Chapter 191: The Treaty of Macau

With the salt licenses as collateral, Gao Ju gathered the city’s wealthy merchants—foreign traders, salt merchants, and Chaozhou merchants—and apportioned the loan among them. Although the interest rate was not high, the salt license collateral ensured there was no risk of loss. The four hundred thousand taels of silver were quickly allocated. Gao Ju couldn’t help but boast a little, and his prestige among the Guangzhou merchants rose somewhat.

The news that Gao Ju had raised the ransom fee through loans quickly spread through Meng Xian’s channels. Delong, as one of Guangzhou’s largest exchange banks, also lent five thousand taels for the “ransom fee” in this collective loan.

Gao Ju collected the silver. Apart from two hundred thousand taels sent in batches to the Australian military camp outside the city by Li Fengjie’s men, one hundred thousand taels were returned to the provincial treasury. Of the remaining one hundred thousand, Gao Ju, according to his own wishes, deposited thirty thousand taels into Delong and had them issue a bank draft to Governor Li.

Boxes of silver were counted in the military camp and then loaded onto ships one by one. This cash would greatly alleviate Lingao’s current shortage of precious metal reserves.

Gao Ju personally visited the military camp outside the city several times, presenting Wen Desi and the others with lavish gifts and many foreign wines to reward the troops. This time, his attitude towards the Australians was even more respectful. They were not just wealthy and capable magnates, but also robbers armed to the teeth. Fortunately, they were also merchants who honored their commitments. As business partners, the Australians were exemplary.

Gao Ju was pleased to maintain a good cooperative relationship with the Australians. Besides Eunuch Yang, the Australians could be a formidable backer, and unlike the insatiably greedy Eunuch Yang, they were the type to share the profits.

Gao Ju’s gifts were of high value, mostly luxuries and consumer goods of the era. Wen Desi was very satisfied and ordered them all to be accepted. He also listened to a heap of compliments from Gao Ju, and the two sides discussed future cooperation on a “larger scale” and “deeper level.” Gao Ju even readily offered to provide the political and commercial channels in the capital, which he had previously been reluctant to do.

On his last visit, He Chengzong accompanied him. They reached an agreement to hold the second phase of negotiations in Macau. According to Li Fengjie’s wishes, Li Luoyou would be in charge of the Macau negotiations. As for the timing of the Australians’ return to Guangzhou, Li Fengjie requested mid-December, after the current turmoil had subsided.

Afterward, Wen Desi and the others hosted a banquet for Gao Ju and He Chengzong’s party at the abode. They exchanged toasts several times, and then gifts were presented. Everyone, including Li Fengjie and his men, received valuable Australian goods. The host and guests parted on a happy note.

With the ransom paid, there was no need for the task force to remain outside the city. After collecting a “reasonable burden” and making a full display of their power, Chen Haiyang and his men chose a day to withdraw from the Provincial River.

On November 20th, the task force fired a 24-gun salute. The entire army boarded the ships and left the camp. The task force arrived at Humen that evening and rendezvoused with the garrison there. Most of the facilities had been dismantled, and the supplies had been transferred to Hong Kong, leaving only two gunboat squadrons and one marine company to continue their station—a bargaining chip for the next round of negotiations with the Guangdong local government. After a night’s rest, Chen Haiyang and his men led the fleet out of the Humen anchorage. On the 21st, at noon, they passed through Macau and the Modaoyang channel, entering Victoria Harbour. The fleet finally anchored at Central. The two-month-long “Pearl River Basin Punitive Expedition” came to an end.

During these two months, the construction of the 852 Base in Hong Kong had progressed rapidly—a large number of prisoners had swelled the labor force. When Chen Haiyang and his men returned to the 852 Base, several outposts and forts covering the entrances to the surrounding waterways had already been completed. The first major road near Central was under intense construction, roughly following the coastline. Hong Kong’s first wharves, warehouses, and trading firms would be built along this road.

