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President Barack Obama told the American people in his inauguration address on
January 20 that the United States was experiencing one of the worst economic
recessions in history. "That we are in the midst of crisis is now well
understood. Our economy is badly weakened ... Homes have been lost, jobs shed,
businesses shuttered." To encourage the nation to fight against the recession,
Obama turned to draw wisdom from the founding fathers, who led the fledging US
to rise above its first economic
crisis 225 years ago. "Our founding fathers faced perils that we can scarcely
imagine."
Clearly, the president reminded the Americans of the difficult situation that
the nation faced directly after the US gained its hard-earned independence from
Britain. It was when the newborn US was in such a critical time that American
trade with China was opened. Again, in face of today's economic predicament,
Obama sent Secretary of State Hillary Clinton to China before any visit to a
European country to seek closer economic cooperation with the Middle Kingdom.
Thus, looking back at the history may be of some help to understand current
US-China economic ties, though the situation today is tremendously different
from previously.
Embodying Americans' hope to break through the British blockade and revitalize
the depressed postwar economy, the Empress of China, the first American
commercial ship after its independence, left New York for Canton (Guangzhou),
China, on February 22, 1784. Before the Empress of China left the East
River Harbor of New York, George Washington duly signed the sea letter, guiding
the purpose of the Empress of China's voyage.
There was a great deal of uncertainty in the newly founded country. After the
war for independence was over, the nation's fiscal system was on the brink of
chaos. Many small farmers, the broad base of the new nation, were being thrown
into jail for debt and many others were forced to lose their farms. The
Congress, established under the Articles of Confederation, was attempting to
bring order out of the turmoil. In Massachusetts, an agrarian revolt spread
quickly.
In the meantime, Britain, which lost the war militarily, was seeking to defeat
the Americans economically. It strengthened its economic pressure on individual
states to compel them, one by one, to return to "Mother England". Britain
closed all traditional trade partners to the new nation, and American merchants
could no longer trade with Spain, Africa and West Indies. In the aftermath of
the victory of the American revolutionary war, France, Holland and other
European countries were willing to use the US as their market, but not anxious
to take American wares in exchange.
Given the situation, commerce became "the lifeblood of America's recovery from
its economic slump". New trade partners had to be discovered, new trade routes
had to be opened and new connections had to be established. Otherwise,
political independence wouldn't last long. It was in this critical situation
that the first American voyage to China started.
Washington regarded Europe as only a sideshow that must not divert attention
from the permanent strategic interests of the US . He had not wanted to do
business with England after the revolution. In October 1783, six months before
the Empress of China started her virgin voyage to China, Washington made
it clear in his letter to Marquis de Lafayette, a general in the American
Revolutionary War and later a leader of the Garde Nationale during the French
Revolution, that "I do not incline to send to England (from whence formerly I
had all my goods) for anything I can get upon tolerable terms elsewhere." Where
could the Americans trade for what they needed? His solution was for the newly
founded US to develop its commercial relationship with China.
Even before the departure of the Empress of China, Washington had
discussed the possibilities of this engagement with people like Ezra Stiles,
the president of Yale College. Washington had realized that the American
merchants "will carry the American flag around the globe itself, and display
the thirteen stripes and new constellation, at Bengal and Canton, on the Indus
and Ganges, on the Whang-ho [the Yellow River] and the Yang-ti-king [Yangtze
River], and with commerce will import the wisdom and literature of the East."
While the Empress of China was still on her way to China, Washington
told Thomas Jefferson that "from trade our citizen will not be restrained".
The Empress of China was mainly supported by Robert Morris (1734-1806)
and other Revolutionary War veterans. Washington was so interested in the Empress
of China that he was personally involved in the selection of the person
in charge of the ship's commercial affairs with China. With Washington's strong
support, Samuel Shaw (1754-1794), the Revolutionary War hero, was appointed as
the supercargo, commercial manager of the ship.
In May 1785, the Empress of China returned to New York with a profit of
more than $30,000, or 20% of the invested capital. Washington was among the
first post-revolution Americans to purchase Chinese goods brought back on the Empress
of China and continued to concern himself with the commercial
development between the two countries, endeavoring to collect as much as
information related to the expansion of the trade.
About the same time when Shaw in Canton was selling the ginseng carried by the Empress
of China, Washington recorded the ginseng business in his diaries on
September, 1784, "In passing over the Mountains, I met numbers of Persons &
Pack horses going in with Ginseng; for salt & other articles at the Markets
below".
