The Hong merchants were responsible to the Hoppo for the duties on all exports and imports. They alone transacted business with that officer's department--viz., the 'Customs'--by which foreigners were spared trouble and inconvenience. It may be as well to mention here that the 'Hoppo' (as he was incorrectly styled) filled an office especially created for the foreign trade at Canton. He received his appointment from the Emperor himself, and took rank with the first officers of the province. The Board of Revenue is in Chinese 'Hoo-poo' and the office was locally misapplied to the officer in question.
As controllers of the entire foreign commerce of the port of Canton, which amounted annually to many millions of dollars, if the benefits derived therefrom were of vast importance, the responsibilities were also great. For infractions of 'regulations' by a ship or by her agents they were liable. It was assumed that they could, or should, control foreigners residing in the Factories as well as the vessels anchored at Whampoa. In both cases they were required to 'secure' due 'obedience.' Every resident therefore had his 'sponsor' from the moment of landing, as every ship had hers, and hence the Hong merchants became 'security merchants.' My own was Houqua, who of course represented some others also, and in view of these mutual relationships we would jocularly call them 'our horse godfathers.'
The purchases of the East India Company were divided amongst the Hong merchants proportionately, in shares, of which fourteen fell to the lot of Houqua.
The position of Hong merchant was obtained through the payment of large sums of money at Pekin. I have heard of as much as 200,000 taels, say 55,000_l._ sterling. If the 'license' thus acquired was costly, it secured to them uninterrupted and extraordinary pecuniary advantages; but, on the other hand, it subjected them to calls or 'squeezes' for contributions to public works or buildings, for the relief of districts suffering from a scarcity of rice, as well as for the often imaginary or over-estimated damage caused by the overflowing of the 'Yang-tsze-Keang' or the 'Yellow River.'
'Well, Houqua,' you would say on some visit, 'hav got news to-day?' 'Hav got too muchee bad news,' he would reply; 'Hwang Ho hav spilum too muchee' That sounded ominously. 'Man-ta-le[15] hav come see you?' 'He no come see my, he sendee come one piece "chop." He come to-mollo. He wantchee my two-lac[16] dollar.' It was the old complaint, a 'squeeze' and this time a formidable one. 'You pay he how mutchee?' 'My pay he fitty, sikky tousand so.' 'But s'pose he no contentee?' 'S'pose he, N^{ o.} 1, no contentee, my pay he one lac.' This actual incident will show the sort of demands upon the senior Hong merchant (each one being called upon in his turn) and their pecuniary importance. They knew at the same time that the object of the 'squeeze' was exaggerated, and, even if necessary, that only a modest portion would go to the repairs of the banks of the river, the mandarin thinking that his own personal wants were far more pressing. They might try to parry the question, they might succeed in getting the sum asked for diminished, but they could not escape. Payments would also be made by them to the Hoppo on the occasion of his return to Pekin, on the appointment of a successor, as well as to the chiefs of the Revenue Board in that capital; but such as these had a _raison d'être_, they secured influence and protection, and besides, the sums paid were voluntary and comparatively moderate in amount.