HONG KONG AND THE EARLY OPIUM TRADE: JARDINE MATHESON

March 18, 2011 at 8:03 pm | Posted in Asia, China, Development, Economics, Financial, Globalization, History, India | Leave a comment

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Jardine, Matheson & Co.

Jardine, Matheson & Co. was founded in Canton on 1 July 1832

Overview

Jardine, Matheson & Co. was founded in Canton on 1 July 1832, following a meeting between William Jardine and another Scots trader, James Matheson from Sutherland. In 1834, the pair sent the first private shipments of Chinese tea to England; another big export to the UK was silk. In return, they traded opium to the Chinese.[8] Jardine Matheson’s early profits were based on this trading of Indian opium into China. When the Chinese emperor tried to ban the trade, the company called on Britain to compel China to provide compensation for the confiscated opium, leading in 1839 to the first of two Opium Wars.

Early history

In 1802, Dr. William Jardine worked as a medicinal practitioner onboard British East India Company vessels sailing between Calcutta and Canton. Under a charter granted to the company in the seventeenth century by Charles I of England, its directors in London’s Leadenhall Street held a monopoly on British trade between India and China. It was customary, however, for the Company’s servants to conduct a certain amount of private business on their own account. In order to regularise this, the East India Company allowed each officer and member of the crew a space about equal to two chests; what the men did with this space was their own business. Using this space, the doctor soon discovered that trading illegal narcotics was more profitable than practising medicine. It was during these early days that William Jardine found himself onboard a ship captured by the French with all its cargo seized. Despite this setback a trading partnership formed at the time by Jardine with a fellow passenger, a Parsee Indian called Jamsetjee Jeejebhoy, would endure for many years.

In Canton, Dr. Jardine met a naturalised Briton of Huguenot extraction named Hollingworth Magniac. He learned that there were ways by which, to a small extent, the monopoly of the East India Company could be circumvented so in 1817 Jardine left his first employers and began the process of establishing his own private firm.

At this time James Matheson was employed in his uncle’s business in Calcutta. One day his uncle entrusted him with a letter to be delivered to the captain of a soon-to-depart British vessel. Matheson forgot to deliver the missive and the vessel sailed without it. Incensed at his nephew’s negligence, the uncle suggested that young James might be better off back in England. He took his uncle at his word and went to engage a passage back home. Instead, on the advice of an old sea captain, Matheson went to Canton.

It was in Canton in 1818 that Matheson first met Jardine. The two men formed a partnership which included also Magniac and a man named Beale, an English inventor of clocks and automata. At first the new firm dealt only with Bombay and Calcutta, at that time called the “country trade” but later extended their business to London.

The activities of these four men made an important contribution to the 1834 termination of the East India Company’s monopoly in China.[9][10][11]

Establishment of the private firm of Jardine, Matheson & Co.

For a long time the British East India Company had been growing increasingly unpopular in Britain. Men such as Sheridan, Elliot, Charles James Fox, William Windham, and Edmund Burke were its bitter enemies. Many British people believed that freedom of the seas and freedom of trade were synonymous. They had fought for years to establish this freedom, only to see it threatened by a King’s charter to a group of London merchants. Further, certain high-handed methods used by the East India Company in dealing with competitors aroused the moral indignation of the British at home.

Nevertheless, open competition with the East India Company was a risky business. The Company was empowered to punish transgressors vigorously — even to the extent of having them hanged. Occasionally, free traders did manage to secure a license from the Company to engage in the “country trade,” usually with India, but never with Britain. In rare instances, other free traders, called “interlopers,” competed with the Company. The interlopers usually were friends of the Government in England from which they had been able to obtain some form of charter of their own. Sooner or later, however, the East India Company always managed to have these other charters revoked.

There was one method available by which a Briton could establish a business on the East India Company’s preserves. He could accept the consulship of a foreign country and register under its laws. This method was employed by Jardine to establish himself in Canton. Magniac had obtained an appointment from the King of Prussia, and later James Matheson represented Denmark and Hawaii. On this basis the partners had nothing to fear from the Company; in fact, relations between these two and the East India Company seemed in time to have become amicable. It is recorded that when ships of the East India Company were detained outside the harbour by the authorities, Jardine offered his services “without fee or reward.” These services saved the East India Company a considerable sum of money and earned for Jardine the Company’s gratitude.

By 1830, the enemies of the East India Company had begun to triumph, and its hold on trade with the East had weakened noticeably. Furthermore, at this time, both Magniac and Beale were getting ready to retire. In 1832, two years before the East India Company lost its monopoly over British trade with China, William Jardine and James Matheson entered into formal partnership as a private firm of Jardine, Matheson & Co.

Establishment of the firm in Hong Kong

In 1834 the first ship free of the East India Company’s monopoly, Jardine’s Sarah, left Whampoa with a cargo of tea for London. This was a signal that showed the East India Company was no longer a power in the East, and was immediately followed by a rush to participate in the fast developing China trade, which was centred on tea. From the middle of the seventeenth century this drink had been growing in popularity in Britain and the British colonies, but the trade in teas was far from simple. Due to the high taxes on tea in Britain, the tax on tea was often as much as two hundred percent of the value.[citation needed] This punitive level of taxation gave rise to widespread smuggling which became an additional hazard to legitimate businesses. To profit in the China trade participants had to be ahead of all competition, both legitimate and otherwise. Each year, fast ships from Britain, Europe, and America lay ready at the Chinese ports to load the first of the new season’s teas. The ships raced home with their precious cargoes, each attempting to be the first to reach the consumer markets, thereby obtaining the premium prices offered for the early deliveries.

Jardines became well established and thereafter commanded a sizeable portion of the China trade.

Raw and manufactured goods were imported from India and the United Kingdom whilst teas and silks were exported.

In 1842, the firm built the first substantial house and established their head office on the recently acquired island of Hong Kong. This began an era of increased prosperity and expansion. New offices soon were opened in the trading centres of Shanghai, Fuzhou, and Tianjin. Jardines has continued to expand since these early beginnings.

William Keswick, the young nephew of Dr. Jardine, was sent to Japan in 1858 to open up trading for the firm where he established an office in Yokohama. In Japan, Jardines also expanded rapidly and additional offices were opened—in Kobe, Nagasaki, and other ports. From the beginning, a large and profitable business was conducted in imports, exports, shipping, and insurance.

The firm became so important that for much of the history of the Executive Council of Hong Kong, to represent the business community the Council’s ‘unofficial members’ included the head of the Hongkong and Shanghai Banking Corporation and the taipan of Jardines.[12]

By the end of the nineteenth century, business in the Far East was no longer confined to simple trading. Industrial expansion had begun and in its wake the Indo-China Steam Navigation Company was formed. To aid further in this development Jardines created insurance companies as well as building cotton mills, wharves and warehouses. Cold storage and press packing plants for China’s widening export trade were erected. In 1935 the company built the Ewo Brewery in Shanghai. The directors of Jardines have since built a modern business structure on the foundations laid by the pioneers of the firm.[13]

War and reconstruction

In 1932, after the first Japanese attack on China, the firm closed its offices in Manchuria with Jardines leaving when the Japanese occupation began. In 1941 at the beginning of World War II in the Asia-Pacific region, the Japanese took over all Jardine’s interests in Hong Kong and occupied China. In the meantime offices of the firm were established in Chongqing and Kunming. (Offices in Bombay were also established around this time.) Contact with the war-time world of Chinese official and commercial life was thus maintained. Immediately on cessation of hostilities, the staff from these offices and from internment camps in China immediately began recovery of the firm’s properties from the Japanese forces.

