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An English Merchant House in China After 1842

Published online by Cambridge University Press:  24 July 2012

S. G. Checkland
S. G. Checkland
Affiliation:
The University of Liverpool
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Extract

A good deal has been written about general commerce between Britain and China in the mid-nineteenth century. But little is available to illuminate the problems of trading as they confronted particular persons or commercial Houses. The surviving records of Rathbone, Worthington and Co. make possible a study of the question: what sort of calculation did rational men attempt in order to turn to profit these new and inchoate markets?

Type
Research Article
Information
Business History Review , Volume 27 , Issue 3 , September 1953 , pp. 158 - 189
Copyright
Copyright © The President and Fellows of Harvard College 1953

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References

1 William Rathbone, V., to S. G. Rathbone at Canton, Jan., 1845.

2 See Sargent, A. J., Anglo-Chinese Commerce and Diplomacy (Oxford, 1907)Google Scholar; Morse, H. B., The International Relations of the Chinese Empire, The Period of Conflict, 1834-1860 (London, 1910)Google Scholar; Morse, H. B., The Trade and Administration of the Chinese Empire (London, 1908)Google Scholar; Wright, S. F., Hart and the Chinese Customs (Belfast, 1950)Google Scholar.

3 The chief manuscript sources are the Rathbone Family Papers and the Rathbone Business Papers, hereafter designated R. F. P. and R. B. P. Generous facilities for studying the former were made available by Mrs. Evelyn Rathbone, to whom I am greatly indebted. The latter valuable collection has been deposited on loan with the Department of Economics, The University of Liverpool, by the firm of Rathbone Brothers. The records of Rathbone, Worthington and Co. extend beyond the period treated here, but the present intention is to deal with the first decade of the trade. I should also like to thank Mr. J. Murphy, of the Department of Education, Liverpool University, who drew my attention to the above sources.

4 For biographical details, see a brochure published by Ashton Brothers and Company Limited.

5 Obituary, , Manchester Guardian, Aug. 22, 1887Google Scholar. Worthington was a favourite protégé of the first Thomas Ashton.

6 They were joined in 1850 by W. S. Brown.

7 See Latourette, K. S., The History of Early Relations between The United States and China, 1784-1844. (Transactions of the Connecticut Academy of Arts and Sciences, XXII, Aug., 1917.)Google Scholar

8 William Rathbone, Jr., Liverpool, to S. G. Rathbone, Canton (R. F. P.), Nov. 3, 1844.

9 John Bates to William Rathbone, Sr. (R. F. P.), Mar. 12, 1841.

10 S. G. Rathbone, Canton, to William Rathbone, Jr., Liverpool (R. B. P.), Jan. 10, 1850.

11 Letter from his mother (R. F. P.), Oct. 15, 1843. Mrs. Rathbone in her letters continually reminded her son, with tact and sincerity, of the possible effects upon character of trading in China.

12 William Rathbone, Jr., Liverpool, to S. G. Rathbone, Boston (R. F. P.), Nov. 4, 1843.

13 An account of this incident is contained in a Memorandum by William Rathbone (R. F. P.).

14 S. G. Rathbone, Canton, to William Rathbone, Jr., Liverpool (R. B. P.) May 27, 1845. For the general disappointment in exporting western goods to China in the forties and fifties see Sargent, op. cit., p. 133.

15 S. G. Rathbone, Canton, to William Rathbone, Jr., Liverpool (R. B. P.), Aug. 22, 1845.

16 Ibid., June 9, 1845.

17 William Rathbone, Jr., Liverpool, to S. G. Rathbone, Canton (R. F. P.), Mar. 7, 1846.

18 Rathbone, Worthington and Co., Canton, to Roopjee Rowjee, Esq., Bombay (R. B. P.), Nov. 17, 1848. There was no cotton sold in Shanghai.

19 J. Worthington, Canton, to William Rathbone, Jr., Liverpool (R. B. P.), June 5, 1849.

20 S. G. Rathbone, Canton, to William Rathbone, Jr., Liverpool (R. B. P.), Dec. 10, 1849.

21 W. S. Brown, Shanghai, to S. G. Rathbone, Liverpool (R. B. P.), Apr. 8, 1851. “I don't wonder,” wrote Brown, “at some people wishing the old monopoly of Canton back again; it must have been a safe and simple trade then compared with what it has been since 1843.”

22 S. G. Rathbone, Canton, to William Rathbone, Jr., Liverpool (R. B. P.), Dec. 22, 1849.

23 Ibid., May 27, 1845.

24 Ibid., Jan. 11, 1850.

25 Ibid.

28 Ibid., Dec. 22, 1849.

27 Ibid., Dec. 11, 1849.

28 Ibid., Apr. 18, 1850.

29 W. S. Brown, Shanghai, to S. G. Rathbone, Liverpool (R. B. P.), July 16, 1851.

30 For the routes followed by American ships see Latourette, op. cit., p. 145. For British ships, see Parkinson, C. Northcote, The Trade Winds (London, 1948), p. 152Google Scholar.

