If asked who the richest person in the world was in the first half of the 19th century, you likely wouldn’t guess correctly. The title belonged to Howqua, a Chinese merchant who amassed a fortune equivalent to approximately 7.6 billion euros.
According to LBV, the history of the hangshang (Chinese merchants) in Canton (now Guangzhou) revolved around large hongs or trading clans, hence the name of the Cohong institution.
In its early days, Cohong held a monopoly on imports and exports from the late Emperor Kangxi’s reign, who passed away in 1722. The monopoly was officially established in 1735 by an imperial edict from Emperor Qianlong.
At least, this is what Chinese historiography claims, while Western sources suggest the foundation occurred in the last decade of the 18th century.
Wu Bingjian was born in Fujian in 1769. He was the third in his family and inherited his father’s nickname, Howqua, a phonetic transliteration of the hokkien pronunciation of the word hong, “Hõ-koa.” It was this name that foreign traders knew him by, and he initially named his company Wu Howqua.
In less than five years, Wu Bingjian transformed it into the most prominent trading company, fiercely competing with the then-leading firm Tongwenhang. His success was largely thanks to a commercial alliance with the British East India Company, headquartered in Canton since the Emperor opened the city to foreign trade in 1757.
Howqua was appointed as an agent and began supplying tea, leveraging the family estate. By 1830, he supplied the British East India Company with around 51,000 chests of tea, representing more than 18% of the company’s total purchases.
The tea was sold in London, Amsterdam, and the United States under the brand Wu Jia Yihe, becoming particularly popular in New York and Philadelphia, despite its high price.
In return, Howqua imported silver, highly sought after in China. The Spanish Empire supplied silver in exchange for Chinese crafts, silk, and porcelain via the Manila Galleon, and Americans obtained it from the newly independent Spanish America.
Of course, there were other clients, such as the Indian trader Merwanji Manikji Taba, who dealt in cotton. Another key client was the American firm Perkin & Co, whose president, John Murray Forbes, started trading Chinese tea in Canton in 1829 before transitioning to opium.
This allowed Howqua to enter the American railway industry and accumulate even greater wealth. Forbes always considered him a mentor and offered him the opportunity to invest in the Michigan Central Railroad and the Berlintown and Missouri River through a specially created company, the Qichang Foreign Company.
By 1834, Howqua was already the richest man in the world, with capital estimated at around 26 million Mexican silver dollars—a currency derived from the highly valued Spanish dollar, which had long been co-official in the United States and other parts of the world.
At that time, the richest American had no more than seven million. It was said that a fire in 1822 melted the silver stored in Howqua’s offices, creating a river nearly three and a half kilometers long. This was an exaggeration, but it illustrates the immense wealth he had amassed.
Opium: A New Source of Wealth
Profits grew further with the introduction of a product even more lucrative than tea: opium. Foreign merchants chose it as a trading currency due to declining shipments of silver, furs from the northeastern coast, and sandalwood from Hawaii.
The Chinese government traditionally banned opium imports and reiterated this prohibition in 1799. However, the British East India Company smuggled opium from Bengal with Howqua’s assistance, who, rumors suggest, trafficked the drug in his youth.
In 1817, authorities confiscated an American merchant ship carrying opium. Protected by Yihehang, Howqua was fined 160,000 taels of silver (a weight unit equivalent to about 40 grams). However, the primary traffickers were the British.
Initially, they brought about 900 tons annually, but by 1828, this had risen to 1,400 tons. Due to the public health crisis caused by widespread opium use, the government imposed the death penalty on traffickers and appointed General Lin Zexu as an imperial commissioner to enforce the law.
Howqua advised his foreign partners to destroy their hidden opium stocks in China and relocate their operations to Singapore. Meanwhile, the Cohong reluctantly participated in the trade to preserve its existence.
The First Opium War and Decline
When the imperial government intensified its crackdown on opium trade, the United Kingdom declared war in the spring of 1839. Howqua and other merchants supported Emperor Daoguang, funding fortress construction and purchasing new ships. However, the effort was futile, as the First Opium War ended in Britain’s favor in the summer of 1842 with the signing of the Treaty of Nanking.
Under the treaty, China was required to pay 21 million taels of silver in war costs and reparations, abolish the hongs’ monopoly, lower customs duties, open six more ports, cede sovereignty over Hong Kong, and grant trade concessions to the US and France.
The British were to receive six million silver coins, three of which were to be paid by the Cohong. Howqua contributed one—earning the right to dress in the Qing dynasty’s style.
However, with the Chinese economy now in foreign hands, Howqua’s former partners resented his opposition to them, especially as he demanded repayment of their debts. As they delayed payment, Howqua considered transferring his business to the United States, as mentioned in a letter to his friend Forbes. However, he passed away a few months later, in the garden of his home, at the age of 75, leaving his fifth son, Wu Chongyao, as heir.
Over time, Yihehang became a mere tea shop. Although Wu Chongyao, also known as Shaorong, continued to be the primary shareholder in Qichang (operating as Russell & Co. in the US), the company went bankrupt in 1891, reducing the family to a modest and economically diminished status. Their fortune had already been severely depleted by financing the suppression of the Taiping Rebellion.
In modern times, the memory of this clan is regarded with ambivalence in China as they are seen as “enemies of the people.” However, in America, Howqua’s legacy persists positively, as numerous businessmen prospered thanks to his loans. Familiar names like Forbes, Russell, and Delano emerged as the new global elite, their portraits still preserved in museums and bourgeois homes in Salem and Newport.
zap.aeiou, 25/11/2024