In the summer of 1947, as soon as the authorities permitted, Jardines re-entered Japan. From that date, the task of re-establishing their former wide interests in that country has been under way.

In Taiwan Jardines have maintained offices since early in the last quarter of the nineteenth century. Today the Taipei office is a leading exporter of tea to Europe, Asia, and America and is engaged in shipping and general export and import business.

Scottish leadership

Jardines is controlled by the Keswick (pronounced “Kezzick”) family who are direct descendants of William Jardine’s sister.

While the leadership of Jardines is Scottish, the firm is international in its dealings. The staff of Jardines (239,000 employees as of January 2007) is predominantly Asian, with senior management levels composed of a mixture of British, Chinese, Indonesians, Europeans, Australians and Americans.

The Keswicks have maintained a relationship with another prominent Scottish family, the Flemings, of which the author Ian Fleming was also a member. From 1970 until 1998, Jardine Matheson operated a pan-Asian investment banking joint venture, Jardine Fleming, with Robert Fleming & Co., a London merchant bank controlled by the Fleming family. In 2000, Jardine Fleming and Robert Fleming & Co. were sold to JP Morgan Chase.

Shipping interests

From the earliest days of the firm, shipping became the most prominent among the many and varied enterprises of Jardines.

Historically, it was the practice of Jardines to possess the fastest and best-handling ships available. The firm did this in order to maintain its leading position in the market. In the early days, it was often possible to make a fortune with the exclusive possession of market or budget news for a period as brief as a few hours. Conversely, a fortune could be lost if the despatches from home were late. The keen competition for faster and more efficient shipping had a significant impact on the rapid development of trade with the Far East. It was due largely to the quality of its fleet that Jardines outlived all rivals. In the days of sail, many of the most well known clippers were part of the Company’s fleet. Among these clippers were the “Red Rover”, “Falcon”, and “Sylph“, the last of which holds a sailing record that has never been beaten.[14] The ship sailed from Calcutta to Lintin in the Pearl River estuary in seventeen days, seventeen hours.

The first merchant steamer in China, the “Jardine”, was built to order for the firm in 1835. She was a small vessel intended for use as a mail and passenger carrier between Lintin Island, Macau, and Whampoa Dock. However, after several trips for unknown reasons the Chinese authorities prohibited her entrance into the river such that the ship had to be sent to Singapore.

The first steamships owned by Jardines ran chiefly between Calcutta and the Chinese ports. They were fast enough to make the 400-mile (640 km) trip in two days less than rival P & O vessels.

As time passed, more and more ships were procured for Jardines’ fleet and ports of call extended as conditions allowed. The firm was among the first to send ships to Japan, and at an early date established a regular service between Yokohama, Kobe, and China’s ports.

Until 1881, the India and China coastal and river services were operated by several companies. In that year, however, these were merged into the Indo-China Steam Navigation Company, Ltd., a public company under the management of Jardines. The activities of this company extended from India to Japan, including the Straits Settlements, Borneo, and the China coast. In the latter sphere, the “Indo-China” sector developed rapidly. The company pushed inland up the Yangtsze River on which a specially designed fleet was built to meet the requirements of the river trade.

Jardines were considered efficient handlers of shipping. As a result, the Royal Mail Steam Packet Company invited the firm to attend to the Agency of their Shire Line which operated in the Far East. This occurred shortly before the first World War and necessitated a further expansion of the firm’s shipping organisation. Today, fifteen internationally known British, Canadian, and United States shipping companies entrust their agencies to this organisation.

In China, the bulk of freight emanates from domestic sources. On account of this a Chinese staff is maintained at all Jardines’ branches. These branches continuously monitor the features and trends of the Chinese markets.

With the disappearance of Japanese competition as a result of the war, and with the resurrection of China’s merchant navy, shipping conditions in the Far East changed vastly requiring an extreme degree of flexibility in the operation of foreign shipping. Jardines experience gained in the pioneering years of the last century and extending through two world wars to the uncertainties of the present day has stood them in good stead, not only in the ports of Hong Kong and Shanghai, but at major ports in China and Japan. Since World War II the firm has operated the Australia-China Line, an enterprise owned jointly with Commons Bros., Ltd., of Newcastle. This line runs from Australia to Hong Kong and Shanghai.

Jardines are also involved in Sino-foreign shipping co-operation.

Interests in wharves and warehouses

Hong Kong

On the initiative of Jardines and the late Sir Paul Chater, the Hongkong & Kowloon Wharf & Godown Company was formed in 1886. Since that date, the chairmanship of the board has been held by the managing director of Jardines.

At the property known as Kowloon Point, ten ocean-going vessels of up to thirty-two feet draught can be berthed regardless of the state of the tide. At the West Point property on Hongkong Island itself, one coastal vessel can be accommodated.

Kowloon Point provides storage space for about 750,000 tons of cargo. The transit sheds have been designed specially to provide maximum light and sorting space. The godowns are six-storeyed, of reinforced concrete, and are fully equipped with cargo lifts and cranes. A treasury, or strong room, capable of storing up to 500 measurement tons of bullion or other valuable cargo, is a part of the facilities offered.

The company also operates a launch and lighter fleet for the discharge of vessels at buoys and for general transshipment work.

Shanghai

Following an amalgamation of several local wharves in 1875, Jardine, Matheson & Co. were appointed general managers of the Shanghai & Hongkew Wharf Co., Ltd. In 1883, the Old Ningpo Wharf was added, and in 1890 the Pootung Wharf was purchased to complete the Company’s already extensive properties. For three quarters of a century, therefore, Jardines have served the great port of Shanghai.

The Company owns some 3,000 feet (910 m) of the most valuable wharf frontage on the Shanghai side of the river. On the opposite, or Pudong (Pootung), side their frontage extends to 2,550. The wharves are capable of accommodating ten large ocean-going vessels at a time.

Before the Pacific War, the Company possessed godown, or warehouse, space of 2,505,000 square feet (232,700 m2), however there was considerable destruction by the Japanese. Rehabilitation progressed rapidly, however.

Railway building in China

1898 also saw the formation by Jardines and HSBC of the British and China Corporation (‘BCC’) which was responsible for much of the development of China’s railway system.

Airways department

Jardines also operates an Airways Department, providing services as general agents, traffic handling, or booking agents.

The firm has formed in Hong Kong an Air Maintenance Company which will bring the most up-to-date technical and maintenance facilities to the many air lines operating from and through Hong Kong.

The British Overseas Airways Corporation (BOAC) appointed Jardines as their general agents for Hong Kong and China.

Insurance interests

Jardine Lloyd Thompson Group “JLT” is 30% owned by Jardine Matheson and is the vehicle for Jardines participation in this business field. Insurance was one of the first lines of business undertaken by Jardines in 19th century China.

Companies

The Jardine Engineering Corporation, Ltd.

The Jardine Engineering Corporation, Ltd., was founded in 1923 as a private limited company. Its purpose was to take over the business of importing machinery into China. Previously, this had been done by the firm’s Engineering Department. The new company was formed in order to be in a position to cater more efficiently to the evergrowing needs of the Chinese. This policy has resulted in the development of a large and vigorous corporation. Offices have been established in Shanghai, Hongkong, Tianjin, Chongqing, and Nanjing, and further branches are being created as the need for this company’s services becomes apparent. The Corporation represents many of the greatest engineering and manufacturing names in the world. A complete field of engineering and equipment requirements is covered.

