It has been already observed, that no British subject could trade to the west of Cape Horn without a licence from the South Sea Company, whilst, on the other hand, to the eastward of the Cape of Good Hope the East India Company possessed an exclusive monopoly of commerce. Thus the mercantile association which assumed the name of the King George’s Sound Company, and which despatched two vessels under Dixon and Portlock from England in the autumn of 1785, had found it necessary to obtain licences from the South Sea Company for them to proceed by way of Cape Horn, and they had likewise entered into an arrangement with the East India Company to carry their furs to Canton, and there exchange them for teas and other products of China, to be conveyed in their turn round the Cape of Good Hope to England. These vessels sailed under the British flag. With a similar object, two vessels, the Nootka, under Captain Meares, and the Sea Otter, under Captain Tipping, were, by an association under the patronage of the Governor General of India, early in 1786, despatched from Calcutta, under the flag of the English East India Company, whilst the Captain Cook and the Experiment sailed from Bombay for the same destination. An attempt, however, had been made by the British merchants in the preceding year, to organise a trade between North-west America and China, under the protection of the Portuguese flag, so as to evade the excessive harbour dues demanded by the Chinese authorities from other European nations, by means of licences granted by the Portuguese authorities at Macao. The first expedition of this kind was made by Captain Hanna, in 1785, and was most successful as a commercial speculation. In a similar manner, in 1788, some British merchants residing in India fitted out the Felice and Iphigenia for this trade, and through the interest of Juan Cavallo, a Portuguese merchant who had resided for many years at Bombay as a naturalised British subject, and traded from that place under the protection of the East India Company, obtained from the Governor of Macao permission for them to navigate under the Portuguese flag, if found convenient. Meares in his memorial states, that Cavallo merely lent his name to the firm, and that he had no real interest in the Iphigenia, as on his subsequent bankruptcy the claims of his creditors were successfully resisted, and the Iphigenia consequently lost the privileges which she had hitherto enjoyed in the ports of China, in her character of a Portuguese ship. On the other hand, in the obligation which Martinez exacted from the master and supercargo of the Iphigenia, Cavallo is spoken of as the lawful owner of the vessel in whose name they bound themselves. It is possible however that they may have bound the ostensible owner on purpose to defeat the object of the Spanish commander, instead of the real owners; and assuredly the instructions of the Merchant Proprietors to Captain Meares, “commanding the Felice and Iphigenia,” seem to be at variance with the fact of Cavallo being the real owner, as they are addressed to him evidently not in the mere character of supercargo, but as having the complete control of the vessels, which are expressly stated to have been fitted out and equipped by the Merchant Proprietors: and Meares is directed to defend his vessel against all attempts of Russian, English, or Spanish vessels to seize it; to protest, if captured, against the seizure of his vessel and cargo; and to take possession of any vessel that attacked him, as also her cargo, in case he should have the superiority in the conflict. (Appendix to Meares’ Voyage.)

To the same effect, the orders of Captain Meares to Captain Douglas, of the Iphigenia, seem to be conclusive that the latter had full control over the vessel. “Should you,” it is observed, “in the course of your voyage, meet with the vessels of any other nation, you will have as little communication with them as possible. If they be of superior force, and desire to see your papers, you will show them. You will, however, be on your guard against surprise. Should they be either Russian, English, Spanish, or any other civilised nation, and are authorised to examine your papers, you will permit them, and treat them with civility and friendship. But at the same time you must be on your guard. Should they attempt to seize you, or even carry you out of your way, you will prevent it by every means in your power, and repel force by force.”

Captain Douglas, moreover, was directed to note down the good behaviour of his officers and crew, and thus afford his employers a medium to distinguish merit from worthlessness. “This log-book,” they go on to state, “is to be signed by yourself. On your return to China you will seal up your log-book, charts, plans, &c., &c., and forward them to Daniel Beale, Esq., of Canton, who is the ostensible agent for the concern; and you have the most particular injunctions not to communicate or give copies of any charts or plans that you may make, as your employers assert a right to all of them, and as such will claim them.”

The person to whom such instructions were addressed must evidently have had the control of the vessel, and not been merely in charge of the cargo. It has been, however, rightly observed by Mr. Greenhow, that the papers on board the Iphigenia, when seized by Martinez, were written in the Portuguese language, which Captain Douglas did not understand, and therefore could not well act upon. The reply to this seems to be, that Douglas himself acted upon the letter of Captain Meares, inserted in the Appendix to Meares’ Voyages, which embodied in English the substance of the general instructions drawn up for the expedition in Portuguese; and that the ship’s papers were in the Portuguese language to support her assumed Portuguese character. There is no doubt that there was some deception in the transaction, but the deception seems to have been directed rather against the Chinese than the Spaniards.