Since the negotiations were not yet formally concluded, the General Military Affairs Directorate telegraphed the task force to rest and refit in Hong Kong. Some ships in need of major repairs could return to Lingao, while the rest of the ships and personnel were to remain on standby, ready to re-enter the Pearl River and resume combat if the negotiations broke down.

Li Luoyou watched the Australian fleet, escorted by small, smoke-belching boats, sail out of the Pearl River estuary. He knew the situation was settled—the most urgent task now was to clean up the mess. Sure enough, an order soon came from Guangzhou to immediately begin negotiations with the Australians.

Li Luoyou had mixed feelings about these negotiations. He was expectant, of course, because after the talks, trade could resume, and normal life would return to the banks of the Pearl River. From both his personal interests and the people’s, a peace treaty with the Australians was of great significance.

He felt resistant because he knew what the Australians had done in the Pearl River over the past two months. The government forces had once again shown their absolute incompetence. A few dozen Australian ships and one or two thousand men had rampaged through the Pearl River Delta as if it were an uninhabited land, extorting “reasonable burdens” everywhere, killing many local gentry, taking thousands of prisoners, and plundering a large amount of property.

The Australians’ actions were like those of another Manchu threat. Of course, they were more polite to the common people than the beastly Manchus; they didn’t randomly capture people or go around robbing, killing, and burning. They were just particularly ruthless towards those who resisted. Li Luoyou keenly realized that the Australians were far more cunning and dangerous than the Manchus.

The negotiations were held in Huang Shunlong’s private residence. Huang Shunlong was honored to serve both the great Manager Li and the Australians and cleared out his best courtyard for their use.

The negotiation representative sent from Lingao was Si Kaide, the director of the Colonial and Trade Department’s office. This peace advocate had long argued for making peace with the Ming as soon as possible, even accepting an offer of amnesty. This time, the Executive Committee had agreed to let him negotiate peace, but not to accept any “amnesty.”

Besides the conditions already agreed upon under the walls of Guangzhou—the return of all Zi-brand properties, compensation for losses, and the reopening of bilateral trade—Si Kaide presented six additional demands:

First, the Australians must be free to purchase and hire people, and to transport them abroad at will, without government interference.

Second, all ships under the Australian name entering Guangzhou for trade would be exempt from all taxes. Cargo on board would be exempt from duties, i.e., customs tariffs.

Third, the Zi-brand and other Australian industrial and commercial enterprises would continue to pay all officially stipulated commercial taxes, but all customary fees would be waived.

Fourth, the Australians would enjoy extraterritoriality in Guangzhou. Any arrest, detention, or trial involving an Australian must have Australian consent.

Fifth, the Australians must be free to purchase land and build houses in Guangzhou.

Sixth, Hong Kong Island and the surrounding islands would be controlled by the Australians, who would be free to act as they pleased on them.

After Si Kaide finished reading the six points, Li Luoyou felt a little relieved—there were no terrible indemnities or annual tributes. Because of the lessons of the two Song dynasties, the Ming was extremely wary of such things. But the last point caught his attention. This so-called “control,” wasn’t it equivalent to ceding Hong Kong Island?

In the history of the Ming, the place called Xiangshan Bay was far less famous than Macau. Even a merchant like Li Luoyou, who had long done business along the Guangdong coast, was not very familiar with it. But familiar or not, ceding territory was absolutely out of the question.

“The cession of Xiangshan Bay is absolutely impossible,” Li Luoyou knew very well that this little-known island was probably already under Australian control. Their demand to include this clause in the negotiations was merely to legitimize their power.

Si Kaide remained silent, listening to his statement.

“…This clause for the cession of Hong Kong Island, let alone the governor, even the emperor himself would not dare to mention the words ‘cede territory’,” Li Luoyou said. “Furthermore, the governor would never dare to report this clause to the court for the emperor’s hearing.”

Si Kaide remained silent. When the negotiation terms were being drafted, Yu E’shui from the Great Library had also mentioned these issues. In the current state of affairs, it was institutionally impossible for the Ming to sign a treaty like the Treaty of Nanking. No viceroy or governor would dare to sign such a document.