Ewo Cold Storage Company

The Jardines-owned Ewo Cold Storage Company was established in 1920 on the Shanghai river front for the manufacture and export of dried eggs. Two or three years later, extensions were made to permit the processing of liquid and shell eggs, as well. Since then, each year, large quantities of these products have been prepared under the most hygienic conditions for shipment abroad, mainly to the United Kingdom.

During the past quarter century, export trade in eggs and egg products has become an increasingly important factor in China’s economy. Immediately prior to the outbreak of the Pacific War, egg trading was high in the list of leading exports. During the war, the Japanese occupation forces gravely diminished the stock of poultry. However, this handicap was quickly overcome, for poultry production in China was never confined to large centres, difficult to reconstruct; instead it is chiefly in innumerable small units scattered over vast areas.

Ewo Cotton Mills, Ltd.

Ewo Cotton Mills, Ltd., is a limited liability company (registered in Hongkong), managed by Jardine, Matheson & Co., Ltd. The firm was first in the field in the cotton industry in China, having established the Ewo Cotton Spinning and Weaving Co. in Shanghai in 1895. Subsequently two other mills were started up in Shanghai—the Yangtszepoo Cotton Mill and the Kung Yik Mill. In 1921 these three companies were amalgamated as Ewo Cotton Mills, Ltd., which concern operated 175,000 cotton spindles and 3,200 looms before the war. In addition the Company extended its activities to include the manufacture of waste cotton products, jute materials, and worsted yarns and cloths. The Company suffered considerable loss of machinery during the war, but its products, which have always enjoyed a high reputation, are back on the market again.

Ewo Press Packing Company

Under the name of Ewo Yuen Press Packing Company, the Ewo Press Packing Company was established in Shanghai in the year 1907. It was then owned jointly by Jardines and a Chinese partner. This partner decided to retire, and in 1919 Jardines became sole proprietors under the present name. The company operates a total floor space of 125,000 square feet (11,600 m2), providing a normal annual output of 40,000 to 50,000 bales. Double this quantity has been achieved in peak years. The activities of the concern cover raw cotton, cotton yarn, waste silk, wool, hides, goatskins, and other commodities for which press packing for shipment or storage is suitable. In addition to the packing facilities offered by the company, well-lighted and airy rooms are available to the public for sorting, grading, and storage of all types of cargo.

The plant is advantageously situated near the mouth of the well-known Soochow Creek. Whether the merchandise is destined for inland, the coast, or abroad, this location provides economical and ready access to the transporting vessels lying in the harbour of Shanghai.

Ewo Breweries, Limited

Although it is the youngest of Jardines’ enterprises, Ewo Breweries, Limited, is already as flourishing a concern as any controlled by the firm. It was founded in 1935, its production commenced in 1936, and Ewo Breweries became a public company under Jardines’ management in 1940. The brewery, built on the outskirts of Shanghai, passed unscathed through two Japanese wars, in 1937 and 1941–45, and during the first of them it was in the centre of hostilities; however, the staff kept to their posts, and the products from time to time found their way through the Japanese lines on to their own markets.

The brewery produces Pilsner and Munich types of beers, both being suitable to Far Eastern climatic conditions: The brewery is recognised as the finest and most up-to-date in the Far East, where the popularity of its brews is unrivalled.

Export and import departments

Tea

Tea is the most romantic of all China’s trades and always must remain inseparably linked in memory to the hey-day of the racing clippers. Now, as in the first half of the nineteenth century, Jardines are the leading shippers. Their connection with this trade dates from 1801 when the forerunners of the firm secured the first free license to exports teas to New South Wales and Van Diemen’s Land. When the monopoly held by the East India Company finally was broken, Jardines were again to the fore, this time trading under their own name. The firm despatched the first teas to London, Liverpool, and Glasgow. Trading offices are located now in Shanghai, Hongkong, Fuzhou, Taipei, and Hankou.

From picturesque old Fuzhou and the beautiful island of Taiwan, as well as from the godowns on the Shanghai Bund, ocean steamers once again are carrying valuable cargoes of Jardines’ teas. The chests of teas are labelled with Old World names such as Keemuns. Soochongs, Oolongs, Gunpowders, and Chun Meas, and are borne to the Mincing Lane and the tea-cups of Europe, Africa, and America.

Silk

The Silk Room, operating in Shanghai, is one of the oldest of the offices within Jardines’ organisation. For over a century, the firm has been shipping raw silk from Shanghai. Before the war, silk was shipped from Japan to America, France, Switzerland, England, and elsewhere. Also, for many years before the war, the firm operated its own Ewo Silk Filature.

Silk inspectors are highly specialised skilled technicians. Usually, they are of Swiss or Italian descent. The Swiss who heads this Department of Jardines today is acknowledged to be the doyen of the silk men in China.

CHINA PRODUCE: The China Produce Department for many years has exported the raw materials of China everywhere abroad. To ensure the maintenance of Jardines’ standards, large warehouses were constructed in Shanghai, Tientsin, Tsingtao, Hankow, and Hongkong, all of these cities being the trading centres for vast producing areas. The interests of the Department, accordingly, cover the products of the cold north, such as wool, furs, soya beans, oils, and oilseeds and bristles; the produce of the vast agricultural centre, which includes tung and other vegetable oils and oilseeds, egg products, bristles, and beans; and also the marketable yield of the sunny south, its tung oil, aniseed, cassia, and ginger. And these are only a few of the commodities which pass through Jardines from China to the markets of the world. Knowledge of individual processing and marketing requirements of these articles takes many years to acquire. Jardines’ vast experience in these lines extends throughout the entire period of China’s trading relations with the outside world.

IMPORTS: The main centres of Jardines’ extensive and well-known import business are Hongkong and Shanghai, but the Department is fully represented in all of the firm’s branches. In the early days, the principal interest was piece goods, but expansion in many and varied directions has developed as China more and more showed desire to share in the goods manufactured and produced by countries far from her shores.

The range of commodities handled by this Department is amazingly wide. It runs the gamut from timber to foodstuffs, from textiles to medicines, from metals to fertilizers, and from wines and spirits to the cosmetic requirements of a lady’s boudoir.

The Import Departments in recent years formed a section for the export of Chinese articles manufactured from silks and linens. This has developed into an increasing business, with an ever-broadening scope of articles of all descriptions.

The development of the colony of Hong Kong by Jardine, Matheson & Co.

At the mouth of the Pearl River, about ninety miles from Canton, there stands a small island. It is separated from the mainland by a strip of water which, at the narrowest point, is only a quarter of a mile wide. As late as 1840, the island seemed to have no potential development value except perhaps to a few visionaries. The island lies just below the Tropic of Cancer, and its climate was always thought to be hot, humid, and unhealthy. In area the island is less than thirty square miles, and it rises steeply from the water. No one lived there except a few stonecutters and fishermen whose huts were scattered along the southern shore, and it was suspected that the island was a hiding place for pirates. Its only recommendation was a natural deep-water harbour. It was this island, together with a small strip of China’s mainland that was ceded to Great Britain by the Treaty of Nanking in 1842.

Despite all obstacles of terrain and climate, in spite of opposition from many of the Canton merchants, this outpost was developed with almost incredible rapidity. Today, on the northern slopes of the island, close-packed roofs of the city blot out the natural landscape. The harbour, world-famous for its beauty, presents a scene of bustling activity, vessels from the Earth’s four corners come and go, small steamers sail to and from Canton, and ferryboats hurry back and forth from the mainland. The island has become a great port and trading centre in the Far East—Hongkong.

