Jardine Matheson and the China Trade: Opium, War and Hong Kong

Each major claim carries one of three labels. established means supported by primary records, official bodies or several independent reliable sources. shared means the core fact is sound but sources disagree on details, dates or interpretation. traditional means widely repeated but not traceable to a primary or independent source.

The firm's role in the opium trade and its lobbying are well documented in its own archives, held at Cambridge University Library, and in government papers. How much the firm's lobbying caused the war is debated; Britain's motives were broader.

Two Scots in Canton

established William Jardine, a ship's surgeon from Dumfriesshire, and James Matheson, a merchant from Sutherland, met in the China trade and founded their partnership in Canton in 1832. Foreign traders were confined to a small area of the city and had to deal through licensed Chinese merchants.

established The historian T. M. Devine, in To the Ends of the Earth (2011), describes how both men came through Edinburgh University. Jardine, born near Lochmaben in 1784, trained in medicine and became a ship's surgeon with the East India Company at about eighteen. Company crews were allowed to carry some cargo on their own account, and this "privilege" trade took him into the China business; he left the Company in 1817. Matheson, born in Lairg in 1796, studied arts, went to India through family connections and moved into the China trade after 1819. Jardine was stern and formidable; the Chinese were said to call him the "Iron-Headed Old Rat" after he walked on, unshaken, when a heavy bar fell on him at a Canton gate. Matheson was thought suave and intellectually curious.

established The firm grew out of earlier partnerships and recruited from kin at home, a pattern Devine traces back to Scottish merchants in early modern Poland and Scandinavia. Jardine made clear that family alone was not enough: he would help relatives who behaved "prudently and industriously" but not "idle and dissipated characters".

Opium

established Britain imported huge quantities of Chinese tea but had few goods the Chinese wanted. Opium, grown in British India, filled the gap. Its import into China was illegal, but it was smuggled in by fast ships and sold through Chinese dealers. Jardine Matheson became one of the largest dealers, and opium was a major source of its profits. Opium addiction caused severe social harm in China.

established Devine gives the scale. China banned the sale of opium in 1799, which is partly why the East India Company left the trade to private merchants rather than its own staff. Imports rose from about 4,500 chests a year (each of 140 lb, or 63.5 kg) in 1800–21 to about 40,000 by 1840. Around 1830 opium alone supplied about a seventh of the Company's revenues. China's trade balance swung from a surplus of about $26 million in 1800–10 to a deficit of $38 million in 1828–36. Jardine Matheson and Dent and Co. were the two leading houses, and Jardine Matheson's net profit in 1832–33 was £309,000. It built a fleet of fast opium clippers. William Jardine called opium "the safest and most gentlemanlike speculation I am aware of".

The road to war

established In 1839 the Chinese commissioner Lin Zexu confiscated and destroyed more than 20,000 chests of opium belonging to foreign merchants. William Jardine, then in London, met Lord Palmerston and provided detailed advice and maps for a military expedition. Britain went to war, and its victory forced China to sign the Treaty of Nanking in 1842, paying compensation, opening five ports and ceding Hong Kong Island.

shared Historians debate how far Jardine's lobbying caused the war, since British motives also included trade access and diplomatic grievances. That the firm promoted the war and profited from it is well established.

established British merchants were shut in their Canton factories for about twelve weeks when they refused to hand over their opium, and the houses presented themselves as victims defending free trade. After the treaty, Palmerston thanked Jardine for "the assistance and information so handsomely afforded us". Devine calls the war "extremely one-sided" and the outcome "a signal victory for The Firm". Jardine became MP for Ashburton and, in Devine's account, set up a London banking business in the oriental trade; he died in 1843.

Hong Kong and Lewis

established Jardine Matheson moved its headquarters to Hong Kong, where it became one of the colony's leading firms. James Matheson returned to Britain, became an MP and in 1844 bought the Isle of Lewis, where he built Lews Castle. During the potato famine he spent money on relief and public works, but he also supported emigration schemes that removed many tenants.

shared Figures for Lewis differ. Devine gives the price as half a million pounds and says Matheson put over £107,000 into the island in 1845–50, about £68,000 more than the estate's revenue. Other accounts give a purchase price of £190,000 and say he had spent £329,000 on the island by 1850. Sources also differ on his seat: Devine has him MP for Ross and Cromarty from 1847 to 1862, while other accounts give Ashburton from 1843 to 1847 and Ross and Cromarty from 1852 to 1868. He was made a baronet in 1851.

established When "improvement" failed, policy hardened. Between 1848 and 1851 Matheson obtained 1,367 summonses of removal. His chamberlain, John Munro Mackenzie, told tenants in 1851 that none need emigrate, but that all two years or more in arrears would lose their land. Nearly 2,400 people left Lewis for Canada from the early 1850s, and Matheson advised the Quebec authorities to disperse them rather than let them settle together. Disraeli caricatured him in Sybil (1845) as "Macdrugy", fresh from Canton "with a million of opium in each pocket".

shared Devine argues that the Victorian merchant princes of the East, Matheson and Jardine among them, used repatriated profits mainly to buy estates and support a leisured life, or ploughed them back into their Asian firms, unlike the eighteenth-century tobacco and sugar merchants who invested in Scottish industry. He notes that research on this is still limited.

Today

established The Jardine Matheson group remains a major business in Asia, with interests in property, retail, hotels and motor vehicles. In recent decades it has acknowledged its historical role in the opium trade.

established Writing in 2011, Devine called it the only survivor among the firms trading at the Treaty of Nanking, with a longer continuous existence than any other British or European business in the China trade. The direct Scottish link has long gone, but the firm's junk in Hong Kong was named Highland Thistle.

• Both founders of Jardine Matheson were Scots.
• Opium smuggling was a major source of the firm's early profits.
• William Jardine advised Palmerston before the First Opium War.
• James Matheson bought the Isle of Lewis.
• The company still exists today.
• The Chinese were said to call William Jardine the "Iron-Headed Old Rat".
• Disraeli satirised Matheson as "Macdrugy" in his novel Sybil.
• Each chest of opium held about 140 lb.

• Myth: Jardine and Matheson were simply enterprising Scots. A large part of their wealth came from smuggling Indian opium into China, where its import was illegal, and opium addiction caused severe social harm there.
• Disputed: Whether the firm caused the First Opium War. Jardine lobbied Palmerston and supplied advice and maps for the expedition, and the firm profited from the war. Historians debate how far this caused it, since British motives also included trade access and diplomatic grievances.
• Disputed: Matheson's record on Lewis. He spent on famine relief and public works, but between 1848 and 1851 he obtained 1,367 summonses of removal, and nearly 2,400 people emigrated to Canada from the early 1850s. Sources also differ on what he paid for the island (half a million pounds in Devine's account, £190,000 in others), how much he spent on it, and which seats he held in Parliament.