Jardine, Matheson & Co., later Jardine, Matheson & Co., Ltd., forerunner of today's Jardine Matheson Holdings, was a Far Eastern company founded in 1832 by Scotsmen William Jardine and James Matheson as senior partners. Trafficking opium in Asia, while also trading cotton, tea, silk and a variety of other goods, from its early beginnings in Canton (modern day Guangzhou), in 1844 the firm established its head office in the new British colony of Hong Kong then proceeded to expand all along the China Coast.
By the end of the nineteenth century, Jardine, Matheson & Co. had become the largest of the foreign trading companies in the Far East and had expanded its activities into sectors including shipping, cotton mills and railway construction.
Further growth occurred in the early decades of the twentieth century with new cold storage, packing and brewing businesses while the firm also became the largest cotton spinner in Shanghai.
After the founding of the People's Republic of China on 1October 1949, doing business in the country became increasingly problematic. As a result, foreign businesses gradually withdrew from the mainland with Jardines leaving in 1954 to reconsolidate its business in Hong Kong. The firm would not return to mainland China until 1979, following the reform and opening up of the country.
Background
The British and other nations had traded informally with China since the beginning of the seventeenth century. Chinese silk and tea gradually became popular in Britain, but imperial China had little need for British manufactured imports such as woollens. Concerned at what they saw as the encroachment of "barbarians" in their Celestial Kingdom, successive Chinese emperors issued numerous edicts restricting trade with foreigners under what was known as the Canton System. From the middle of the eighteenth century merchants were restricted to an area of Canton on the south China coast, where they were permitted to trade with a group of Chinese merchants known as the Cohong who operated from Thirteen Factories located on the banks of the Pearl River. One of the commodities that the Chinese merchants were interested in buying was opium – considered to have been "the world's most valuable single commodity trade of the nineteenth century". Trade in the drug was controlled by the East India Company, who had been granted a monopoly by the British crown in 1773 giving them sole access to the opium of Bengal although independent traders could still obtain supplies in Malwa, India. However, opium imports were banned in China as reaffirmed by a 1796 edict issued by the Jiaqing Emperor and the only way that the drug could enter the country was if it was smuggled in. At the time, opium was legal and considered relatively safe in the West. As a result, the trade hungry British Empire considered China's refusal to allow imports of the drug an affront to their principles of free trade espoused by Adam Smith and other leading thinkers of the day.
Early history
William Jardine was born in 1784 in the south west of Scotland and graduated from Edinburgh University with a degree in medicine. In 1803, at the age of 19, he became a surgeon on the ships of the British East India Company working the trading routes between London, China and India; a position he held for the next 14 years. As a senior ship's officer, Jardine was allocated an amount of cargo space equal to two chests which he could use to conduct his own business. Using this space, the doctor soon discovered that trading opium was more profitable than practicing medicine. It was during these early days that Jardine found himself on board 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, Jardine met a naturalised Briton of Huguenot extraction named Charles Magniac, brother of Hollingworth Magniac, both of whom would later partner with the Scotsman. Jardine learned that there were ways by which to a small extent the monopoly of the East India Company could be circumvented so in 1819 Jardine left his first employers and began the process of establishing his own private firm. In 1822, he set up in Canton as a free merchant and later, in 1828, joined the established firm of Magniac & Co, which was the forerunner to Jardine Matheson & Co.