James Matheson had long believed in the future of Hongkong. His enthusiasm was not shared by many of his fellow merchants. Understandably, they preferred not to abandon their comfortable residences on Canton’s Praya Grande for the bleak slopes of Hongkong Island. Bad luck made matters worse for the early builders of Victoria. In quick succession, two typhoons and two fires flattened the new settlement. An epidemic of virulent malaria almost succeeded in returning the island to the oblivion from which it had risen. For years, the Canton Press in Macau never lost an opportunity to ridicule and slander the venture. Even Queen Victoria was unimpressed with her new acquisition. Once she wrote in gentle sarcasm to the King of the Belgians:”–Albert is so much amused at my having got the island of Hongkong, and we think Victoria ought to be called Princess of Hongkong as well as Princess Royal.” Nevertheless, the founders refused to be discouraged.

On 14 June 1841, the first lots were sold on Hongkong. At the instigation of James Matheson, three of these lots, comprising 57,150 square feet (5,309 m2), were purchased for the sum of Pounds 565, and Jardines set up one of the first offices to be established in the new colony. Lot No 1 is presently the site of the Mandarin Oriental Hotel (owned by Jardines) and is still referred to in the company as No.1. In the beginning, the settlement consisted of hastily constructed mat sheds and wooden buildings. Jardines built the first house of consequence. It was erected at East Point, and the firm still retains most of the original property. Among the buildings that can be seen there today is one of the old warehouses with the date 1843 engraved in the stone above the door.

Throughout the history of Hongkong, Jardines have played a large part in all the affairs of the colony. In June 1850, David Jardine was one of the first two unofficial members of the Legislative Council. Hongkong is the head office of the Company, and, on many occasions, the managing directors have been members of both the legislative and executive councils of the government. The firm has been closely connected with every phase of Hongkong’s development. Many of the essential services that are operating at present owe their inception to the firm. The Indo-China Steam Navigation Co., Ltd., has its head office in Hongkong. The chairmanship of the boards of directors of the Hongkong Land Investment Co., Ltd., the Hongkong & Kowloon Wharf & Godown Co., Ltd., the Star Ferry Co., Ltd., and the Hong Kong Tramways, Ltd., has always been held by the managing director of Jardines in Hongkong. It is worth noting that Jardines, although they control these companies, hold majority stock in none of them. The company’s power is derived from many special voting shares issued upon the formation of these companies.

There are numerous landmarks which denote the part that has been played by the seniors of the firm in the history of this thriving community. In the early days, fevers and plagues were a constant menace to the dwellers in Hongkong, and, the heat during the summer months was difficult to bear. The directors of the firm were pioneers in building residences on The Peak where living is more pleasant and healthful.

“Jardines’ Corner” is well known to the inhabitants of Hong Kong, but chief among the place names associated with the firm is a hill top known as “Jardine’s Lookout“. It was from here, in the days of the sailing ships, that a watch was kept for the first glimpse of the sails of the firm’s clippers coming from India and London. As soon as a vessel was signalled, a fast whaleboat was sent out to collect Jardines’ mails. The correspondence was rushed back to the office so that the directors could have the first possible information on the world’s markets.

The same speed, efficiency, and enterprise of those early days still persists, and are responsible for the solid foundation on which Jardines now stand. Thus, the firm’s position as the leading foreign commercial enterprise in China remains unchallenged.

Branch offices in China

(the largest office of Jardine’s), Canton, Swatow, Fuzhou, Chongqing, Qingdao, and Tianjin. The firm has correspondents in Kunming, Xiamen, Beijing, and in the Yangtze River ports of Jinjiang, Nanjing, Wuhu, Jiujiang, Yichang and Changsha. Of these branches, Hankou and Tianjin are the greatest. Today, Hankou is mostly a ruin and a reminder of hideous warfare. Rehabilitation is sure, but it will take time. Tianjin, through which vast volumes of trade flowed outwards and inwards in days gone by, survived undamaged and is returning gradually to the position of the leading port of North China. Qingdao, one of China’s few good harbours, came through the war with little or no damage, and is fast resuming its important role in the trade of China.

Jardine representations abroad

Matheson & Co., Ltd., are Jardines’ correspondents in London. “Mathesons” was founded in 1848 as a private house of merchant bankers, and in 1906 it became a limited liability company. It is controlled by Jardine, Matheson & Co., Ltd., and Keswick family. It is the leading Far Eastern house in London, enjoying an enviable reputation for enterprise and long-established reliability.

In the United States of America the correspondents are Balfour, Guthrie & Co., Ltd., New York. This is a firm of the highest standing, the centre of a network of worldwide trading and manufacturing interests.

Throughout the world, in Africa, Asia, Australia, and Europe, there are correspondents. In Calcutta, the sister firm Jardine, Henderson, Ltd. (which for many years was styled Jardine, Skinner & Co.), still maintains the closest links.

These links reach back to the early days when Jardine and Matheson and the other pioneers were trading between Canton, Hong Kong, and India.

Today

The Jardine Matheson Group is still very much active in Hong Kong, being one of the largest conglomerates in Hong Kong and its largest private employer, second only to the government. Several landmarks in present day Hong Kong are named after the firm and the founders Jardine and Matheson like Jardine’s Bazaar, Jardine’s Crescent, Jardine’s Bridge, Jardine’s Lookout, Yee Wo Street, Matheson Street, Jardine House and the Noon-day Gun. Jardines is primarily active in Asia.[15]

It went through several major internal changes throughout the 19th and 20th century, in 1947 a Trust was formed by members of the family to permit the management of the company to participate in the financial growth of the company. Jardine, Matheson and Co. offered its shares to the public in 1961 under the tenure of taipan Sir Hugh Barton and was oversubscribed 56 times. The Keswick family, in consortium with several London-based banks and financial institutions, bought out the controlling shares of the Buchanan-Jardine family in 1959 but subsequently sold most of the shares during the 1961 public offering, retaining only about 10% of the company.

The company redomiciled to Bermuda in 1984 under the tenure of taipan Simon Keswick so as to maintain its governance under a familiar British-based legal system. In the late 1980s, the corporate structure of the Jardine, Matheson Group, including all its allied companies, were restructured.

In late 1987, there was an attempted takeover of Hongkong Land, a real-estate company considered the jewel in the Jardines crown as its properties included some of the most prestigious office and commercial space in Hong Kong. The hostile bid which was ultimately unsuccessful had been led by a group of Hong Kong tycoons, including Li Ka-shing, working together with the mainland’s state-owned China International Trust & Investment Corp. As a result, Jardine Matheson asked Hong Kong’s Securities and Futures Commission (SFC) for an exemption from the takeover and mergers code in 1994, in order to give the company greater security if Chinese parties attempted a hostile takeover of its listed companies after Hong Kong’s 1997 handover from British to Chinese sovereignty. However, the SFC refused and so Jardine firm delisted from the Hong Kong Stock Exchange (Hang Seng Index) in 1994 under the tenure of Alasdair Morrison and placed its primary listing in London.[16] Officials in the People’s Republic of China (PRC) regarded the delisting as a rebuke to the future of Hong Kong and the government of PRC. This caused trouble when Jardine Matheson attempted to participate in the Container Terminal 9.

The present Chairmain of Jardine Matheson Holdings Ltd. is Henry Keswick, the company’s tai-pan from 1970 (aged 31) to 1975 and was the 6th Keswick to be tai-pan of the company. His brother, Simon, was the company’s tai-pan from 1983 to 1988 and is the 7th Keswick to be tai-pan. Both brothers are the 4th generation of Keswicks in the company. The 5th generation of Keswicks are also active within the organisation, Ben Keswick, son of Simon, is in charge of Jardine, Cycle & Carriage in Singapore and Adam Keswick, son of Chips, is in charge of Jardine Pacific and Jardine Motors Group in Hong Kong. The organizational structure of Jardines has changed almost totally, but the members of the family of Dr. William Jardine still have significant influence in the firm.

