Old China Trade - Growth

Growth

Trade with China, originally merely a prospect—not to mention a risky venture—was soon not only realized but also proven to be extremely lucrative. American traders, now with a stable foothold in Canton, were eager to sell their goods to China; the extravagant mandarins in China, in turn, were excited to buy these goods. The first item that tended to sell in China was Spanish bullion: American traders would devote large sums of money to buying and amassing large quantities of specie for export to China. Bullion was primarily used to complement the less profitable American goods such as cheese, grain, and rum. Use of bullion eventually became considerable: over $62 million worth of specie was traded to China between 1805 and 1825. This practice, however, gradually declined after 1815, when American merchants began to participate in “chain trade” routes—buying and selling goods en route to Canton. The second major—and by far the most lucrative—American export to China was ginseng. Hailed by the Chinese as a panacea, the most potent and therefore most demanded type of ginseng, aralia quinquefolia, grew in Manchuria and the Appalachian Mountains. Ginseng would be transported from the interiors of Pennsylvania and Virginia to Philadelphia, New York, or Boston, at which point it would be shipped to China and sold for up to 250 times its weight in silver. Furs were the third-most lucrative American export to China. Searching for another type of item that could be sold to the Chinese aside from specie and ginseng, Americans soon found that the mandarins had a taste for sea otter pelts, which could be inexpensively purchased from the Indians of the northwest coast of America and shipped to Canton. The Chinese mandarins’ desire for bullion, ginseng, and furs was the primary impetus for America’s initiation of trade with China: seeing the Empress of China, which had carried all three goods, returning to America rich in 1785 inspired other Americans to make similar voyages. Reasons for maintaining the China trade, however, were different.

There had always been a general American desire for foreign and sometimes exotic wares, and, with the British conglomerates (namely the East India Company) no longer dominating American trade, the job of satisfying this want fell to the American merchants. Therefore, when the Empress returned home, she brought with her a large stock of outlandish Chinese goods, which her owners sold for a significant profit of $30,000—a 25% gain. Other American merchants did not take long in realizing that, while selling American specie, ginseng, and fur to the Chinese mandarins was undoubtedly profitable, selling Chinese goods in America was considerably more so. Further motivation came from the knowledge that China, as a whole, had a mercantilist-like attitude towards foreign commerce; they tended to resist the importation of foreign goods because of a mixture of the Confucian doctrine, which deprecated it, and the underlying ethnocentrism felt by the Chinese—that they did not need to actively search for trade because the inferior white barbarian states would instinctively bring it to them as a form of tribute. Because of these factors, American traders began to focus their funds on acquiring Chinese goods—a practice that the Chinese were more willing to adopt—rather than on purchasing those of America. What resulted was the flooding of Chinese teas, cottons, silks, rhubarb, cassia, nankeens (durable, yellow cloth), floor-matting, lacquerware, fans, furniture, and porcelains, into America, to the extent that even those of poor social classes possessed some Chinese items—perhaps a painting of Canton harbor or a pair of trousers made out of nankeen cloth.