[1] In order to avoid the cost of acquiring licenses from the East India Company and South Sea Company—required for British merchant ships trading across the Pacific Ocean—and to evade the high port costs China demanded of foreign ships other than those of Portugal, Meares and his partners had Felice and Iphigenia sail under the Portuguese flag.
This tactic of sailing under false colors was not uncommon at the time and was used by other British maritime fur traders such as Charles William Barkley.
Also sailing with Meares and Douglas were a number of Native Hawaiians and Native Americans, including Tianna (Kaʻiana – also spelled Tyaana & Tyanna), a chief of Kauai, who Meares had brought from Hawaii to Macau, and Wynee (or Winee), a Hawaiian girl who Charles William Barkley had brought to Macau in 1787.
Because of the delay he decided to sail first to the Pacific Northwest coast, instead of Hawaii, in order to arrive in time for the fur trading season.
Meares decided that as soon as the new schooner, North West America, was launched he would sail Felice to Macau, China, with the combined cargo of furs.
Douglas and Iphigenia would remain at Nootka Sound until North West America was ready for sea, then the two vessels would sail to Hawaii and spend the winter there.
[4] On 17 September 1788, before North West America was finished, the American maritime fur trader Robert Gray arrived at Nootka Sound with Lady Washington.
Douglas gave some of the planks to John Kendrick, the American captain of Columbia Rediviva, which had arrived at Nootka Sound shortly after Lady Washington.
After the British ships left, the local natives who had been very skittish since the Americans arrived, suddenly came in great numbers and soon a friendly trading relationship was established.
According to the journals and logs of the Americans, Douglas and his men had treated the local natives very poorly—repeatedly taking food and provisions from them under the threat of force.
[7] On 27 October 1788 Iphigenia and North West America, under Douglas and Funter, left Nootka Sound for the Hawaiian Islands, where they spent the winter.
Kamehameha gave Douglas a large fan and two full-length cloaks made from the feathers of mamo and ʻŌʻō birds (both now extinct).
[6] On December 19 Douglas, wanting to find an anchorage more protected from squally weather, ordered Iphigenia's anchor raised only to discover that the line had been cut.
Kaiana decided to stay on Hawaii with Kamehameha, who promised him a rich life of honor and security, instead of returning to his native Kauai.
In January 1789 Meares and his remaining partners had decided to merge their business with their former rivals, the King George's Sound Company, owned by the Etches brothers of London.
Captain Colnett was given overall command of both ships as well as Douglas's Iphigenia and Funter's North West America, which were now owned by the Associated Merchants company.
Thus the only ships in Nootka Sound were Douglas's Iphigenia and Kendrick's Columbia when on May 6 the Spanish warship Princesa, under Esteban José Martínez, entered the harbor.
The crew was taken to the two Spanish warships and the ship was emptied of supplies, cannons, trade goods, charts, and essentially all removable objects.
[8] Held captive on Princesa, Douglas managed to send a message to the native chief Maquinna, asking that he warn Meares's Felice and Funter's North West America should either appear.
Preparations were made for taking the captive British and Iphigenia to San Blas, Mexico, New Spain's Pacific naval headquarters.
Iphigenia was careened and the Spaniards spent considerable time and effort repairing and refitting the ship in preparation for the voyage to San Blas.
Martínez did not have enough men of his own to spare and had planned to have Douglas's crew, under Spanish officers, sail Iphigenia to San Blas.
He also said that if the Viceroy Flores later ruled that it had been valid to seize Iphigenia, then the firm of the Portuguese merchant Carvalho would have to pay a proper forfeit.
By the late afternoon Iphigenia, flying Portuguese colors, was sailing southwest from Nootka Sound, as though headed for Hawaii.
In a series of events similar to what had happened to Douglas and Iphigenia, Funter and his crew were soon arrested and North West America seized.
Nonetheless when Iphigenia reached the open ocean on 28 June 1789 Douglas had 760 prime sea otter skins in the hold—far more than the 60-70 he had when leaving Nootka Sound a month before.
Not long after Douglas reached Macau the American ship Columbia arrived, under Robert Gray, who brought an account of the later events of the Nootka Crisis.
Meares and company had intended to attempt to open British trade with Japan, but the Nootka Crisis had put an end to that.
An officer of the Royal Navy who was in Macau sent word to London and the British court launched new efforts toward opening trade with Japan, but not before Kendrick and Douglas made their attempt.
[13] Douglas sailed Grace to Haida Gwaii (the Queen Charlotte Islands) and apparently secured a fair number of sea otter skins.