“Gentlemanly capitalism”—what a strange concept to those steeped in twenty-first century business. But it apparently helped the Victorian empire grow. Richard J. Grace looks at two test cases in Opium and Empire: The Lives and Careers of William Jardine and James Matheson (McGill-Queen’s University Press, 2014).
Jardine and Matheson were born in Scotland, “a land that was exporting many of its energetic young men because of its political subordination after the Union of 1707 and because of its enforced cultural change after the last Jacobite rising.”
The two Scotsmen met in Bombay. Jardine had already had some years of experience as a ship’s surgeon on vessels sailing between England and Canton. Matheson, a dozen years younger than Jardine, had lost his job at his uncle’s agency house in Calcutta but was beginning to discover the dazzling profits that could be earned in opium speculation. The partnership between the two men was still a long way off, but by 1821 “the business courtship had begun.” By the time they became partners in late 1827 Jardine was 44 years old and had lived in China since 1822; Matheson, age 32, had been on the coast since 1820. By 1830 they were the most prominent private English merchants in China.
Jardine in no way considered himself a drug dealer in the modern sense of the term. He wrote to a young client in Essex: “The safest, and most Gentlemanlike speculation that I am aware of is this. Buy good bills on Calcutta or Bombay … Send the bills on to India to be realized, and the proceeds invested in the drug under such limits as may be advised from hence, which drug send here, to be made the most of, and the proceeds to be invested home, as directed, in Raw Silk, Nankeens, Sycee, or even broken coin.” And so, as Grace writes, “in spite of prohibitions by the Chinese government, Jardine did not regard the opium sector of his agency business as a black-market operation run by shady figures; rather, he saw it as a sound commercial opportunity, pursued through normal business procedures (marketing, financing, accounting, shipping, quality control, etc.) in defiance of the official Chinese resistance.” (p. 108)
The two partners “articulated a canon of commercial integrity, but they were not reluctant to defy the laws of China with regard to limiting trade to the port of Canton. Decrees that seemed to them nonsensical or insulting were evaded by recourse to a coastal trade which relied on the willingness of the buyers to smuggle the goods ashore.” (p. 132)
The author traces the ups and downs of the opium trade, and of the Scotsmen’s business. Even when the Chinese shut down the opium business and the British community was exiled from Canton, Matheson resumed drug sales, justifying his action as “an obligation to long-time clients in India.” He wrote: “As many of our friends to whom we are endebted for extensive business have probably opium on hand, in India without any means of realizing it, since being excluded from the China market, it has occurred to me as a sort of duty, in protection of their interests to extend a Branch of our Firm to Manila for drug business, and no other, as a mere temporary arrangement till times mend.” But, as the author notes, “there was no local market for opium at Manila, so the drug sales there would be for vessels selling along the coast of China.” (p. 244)
Even during the opium wars between England and China, Matheson continued to ply his trade, though it was considerably dicier and less lucrative.