Trading Freedom

How Trade with China Defined Early America

Dael A. Norwood

• Publisher: University of Chicago Press
• Year: 2022
• Print ISBN: 9780226836751, 9780226815589
• eBook ISBN: 9780226815596
• Topic: History
• Subtopic: Foreign Exchange
• Index: History

Explores the surprisingly rich early history of US-China trade and its unexpected impact on the developing republic.
 
The economic and geographic development of the early United States is usually thought of in trans-Atlantic terms, defined by entanglements with Europe and Africa. In Trading Freedom, Dael A. Norwood recasts these common conceptions by looking to Asia, making clear that from its earliest days, the United States has been closely intertwined with China—monetarily, politically, and psychologically.

Norwood details US trade with China from the late eighteenth through the late nineteenth centuries—a critical period in America's self-definition as a capitalist nation—and shows how global commerce was central to the articulation of that national identity. Trading Freedom illuminates how debates over political economy and trade policy, the building of the transcontinental railroad, and the looming sectional struggle over slavery were all influenced by Sino-American relations. Deftly weaving together interdisciplinary threads from the worlds of commerce, foreign policy, and immigration, Trading Freedom thoroughly dismantles the idea that American engagement with China is anything new.

 

* CHAPTER ONE *

Founding a Free, Trading Republic

In Paris, John Adams worried for the future. In mid-July 1783 Adams was in the French capital to negotiate a final peace settlement with Great Britain, work he found frustrating and difficult. A fortnight before, Britain had issued a proclamation that reemphasized the empire’s commitment to reserving trade with the British West Indies to their own subjects. Though he thought this a piece of “Refugee Politicks”—the result of lobbying by expatriate loyalists—Adams fretted that without access to the traditional outlets for American produce and charters for American ships, any plans for the “happiness and prosperity” of the new nation would be “straitened and shackled.” The best way to respond, Adams advised the Continental Congress, was to retaliate in kind. Each state, he wrote, should lay the same punitive impost on British imports in order to convince London of the wisdom of freer trade policy.

Doubting, however, that even this “common danger . . . will induce a perfect unanimity among the States,” Adams also ruminated on other ways of “making impressions upon the English.” Some of his recommendations would be familiar to any student of early American political economy: growing West Indian products within the United States would help, he thought, as would encouraging domestic manufacturing. But Adams’s advice reached beyond the Atlantic world, revealing a revolutionary geopolitics less familiar to historians. “Send Ships immediately to China,” he told Congress, because “this trade is as open to us as to any nation.” Putting competitive pressure on Britain in Asia, his logic ran, would force open markets in the Atlantic or, failing that, help compensate for their absence. Like many of his fellow revolutionaries, Adams saw overseas commerce as a continuation of international politics by other means—and China’s trade as a key part of any political calculation made for the United States.1

As the Revolutionary War wound down and the problems of peace emerged, American elites turned to Chinese commerce as an important component of the republic’s political economy. What they termed “the China trade,” or “trade with the East Indies,” was not simple, direct trade but access to a complex set of exchanges linking the ports of Asia—above all the hub of Canton—to the Americas, Africa, Europe, and the Pacific islands. Among an influential group of American leaders, the China trade seemed to offer a particularly useful instrument for expanding economic power and buttressing the infant republic’s independence within a republican ideological framework. As the problems of peace became manifest, an interest in the China trade informed the way American leaders explained the need for a more consolidated nation-state, as well as how they shaped the core institutions that defined and animated it—notably the federal government’s key source of revenue, the tariff, which singled out for special protection the traffic in goods imported “from China or India.” These movements were made in dialogue with the evolving realities of Americans’ trade in China, a practice that by the turn of the nineteenth century had revealed the limits of American statecraft. American policymakers looked to the China trade to slake their thirst for tea and nourish their revolutionary nation’s political economy; the difficulties involved in seeking China’s commerce led them to develop new ideas about what capabilities their new nation needed in order to survive in a competitive world.

