Chapter 6 East India Company: A Banker's Empire

It is difficult for ordinary people to imagine that a company can recruit troops, seize land, mint coins, administer justice, declare war and conclude peace treaties, but the East India Company has actually done it.Who can have such a huge energy to build such a powerful company?The answer is the international bankers of the City of London! The East India Company, founded as a joint venture by the Bankers of the City of London and with the participation of the British Crown, was an empire in itself.According to the authorization of the British Parliament, the East India Company monopolized all trade from the Cape of Good Hope to the Strait of Magellan, and had the right to recruit army and navy in such a vast area, occupy territory, levy taxes in the occupied area, issue currency, carry out Legislation and judiciary, declaration of war and conclusion of peace.

In the Seven Years War between Britain and France from 1756 to 1763, since Britain defeated France to monopolize the Indian subcontinent, it established a complete set of governance and plundering mechanisms in British India, including today's Pakistan, Bangladesh, and Burma. In the 50 years after 1750, the East India Company extracted a total of 100 million to 150 million pounds from British India, while the annual fiscal revenue of Britain in 1750 was only 9.2 million pounds. [12] This does not include the huge international trade benefits brought about by monopolizing Indian trade.Stunning wealth flowed like a tidal wave into the purses of the City of London bankers and the British royal family. From the 18th to the 19th centuries, due to the huge amount of colonial plunder and commercial trade accumulation, Britain never lacked capital, which was an important prerequisite for Britain to start the industrial revolution in the 18th century.

As one of the 17 largest international banking families in the world, the Baring family dominated the world's financial arena as early as the beginning of the 19th century, known as the "sixth power in Europe" [13]. In 1779, the founder of the Bahrain Dynasty, Francis Bahrain, began to serve as the director of the East India Company until his death in 1810, and he reigned for 30 years.Since joining the East India Company, he has become the main representative of the City of London bankers in the East India Company, and is recognized as the heart and soul of the company.He has served as the chairman of the board of directors of the East India Company since 1792 and is in charge of the entire East India Company, a huge colonial empire.It was under his leadership that the East India Company's opium trade to China achieved astonishing growth.

From 1790 to 1838, the amount of opium smuggled into China by the East India Company increased from hundreds of boxes to tens of thousands of boxes every year. More than 230 million taels of silver! The East India Company’s opium trade followed a strict system: First, the East India Company established its opium monopoly in the British Indian colonies, implemented unified purchase and sales of opium in India and Bangladesh, and only opened Calcutta to conduct opium auctions in one place, and authorized The opium trade is carried out by retail merchants who have an agency relationship with the company.At the same time, the company set up a permanent management committee in Guangzhou, whose members are called "Dapan" to conduct unified management of all trade with China.This management committee is also the "central bank" for all trade with China. All trade exchange business with China must be handled by it, and it provides credit support to retail merchants. Later, it also extended credit to Guangzhou No. 13 Bank that did business with them.The income of retail merchants from trade with China, including the proceeds from the sale of opium, must be deposited in the treasury under the committee, and the committee will issue bills of exchange in London, India, and Bangladesh, and retail merchants can go to the local area to exchange cash.The company then uses the silver in stock to buy gold, silk tea and other bulk commodities in China and sell them to Europe to obtain huge profits.

The structure of the East India Company was more like a chain of opium trade stores under a financial umbrella monopoly.If it is said that independent retail merchants still have to bear certain trade risks, then companies that provide monopoly financial services can "guarantee income in drought and flood." The East India Company's huge profits from the "financial services" of the opium trade were enough to pay for Britain's import of tea and raw silk from China, import of cotton from the United States and India, export of British manufactured goods to India, and most of the administration of British colonial rule in India. cost.Throughout the 19th century, the opium monopoly of the British Empire played a strategic role in international trade, comparable to the oil hegemony of the United States today.The basic national policy of the East India Company empire was to control all links of the opium trade chain financially, and to firmly control production, sales, warehousing, transportation and marketing channels in its own hands.

Among the scattered merchants under the East India Company, three major foreign firms formed a separatist regime: Jardine, Baoshun and Qichang. Jardine Matheson was established in July 1832 by the partnership of Jardine and Matheson, and it was the Baling family who provided them with financing.With the support of the most powerful banking family in the City of London, Jardine quickly became the "King of Foreign Firms" in the Far East.It was Hu Xueyan who was defeated by Yihe in the battle for raw silk hegemony, and he probably didn't know the origin of Yihe.Matheson went on to become governor of the Bank of England and Britain's second-largest landowner.Hugh Matheson, the heir of the Matheson family, used the income from the family’s opium trade to acquire tin mines in Spain in 1873 and established a mining company, which was named “Rio Tio”, which is called Rio Tinto today. group.

The head of Baoshun Foreign Firm is the famous opium dealer Diandi, and the owner behind him is the Bahrain family.Later, because the direct engagement in the opium business damaged the "reputation" of the number one banking family in the City of London, Bahrain, he retreated behind the scenes, and was fully represented by Diandi in China, becoming the second largest opium trader after Jardine Matheson. Qichang Foreign Trade Co., Ltd. is an American-funded company engaged in the trade of opium, tea and raw silk between Guangzhou and Boston.Its senior partner, John Murray Forbes, great-grandfather of 2004 U.S. presidential candidate John Forbes Kerry, has been acting as Baring Bros.' agent in the United States.The business executive, Warren Delano Jr., was the grandfather of US President Franklin D. Roosevelt.The cousin of the owner of the foreign firm, William Huntington Russell, created the famous "Skull and Bones Club" at Yale University.In addition, several major banking families in Boston also participated in the opium trade through Qichang Foreign Bank.It was the rich opium dividends that nourished these banking families, forming the future Boston consortium and the Roosevelt family dynasty.