31 S. G. Rathbone, Canton, to William Rathbone, Jr., Liverpool (R. B. P), Jan. 10, 1850.

32 Ibid.

33 S. G. Rathbone, Canton, to Thomas Moncrieff, Shanghai (R. B. P.), Jan. 1, 1850.

34 W. S. Brown, Shanghai, to S. G. Rathbone, Liverpool (R. B. P.), Oct. 27, 1851.

35 There was also the risk, as Sam put it, “of a partner turning out clever”; that is, backing speculative guesses. S. G. Rathbone, Canton, to William Rathbone, Jr., Liverpool (R. B. P.), Dec. 10, 1849.

36 Ibid., Jan. 10, 1850.

37 S. G. Rathbone, Canton, to Thomas Moncrieff, Shanghai (R. B. P.), Jan. 1, 1850.

38 S. G. Rathbone, Liverpool, to William Rathbone, Jr., U. S. A. (R. F. P.), Jan. 25, 1849.

39 S. G. Rathbone, Canton, to William Rathbone, Jr., Liverpool (R. B. P.), May 27, 1845.

40 W. S. Brown, Shanghai, to William Rathbone, Jr., Liverpool (R. B. P.), Oct. 11, 1851.

41 Rathbone, Worthington and Co., Canton, to William Rathbone, Jr., Liverpool (R. B. P.), Dec. 3, 1849.

42 S. G. Rathbone, Canton, to William Rathbone, Jr., Liverpool (R. B. P.), Jan. 11, 1850.

43 J. Worthington, Canton, to William Rathbone, Jr., Liverpool (R. B. P.), June 5, 1849.

44 W. S. Brown, Shanghai, to S. G. Rathbone, Liverpool (R. B. P.), Oct. 27, 1851.

45 Rathbone, Worthington and Co., Shanghai, to Rathbone, Worthington and Co., Canton (R. B. P.), Dec. 3, 1849.

46 S. G. Rathbone, Canton, to William Rathbone, Jr., Liverpool (R. B. P.), Apr. 22, 1850.

47 Ibid., Jan. 11, 1850.

48 William Rathbone, Jr., Liverpool, to S. G. Rathbone, Canton (R. F. P.) Aug. 4, 1844.

49 W. S. Brown, Shanghai, to William Rathbone, Jr., Liverpool (R. B. P.), Oct. 11, 1851.

50 S. G. Rathbone, Liverpool, to William Rathbone, Jr., U. S. A. (R. F. P.), Jan. 25, 1849.

51 S. G. Rathbone, Canton, to William Rathbone, Jr., Liverpool (R. B. P.), Aug. 22, 1845.

52 W. Rathbone, Sr., Liverpool, to S. G. Rathbone, Boston (R. F. P.), Oct. 12, 1843.

53 Of course the rates charged by Commission Houses were not independent of the rates of profit enjoyed by traders. In 1850 there was a scheme afoot among the American commission men in Canton to raise their charges by joint agreement about 50%. The principals at home threatened to send out their own representatives if the Commission Houses persisted. James Worthington, New York, to William Rathbone, Jr. (R. B. P.), May 7, 1850.

54 I am indebted to Mr. H. W. Meyrick and Mr. J. Leighton-Boyce of the Chartered Bank of India, Australia, and China, for valuable suggestions on this aspect. For the general banking and monetary background, see Baster, A. S. J., “The Origins of the British Exchange Banks in China,” Economic History, III (Jan., 1934), 140Google Scholar; Cooke, C. N., The Rise, Progress and Present Condition of Banking in India (Calcutta, 1863)Google Scholar; Spalding, W. F., Eastern Exchange, Currency and Finance (London, 1917)Google Scholar.

55 S. G. Rathbone, Canton, to William Rathbone, Jr., Liverpool (R. B. P.), Apr. 26, 1845.

56 See Greenberg, Michael, British Trade and the Opening of China, 1800–1842 (Cambridge, 1951), pp. 49, 159, 199Google Scholar.

57 Sayers, R. S., “The Standard in the Eighteen-Fifties,” Economic History, II (Jan., 1933), 584Google Scholar. Professor Sayers has discussed the effects upon the Chinese silver position following upon the Californian gold discoveries of the mid-century. The greatly increased movements, of silver to China at that time were imputed by many to an increased preference in the West for Eastern goods; Professor Sayers, shows that a monetary phenomenon was responsible. The price levels of the West were raised by the new gold, those of the East were largely unaffected, with a consequent increase in Chinese exports to the West, largely paid for with silver displaced from the circulation of France.

58 Thomas Moncrieff, Shanghai, to J. Worthington, Canton (R. B. P.), Mar. 1, 1847.

59 W. S. Brown, Shanghai, to S. G. Rathbone, Liverpool (R. B. P.), Dec. 16, 1851.

60 S. G. Rathbone, Canton, to William Rathbone, Jr., Liverpool (R. B. P.), Apr. 18, 1850.

61 W. S. Brown, Shanghai, to S. G. Rathbone, Liverpool (R. B. P.), Dec. 16, 1851.

62 Cooke, op. cit., p. 39. China, unlike India, had long been in this position.

63 S. G. Rathbone, Canton, to William Rathbone, Jr., Liverpool (R. B. P.), Aug. 22, 1845. Sam reported home that in most circumstances the only way to get money in Shanghai without a sacrifice was by opium transactions.