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Adams did not have to wait long for American ships to be sent out; trade with China launched with the nation’s formal independence. In February 1784, just over a month after the Continental Congress had ratified the Treaty of Paris and proclaimed the end of the War of Independence, the ice damming New York’s harbor receded, and in its wake came the Empress of China, a small, square-sterned ship bound for Canton.2 The novelty of the ship’s destination loaded the vessel with more than just ginseng and Spanish dollars as it sailed down the East River.3 Backed by a group of prominent Philadelphia and New York merchants (including the Continental Congress’s superintendent of finance, Robert Morris), and managed by several respected veterans of the Revolutionary War, the Empress bore Americans’ hopes for a new era of prosperity.4

The Empress left a country in increasingly desperate straits. Independence had cost Americans dearly. The war had destroyed lives and property, and put state governments and the Continental Congress deeply in debt. The national government organized under the Articles of Confederation was too weak to improve matters, lacking mechanisms to tax, regulate trade, or normalize relations with other nations. Worse, by early 1784 Americans were beginning to realize what separation from the British Empire meant in economic terms. In the peace, they were cut off from the West Indian ports that had been the lifeblood of the colonial economy—but British and Continental merchants retained easy access to US ports and flooded them with goods, suffocating domestic producers and merchants. With no friendly outlets for their wares, few profitable routes for shipping, and no government capable of organizing a coherent response, the situation at the time of the Empress’s departure was grim indeed.5

The Empress’s voyage launched as part of a larger push to overcome these economic and political problems by expanding commerce. Proposals for exploring new branches of trade were common after the war—merchants gambled their ships and capital on new markets in the Mediterranean and the Baltic, in South America as well as in Asia. But while voyages like the Empress’s were unremarkable in their motivations, ventures to China were something more than just another kind of investment. During the first decades of the China trade American merchants from ports up and down the East Coast sailed the world over to accumulate the commodities, credit, and coin required for purchases in China. They gathered ginseng root from Appalachian forests, marine furs from the Pacific Northwest and southern South America, sandalwood from Hawaii, opium from Smyrna and Bengal, and, crucially in the early years, Spanish silver dollars, the favored currency of East-West trade, from commerce with Mexico, the Caribbean, South America, and Europe. Moreover, Americans conducted a carrying trade between these areas, sometimes finding it more effective to tramp around the globe on multiyear voyages than to simply go to China directly.

The necessity of global engagement helps explains why trading to Canton was seen as an entrée into a whole new world—and a prestigious endeavor. Americans were familiar with the giant chartered monopoly corporations that Europeans organized to meet the trade’s challenges. The wealth and power that East India Companies amassed, and the military and maritime technology they deployed, gave the eighteenth-century “East Indies” trade a cachet similar to that of the twentieth-century aerospace industry. But the products of trade with China were important too. As its moment as an object of counterimperial protest helped to prove, Chinese tea remained a key article of consumption in early America. In addition to its restorative properties, tea was a crucial marker of gentility and status—as were Chinese textiles, porcelains, and furniture. Americans also valued the idea of a connection to China for its own sake. If the problem of “oriental despotism” was forgotten (as it sometimes was in moments of physiocratic excitement) Americans could imagine that the populous superpower, fueled by the world’s most productive agriculture and sophisticated internal transportation systems, was a model for what they hoped their new republic would become.6 Americans’ desire to participate in the China trade was overdetermined: it would prove Americans’ mettle as traders, satisfy existing consumer demand, and put the nation in contact with one of the most sophisticated and powerful societies on the planet—all without exposing the republic to further encroachment from other Atlantic states.

Figure 5. A Spanish silver dollar, the key currency of the China trade, and the most important—and valuable—commodity American traders carried to Asia. 8 Reales, Mexico, 1805, http://n2t.net/ark:/65665/ng49ca746a9-9b61-704b-e053-15f76fa0b4fa, Division of Work and Industry, National Museum of American History, Smithsonian Institution.

For all these reasons, contemporary commentary on the Empress’s endeavor and other early voyages cast these ventures in terms of what historian James Fichter has usefully characterized as “public economy”—an enterprise aimed at generating both national glory and private profit.7 In the case of the Empress, investors and a wide range of observers saw its voyage as a harbinger of a national commercial movement. Robert Morris, US superintendent of finance and part owner of the Empress, told John Jay, secretary of foreign affairs, that he was “sending some ships to China” not only for his own profit, but also “to encourage others in the adventurous pursuits of commerce.”8 Philadelphia’s newspapers reported that this desire to serve the national interest extended even to the captain and his crew, who were allegedly “elated on being considered the first instruments, in the hands of Providence . . . to extend the commerce of the United States of America, to that distant, and to us unexplored country.”9

