Barons of the Sea Read online

  As for the fanqui merchants of later years, there were many beautiful and exotic Chinese items to ship back home to sell, but the most coveted (and profitable) were the dried leaves of a plant that could not be grown in Europe’s temperate climate. Tea (Camellia sinensis), which the Chinese used as medicine, came from a mysterious evergreen shrub that, when dried and boiled in water, produced a beguiling beverage. Its kicks of caffeine, theobromine, and theophylline soothed the nerves, while its rich taste delighted the palate. A subtropical plant, it thrived on the banks of the Pearl River in southeast China, alongside mulberry bushes, host plants for silkworms. When the Portuguese traders introduced tea to the West, Europeans could not get enough of it. By the mid-1700s, England was hooked. Because of its expense and exotic origins, drinking tea became an elaborate social ritual. For the rich, this also meant purchasing new precious objects—filigreed silver and porcelain tea sets—that were manufactured in their home countries.

  The passion for tea found its way across the Atlantic to England’s American colonies. Tea helped spark the American Revolution, when a new parliamentary tax on imports to the colonies provoked a group of revolutionaries dressed as Native Americans to dump 342 chests of the prized shrub into Boston Harbor. One ditty urged American patriots to drink tea brewed from clover, called labrador tea:

  Throw aside your Bohea and your green hyson tea,

  And all things with a new fashioned duty;

  Procure a good store of the choice labrador,

  For there’ll soon be enough here to suit ye;

  There do without fear, and to all you’ll appear

  Fair, charming, true, lovely, and clever;

  Though the times remain darkish, young men may be sparkish,

  And love you much stronger than ever.22

  The Boston Tea Party was as much a revolt against a cartel as it was against taxation without representation. As elsewhere in the British colonies, the Honorable East India Company had a lock on the tea trade; only it could sell the in-demand drink.

  After independence, Americans retained their thirst for tea, especially green tea. (The British tended to favor black.) With the Honorable Company monopoly out of the way—only countries in the British Empire could remain part of her tea supply chain—US merchants had to start dispatching their own ships to China. On February 22, 1784, the Baltimore-built Empress of China sailed from New York with a cargo of ginseng, becoming the first American ship to arrive in Canton.23 The Chinese market had long coveted the American variety of ginseng over the native strain for its superior taste and strength.24 The trip’s backers were a constellation of the young nation’s richest men, including Robert Morris, known as the “financier of the Revolution” for using his business connections to equip and pay General George Washington’s troops. Fourteen months later, when Empress of China arrived triumphantly back in New York Harbor, the cargo brought auctioneers stampeding to the wharf. The American people, tea-starved during the lean years of the American Revolution, were finally getting their fix.IV

  For its part, the Empress of China syndicate enjoyed a 25 percent return on its investment. The successful venture attracted merchants from other American commercial cities—Boston, Salem, New York, Philadelphia, and Baltimore—to dispatch ships in the Empress’s wake.

  The men who sailed these ships—and mostly single men braved the long and treacherous journey—were the soldiers of fortune of the new era of global trade. Most came from comfortable backgrounds, well connected but not independently wealthy. To go to China as a young bachelor and risk everything took a lot of guts, and to get an apprenticeship with a merchant firm usually meant procuring a letter of introduction from richer relatives.

  Young Warren Delano II of Fairhaven, Massachusetts, fit the bill exactly. His family was established and esteemed but hardly wealthy. The Delanos still had to work for a living, and in their native Fairhaven, that meant either plowing rocky New England soil or braving the cruel sea. Fairhaven was just across the Acushnet River from New Bedford, Massachusetts, America’s whaling capital and arguably the richest city per capita in the United States. Many of Warren’s forebears, including his father Warren Sr., had commanded whaling ships, harpooning the colossal beasts from slim whaleboats rowed by crews of six men. One of Warren’s cousins, Captain Amasa Delano, made a trip to China in 1794 aboard the Massachusetts, writing in his memoir that China “is the first for greatness, riches, and grandeur of any country ever known.”25

  Tough men such as Warren’s father, one historian would rhapsodize later, were “great types of our American manhood” who practiced a “handicraft in which courage, resourcefulness, agility, clear eye, and steady nerve were the very common places of the calling.”26 At the city’s peak in the 1830s, the merchant princes of New Bedford owned almost seventy whaling ships, which sailed to as far away as Antarctica and the Sea of Japan to bring back barrels of the precious oil used for candles and industrial lubricants. Charles Francis Adams, son of President John Quincy Adams and grandson of John Adams, the second president of the United States, wrote admiringly of New Bedford, saying that, “it had risen like magic, and … presents more noble-looking mansions than any other in the country.”27 The whaling wealth of New Bedford spilled over into Fairhaven, which had a whaling fleet of its own.