Miscellaneous

  • Jardines‘ history was the inspiration for a series of novels written by James Clavell, including Tai-Pan, Gai-Jin, and Noble House. The Noble House TV miniseries actually used Jardine as the headquarters of Struan’s & Co, the fictional company depicted in Clavell’s novels.
  • Jardines installed the first elevator in China in Tianjin.
  • Mail sent to Jardines requires no address—just the name is enough to ensure its delivery.
  • Jardines‘ official website gives no mention of their opium trading exploits (on which the wealth of the company was built).
  • Jardines‘ have a strict policy of not buying/investing in new companies as it is said to be against William Jardine’s wishes.

References

1. Businessweek: Jardine Matheson Holdings

2. Reuters: Jardine Matheson Holdings

3. “Jardine Matheson Group Outline 2010”. http://www.jardines.com/profile/pdf/outline.pdf. Retrieved 13 October 2010.

4. Jardine Matheson Archive

5. Corporate Information: Jardine Matheson Holdings

6. Transnationale: Jardine Matheson Holdings

7. “Jardines Company Profile”. http://www.jardines.com/profile/intro.html. Retrieved 13 October 2010.

8. “Four of the fastest (ships) were built in American yards for Russell & Co., the Yankee trading house, that would use their speed to challenge the great British opium merchants, Jardine Matheson & Co.” McCoy, Prof. Alfred W. (2003). “THE POLITICS OF HEROIN — CIA COMPLICITY IN THE GLOBAL DRUG TRADE”, 2nd Rev. Ed., Lawrence Hill Books. ISBN 978-1-55652-483-7, p. 87.

9. Jardines: History

10. University of Cambridge

11. Records of Social and Economic History New Series “China Trade and Empire: Jardine, Matheson & Co. and the Origins of British Rule in Hong Kong, 1827-1843” Alain le Pichon

12. Ingrams, Harold, Hong Kong (Her Majesty’s Stationery Office, London: 1952), p. 231.

13. Funding Universe: Jardine Matheson History

14. Hunt, Janin (28 October 1999). The India-China opium trade in the nineteenth century. McFarland & Company. ISBN 9780786407156.

15. Datamonitor, Jardine Matheson Holdings Limited – SWOT Analysis, January 2009

16. Remembrance of (bad) things past Wall Street Journal, 22 May 2009

Retrieved from “http://en.wikipedia.org/wiki/Jardine_Matheson_Holdings

Categories: Companies listed on the Singapore Exchange | Companies listed on the London Stock Exchange | Jardine Matheson Group | History of Hong Kong | British rule in Hong Kong | Companies established in 1832 | Trading companies | Conglomerate companies | Companies formerly listed on the Hong Kong Stock Exchange | Former Hang Seng Index Constituent Stocks | Companies of Bermuda | Mandarin Oriental Hotel Group

William Jardine (1784–1843)

William Jardine (24 February 1784 – 27 February 1843) was a Scottish physician and merchant. He co-founded the Hong Kong conglomerate Jardine, Matheson and Company. From 1841 to 1843, he was Member of Parliament for Ashburton as a Whig.

Educated in medicine at the University of Edinburgh, Jardine obtained a diploma from the Royal College of Surgeons of Edinburgh in 1802. In the same year, he became a surgeon’s mate aboard the Brunswick of the East India Company, bound for India. Captured by the French and shipwrecked in 1805, he was repatriated and returned to the East India Company’s service as ship’s surgeon. In May 1817, he left medicine for commerce.[1]

Jardine was a resident in China from 1820 to 1839. His early success in Canton as a commercial agent for opium merchants in India led to his admission in 1825 as a partner of Magniac & Co., and by 1826 he was controlling that firm’s Canton operations. James Matheson joined him shortly after, and Magniac & Co. was reconstituted as Jardine, Matheson & Co in 1832. After Imperial Commissioner Lin Zexu confiscated 20,000 cases of British-owned opium in 1839, Jardine arrived in London in September, and pressed Foreign Secretary Lord Palmerston for a forceful response.[1]

Early life

Jardine was born in 1784, on a small farm near Lochmaben, Dumfriesshire, Scotland, one of five children. His father, Andrew Jardine, died when he was nine, leading the family to some economic difficulties. Though struggling to make ends meet, Jardine’s older brother David provided him with money to attend school, also as a way help set up one of the family. Jardine started to acquire credentials at the very young age of sixteen, in 1800, when he entered the University of Edinburgh Medical School. He took classes in anatomy, medical practice, and obstetrics among others. While his schooling was in progress, Jardine was apprenticed to a surgeon who would provide housing, food, and the essential acquaintance with a hospital practice, with the money his older brother, David, provided for. He graduated from the Edinburgh Medical School on 2 March 1802 , and was presented a full diploma from the Royal College of Surgeons of Edinburgh and chose to join the service of the British East India Company in 1802, at the age of 18, in the East India Merchantman “Brunswick”. On 15 March, after satisfying the requirements, William Jardine, was paid two months advanced wages as a surgeon’s mate in the East India Company’s Maritime Marine Service, and was headed to sea. A good advantage with being in service with the East India Company was that employees were allowed to trade in goods for their own profit. Each employee was allowed cargo space equivalent to two chests or about a hundred pounds of cargo. Jardine engaged in this trade with exceptional dexterity, even cleverly leasing the apportioned cargo space of other crew members who did not have interest in using the space, and was able to save quite an amount of money.

The young William’s first voyage was rather uneventful other than his first encounter with the economics of an Indiaman’s journey to Asia. Jardine also met two men on his first voyage that would come to play a role in his future as a merchant. The first was Thomas Weeding, a fellow doctor, and surgeon of the Glatton, one of the other ships in the convoy. The second was a 26-year-old Charles Magniac who had just arrived in Guangzhou at the beginning of 1801.

On leaving the company in 1817, Jardine became an independent trader and entered into partnership with Thomas Weeding and Framjee Cowasjee. The firm did very well in the domain of private traders and established Jardine’s reputation as an able, steady and experienced private trader. It is interesting to note that one of Jardine’s agents in Bombay, who would become his lifelong friend, was Jamsetjee Jejeebhoy. Both men were on the Brunswick when a French ship forcibly boarded her. Jejeebhoy was the first Parsee merchant to be created a baronet by Queen Victoria and he would become fabulously wealthy in the years to come.

In 1824, a very important opportunity arose for Jardine. The house of Magniac, the largest and most prominent of all China trading houses fell into disarray. Hollingworth Magniac, who succeeded Charles Magniac after the latter’s death in Paris, was in search for competent partners to join his firm as he was intent on leaving Asia. He was also forced to have his brother, Daniel, resign from the firm after marrying his Chinese mistress. In later years, Jardine had helped Daniel by sending his young son Daniel Francis, his child by his Chinese wife, to Scotland for school. Hollingworth, after an extensive search for a senior partner, settled with Jardine, whose business reputation was already well known throughout Asia. Both Jardine and Magniac also invited James Matheson to join the firm. Magniac returned to England in late 1820s with the firm in the hands of two of the most talented traders in Asia. Contrary to the practice at the time of retiring partners removing their capital from the firm, Hollingworth left his capital with the firm in trust to Jardine and Matheson. The firm carried the name Magniac and Co. until 1832 as the name Magniac was still formidable throughout China and India. Hollingworth wrote about William Jardine:

“You will find Jardine a most conscientious, honourable, and kind-hearted fellow, extremely liberal and an excellent man of business in this market, where his knowledge and experience in the opium trade and in most articles of export is highly valuable. He requires to be known and to be properly appreciated.”