These three big foreign firms accounted for half of China's opium trade. They were all closely related to the Bahrain family. Attack on government silver currency. The City of London established a little-known but effective underground marketing system in China through the East India Company, which consisted of four parts: missionaries, triads, merchants, and Qing bureaucrats.This system has influenced the historical process of modern China in the future. On the one hand, missionaries in China made friends with dignitaries and elites of various religions through missionary work, learned about Chinese society, economy, military and other aspects of intelligence, mainly established modern missionary schools, hospitals, and media, and became an important force in shaping the pro-Western Chinese social elite.

The Triad Society was originally a Chinese folk secret society with the purpose of opposing the Qing Dynasty and restoring the Ming Dynasty. Later, many members accepted Christianity.The anti-Qing armed actions of the Triads in the Guangdong and Guangxi areas also required large-scale financing support. Therefore, through the intermediary of the church, many members joined the East India Company's opium sales network to China and became the main force of opium smuggling along the Guangdong coast.The triads with the purpose of anti-Qing are tantamount to indirectly receiving financial subsidies from the City of London.The future development of the Triad Society has a deep relationship with Hong Xiuquan's God Worship Society, Kang (Youwei) Liang (Qichao) Tan (Sitong) Tang (Caichang) Reformist's secret association and the Tongmenghui.Feng Yunshan, Hong Xiuquan's right-hand man in charge of ideological work, worshiped under the Chinese Welfare Church in his early years; Yang Xiuqing, who was in charge of military struggles, was also involved in the triad's opium smuggling business in the Pearl River Basin; Jintian uprising.After the failure of the Reform Movement of 1898, Tan Sitong was killed, and Tang Caichang, a general of the Tan faction in the reformation faction, mobilized the forces of the Huguang Triad Society to stage an independent army uprising.The early anti-Qing uprisings of the Tongmenghui were all based on the strength of the Triad Society.The Shanghai Youth Gang of the Triad Society even played an important role in the process of Chiang Kai-shek launching the "April 12" coup and consolidating his power.

Hongshang, that is, Guangzhou Shisanhang, was authorized by the imperial court to be in charge of foreign trade. It dealt directly with foreign businessmen. It was not only a trading company, but also assumed certain diplomatic functions. At the same time, it had to guarantee its foreign business partners.After the Opium War, the Thirteen Banks mostly turned into compradors of foreign firms, which is the source of the comprador class in modern China. The East India Company also controlled and manipulated some Manchu bureaucrats through bribery and drug addiction.Starting from China's superstructure, protect and develop the opium trade.The company penetrated into the Beijing court through the northern opium trade network centered on Tianjin.Before the Opium War, quite a large number of high-ranking Manchu and Qing officials had been controlled for their use.Among them are Mu Zhang'a, a scholar of the university, Qi Shan, the governor of Zhili, and Qi Ying, the head of the clan mansion.In this regard, Marx made a brilliant exposition: "The British bought the Chinese authorities, customs officials and general officials. This is the latest result of the Chinese boycott of opium in law. Bribery and opium boxes have invaded the 'Tian Dynasty' The heart of the bureaucracy has destroyed the pillar of the patriarchal system." [14] This group of people constituted the source of the Westernization School of the Qing government.

In 1839, when the ambitious Lin Zexu came to Guangdong as an imperial envoy to enforce the ban on smoking, what this great national hero faced was such an opium empire with strict organization, strong financial resources, strong armed forces, and internal and external cooperation.As soon as Lin Zexu took office, he severely suppressed the underground drug smuggling network of the triads, ordered foreign businessmen to turn over opium, and carried out the Humen opium sale that shocked the world.But Lin Zexu never imagined how powerful his opponent was. What he challenged was the core financial strategy of the entire British Empire and the life and death of international bankers! The opium trade led to a large-scale outflow of silver from China, which triggered a serious currency crisis in China where "silver is expensive and money is cheap".In the more than 100 years from the establishment of the Qing Dynasty to the beginning of the 19th century, China's silver-copper dual currency mechanism worked well, and the price ratio was basically stable at 1 tael of silver equivalent to 1,000 copper coins.On the eve of the Opium War, silver taels soared to 1,600 copper coins.Peasants, handicraftsmen, and ordinary people usually earn copper coins, but they need to convert them into silver to pay various taxes. As a result, the economic burden is greatly increased.Due to the poor life of the people, the payment of taxes was naturally delayed. As a result, the provinces were in arrears of taxes, which caused a sharp decline in the financial capacity of the Qing government.Before the opium trade started on a large scale, until 1781 during the Qianlong period, the national silver inventory was as high as 70 million taels, and by 1789 it was about 60 million taels.With the flood of opium, there were only more than 8 million taels left in 1850, which was no longer enough to cope with a war. It was opium that destroyed the silver currency standard, the cornerstone of the high financial frontier of the Qing Empire. What followed was a large trade deficit, a decline in fiscal revenue, people's lives were miserable, the polarization between the rich and the poor was severe, and social conflicts became increasingly acute.International bankers, armed with huge amounts of silver purchased from opium, established the "China's Bank of England" and seized the commanding heights of the Qing Empire's financial high frontier: the central bank. The establishment of HSBC marks the beginning of an era of financial colonization in modern Chinese history.In the process of HSBC's seizure of the central bank of the Qing Empire, a new Sassoon empire arose, replacing the East India Company as the latest manipulator to execute the opium finance strategy.