  Warren’s father, a gruff old salt if there ever was one, lived in a Greek Revival wood-frame structure, paid for with the modest fortune he had earned from the sea. Early in the Anglo-American War of 1812, he had been captured by the British while running a blockade and nearly starved to death in captivity. On his release, he returned home to his family sick but safe. Then, in 1814, the British bombarded the New England coast, burning Essex, Connecticut, to the ground and threatening Fairhaven and New Bedford. A still-frail Warren Sr. and his wife, Deborah, spirited their young sons Warren, Frederic, Franklin, and Edward, inland to avoid the exploding British shells. When the war ended in 1815, the elder Delano retired from the sea, and went to work as a ship agent and whale oil broker.

  The Delanos were smart, resourceful, and tough minded. As one descendant wrote later, although a “courageous and self-respecting lot … they must have had a very hard and up-hill struggle for existence.”28 The elder Warren and his wife wanted better for their children, grooming Warren II and his brothers for a commercial career from a very young age. He attended Fairhaven Academy, the local private school, which cost $2 per quarter in tuition and educated boys and girls (albeit in separate classrooms). The curriculum included English, French, Greek, Latin, music, and drawing. “Particular attention will be given to the culture of the moral character,” boasted a Fairhaven Academy advertisement.29

  None of the Delano boys was bound for college. The Delanos, like many prosperous families of Puritan stock, valued intelligence, but of the mercantile rather than bookish kind; that is, unless the young man in question were destined for the clergy or law, in which case, the family would pack him off to Harvard or Yale. Although no intellectual slouch—Delano became a prolific letter writer as an adult—Warren fit the description of his near contemporary Moses Grinnell, another scion of a leading whaling family: “not burdened with special predilections for scholastic pursuits, and determined to become a shipping merchant.”30

  At the age of sixteen, Warren Delano II headed north to Boston to work as an apprentice clerk at a firm with strong New Bedford roots: the Boston-based firm of Hathaway & Company. One Hathaway, Francis, had been among the first New Bedford merchants to break into the China trade, which had previously been the domain of men from Boston, Salem, and New York. The Hathaways and the Delanos almost certainly knew each other socially, although, unlike the Unitarian Delanos, the Hathaways were Quakers, known formally as the Society of Friends. Even in the New World, the “Friends” kept a low profile, dressing in plain clothes and keeping businesses within families.

  Perhaps Warren found the sweet fragrance wafting from the Chinese tea chests on the Hathaway ships more appealing than sti
nky barrels of whale oil. He kept his sights on the China trade. Moving to New York, he took a position at another merchant firm, Goodhue & Company, where work was gentlemanly and lucrative: “they sell a cargo of teas and China goods (worth perhaps $400,000 at auction) at auction or by brokers with less noise than an eighth avenue dealer in tea and soap displays in an hour.”31

  New Bedford connections continued to favor the Delanos. Warren’s younger brother Franklin was hired by Moses Grinnell to work in his firm’s New York office. The bread-and-butter of Grinnell, Minturn & Company was the transatlantic packet trade, run under the flag of the Swallowtail Line, which carried passengers (mostly immigrants) and British-manufactured goods (mostly crockery and textiles) across the North Atlantic. Yet the most valuable items on the manifest were the so-called bills of exchange: the European promissory notes that were greasing the financial wheels of the growing American economy. These notes were issued in England by banks such as Baring Brothers & Co. to a select group of American business partners. Once the ink had dried, the precious bills of exchange would be placed aboard a sailing packet departing from Liverpool or London.32 In an era before America had a national currency, bills of exchange backed by gold were safer to transport than gold itself.”33