Jardine, Matheson and Co.

James Matheson joined Magniac & Co. from the firm Yrissari & Co where he was partner. After Francis Xavier de Yrissari’s death, Matheson wound up the firm’s affairs and closed shop. Yrissari, leaving no heir, had willed all his shares in the firm to Matheson. This created the perfect opportunity for Matheson to join in commerce with Jardine. Matheson proved a perfect partner for Jardine. James Matheson and his nephew, Alexander Matheson, joined the firm Magniac and Co. in 1827, but their association was officially advertised on 1 January 1828. Jardine was known as the planner, the tough negotiator and strategist of the firm and Matheson was known as the organization man, who handled the firm’s correspondence, and other complex articles including legal affairs. Matheson was known to be behind many of the company’s innovative practices. And both men were a study in contrasts, Jardine being tall, lean and trim while Matheson was short and slightly portly. Matheson had the advantage of coming from a family with social and economic means, while Jardine came from a much more humble background. Jardine was tough, serious, detail-oriented and reserved while Matheson was creative, outspoken and jovial. Jardine was known to work long hours and was extremely business-minded, while Matheson enjoyed the arts and was very eloquent. William C. Hunter wrote about Jardine, “He was a gentleman of great strength of character and of unbounded generosity.” Hunter’s description of Matheson was, “He was a gentleman of great suavity of manner and the impersonation of benevolence.” But there were similarities in both men. Jardine and Matheson were second sons, possibly explaining their drive and character. Both men were hardworking, driven and single-minded in their pursuit of wealth.

And according to Richard Hughes, “…both men scrupulous in their personal and financial dealings.” Both men were well respected within the Foreign and local community both in India and in South China, having quietly helped so many people in financial distress. Though their charity was never belabored, it was well accepted that they were done with sincerity. Jardine’s tough exterior and candid letters to agents masked his compassionate nature, never exacting punishment when due. An elderly and longtime Portuguese employee who worked as a bookkeeper and clerk for the firm, in his latter years with the firm, had frequently been committing serious errors in the firm’s books and his mental capacity was deteriorating. Rather than dismiss the elderly employee, Jardine had allowed the man to retire in honor and in his usual generous character, set up a considerable retirement fund for the man and his family. Both men were also known to have continuously sent money home to less fortunate family members in Scotland and to have helped nephews by providing them work within the firm. Upon the death of his older brother, David, Jardine set up a fund for his brother’s widow and arranged schooling for his four sons. In a letter to Hollingworth Magniac, Jardine wrote,

“My only Brother has a very large family, three or four of them Boys, and as he has not the means of providing for them all, in the way I wish to see them provided for, I am desirous of having one of them here, to commence in the office, and work his way, by industry and application to business.”

All four of David’s sons moved on to work with Jardine, Matheson & Co. in Hong Kong and South China, starting as clerks and eventually becoming partners or managing partners or taipan in the firm.

In another example of Jardine’s compassion, in his deathbed years later, he wrote to Jamsetjee Jejeebhoy,

“I have been requested by one of my oldest and best friends in the Company’s service to introduce to your [good] and kind offices [captain] John Campbell of the Ship Scotia which vessel he has commanded since she was launched, but owing to change of owners and other [circumstances] he is now out of employ with a numerous family and very slender means to provide for them. He is, however, an active, able, and trustworthy Commander, in good health, well-known to your friends in Bombay, to the Lyalls in Calcutta, and to our friends in China. Under these circumstances, destitute at home though willing to work, he intends embarking by the October mail for Bombay, and I beg most earnestly to bring him under your notice and bespeak for him as early employment as though you and other kind friends can possibly be procured.”

But it was their reputation for business probity, innovative management and strict fiscal policies that sustained their partnership’s success in a period where businesses operated in a highly volatile and uncertain environment where the line between success and bankruptcy was extremely thin. Jardine was known for his legendary imperiousness and pride. He was nicknamed by the locals “The Iron-headed Old Rat” after being hit on the head by a club in Guangzhou. Jardine, after being hit, just shrugged off the injury with dour resilience. He had only one chair in his office in the “Creek Hong” in Canton, and that was his own. Visitors were never allowed to sit, to impress upon them that Jardine was a very busy man. Jardine was also known as a crisis manager. In 1822, during his visit to the firm’s Guangzhou office, he found the local office in management crisis, with employees in near mutiny against the firm’s officers. Jardine then proceeded to take temporary control and succeeded in putting the office in order in just a matter of days. Also a shrewd judge of character, Jardine was even able to persuade the Rev. Charles Gutzlaff, a Prussian missionary, to interpret for their ship captains during coastal smuggling of opium, using the idea that the reverend would best gather more converts during these smuggling operations. Matheson claimed to own the only piano in Asia and was also an accomplished player. He was also responsible for removing one of the firm’s ship captains for refusing to offload opium chests on the Sabbath, Matheson observed, “We have every respect for persons entertaining strict religious principles, but we fear that very godly people are not suited for the drug trade.”

In 1 July 1832, Jardine, Matheson and Company, a partnership, between William Jardine, James Matheson as senior partners, and Hollingworth Magniac, Alexander Matheson, Andrew Johnstone, Jardine’s nephew, Hugh Matheson, Matheson’s nephew, John Abel Smith, and Henry Wright, as the first partners, was formed in China, taking the Chinese name ‘Ewo’ or pronounced as “Yee-Wo”, meaning ‘Happy Harmony’, (though according to some that the name ‘Yee-wo’ was actually the Hong name of Jardines’ compradore during the 1830s), trading opium, tea and other goods. In 1833, Parliament ended the monopoly of the British East India Company on trade between Britain and China. Jardine, Matheson and Company then took this opportunity to fill the vacuum left by the East India Company. With its first voyage carrying tea, the Jardine clipper ship “Sarah” left for England. Jardines was then transformed from a major commercial agent of the East India Company to become the largest British trading hong , or firm, in Asia. William Jardine was now being referred to by the other traders as “Tai-pan”, a Chinese colloquial title meaning ‘Great Manager’. In a thunderous tribute to Jardine, Matheson wrote, “I am sure none can be more zealous in your service.”

Departure from China and breakdown of relations

In 1841, Jardines had 19 intercontinental clipper ships, compared to close rival Dent and Company with 13. Jardines also had hundreds of small ships, lorchas and small smuggling crafts for coastal and upriver smuggling. The trading concerns of Jardine’s included smuggling opium into China from India, trading spices and sugar from the Philippines, importing Chinese tea and silk into England, handling cargo papers and cargo insurance, renting of dockyard facilities and warehouse space, trade financing and other numerous lines of business and trade. During the mid-1830s, trade with China was becoming more difficult due to the Qing government’s increasing restrictions on the narcotic trade in part to control the worsening outflow of silver. This trade imbalance stemmed from the fact that Western traders were importing more opium into China than they were exporting teas and silk.

Nevertheless, Dr. William Jardine wanted the opium trade to expand in China. In 1834, working with the Chief Superintendent of Trade representing the British Empire, William, Lord Napier, tried unsuccessfully to negotiate with the Chinese officials in Canton. The Chinese Viceroy ordered the Canton offices where Napier was staying to be blockaded and the inhabitants including Napier to be held hostages. Lord Napier, a broken and humiliated man, was allowed to return to Macao by land and not by ship as requested. Suffering a fever, he died a few days later.