“Furthermore, the court has always been extremely wary of overseas people. The debate between sea ban and open trade has never ceased at court. And you want to openly fly the Australian banner in Guangzhou? Let alone the fact that the governor cannot cover the sky with one hand—there are several officials in this city who can directly report to the court—even if he could, what would happen if the Guangdong governor were replaced?”

Si Kaide was quite convinced. “What is your opinion, sir?”

“This matter can only be known to you and me. It must never be proclaimed to the world,” Li Luoyou said.

Li Luoyou stated that the Guangdong local government could only secretly agree to the various conditions proposed by the Australians. The two sides could make a fortune quietly, but they could absolutely not formalize it in writing, let alone openly fly the Australian flag.

The Ming government forbade all foreigners from residing and doing business in Guangzhou. Except for the Portuguese, who had the privilege of entering Guangzhou for trade twice a year, no other foreigners could stay in the city. The Australians were, of course, no exception.

If they insisted on this right, even if Li Fengjie was willing to memorialize the throne, it would take at least three or four years of wrangling at court before there was any result.

“Fortunately, the Australians are also of Chinese descent, and their appearance is no different from that of the Ming people. Why not just continue to act as Ming subjects?” Li Luoyou suggested, proposing that they simply claim to be natives of Guangzhou.

Once the identity issue was resolved, everything else could be easily solved.

As natives of Guangzhou, they could freely buy land, build houses, buy and sell people, and hire workers. The government would not interfere. As for large-scale population export, Li Luoyou believed that as long as they were transporting vagrants from other places, the government would not only not obstruct it but would be very welcoming. Otherwise, they could have stopped the Australians from exporting people from Guangzhou years ago.

As for the second point, ship taxation, since the Australians were considered natives of Guangzhou and their ships sailed only between Lingao and Guangzhou, it was purely domestic coastal trade and naturally exempt from the duties and measurement taxes required of foreign merchant ships.

As for the third point, tax exemption, as long as a tacit understanding could be reached with the government, it would not be a problem. The commercial taxes of the Ming were not high to begin with. As long as a merchant had some backing, local officials would not dare to extort too much, and the merchants would have little pressure in paying taxes. Of course, some necessary customary fees were unavoidable, but with the Australians’ reputation for killing without blinking, it was unlikely anyone would be foolish enough to try and extort them.

Regarding extraterritoriality, Li Luoyou said with a bitter smile, “Do you even care about this? There’s no one in all of Guangzhou foolish enough to bring you to justice. You are now the powerful gentry. A single note sent to the yamen can bail out even a murderous pirate.”

On the issue of Hong Kong Island, Li Luoyou firmly opposed their occupation, believing the governor would never agree.

“The governor can only turn a blind eye to this matter. He can never grant you the right to lease this place like the Portuguese,” Li Luoyou said. “This is no small matter. The Portuguese were able to settle in Macau due to a combination of time and luck. It cannot be forced.”

After more than ten days of haggling and correspondence between the two sides and their respective headquarters in Guangzhou and Lingao, they finally reached a principled agreement in Macau. It was later known as the “Treaty of Macau,” though there is considerable debate among imperial historians as to whether it was a true treaty. The mainstream view is that it was more of a memorandum of understanding between the Empire and the local government of the Ming. The text of the treaty was never formally signed or sealed, and the copy retained by the Ming was later lost. It was not a treaty in the true international sense; its implementation in Guangdong was only possible due to the Empire’s powerful ships and cannons.

Since the Guangdong government had concluded this treaty in secret, it was of course not openly filed in the archives. It was kept as a top-secret private document in Li Luoyou’s residence for reference, but this text has long been lost. According to the text preserved in the Great Library, the entire “Treaty of Macau” had eleven articles:

I. Australians may freely travel to Guangzhou and several surrounding prefectures and counties under the jurisdiction of the Guangdong Governor to reside, trade, and farm, and may bring their families, servants, and employees. However, they must claim to be natives of Guangdong and may not openly identify as Australians.