  The Grinnell firm was also in the whaling business. (One wag joked that the Grinnell firm “sold two kinds of oil, good and bad.”)34 It was a business that both Delano brothers hoped to leave behind. Tea was an imported luxury product that tempted the palate. Whale oil, while a necessity that lit the lamps of the nation, was rendered from slaughtered animals on filthy ships. Harvard student-turned-sailor Richard Henry Dana, author of the hugely popular memoir Two Years Before the Mast, wrote disdainfully of one such “slovenly” whaler: “She had a false deck, which was rough and oily, and cut up in every direction by the chines of oil casks; her rigging was slack, and turning white, paint worn off the spars and blocks.” He found her “slab-sided Quaker” captain just as unappealing. These descriptions insulted the residents of Nantucket and New Bedford, who mailed complaints to the author, but Dana replied cheekily that his description was “not exaggerated” and that the whaling ship was indeed “ugly to behold.”35

  Warren Delano wanted to avoid the whaling business for another reason: money. On a good voyage, a New Bedford whaling ship could expect to earn $16,000—after years on the high seas. A few Yankee whalers got really lucky: one ship came in with a haul of 4,100 barrels of whale oil worth $109,000. But such profits still had to be divided up among the owners, the captain, and more than thirty crew members, as well as local charities.36 A typical captain would receive about 1/8 of the profit, perhaps no more than $900, while a sailor who had shipped out for the first time would receive only about 1/350 of the profit (or “lay,” as seamen called it in Moby-Dick)—sometimes as little as $25 for several years’ work.37

  This is the life Warren’s father had known, and he had been one of the lucky ones. In China, Warren knew he had the potential to earn much, much more. His goal was a lifetime “competence”: a bankable sum large enough to make a man independently wealthy. In the mid-nineteenth century, a competence was the equivalent of $100,000, earned over five to ten years away from home. Earning this from trading tea and opium wouldn’t be easy. Most men didn’t have the connections to get into the trade and, once there, couldn’t do the intense work. Warren Delano II had and could.

  The Americans who went to China included a smattering of New Yorkers, Philadelphians, and southerners, but Delano’s Yankees prevailed. Originally a derogatory term used by the Dutch settlers of New Amsterdam (later New York) to describe their British neighbors to the north, Yankee meant New Englanders, usually descendants of Pilgrims, Puritans, and other Protestant dissidents who fell afoul of the Church of England and fled to North America. Buttressed by uncompromising faith and toughened by the severe climate, Yankees excelled at commerce, the cutting-edge technology of the time, and the art of seamanship. Self-reliance was the ultimate virtue. Sentimentality had no place in their lives. At least in public.

  Warren Delano II most likely made his first China connection at Goodhue or Hathaway. By 1833, he’d left New York for Canton. Being a merchant in China was a big step up; his family expected great things of him. He was only twenty-four.

  Delano traveled aboard the brig Commerce as a “supercargo”—the onboard representative—of his new employer Bryant & Sturgis, a firm with branches in New York, Canton, and Manila. It was a Bryant-owned ship that Harvard’s Dana crewed with on his famous voyage, a vessel carrying “spirits of all kinds (sold by the cask), teas, coffee, sugars, raisins, molasses, hardware, crockery-ware, tin-ware, cutlery, clothing of all kinds, boots and shoes from Lynn, calicoes, and cotton from Lowell, crapes [sic], silks; also shawls, scarves, necklaces, jewelry, and combs for the women; furniture; and, in fact, everything that can be imaged, from Chinese fireworks to English cart-wheels,—of which we had a dozen pairs with their iron tires on.”38

  As the Commerce set her sails and headed out to sea on her six-month voyage, Delano knew that he had hard tasks ahead. He had to get to Canton alive, he had to stay healthy in the strange land, and he had to ingratiate himself with his trading associates—not only as a hard worker but also as good company.

  His employer had invested considerable resources in sending him to China. The passage alone cost about $600, a good tradesman’s income in the 1830s.39 The longer he stayed, and the harder he worked, the more money he could make for the firm. If he did not die of tropical disease, an accident in the harbor, or alcohol poisoning, he had a shot at his goals: a partnership at a big firm that could lead to the competence he needed to return home a success.