Jardine, who had good relations with Lord Napier, a Scottish peer, and his family, then took the initiative to use the debacle as an opportunity to convince the British government to use force to further open trade. In early 1835 he ordered James Matheson to leave for Britain to persuade the Government to take up strong action to further open up trade in China. Matheson accompanied Napier’s widow to England using an eye-infection as an excuse to return home. Matheson in England then extensively travelled to meet with several parties, both for government and for trade, to gather support for a war with China. Though in some ways unsuccessful in his forays in England, he was brushed aside by the “Iron Duke” (Duke of Wellington), the then British Foreign Secretary, and reported bitterly to Jardine of being insulted by an arrogant and stupid man. But his activities and widespread lobbying in several forums including Parliament bore the seeds that would eventually lead to war in a few years. Matheson returned to China in 1836 to prepare to take over the firm as Jardine was preparing to fulfill his temporarily delayed retirement. Jardine left Canton on January 26, 1839 for Britain as retirement but in actuality to try to continue Matheson’s work. The respect shown by other foreign opium traders to Jardine before his departure can be best illustrated in the following passage from a book by William C. Hunter.

“A few days before Mr. Jardine’s departure from Canton, the entire foreign community entertained him at a dinner in the dining room of the East India Company’s Factory. About eighty persons of all nationalities, including India, were present, and they did not separate until several hours after midnight. It was an event frequently referred to afterwards amongst the residents, and to this day there are a few of us who still speak of it.”

The farewell dinner to Jardine was held on January 22, 1839 with several members of the Foreign settlement in Canton mostly traders. Among the guests were the Forbes brothers of the prominent Forbes family and Warren Delano, a senior partner in the trading firm Russel & Co. and maternal grandfather of US President Franklin Delano Roosevelt.

The Qing government was pleased to hear of Jardine’s departure, then proceeded to stop the opium trade. Lin Zexu, appointed specifically to suppress the drug trade in Guangzhou, stated, “The Iron-headed Old Rat, the sly and cunning ring-leader of the opium smugglers has left for The Land of Mist, of fear from the Middle Kingdom’s wrath.” He then ordered the surrender of all opium and the destruction of more than 20,000 cases of opium in Guangzhou. He also ordered the arrest of opium trader Lancelot Dent, the head of Dent and Company (a rival company to Jardine Matheson) since the Chinese were more familiar with Jardine as the trading head and were quite unfamiliar with Matheson. Lin also wrote to Queen Victoria, to submit in obeisance in the presence of the Chinese Emperor.

War and the Chinese surrender

Once in London, Jardine’s first order of business was to meet with Lord Palmerston. He carried with him a letter of introduction written by Superintendent Elliot that relayed a few of his credentials to Palmerston,

“This gentleman has for several years stood at the head of our commercial community and he carries with him the esteem and kind wishes of the whole foreign society, honourably acquired by a long career of private charity and public spirit.”

In 1839, Jardine successfully persuaded the British Foreign Minister, Lord Palmerston, to wage war on China, giving a full detailed plan for war, detailed strategic maps, battle strategies, the indemnifications and political demands from China and even the number of troops and warships needed. Aided by Matheson’s nephew, Alexander Matheson (1805–1881) and MP John Abel Smith, Jardine met several times with Palmerston to argue the necessity for a war plan. This plan was known as the Jardine Paper. In the ‘Jardine Paper’, Jardine emphasized several points to Palmerston in several meetings and they are as follows: There was to be complete compensation for the 20,000 chests of opium that Lin had confiscated, the conclusion of a viable commercial treaty that would prevent any further hostilities, and the opening of further ports of trade such as Fuzhou, Ningbo, Shanghai, and Keeson-chow. It was also suggested by Jardine that should the need arise to occupy an island or harbor in the vicinity of Guangzhou. Hong Kong would be perfect because it provided an extensive and protected anchorage. As early as the mid-1830s, the island of Hong Kong had already been used for transhipment points by Jardine Matheson and other firms’ ships. Jardine clearly stated what he thought would be a sufficient naval and military force to complete the objectives he had outlined. He also provided maps and charts of the area. In a well calculated recommendation letter to Parliament, creating a precedent now infamously known as ‘Gunboat Diplomacy’, Jardine states:

“No formal Purchase, — no tedious negotiations,…A firman insistently issued to Sir F. Maitland authorizing him to take & retain possession is all that is necessary, & the Squadron under his Command is quite competent to do both,…until an adequate naval and military force…could be sent out from the mother Country. When All this is accomplished, — but not till then, a negotiation may be commenced in some such Terms as the following – You take my opium – I take your Islands in return – we are therefore Quits, –& thenceforth if you please let us live in friendly Communion and good fellowship. You cannot protect your Seaboard against Pirates & Buccaneers. I can – So let us understand Each other, & study to promote our mutual Interests.”

This letter is in itself a reflection of the very nature of Jardine as a businessman and itself an explanation why the man was considered as the most powerful trader in the South China coast.

Lord Palmerston, the Foreign Secretary who succeeded Wellington, decided mainly on the “suggestions” of Jardine to wage war on China. In mid-1840, a large fleet of war ships appeared on the China coast and with the first cannon fire aimed at a British ship, the Royal Saxon, the British started the first of the Opium Wars. British warships destroyed numerous shore batteries and enemy warships, laid waste to several coastal forts, indiscriminately bombarding town after town with heavy cannon fire, even pushing up north to threaten the Imperial Palace in Beijing itself. The Imperial Government, forced to surrender, gave in to the demands of the British. Richard Hughes, in Hongkong: A Borrowed Place, A Borrowed Time, stated “William Jardine would have made his mark as admirably as a soldier as he did as a Tai-pan.” Lord Palmerston wrote,

“To the assistance and information which you and Mr. Jardine so handsomely afforded us it was mainly owing that we were able to give our affairs naval, military and diplomatic, in China those detailed instructions which have led to these satisfactory results.”

In 1843, the Treaty of Nanjing was signed by official representatives of both Britain and China. It allowed the opening of major five major Chinese ports, granted extraterritoriality to foreigners and their activities in China, indemnification for the opium destroyed and completed the formal acquisition of the island of Hong Kong, which had been officially taken over as a trading and military base since 26 January 1841, though it had already been used years earlier as a transhipment point. Trade with China, especially in the illegal opium, grew, and so did the firm of Jardine, Matheson and Co, which was already known as the Princely Hong for being the largest British trading firm in East Asia.

In 1841, Jardine was elected to the House of Commons a Whig Member of Parliament (MP) representing Ashburton in Devon. He was also a partner along with longtime friend and business partner Hollingworth Magniac in the merchant banking firm of Magniac, Smith & Co., later renamed Magniac, Jardine & Co., the forerunner of the firm Matheson and Co. Despite his nominal retirement, Jardine was still very much active in business and politics and built a townhouse in 6 Upper Belgrave Street, then a new upscale residential district in London near Buckingham Palace. He had also bought a country estate, Lanrick Castle, in Perthshire, Scotland. He had enjoyed the fruits of his long years of labor in China as a wealthy gentleman and MP in England and in Scotland.

Death and legacy

In late 1842, Jardine’s health had rapidly deteriorated possibly from pulmonary oedima. In the latter part of the year, Jardine was already bedridden and in great pain. He was assisted by his nephew, Andrew Johnstone and later on by James Matheson in his correspondence. Despite his illness, Jardine was still very active in keeping an eye on business, politics and current affairs. Despite his poor health, he still welcomed a steady stream of visitors from family members, business partners, political associates and his constituents. A constituent, James Stewart, once commented to a friend who wrote this letter, “…he (Stewart) had come mainly to see one Jardine, an enormous Laird from Applegarth Parish and China, and a very good man; who is understood to be dangerously ill at present.” It is interesting to note that Jardine had helped James Stewart’s son William by giving him a place in the firm in Canton as a clerk in the 1830s and eventually became a partner in 1842.

