Previously, a Thirteen Hongs merchant had hosted Nick at a banquet. Though he had done so on the admiral's behalf to express thanks, Nick had also "helped" him with something.
It was necessary here to mention the Qing dynasty's legal system. Whenever someone broke the law or committed a crime, someone had to be punished. If the criminal fled, his family would be punished instead. If someone brought a public prosecution, judicial officials would become involved. Reports traveled upward from the lowly prison wardens to local officials, then to governors-general, the Board of Punishments, and grand councillors. Some major cases even required the emperor's personal attention. Thus, one could see entire villages burned down because someone had committed treason; an entire county fined, an entire province forced into mourning, high-ranking officials stripped of office and title, and even the Son of Heaven himself making public atonement.
With that background, it became clear why the Co-Hong had been established. Foreign merchants in Guangzhou sometimes caused serious disturbances, yet those disturbances did not receive the punishment they deserved. First, no one knew who the troublemakers were. Second, certain forces secretly protected them, disrupting the normal order of the criminal justice system. Thus, the imperial court established the Co-Hong, requiring it to act as intermediary and guarantor for European merchants. That was the earliest origin of the Guangzhou Thirteen Hongs.
At first, every one of these hong merchants had engaged in smuggling or suffered humiliating punishment, which was why they took on such a dangerous responsibility. After reaching agreements with foreign merchants, they were responsible for conveying the demands of European merchants as well as the replies of the governor-general, the two provincial governors, and imperial commissioners.
Enormous profits produced an insular, self-important guild mentality. Before government officials, they prostrated themselves and kowtowed,