Wealth amassed from drug-trafficking

Shanghai Star. 2001-08-09
The American-owned Russell & Co built up its great riches from shipping business.

TODAY Shanghai is the conflux of many multinational companies, some of which have set up their China headquarters here.

The city's old-timers are reminded of the hongs, the foreign trading houses of the colonial period.

Foreigners at the hongs boasted many privileges, and local employees were regarded as inferior and treated unfairly.

The premier hongs were Jardine, Matheson & Co of Britain and Russell & Co of the US.

Jardines began trading in Canton in 1782, building its fortunes on the smuggling of opium and tea. It set up its Shanghai branch in 1843.

When profit margins in the firm's drug-trafficking business were squeezed too tight, it diversified into shipping, manufacturing, construction and property.

The company co-operated with the Hongkong and Shanghai Banking Corporation to lend a large sum of money to the Chinese government in 1898.

The company was also known as Ewo Hong, which came from the Cantonese pronunciation of the company's Chinese name.

The company was considered the king of hongs, and some claimed its fortune was equal to half of Hong Kong.

In 1845, Ewo Hong purchased the first land offered for sale to foreigners in Shanghai and began work on its first office building.

The site was on the Bund just south of the British Consulate.

Ewo's influence in Shanghai was very great. David Landale, director between 1920 and 1935, served as chairman of the Shanghai Municipal Council.

Russell & Co was not as successful in its speculation. In 1862, it set up its office building following the blueprint of the British firm of architects Morrison.

It was a three-storey Baroque-style house at 9 Zhongshan Dongyi Lu on the Bund. Between 1862 and 1867, the company derived big profits from the shipping business, but after the British company Taikoo's entry into the market, it failed.

In 1877, it was bought by the Chinese Merchant Steam Navigation Co for 220 million tael. The building was also taken over by the navigation company. Zou Huilin

Copyright by Shanghai Star.