The Empress’s successful return on May 11, 1785, with a cargo of teas, silks, cottons, and porcelain generated celebratory commentary.10 This praise was motivated in part by how closely Americans identified the expansion of trade with escape from the “shackles of British mercantilism.”11 The president of Congress, Richard Henry Lee, filled his letters that spring with news of the Empress’s arrival, gleefully describing it as “a proof of American enterprise,” that “will probably mortify, as much as it will injure our old Oppressors, the British.”12 Editor and poet Philip Freneau later celebrated the voyage in verse as a demonstration of Americans’ liberation from the mercantilist confines of the British Empire.13 The congressional delegation from South Carolina expanded on this point in a report home, explaining that trade to the East Indies was noteworthy because it was “free from an inconvenience to which European connexions”—trade and politics—“expose us, that is, an interference in our Governments.”14 Even those less sanguine were still excited at the possibilities: William Grayson grumbled to his fellow Virginian James Madison about the apparent “Asiatic hauteur” shown by the Chinese, but he nonetheless declared that he “could heartily wish to see the merchts. of our State engaged in this business”—especially if they could find a way to smuggle Chinese goods into the West Indies.15 Congress, as a body, congratulated the mariners, expressing “peculiar satisfaction” in “this first effort of the citizens of America to establish a direct trade with China.”16

Figure 6. A tea crate, similar in form to those that returned as part of the cargo of the Empress of China. A man writes on sealed crates of tea, ready for export. Painting by a Chinese artist, ca. 1850, https://wellcomecollection.org/works/dj3vse2z, Wellcome Collection. Attribution 4.0 International (CC BY 4.0).

The apparent success of the Empress led to imitators—a handful at first, then a steady stream of voyages each year.17 American merchants’ approach to the business, dictated by their comparatively disadvantaged circumstances, differed markedly from their European competitors’. Instead of being managed by large joint-stock companies with deep pools of capital, American ventures to China were organized the same way shorter voyages were: as small one-off adventures by groups of local merchants, who minimized principal-agent problems by working with family members and by assigning shares in the venture to the ship’s master, and in some cases also to a supercargo, an agent who traveled aboard the ship to oversee the venture’s transactions abroad. Though they were traveling much farther, American China traders sailed with the same small crews in the sub-three hundred ton sloops, brigs, and ships they used for transatlantic or Caribbean voyages—not in the seasonal convoys of huge purpose-built “East Indiamen” their European rivals typically used.18

Some of these practices were the product of deliberation. When John Wingrove, a trader with experience in India, proposed creating official US trading posts (“factories”) in Asia, the Continental Congress quickly killed his suggestion. Speaking for a congressional committee, Rufus King explained that they “were of Opinion that the commercial intercourse between the United States and India would be more prosperous if left unfettered in the hands of private adventurers, than if regulated by any system of a national complexion.” This stated preference was convenient—the Continental Congress had no resources to support Wingrove’s plan—but consistent with later practice. When it came to overseas commerce, early American leaders opposed corporate monopolies.19

In the late eighteenth century, some of the necessities that shaped Americans’ China trade were also virtues. Using infrastructure, protocols, and contacts their rivals had developed, but operating with lower costs, American traders could take more risks and react more quickly to shifts in market prices as well as changes in winds. Their wandering routes exposed them to new opportunities for profitable freighting and arbitrage, growing the sphere of American commerce. In light of political decisions like the rejection of Wingrove’s plan, Americans understood their successes in the China trade as proof of their mercantile prowess as well as their republican ideals.

The importance of going to China for securing Americans’ place in the world was substantiated by reports coming back with the Empress itself. On his return to New York, Samuel Shaw, a respected Continental Army veteran who served as a supercargo on the voyage, ...

Table of contents

• Cover
• Title Page
• Copyright Page
• Dedication
• Contents
• introduction   America’s Business with China
• chapter one   Founding a Free, Trading Republic
• chapter two   The Paradox of a Pacific Policy
• chapter three   Troubled Waters
• chapter four   Sovereign Rights, or America’s First Opium Problem
• chapter five   The Empire’s New Roads
• chapter six   This Slave Trade of the Nineteenth Century
• chapter seven   A Propped-Open Door
• chapter eight   Death of a Trade, Birth of a Market
• Acknowledgments
• Appendix: Accounting for the China Trade
• Notes
• Index