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30 merchants. It was directed that all the factors' affairs of buying and selling should be managed in Council, for which purpose consultations should be held once a week or oftener and the proceedings regularly entered by a Secretary.

The Council was empowered to dismiss any servant who defrauded the Company or betrayed their interests, or who "should commit any heinous crime as murder, theft, blasphemy or the like,—or should rent any farms or duties of the Emperor of China or his Ministers whereby they might be subjected to their arbitrary powers and the Company's estate under their management hazarded,—or if any Company's servant marry any Mahometan, Gentoo or Pagan."

To encourage their servants the Court allowed them to send home yearly what gold they pleased in order that their friends might return the proceeds to them in silver. All salaries in China were, it was stipulated, to be paid at the rate of 5s. the "piece of eight" or dollar. The jurisdiction of the presidency was to extend over the whole Empire of China and the adjacent islands.

The new Council sailed from England in the Eaton frigate at the close of 1699, and arrived at Banjarmassin on July 16, 1700. There news was received that the Company's ship, Trumball galley, had left in company with two junks on the 15th of June previously for Chusan, where it was intended to form a settlement. In consequence of this information the Eaton directed her course also to Chusan, and arrived off that island on the 11th of October. President Catchpoole met with a friendly reception from the Governors, but he could not obtain permission to form a settlement. When he pressed the matter he was referred to Peking. To approach the Emperor an embassy would have been necessary, and as this would have cost at the least £10,000, the recommendation to memorialise the throne was not unnaturally disregarded. President Catchpoole continued at Chusan in the hope that some change might be effected in the situation by persistent applications backed by gratuities to the hungry officialdom of the Government. In this expectation he was disappointed, and month after month slipped by without the Council advancing an inch in the direction in which it wished to go. Meanwhile, trouble arose through the rivalry of the London East India Company which at this time was actively competing for the China trade, notwithstanding that negotiations were going forward and, indeed, were advancing towards a satisfactory issue, for the amalgamation of the two Companies. There were constant disputes and bickerings between the two establishments, to their mutual disadvantage as far as trade was concerned. At the beginning of 1701–2 matters reached a crisis. Through the machinations of Mr. Gough, the agent of the London Company, an edict was issued by the Chinese authorities expelling Catchpoole and his establishment from the island. The terms of the order were so emphatically expressed that Catchpoole had no alternative but to obey, and on the 2nd of February he and his colleagues left in the Eaton for Batavia. In writing home at this period, Catchpoole and his colleagues reverted to their troubles and disappointments since their arrival in China. They stated that they had been "scarce a day free from insults, impositions, or hardships from the mandarins or merchants in respect of trade or government;" but, they went on to say, "nothing thereof have affected us with that concern as the treachery and undermining practices of our own countrymen and bosom friends; who whilst sitting in Council with us have been privately working the ruin of our footing with the mandarins and merchants of the place by abetting and encouraging them to force us away in the Eaton."

After an absence of about twelve months the Council returned to Chusan, the way for them having been made smooth by the usual material agencies. But it was only to renew the old struggle for ascendency with obstinate and unreasonable colleagues. On this occasion it was the captains of the Company's ships who caused the trouble. These individuals comported themselves in independent fashion, showing a contempt for authority which was resented by President Catchpoole and his Council. Their worst offence seems to have been to make themselves at home at the factory, utilising rooms which were required by the establishment. Catchpoole, in reporting their delinquencies at home, remarked à propos of an unwelcome visit from the captains: "The writers and factors lay up and down on tables. As we now are four writers lie in a room; and yet the Factory rent stands the Company in 100 taels a month. We had trouble to get Captain Palmer out of Mr. Hal's apartment: he left in such a rage that he went on board and broke open Mr. Carleton and Mr. Chitty's, the supercargoes' apartments, and has made the great cabin less. Should your honours think I act too little I must plead for myself that we are in China, where the Governors are so villainous that they embrace any opportunity to confound all, and these captains, to gratify their little pride, fear nothing."

In another communication, after further dissensions, Catchpoole wrote saying that all the captains were unruly, but there were distinctions to be made between them.

"We look upon Captain Palmer's as a giddy headed boyish distraction; but Captain Smith's rudeness grew to so great a height, that in Council we unanimously ordered him not to come into the factory; yet some few days after he did come, and falling into hot and quarrelsome words, he challenged the President out of the Factory; who did go out after him, and to avoid the porterly dispute of Boxing, threw a counting board at him and broke his head; and he having in this encounter offered to strike the President, the said Captain was again brought into the Factory and with abundance of violence forced on board the Liampo (one of the three ships in port). Which although it raised a great uproar in the town and amused the mandarins, yet it convinced them that the English Company's President has some power."

President Catchpoole came eventually to the conclusion that the position at Chusan was not worth maintaining. Trade was irregular and at the best not lucrative and the official interferences and exactions made existence almost intolerable. He had long had his eye on Pulo Condore, an island off the coast of Cochin China, which he confidently believed might with due enterprise be made to become a valuable entrepôt for the China trade. Thither he proceeded in 1703 and forthwith commenced to establish a factory. Apparently the King of Cochin China claimed sovereignty over the island, and on hearing of the occupation sent a letter of protest through a local governor. President Catchpoole acknowledged this in a strain of humility worthy of Uriah Heap. Addressing the official as "great and noble sir," he assured him that if they had been wanting in respect it was due to their ignorance of the customs of Cochin China. But now that he had been pleased "to condescend so far as to style me your brother, you shall on all occasions find me to behave with the dutifulness of a younger brother to his elder." Referring to the presence of two of the Company's servants in the King's dominions, he said that he did not doubt his countrymen would return to him "with the welcome news of the conquering King of Cochin China's leave for my settling here with my people. But I shall find some