Jardine’s strength and character were brought to light with descriptions from both John Abel Smith and James Matheson. John Abel Smith wrote, “…his bodily strength and physical powers are much reduced…His resignation and fortitude are most extraordinary and really almost heroic.” While Matheson wrote, “…his mind continue clear and composed to the last.”

The taipan, Dr. William Jardine died on 27 February 1843, just three days after his 59th birthday, one of the richest and most powerful men in Britain and a respected Member of Parliament. Jardine’s funeral was attended by a very large gathering of family, friends, government and business personalities, many of whom Jardine had helped in his lifetime.

Jardine, a bachelor, willed his estate to his siblings and his nephews. An older nephew, Andrew Johnstone, administered Jardine’s issue. His other nephews David, Joseph, Robert and Andrew Jardine, all sons of Jardine’s older brother David, continued to assist James Matheson in running Jardines. Matheson retired as taipan in 1842 and handed over control of the firm to his nephew Sir Alexander Matheson, who was also known as of the same capacity and competence as the elder Jardine and Matheson. David Jardine, another nephew of Jardine, became taipan after Sir Alexander Matheson. David in turn would hand over to his brother Sir Robert control of the firm. Joseph succeeded Robert as taipan. Succeeding Joseph was Alexander Percival, a relative of Sir James Matheson’s wife. Succeeding Alexander Percival is James Whittall who is related neither to the Jardine or Matheson families. No other member of the Matheson family became active in the firm after Percival, though another nephew, Donald Matheson, served as director. Sir Robert Jardine (1825–1905) is the ancestor of the Buchanan-Jardine branch of the family. A descendant of Sir Robert, Sir John Buchanan-Jardine, sold his family’s 51% holding in Jardine, Matheson and Co. for $84 million at the then prevailing exchange rate in 1959. A great-nephew of Jardine who would be taipan from 1874 to 1886, William Keswick (1834–1912), is the ancestor of the Keswick branch (pronounced Ke-zick)) of the family. Keswick is a grandson of Jardine’s older sister, Jean Johnstone. Keswick was responsible for opening the Japan office of the firm in 1859 and also expanding the Shanghai office. James Matheson returned to England to fill up the Parliament seat left vacant by Jardine and to head up the firm Matheson & Co., previously known as Magniac, Jardine & Co., in London, a merchant bank and Jardines’ agent in England. In 1912, Jardine, Matheson & Co. and the Keswicks would eventually buy out the shares of the Matheson family in the firm although the name is still retained. The company was managed by several family members of William Jardine and their descendants throughout the decades, including the Keswicks, Buchanan-Jardines, Landales, Bell-Irvings, Patersons, Newbiggings and Weatheralls.

An arrangement was made that the management setup of the firm was that a senior partner or proprietor was based in London who had power to appoint senior managers in the firm but had little operational control while a managing director or ‘Tai-pan’ was stationed in the Far East, either in Shanghai or Hong Kong, who dealt with everyday affairs of the firm. This arrangement had been in practice since the early years of the firm up to the present.

Notable Jardines Managing Directors or Tai-pans included Sir Alexander Matheson, David Jardine, Robert Jardine, William Keswick, James Johnstone Keswick, Ben Beith, David Landale, Sir John Buchanan-Jardine, Sir William Johnstone “Tony” Keswick, Sir Hugh Barton, Sir Michael Herries, Sir John Keswick, Sir Henry Keswick, Simon Keswick and Alasdair Morrison. There was a point in time in the early 20th century that the firm had two ‘Tai-pans’ at the same time, one in Hong Kong and one in Shanghai, to effectively manage the firm’s extensive affairs in both locations. Both tai-pans were responsible only to the senior partner or proprietor in London who was normally a retired former tai-pan and an elder member of the Jardine family.

Today, the Jardine Matheson Group is still very much active in Hong Kong, being one of the largest conglomerates in Hong Kong and its largest employer, second only to the government. Several landmarks in present day Hong Kong are named after the firm and the founders Jardine and Matheson like Jardine’s Bazaar, Jardine’s Crescent, Jardine’s Bridge, Jardine’s Lookout, Yee Wo Street, Matheson Street, Jardine House and the Noon Day Gun. Jardines is also active in China, North America, Europe, Australia, the Middle East and parts of Africa. It went through several major internal changes throughout the 19th and 20th century. In 1947, a secret Trust was formed by members of the family to retain effective control over the company. Jardine, Matheson and Co. offered its shares to the public in 1961 under the tenure of Sir Hugh Barton and was oversubscribed 56 times. The Keswick family, in consortium with several London-based banks and financial institutions, bought out the controlling shares of the Buchanan-Jardine family in 1959, but subsequently sold most of the shares during the 1961 public offering, retaining only about 10% of the company. The company had its head office redomiciled to Bermuda in 1984 under the tenure of Simon Keswick to maintain control after nearly being taken over by Chinese tycoon Li Ka-shing of Cheung Kong after a hostile raid in 1980. Li, who bought nearly 20% of the company at that time the largest shareholding in the company, agreed to sell his shares to Hongkong Land, a sister company of Jardines, at a premium. Another reason for the move was fear of the Chinese take-over of Hong Kong and the threat of Chinese retaliation for Jardines drug smuggling past. Subsequent events led to the cross-shareholding structure between Jardine, Matheson & Co. and Hongkong Land which was first instigated in 1980 by then taipan David Newbigging. In 1988, instigated by Brian Powers, the first American taipan of Jardines, the entire corporate structure of Jardine, Matheson & Co., including all its allied companies, were restructured so that a holding company based in London and controlled by the Keswick family would have overall policy and strategic control of all Jardine Matheson Group companies. The firm delisted from the Hong Kong Stock exchange (Hang Seng Index) in 1994 under the tenure of Alasdair Morrison and placed its primary listing in London and its secondary listing in Singapore. The present Chairman of Jardine Matheson Holdings Ltd. is Sir Henry Keswick, who is based in the UK, was the company’s tai-pan from 1970 (aged 31) to 1975 and was the 6th Keswick to be tai-pan of the company. His brother, Simon, was the company’s taipan from 1983 to 1988 and is the 7th Keswick to be tai-pan. Both brothers are the 4th generation of Keswicks in the company. The firm’s present managing director or tai-pan is Anthony Nightingale who is based in Hong Kong. The organizational structure of Jardines has changed almost totally, but the members of the family of Dr. William Jardine still control the firm through a complex cross-shareholding structure, several allied shareholders and a secretive 1947 Trust.

Notes

1. a b Grace, Richard J.. “Jardine, William (1784–1843)”. Oxford Dictionary of National Biography (2004 ed.). Oxford University Press. doi:10.1093/ref:odnb/37595. Accessed 29 April 2010.

References

  • William Jardine and other Jardine tai-pans are fictionally portrayed in author James Clavell‘s popular fiction novels Tai-Pan (1966), Gai-Jin (1993), Noble House (1981) and Whirlwind (1987).
  • China Trade and Empire: Jardine, Matheson & Co. and the Origins of British Rule in Hong Kong 1827-1843 by Alain Le Pichon
  • Jardine Matheson Archives Cambridge Library
  • Jardine Matheson: Traders of the Far East by Sir Robert Blake
  • The Thistle and the Jade by Maggie Keswick

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