64 W. S. Brown, Shanghai, to S. G. Rathbone, Liverpool (R. B. P.), Nov. 10, 1851.

65 Batster, op. cit., p. 145.

66 W. S. Brown, Shanghai, to S. G. Rathbone, Liverpool (R. B. P.), Nov. 10, 1851. Brown reported: “We spoke a few days ago to the Agent of the Oriental Bank about the possibility of our soon being able to execute M'Clure's order—he said he could not at present engage to give us the funds, although he hoped he might be able to arrange it: and then he asked if we could take opium and pay it to the teamen—the question was of course put to the writer in confidence, and will not of course be repeated by you; but it is mentioned to give you some idea of the impossibility of selling any large amount here for dollars: the operation of the Bank you will understand is selling its Bills to the Parsees, taking payment in opium, which it was taken to the parties from whom they buy English Bills at a higher rate.”

67 Ibid., Dec. 16, 1851.

68 Spalding, op. cit., p. 256, gives a table showing the monthly fluctuations in the London bullion market, of the price per oz. of bar-silver, from 1833 to 1916. Between 1842 and 1852 it varied between the extremes of 59 3/8 and 615/8 pence. The charges consisted of overland carriage 2½ per cent, insurance 1½ per cent, purchasing commission 1/8 per cent, bank commission ¼ per cent, and interest for 12 months at 5 per cent (R. B. P. from a calculation dated Apr. 7, 1853).

69 J. Worthington, Canton, to William Rathbone, Jr., Liverpool (R. B. P.), Sept. 15, 1849.

70 W. S. Brown, Shanghai, to S. G. Rathbone, Liverpool (R. B. P.), Apr. 8, 1851.

71 S. G. Rathbone, Canton, to William Rathbone, Jr., Liverpool (R. B. P.), Apr. 18, 1850.

72 W. S. Brown, Shanghai, to S. G. Rathbone, Liverpool (R. B. P.), Nov. 10, 1851.

73 Until about 1827 American merchants paid in China in silver obtained from the Spanish West Indies, South America, Portugal and Gibraltar. Boston newspapers published advertisements of premiums offered for Spanish dollars. After 1827 American traders paid largely in bills drawn upon London (Latourette, op. cit., p. 71).

74 Worthington wrote home from Canton (Mar. 24, 1849): “Company's Bills are likely to continue, I think for some time to come a very good remittance to China—as an exchange operation at the present rate the proceeds sent home in sycee would realise 8 to 9% in 4 or 5 months.”

75 Ibid., Oct. 27, 1851.

76 S. G. Rathbone, Canton, to William Rathbone, Jr., Liverpool (R. B. P.) May 27, 1845.

77 Ibid., Jan. 10, 1850.

78 W. S. Brown, Shanghai, to S. G. Rathbone, Liverpool (R. B. P.), Dee. 19, 1851.

79 S. G. Rathbone warned that “selling on too general a constituency does not improve a firm's credit.”

80 S. G. Rathbone, Canton, to William Rathbone, Jr., Liverpool (R. B. P.), Apr. 18, 1850.

81 William Rathbone, Jr., to S. G. Rathbone, Canton (R. F. P.), Mar. 17, 1846.

82 Rathbone Brothers, Liverpool, to S. G. Rathbone, Ceylon (R. F. P.), Nov. 20, 1845.

83 Cooke, op. cit., p. 141 ff.; it had begun as the Bank of Western India, in 1842.

84 Ibid., p. 366. The Liverpool Chamber of Commerce mindful of the collapses of 1836-37, 1841-42, and 1846 in China, campaigned for stringent conditions.

85 W. S. Brown, Shanghai, to William Rathbone, Jr., Liverpool (R. B. P.), July 3 1851. Brown wrote: “We seem to have placed ourselves here in altogether a false position, by assuming an establishment, and an expenditure corresponding (saving Jardines & Dent's) with the leading Houses English and American, while by excluding opium and declining to do business like the bulk of the Community (smuggling) we are precluded from those sources of profit which may justify them in their large expenditure.”

86 William Rathbone, Jr., to S. G. Rathbone, Canton (R. F. P.), Oct. 22, 1845.

87 William Rathbone, Jr., Liverpool, to S. G. Rathbone, Canton (R. F. P.), Mar. 7, 1846.

88 S. G. Rathbone, Canton, to William Rathbone, Jr., Liverpool (R. B. P.), Dec. 22, 1840.

89 S. G. Rathbone, Canton, to William Rathbone, Jr., Liverpool (R. B. P.), Jan. 10, 1850.

90 W. S. Brown, Shanghai, to S. G. Rathbone, Liverpool (R. B. P.), July 16, 1851.