cotland's People
Tue 6 Sep 2005
Portrait of James Matheson, 1796-1878.
Picture: Jardine Matheson Group
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The Opium Wars: how Scottish traders fed the habit
DIANE MACLEAN
THE BEGINNING of the 19th century was a good time if you were ambitious,
male and British. There was money to be made in the Empire for those willing
to travel in search of opportunity. Two young Scots, William Jardine and
James Matheson set up a company that became hugely successful then and is
still flourishing today. They also stand accused of starting the Opium Wars.
By the mid 18th century the powerful British-owned East India Company held
the monopoly on all trade in the eastern empire. They had India sewn up, but
China was still a closed door.
Chinese wares, like silk and tea were enormously attractive to Britain, but
imperial China had little need for British manufactured imports like
woollens. They did not welcome foreigners and saw no need to trade with the
West. As a consequence only a few warehouses in Canton were given over to
British traders. It was there, in 1832, that the two Scots entrepreneurs set
up their trading company Jardine, Matheson Co.
"Sir James Matheson was a drug dealer on a massive scale."
- Professor Tom Devine Director of the Centre for Irish and Scottish
Studies, University of Aberdeen
Born in Dumfriesshire in 1784, Jardine left Scotland after completing his
medical degree at the University of Edinburgh to work onboard ship as a
surgeon's mate. Realising that there was more money to be made in trade he
began importing and exporting goods from India to Britain.
Matheson was born in Sutherland and started out as an employee of the East
India Company. When he and Jardine met they both wanted to escape the
stronghold of the company. The place to do this was in China.
A great proponent of Adam Smith, Matheson saw in China the obvious necessity
for free trade.
"Did not the laws of nature," he asked, "oblige all people to mingle freely
with each other?" His conclusion was obvious. China must open and he
believed Britain would do it.
So began a process which historian and broadcaster Saul David considers to
be one of the most unforgivable acts of empire, saying:
"It was one of the blackest marks in the Imperial story, capitalism and
mercantilism at its worst."
The enormous problem facing traders in China was the inequality of trading
options. This imbalance was soon to be answered.
Opium was banned in China by an Imperial Court worried by its pernicious
influence. For British traders, opium was the only commodity that they could
ship from India and trade. The East India Company was the first to begin
smuggling or as they saw it "importing" opium into China, and as their
monopoly began to loosen, Jardine Matheson quickly saw the potential for
enormous profits.
A painting showing Causeway Bay, Hong Kong around the time when British
traders made it their base.
Picture: Jardine Matheson Group
As opium was prohibited in China it had to be sold indirectly to traders in
Canton Bay. In the early 1830s some 20,000 chests of Opium were coming into
China and by the end of the decade this rose to almost 40,000 - most handled
by Jardine Matheson. As Jardine said: "Opium is the safest and most
gentlemanlike speculation I am aware of."
To facilitate this lucrative trade the company built racing ships called
clippers, which could undertake the journey from India to China in record
time. Chinese smugglers were quick to patronise these floating warehouses.
Few traders allowed themselves the luxury of sensitivity in their actions.
However, Matheson's nephew Donald eventually became concerned about the
physical and social effect of opium and resigned. Matheson himself
maintained that he had "never seen a native in the least bestialised by
opium smoking." To the Chinese the devastating effects of opium were
obvious. Some sources conclude that by the late 1830s 90 per cent of the
coastal population were addicts.
China decided to act and in 1839 it dispatched the high mandarin Lin
Tse-Shin to Canton. He placed the traders under house arrest and demanded
the surrender of all opium chests. Jardine Matheson handed over 7,000
chests. In total Lin Tse-Shin destroyed nearly £2 million worth of opium.
The British traders were expelled from Canton, but unwilling to give up a
trading base, moved south to Hong Kong and continued trading.
Fast Fact
Benjamin Disraeli's 1937 novel Sybil contains a barely disguised reference
to Matheson: "
a dreadful man, richer than Croesus, one McDrug, fresh from
Canton with a million of Opium in each pocket, denouncing competition and
bellowing free trade."
Jardine was travelling to Britain when he heard of the Chinese action. He
immediately hurried to London where he was granted an audience with Lord
Henry Palmerston, then foreign secretary. Jardine lobbied hard for British
action and provided knowledge and maps to help plan an armed response.
Britain, prompted by the influential traders, went to war against China in
1839. Since then the question has been asked. Did Palmerston begin the Opium
Wars at the behest of Jardine Matheson?
"If I had to say who holds the chief responsibility for the wars," concludes
David, "then I'd have to say that the traders were to blame. And largest and
most powerful amongst the traders was Jardine Matheson."
The British quickly overwhelmed the Chinese. In the face of massive British
aggression and substantial loss of lives they were forced in 1841 to sign
the Treaty of Nanking, which confirmed British possession of Hong Kong and
opened up large swathes of China to trade.
Jardine Matheson had won. China had been forced to accept free trade and the
opium continued to be sold.
This sketch shows the construction of James Matheson's Hong Kong mansion. It
was a luxurious home, reflecting his wealth.
Picture: Jardine Matheson Group
Shortly afterward both Jardine and Matheson retired. By then the company
that had started with one ship had grown exponentially. They had moved on to
banking, ship leasing, insurance, docks, cotton mills and mines.
Jardine returned to England, where in 1841, he successfully entered
parliament as a Whig MP for Ashburton. When he died one year later Matheson
succeeded his erstwhile business partner as the Whig MP for the same
constituency. Matheson became a baronet in 1851 and was one of the richest
landowners in Britain.
With his fortune, made in the East at the expense of so many, he bought the
Isle of Lewis where he spent hundreds and thousands of pounds building an
extravagant castle. He lived a long life before dying in the South of France
aged 82.
Jardine Matheson Group continues to trade today from their base in Hong
Kong.
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If you enjoyed reading this, you may want to read:
Adam Smith: founder of modern economic theory
This article: http://heritage.scotsman.com/people.cfm?id=1893222005
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