whom his fellow Philadelphians came to know was a small, balding man with a blind, disfigured right eye. He spoke poor English with a French accent and made his home above his offices near the waterfront. Girard is still remembered in Philadelphia for his philanthropy. During a yellow-fever epidemic in 1793 that killed between four and five thousand people, Girard won the admiration of his neighbors by remaining in Philadelphia and organizing operations in Bush Hill Hospital.

Girard was the embodiment of the secular North Atlantic bourgeoisie in the age of the American and French Revolutions. He sided with the Francophile Jeffersonian Republicans against the Anglophile Hamiltonian Federalists. He named three of the ships in his merchant fleet the
Montesquieu
, the
Voltaire
, and the
Rousseau
and hired the painter and sculptor William Rush to fashion busts of the
philosophes
as their figureheads. All but $140,000 of the childless merchant’s $7 million fortune went to Girard College for “white male orphans.” In his will he stipulated that clerics would not be allowed in the school.

His enemies called the odd little French immigrant “Stephen Grasp-all.” Girard bribed customs officials on three continents, forged ship manifests and other documents, and used young apprentices in order to avoid paying high wages for experienced sailors.
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During a spell of exile in Philadelphia, Napoleon’s brother Joseph, the former king of Spain, rented a house from Girard and wanted to buy an entire block. When Joseph Bonaparte proposed that he would pay the amount that resulted from covering the entire area with silver half-dollars, Girard is said to have replied, “I will take that offer, on condition that you stand them on edge.”
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Girard got into the China trade in the 1790s. Much of his fortune was made in trade with the West Indies. Girard sent flour, rice, lard, ham, and other foodstuffs to be consumed mostly by slaves to the French sugar colony of Saint-Domingue (Santo Domingo), in return for sugar, molasses, coffee, and cocoa. On one occasion Girard instructed agents to give customhouse officers “a few portugaises to silence them.”
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He evaded customs duties and engaged in large-scale smuggling with the help of his brother, a resident of the island who threatened to blackmail the rival partner whom Girard chose after a quarrel.

When a massive slave rebellion broke out, following the revolutionary French Assembly’s promise to grant rights to slaves, Girard suffered losses and helped refugees from the white French-speaking elite of the island in Philadelphia. He owned slaves, including a black woman named Hanna whom he freed and provided for in his will, as well as dozens of slaves who worked a Louisiana plantation he owned. Although historians dismiss the rumor that he grew rich by stealing assets of refugees killed in the slave rebellion, Girard like many merchants and bankers of the time was deeply implicated in the institution of slavery. In 1906, the
New York Daily Tribune
reported: “The charge that Stephen Girard, philanthropist, was a slave dealer, is being forced upon the unwilling attention of the world by the recent discovery, in demolishing his old house at No. 22 North Water street, Philadelphia, of three tiers of underground cells that seem to have been used for the purpose of incarcerating human beings.”
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Wachovia Bank has officially apologized for the participation of one of its predecessors, the Bank of Stephen Girard, in the slave trade and the slave plantation system.

“NOW I WILL MAKE MY FORTUNE IN THE FUR TRADE”

Like Girard, John Jacob Astor was one of the richest Americans who ever lived, on the basis of the proportion between his wealth and that of the national economy. And like Girard, Astor made part of his fortune in the China trade, in part by selling opium but mainly by selling the furs of beavers, otters, and other North American mammals whose populations he did more than any other individual to decimate.

Astor was the son of a butcher, born in 1763 in Waldorf, Germany, near Heidelberg. Following the examples of his brother George in England and his brother Henry in New York, Astor emigrated, against the wishes of his father. Astor spent four years in London working with his brother George, before emigrating to join Henry in the United States in 1783, following the end of the war between Britain and its former colonies.

On his way to New York, Astor learned about opportunities in the fur trade from another German passenger on a ship. Soon he was working for a New York fur merchant, William Backhouse. Astor made arduous trips up the Hudson River to negotiate for furs from beaver, otter, muskrat, bear, and other mammals with members of the Iroquois and other tribes. He learned much of the business from a friend, Alexander Henry, an experienced employee of the British-Canadian Hudson Bay Company, which dominated the North American fur trade. From an early age he seems to have envisioned establishing a private monopoly that he would completely control to rival the Hudson Bay Company. When Jay’s Treaty with Britain permitted both British subjects and American citizens to share in the jointly administered Northwest Territory, Astor exclaimed: “Now I will make my fortune in the fur trade.”
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In 1800, Astor and fellow investors sent a ship called the
Severn
loaded with furs to Canton. On its return, Astor invested his profits in his own ship, which he named the
Beaver
, and soon began to invest in the Manhattan real estate that would further enrich him and his heirs. Following the Louisiana Purchase of 1803 and the Lewis and Clark Expedition of 1806, Astor saw an opportunity to expand his operations. He won the support of President Thomas Jefferson to establish a trading community called Astoria at the mouth of the Columbia River. The expeditions that he sent to Astoria ended in disaster, but Astor hired the celebrated writer Washington Irving to pen a romantic account of the debacle, portraying it as a success.
Astoria: Or Anecdotes of an Enterprise Beyond the Rocky Mountains
became a best seller.

In November 1807, a British order in council declared all ports in France and its allies blockaded. Neutral vessels were required to enter a British port and pay for a license. In retaliation, under the leadership of Jefferson in December 1807, the US adopted a self-imposed embargo—known by its critics as the “Dambargo” or “O-grab-me”—that outlawed all foreign trade, although American ships were permitted to engage in coastal trade in the United States. Instead of forcing Britain to change its policy, this ill-conceived measure merely crippled American commerce and inspired smuggling on a heroic scale. In 1809, Congress repealed the Embargo Act but maintained a prohibition on trade by US vessels with Britain, France, or ports they controlled.

When Jefferson’s embargo banned American ships from engaging in international trade, Astor asked for an exemption from the law. First he pretended that he needed to bring back property he owned in Canton. After the Swiss-born Treasury secretary Albert Gallatin refused to grant an exception, the German-American merchant came up with another plan. Astor lobbied New York senator Samuel Latham Mitchell to write a letter to President Jefferson, explaining the desire of a Chinese merchant in the United States named “Punqua Wingchong” to return “to Canton, where the affairs of his family and particularly the funeral obsequies of his grandfather, require his solemn attention.” A letter from the alleged mandarin followed. Jefferson told Gallatin: “I consider it a case of national comity . . . the departure of this individual may be the means of our making our nation known advantageously at the source of power in China to which it is otherwise difficult to convey information.” Gallatin obeyed, but complained to Jefferson: “Had I any discretion to the application itself I would have hesitated.”