II. All Australian affairs in Guangzhou shall be handled by the chief manager of the Zi-brand. In the event of any commercial or civil disputes, he shall have full authority to deal with the government on their behalf.

III. All Australian properties in Guangzhou shall pay taxes as stipulated by the government, but shall be exempt from all miscellaneous levies and customary fees.

IV. Australians may purchase land and real estate in Guangzhou.

V. Australian ships entering Guangzhou for trade shall be exempt from all water taxes, duties, and customary fees. However, they must be registered as Ming ships and may not identify as Australian ships. Otherwise, all taxes and fees will apply.

VI. Australians may freely engage in any trade in Guangzhou and may freely transport goods, gold, and silver in and out, without government interference.

VII. Australians may hire and purchase people in Guangzhou and may freely take them to any location they wish.

VIII. The Guangdong government shall not interfere with Australians repairing ships and residing in Xiangshan Bay (Hong Kong).

IX. All former Australian properties, lands, businesses, and goods in Guangzhou shall be returned. As some goods have been sold and some equipment has been damaged, both sides have agreed that the Guangdong side will pay a one-time compensation of thirty thousand taels of treasury silver.

X. The government shall not further harm or arrest any Ming subjects implicated in the previous search for Australians. All those who have been arrested shall be released. The government shall pay a one-time compensation of five thousand taels of treasury silver for the property that was harmed.

XI. After all compensation, releases, and returns are completed, the Australian garrison at Humen shall be completely withdrawn.

In addition to the eleven articles, there were supplementary clauses and several agreements. Many details were personally drafted by Ma Jia from the Arbitration Tribunal, and the format was made to be very grand.

Overall, the Executive Committee did not place great importance on this treaty, as it was merely a private agreement between the Senate and Li Fengjie. Its binding power on the Ming government was limited to Li Fengjie’s tenure as governor of Guangdong. Once he left office, the entire agreement would be void.

However, a traditional feature of the Chinese bureaucracy was the strong inheritance of customary practices. As long as this agreement operated smoothly for a few years and a certain interest group formed around it, a new governor would be helpless to change it. Furthermore, given the current development trend, it was uncertain how long the Ming’s rule in Guangdong would last, or how many new governors there would be.

The reason this low-level memorandum was made so detailed and grand was mainly Ma Jia’s desire to satisfy the Senate—to give the elders the satisfaction of having signed an unequal treaty. In Ma Jia’s view, the countless goods, people, and the three-hundred-thousand-tael ransom brought back by the task force were worth more than any treaty.

Although the treaty itself was of little significance, when the telegram announcing the signing of the “Treaty of Macau” reached Lingao, the Senate still ordered a 24-gun salute at Bopu and a one-minute blast of all steam whistles in celebration.

The Treaty of Macau did not address the issue of He Ruyin’s remnant forces trapped in Qiongshan. Li Fengjie believed this matter had nothing to do with him, and besides, no prefecture or county in Qiongzhou had reported being captured. He was happy to play dumb.

The day after the celebration of the signing of the Treaty of Macau, news came from Guangdong: the Viceroy of Liangguang, Wang Zunde, had died of illness at his post in Zhaoqing. The viceroy’s seal was temporarily taken over by Li Fengjie.

Thus, the task of cleaning up the mess in Qiongshan and rescuing He Ruyin’s troops fell on Li Fengjie’s shoulders. Of course, he could continue to play dumb until a new Viceroy of Liangguang was appointed to handle it. But Li Fengjie harbored a thought: he hoped to turn his “acting” role into a “deputy” role, and finally be promoted to the full position. To this end, he sent a messenger on horseback to the capital to have his liaison office start lobbying immediately. At the same time, he once again dispatched Li Luoyou to Lingao to strive for a quick agreement with the Australians on the rescue of He Ruyin’s remnant forces.