  In Canton, Delano’s immediate supervisor was the unflappable, intelligent Russell Sturgis. Only four years older than Delano, Sturgis was everything that a China merchant should be. He had a killer instinct for making money and had the right connections: he was a great-nephew of Colonel Thomas Handasyd Perkins, one of the first Americans in the China trade. Sturgis considered himself lucky to have his second wife, Mary, and his four children with him. (Mary Sturgis would never come home, dying in Manila in 1837.)

  Delano worked hard for Sturgis, and it paid off. In 1835, two years after his arrival in China, he made partner at the firm.40 It was an unusually fast rise. Yet Delano remained unsatisfied. He saw Bryant & Sturgis as a second-tier concern, and he hadn’t come to China to accept second place. He wanted to break into the most prestigious and profitable operation of them all, one boasting deep relationships with the Chinese merchant community that gave its partners unparalleled access to the tea and opium trade. That firm was Russell & Company, which had the fastest vessels in the American merchant marine: trim, loftily rigged schooners with huge spreads of white canvas when flying before the wind. Russell & Company far outclassed its American rivals in profits, earning $240,000 in one particularly good year.41 Much of this was due to Houqua’s relationship with two of Russell & Company’s partners: brothers John Murray Forbes and Robert Bennet Forbes. One rival firm despaired: “They now have a fearful advantage over us, backed as they are by Houqua on one side and Barings on the other.”42

  With luck, young Delano could use his partnership to engineer a merger between Bryant & Sturgis and the greater firm. But there was one problem: he was a nobody.

  *

  I. Known today as Daahnga¯, this Southern Chinese ethnic subgroup lived on junks and made their living from the sea. The Han Chinese looked down on them as outcasts. For their part, the Daahnga¯ had comparatively few reservations about having sexual relationships with Westerners.

  II. South Asian and Arab militiamen working for the British Crown.

  III. A firm, yellowish Chinese cotton cloth.

  IV. Tea would not be cultivated in Britain’s colony of Kenya until the early nineteen hundreds.

  CHAPTER 2

  BREAKING INTO THE FAMILY

  I shall not go into any argument to prove that I considered it right to f
ollow the example of England, the East India Company, the countries that cleared it for China, and the merchants whom I had always accustomed to look up to as exponents of all that was honorable in trade,—the Perkins’s, the Peabody’s, the Russells, and the Lows.1

  —ROBERT BENNET FORBES

  “It” was opium, smuggled into China from India by the British and from Turkey by the Americans. Of all the American firms trading tea in Canton, only the Quaker-run Olyphant & Company refrained from the opium trade. (The partners of the rival firms called them “Zion’s Corner.”) One calming buzz fed the other, although the Chinese craving for opium was far more potent, addictive, and deadly than the Western craving for tea. And no American company excelled at the business better than Russell & Company.

  Russell & Company was a family affair, staffed almost entirely by a network of cousins connected through the craggy-faced founder of America’s trade in China, Colonel Thomas Perkins. It was Perkins who had introduced Turkish opium to the Chinese market, breaking the British monopoly on the drug from India. According to his biographer, Thomas Cary, Perkins “became well acquainted with the habits of the Chinese, and collected a fund of information concerning trade there in all its branches.”2 So much so that Perkins became one of America’s first millionaires, worth $3 million at his death in 1854.

  In Canton, Colonel Perkins’s operation was called the Boston Concern. After Perkins, a Yankee from Connecticut would take over. The affable yet shrewd Samuel Russell built upon his predecessors’ pattern of trade: selling the Chinese ginseng, beaver and other animal pelts, cotton, and sandalwood (and, covertly, opium); and buying Chinese tea, silk, porcelain, and other luxury goods to sell back in the United States. Few mastered the game of risk better than Russell. “There was about him a suavity and charm of manner under which no circumstances ever deserted him,” wrote Russell’s business partner William C. Hunter, the same man who kept a Chinese mistress during his many years in Canton.3 “Of his considerable forbearance under great provocation I can vouch from personal experience.”4 The Perkins men felt that they could do business with their fellow Yankee, even if Russell wasn’t a relative. In 1827 Perkins and Russell merged into a new partnership under the Russell moniker: Russell & Company.