Whatever may have been the character which was sought to be given to the Felice and Iphigenia, Meares appears on landing at Nootka to have avowed his British character, by hoisting British colours upon the house which he built on ground granted to him by Maquilla, the chief of the neighbouring district, as well as by displaying the English ensign on the vessel which he constructed and launched at Nootka. It was his intention to employ this vessel, a sloop of about forty tons, exclusively on the coast of America, in exploring new trading stations, and in collecting furs to be conveyed by the other vessels to the Chinese markets. It was named the North-west America, and was manned by a crew of seven British subjects and three natives of China.

Meares, having left the Iphigenia and North-west America to carry on the trade on the American coast, returned with a cargo of furs to Macao, in December 1788, and having there sold the Felice, associated himself with some merchants of London, who had embarked in this commerce under licences from the East India and South Sea Companies. Two of their vessels, under Dixon and Portlock, which have already been alluded to, the Prince of Wales and Princess Royal, had just arrived at Canton from the north-west coast of America. Meares, apprehending that mutual loss would result from competition, entered into a formal agreement with Mr. John Etches, the supercargo of the two ships, making a joint stock of all the vessels and property employed in that trade. The new firm immediately purchased an additional ship, named the Argonaut, and the Prince of Wales being chartered with a cargo of tea to England by the East India Company, the Princess Royal and the Argonaut were ordered to sail to Nootka Sound under the command of Captain Colnett and Captain Hudson. It is indisputable that these vessels were sailing under the British flag, and from the instructions delivered to Captain Colnett, the Iphigenia and North-west America were henceforward to be under his orders, and to trade on account of the Company. He was accordingly directed to send home Captain Douglas in the Argonaut, and to receive from him the Iphigenia and North-west America, shifting their crews, &c.

“We also authorise you,” the instructions go on to state, “to dismiss from your service all persons who shall refuse to obey your orders, when they are for our benefit, and in this case we give you to understand, the Princess Royal, America, and other small craft, are always to continue on the coast of America. Their officers and people, when the time of their service is up, must be embarked in the returning ship to China, and on no account whatever will we suffer a deviation from these orders.”

Thenceforward, it appears, that the Iphigenia and North-west America would be considered as sailing under the same character as the other vessels of this Company.

The steady advance of the Russian establishments along the north-west shores of the Pacific, which had become notorious from the publication of Captain Cook’s journals, could not but cause great anxiety to the Spanish government. An expedition of inquiry was in consequence sent northward from the port of San Blas in 1788, consisting of two vessels, the Princesa and San Carlos, under the command of Esteban José Martinez and Gonzalo Lopez de Haro. They were instructed to proceed directly to Prince William’s Sound, and to visit the various factories of the Russians in that neighbourhood. Having executed their commission, they returned to San Blas in the autumn of the same year, and reported the results of their voyage to the Viceroy of Mexico. Martinez brought back the information that it was the intention of the Russians to found a settlement at Nootka. The Court of Madrid in consequence addressed a remonstrance to the Emperor of Russia against the encroachments upon the territories of his Catholic Majesty, which were assumed to extend northward up to Prince William’s Sound, and the Viceroy of Mexico in the mean time took measures to prevent the execution of any such schemes. With this object he despatched Martinez and Haro in 1789, with instructions to occupy the port of Nootka by right of the prior discovery of Perez in 1774, to treat any Russian or English vessels that might be there with the courtesy which the amicable relations between the several nations required, but to manifest to them the paramount rights of Spain to make establishments there, and by inference to prevent all foreign establishments which might be prejudicial to Spanish interests.

The Princesa sailed into Nootka Sound on the 6th of May 1789, and found the Iphigenia at Friendly Cove. The San Carlos joined her consort on the 13th. The Columbia merchantman, of the United States of America, was lying at anchor at no great distance. Mutual civilities passed between the different vessels till the 15th, when Martinez took possession of the Iphigenia, and transferred her captain and crew as prisoners to his own vessels. He subsequently allowed the Iphigenia to depart, upon an obligation being signed by the captain and supercargo on behalf of Juan Cavallo of Macao, as the owner, to satisfy all demands, in case the Viceroy of Spain should pronounce her to be a prize, on account of navigating or anchoring in seas or ports belonging to the dominion of his Catholic Majesty without his permission. Captain Kendrick of the Columbia, and Ingraham his first pilot, were called in to witness this agreement. The Iphigenia was released on the 1st of June, and sailed away directly to Queen Charlotte’s Island. On the 8th, the North-west America arrived from a trading voyage along the southern coasts, and was immediately taken possession of by Martinez. A few days afterwards the Princess Royal arrived from Macao, bringing intelligence of the failure of the house of Cavallo, in consequence of which Martinez hoisted Spanish colours on board of the North-west America, and employed her to trade along the coast upon his own account.