In order to obtain first hand knowledge of the materials on the China trade and
its influence in the US , Washington visited Captain John O'Donnell (died c
1805) in August 1785, when the owner and master of the Pallas sailed to
Baltimore with a cargo from China and bought about 2,000 acres on the Baltimore
waterfront east of Fell's Point where he built a mansion and named it "Canton".
Washington planned to expand the China trade from New England to Virginia. In
1787, he instructed David Stuart to inspect the Potomac River and to find a
place where a warehouse for the objects needed in trade with China could be
constructed. In order to observe the advancement of the America trade with
China, he requested his subordinates to provide with him the previous year's
list of the ships that were in Canton, China in July 1789.
In 1789, when Washington was elected as the first president of the US , he
fully stated the significance of the trade to his still-young country. He told
the Marquis de Lafayette that the national revenues had been considerably more
productive than had been imagined they would be because of the China trade. He
then listed some examples:
"A single vessel just arrived in this port pays $30,000 to government. Two
vessels fitted out for the fur trade to the northwest coast of America have
succeeded well. The whole outfits of vessels and cargoes cost but $7,000. One
is returning home loaded with India produce, the other going back to the coast
of America; and they have deposited $100,000 of their profits in China."
Since 1784, the value of American trade with China increased greatly. In 1790,
it was estimated that trade with China accounted for about one seventh of US
imported goods. By 1792, the value of the American trade with China had
surpassed that of Holland, France and Denmark, and was second only to Great
Britain, which had had established commercial relations with China for over 100
years. In 1840, American business with China amounted to nearly US$75 million,
a sum greater than the total debt of the American Revolution.
Trade with China helped revitalize the US and port cities like Salem, New York
and Boston hugely benefited from it. The trade brought back hard money that
capitalized new industry. Factory towns sprang up, and Americans began to
experiment with the techniques of mass production. Soon the groundwork had been
laid for the greatest industrial expansion the world had seen.
The voyage of the Empress of China to China had also brought a "China
fever". With the opening of the lucrative new avenue of commerce, American
merchants increasingly looked across the Pacific for business. New England, New
York and Philadelphia merchants accumulated in the China trade fortunes that
were impressively sizable for that day and age. Businessmen such as Elias
Hasket Derby, known as "King Derby of Salem", sent their best ships to Canton
where Perkins and Company of Boston established the first agency in Canton.
In 1784, the Empress of China was the only ship to fly the Stars and
Stripes in Chinese waters. In early December 1786, othrs the Canton (Philadelphia),
Hope (New York), and Grand Turk (Salem) had cleared from the US .
Lacking big ships, businessmen in Albany sent a sixty-tonne sloop to China. By
1790, from Salem to Norfolk, every city of significance on the Atlantic was
excited about Chinese trade, each sending at least one ship to the new source
of wealth to the west.
Washington had expressed his feeling thus: "the Maritime Genius of this Country
is now steering our vessels in every ocean ..." In September 1796, he told the
American people that the US "will more and more find a valuable vent for the
commodities of which it brings from abroad" - namely through trade with China.
In the same year, he invited Thomas Handasyd Perkins, the pioneer of China
trade in Boston, to Mount Vernon to drink tea and to spend the night there.
The China trade helped change America's political map. It helped the US to move
its political center from Virginia to New York City and New England. Hamilton
decided to build the national bank in New York. The political center of the
United States would be in New York, the commercial and financial center of the
new nation.
The significance of the China trade in the early development of the US was
crucial to Washington's thinking about American foreign policy. On September
1796, Washington in his Farewell Address told his fellow American citizens that
"the great rule of conduct for us, in regard to foreign nations is in extending
our commercial relations".
Obama's decision to send Clinton to China before her visit to a European
country is an indicator that he is adhering to the founding father's advice. It
is true that today the economies of the US and China are closely linked.
Mutual dependence between China and the US is becoming more and more important.
China and the US have become each other's second-largest trade partner. China,
with its monetary reserves of around $2 trillion, is the American Treasury's
chief financial backer. The founding father's guidance and the economic reality
led Secretary of State Clinton to declare during her visit to China that "We
are truly going to rise or fall together. We are in the same boat and,
thankfully, we are rowing in the same direction."
Dave Wang, PhD, is manager of Queens Library at Hollis in New York and
adjunct professor with St Johns University.
(Copyright 2009 Dave Wang.)
Speaking Freely is an Asia Times Online feature that allows guest writers to have
their say.
Please click hereif you are interested in contributing.
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