When British ships first appeared in the Pacific Ocean, the Portuguese, Spaniards, and Dutch were all equally anxious to trade with the Asiatic people. Each nation wanted this trade for itself, and whenever two or more ships of different nations came together, there was sure to be a fight. The victors killed the crew of the other ship and plundered it. Sometimes they burned the vessel, or kept it, if they had men enough to sail it. Whenever a ship was fortunate enough to get back to Europe with a cargo the owners made an enormous profit. Still, there was always the danger that their vessels might be burned or captured. A number of rich merchants formed a company for mutual protection, and asked the government to give them a charter. The government agreed, and the association was known as the East India Company. The company was permitted to make treaties with Indian princes; to build forts, and to hire soldiers; to take cannon on their ships, and to fight when it was necessary. In return, the company agreed to allow the government the use of its ships in case of war.

In the year 1615 the East India Company sent some ships to Amoy to open an agency, or factory, as it was called at that time, and twelve years later an effort was made to open a market at Canton. In 1637 a fleet, under command of Captain Weddell, was sent to China, and anchored off Macao (mah-cow). The captain sent some of his officers to Canton. When they returned, they said so much of the wealth of that city that Weddell was anxious to take his ships there to trade. He sailed up the river as far as the forts, and sent a written request to the Chinese commandant, asking permission to go on to Canton. The commandant replied that he would answer in a week. But the Portuguese, who did not like to see the British secure a share of their trade, influenced the Chinese against them, and the commandant thought that it was best to drive them away. So he fired upon one of the ships' boats, which was returning to the vessel with drinking water for the sailors.

This made Weddell very angry, so he weighed anchor, took his ships up the river, anchored off the forts and the castle, and fired a broadside to such effect that in two or three hours the Chinese had had enough. The British landed some men, and the Chinese soldiers ran away without trying to defend the castle. The sailors entered and hoisted the British flag. All the guns were taken from the forts and sent aboard, and the castle was set on fire. Two large junks, or trading vessels, were captured, and the captain of a smaller one was hired to take a letter to the Governor of Canton. In this letter Weddell complained of the action of the commandant. The governor told Weddell that if he would return the guns and the junks, he might have permission to trade. Weddell agreed, and, loading his ships with Chinese goods, he sailed away.

Although the English had obtained permission to trade at Canton, there was no love or friendship between them and the Chinese. Chinese merchants did not understand the English way of doing business, and the English did not try to learn the Chinese way. The East India Company cared only to make money, and did not always deal justly, as the following instance will show:

Among the merchants employed by the Company was a man named Flint, who had studied the Chinese language so that he could read and write it. In 1759 the Company's factory at Ningpo was destroyed and Flint was sent there to have it rebuilt. When he arrived at Ningpo, he found that the governor had forbidden the Chinese to have anything to do with foreigners. Seeing that he could do nothing there, Flint went on to Tientsin, and from there addressed a complaint to the Emperor. When the Emperor received it, he appointed a high officer to go with Flint back to Canton, and to make a report. When they arrived at Canton, Flint returned to the factory, where he was told that everything had been settled.

Flint's going to Tientsin had angered the governor, who would have been severely punished by the Emperor, if he had not bribed the officer with a large sum of money to make a false report. Flint, accordingly, was called to the governor's office, where he was taken prisoner, after he had been struck repeatedly. He was then sent to a place near Macao, where he was kept in jail for two years and a half. The poor man, who was innocent, and who had only tried to do his duty, wrote to the Company that he would be set free if $1,250 was paid to the governor. But the Company refused to pay this sum for his release.

The Chinese, in their dealings with foreigners, act upon the following rule: "The Barbarians are like beasts, and can not be ruled on the same principles as the civilized Chinese. If anyone should try to control them by the great principles of reason, it would lead to nothing but confusion. The ancient emperors well understood this, and, therefore, ruled the barbarians by misrule; therefore, to rule the barbarians by misrule is the true and best way to rule them."

A recent English writer says: "The Chinese certainly saw but little of the better side of the strangers from the West, whether hailing from Europe or America. To them the foreigner was a man thinking of nothing but gain by trade, gain at any price; a coarse and vicious-tempered being, with no appreciation of Chinese philosophy, or literature, or history, and not even the most elementary acquaintance with Chinese etiquette."

An American author, who lived many years in China, speaking of the East India Company, says: "During that long time, even if they had only paid an interpreter in their agency, who, besides attending to his office duties, could have translated books on geography, astronomy, and other sciences into Chinese, the Chinese would have a far better opinion of the foreigners than now."

The Chinese complained constantly of the conduct of the sailors when ashore. In those days a voyage to China sometimes lasted more than a year. All that time the sailors were confined in the ship; they had to be up at all hours of the day or night, and in all sorts of weather, and their food was very poor. Ship biscuits, or hard tack as it is called, with salt beef and pork, was all that they received. When these men, at the end of a voyage, were allowed to go ashore, they were often quarrelsome and hard to control. This caused many quarrels between the Chinese officers and the British.

The general law in China is: "An eye for an eye, a tooth for a tooth, a life for a life." That is, if one person kills another, the man who committed the crime must die. Yet the laws in China are not cruel, for every sentence of death must be submitted to the Emperor, who alone can order an execution.

In 1784, the Lady Hughes, a British ship, at anchor near where the city of Hongkong now stands, fired a salute, and a Chinese was accidentally killed by a ball carelessly left in one of the guns. The Chinese officers demanded that the gunner should be surrendered to them, but this the British refused to do. Mr. Smith, the supercargo, or merchant, of the ship, shortly afterwards went ashore, when he was seized and put in prison. The Chinese refused to set him free unless the captain gave up the gunner. The gunner accordingly was sent into the city, where he was arrested at once, and Mr. Smith was released. The gunner was tried in a Chinese court, although he could not understand a word of the language, nor did the judge understand English. He was kept in jail six weeks, when the order arrived from the Emperor and the unfortunate man was strangled.

Another instance shows how Chinese officers evade the law. In 1807 a party of sailors were jeered at by a mob of Chinese at Canton; a scuffle followed, and one of the Chinese was killed by a blow from the fist of a sailor. The Lion, a British man-of-war, being in port, the captain called a court. The man who struck the blow could not be found, but one of the sailors, named Edward Sheen, was placed under arrest. This satisfied the Chinese until the ship was going to sail. They then demanded that the man be given up to them, but the captain of the Lion  refused to surrender him. When the ship had sailed away, the Chinese officers sent a report to Peking. They said that the sailor had opened a window and accidentally dropped a stick upon the head of the deceased, and so killed him. They added that they had examined the sailor, and fined him twenty dollars to pay the funeral expenses. This shows that the Chinese sometimes have a lively imagination and little regard for the truth.

During all the years that the East India Company traded at Canton there were complaints on both sides, and constant misunderstandings. The charter expired in 1834, and was not renewed. After that British trade in China was to be managed by an officer appointed by the Crown, and Lord Napier was appointed chief superintendent.