Money, money, money...

"Eagle Dollars": The local Shanghai currency for 'legitimate' business. Imported from Mexico, they were certified 100% pure silver and stamped with Chinese characters to indicate their status.

 

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The Taipans & their Compradors

“A taipan, let me explain, is a red-faced man (the redder the face, the taipanner the taipan) who has either sufficient brains or bluff to make others work for him and yet retain the kudos and the bulk of the spoil himself."

-Jay Denby, Letters from China

The economic life of Shanghai was ultimately controlled by the taipans. These were entrepreneurs who moved to the city from Canton in southern China after the opening of the treaty ports in the wake of the Treaty of Nanking. In Canton, these businessmen had been forced to occupy a cramped ghetto, strictly policed by indifferent Chinese mandarins and they suffered frequent food shortages, curfews and occasional attacks while living there. Some taipans chose other ports as havens, depending upon the utility to their business efforts; many however, chose Shanghai because of the reassuring presence of the British Navy and its gunboats. As well, Ningpo and Shanghai were less frequently ravaged by pirates as were the other treaty ports of Amoy, Foochow and Canton.

Once ensconced along the Whangpoo, the taipans settled in to the business of making copious amounts of money. The majority of taipans indulged at least part of their operations in the warehousing and distribution of opium, to which the outcome of the First Opium War had entitled them and which was the touch paper for their newfound prosperity. However the freedom to make money, unfettered by Imperial interference and in the less volatile northern territories of China, allowed the business-minded to find many avenues for the pursuit and cultivation of wealth.

Essential to the life of the taipan were two locally employed staff members each chosen with care when the taipan settled in: the first was his ‘boy’, a kind of cross between a valet and a butler, whose duties ran the gamut of dressing and feeding his master to running errands and delivering messages. Inevitably, in a taipan’s household, the ‘boy’ held a great deal of autocratic power over the other staff.

The other person on the taipan’s payroll and even more important than his domestic staff, was the comprador. These were enigmatic men, initially recruited from a taipan’s former dealings out of Canton, good with business and figures and able to speak and write the local language, something which no Westerner usually bothered to do. The comprador had intimate knowledge of the taipan’s capital and income and eagerly set out to extend their masters’ domains. Inevitably, they also managed to make phenomenal amounts of money themselves and, in time, had their own businesses and mansions alongside those of the taipans, just as elegant and magnificent.

The relationship between the taipan and his comprador was an unusual and delicate one. The comprador usually spoke to his boss in the Pidgin tongue, a demeaning and shameful exercise but necessary due to the taipan’s invariable lack of linguistic flexibility. The taipan assumed a position of social superiority over their servant, due to the fact that his nationality gave the both of them unparalleled access to the economic structure of China; however they both knew that without the comprador’s skills and nous, the relationship would ultimately prove fruitless. In this vein, they both agreed to live without comment on each other’s lifestyles and points of view.

The taipans lived a lifestyle of sordid excess. Meals consisted of delicacies and beverages imported from across the globe and lunch would often take up a major portion of each working day, comprised of many courses of roasted meats and accompanying wines. The stereotypical image of a taipan of this time is a sweating, red-faced Englishman in fine, sober clothes, straining to contain a paunchy, bandy-legged form. By contrast, the comprador was often caricatured as thin, sly and sardonic, encased in the traditional Manchu garb but made from the finest silk brocades and with outrageous long, lacquered fingernails: the archetype of the Fu Manchu character.

After this new state of affairs had been established, new blood entered upon the scene. Stories of abundant wealth to be made in China lured young men from England, America and France to come and try their luck. To begin with these newcomers had connexions to the extant taipans – nephews, sons and so forth – and were sent to test their wings; later, these hopefuls arrived from all over with only a few hurriedly assembled letters of introduction to serve them. They all started in various firms as clerks, or foremen, depending upon their aptitudes and their ability to sink or swim was a common point of conversation for the lunching taipans. They became known as ‘griffins’ and while the majority returned home after a few years somewhat richer than when they arrived, a small few went on to replace the taipans there before them. A sorry few fell into decrepitude, distracted and spent, only to be sent home by means of the pooled donations of benevolent funds, arranged for this purpose.

Opium

"...the Rivers Phlegethon and Lethe were united in it, carrying fire and destruction wherever it flows, and leaving a deadly forgetfulness wherever it has passed."

-The Rev. Dr. Wells Williams, The Middle Kingdom

Opium was an open secret in the International communities: it was a deadly drug, outrageous to Christian thought and a breeder of ‘weak moral character’. That being said, 1 in 10 Chinese citizens was an addict of the ‘foreign mud’ and it was therefore a reliable investment, guaranteed to bring in huge returns. The First and Second Opium Wars granted the foreigners the right to cultivate this enterprise as they saw fit and, for awhile, salved the consciences of those embroiled in its traffic. In England the money being made in such trade was, in private, eagerly pocketed, while the practise was publicly decried in Parliament.

The French took a different approach. In the Concession the business of making money from the drug was largely turned over to the police force which controlled its distribution within the Concession limits. Profits were funnelled back directly into the French Government coffers and helped fund their colonial efforts in Indochina (later Viet Nam) and Annam.

 

“Different races also seem to be differently affected by [opium’s] use. It seldom, perhaps never, intoxicates the European; it seems habitually to intoxicate the Oriental. It does not generally distort the person of the English or American opium-eater; in the East it is represented as frequently producing this effect.”

-Horace B. Day, The Opium Habit

By 1860, the efforts of missionaries and other organisations began to have an effect: the opium business began to be seen as a dirty business. Many taipans gradually withdrew their efforts from the opium trade and turned to other, equally lucrative, areas of investment. The Jewish taipans, spearheaded by the Sassoon Dynasty and the Kadoorie Clan, were the only opium dealers after this period, eager to step in after the other traders had washed their hands of the business.

Gun-running

As the shine fell off opium dealing, an immediate business alternative became obvious. The Taiping Revolt raged across mainland China and neither side – the rebels nor the Imperials – were capably outfitted to have a lasting impact. Shanghai taipans began running guns to both sides, introducing the technical advantages of wars being fought in the European and American homelands to the Chinese conflict.

In government conclaves in China and abroad there was open objection to this state of affairs. Governments, it was thought, who held treaties with China should only provide armaments to the representative forces of China, not her enemies, even if they were her own citizens. The taipans manoeuvred around such objection by selling their guns to third parties who passed them on to the highest bidders, without regard to creed or allegiance. It fell back on the Imperial Government to ensure that they were simply better funded than the Taipings and so, snatch up the better weaponry.

 

The Property Boom

After the Taipings seized Nanking, a panic spread throughout the countryside between the ancient Ming Capital and Shanghai; refugees fearing for their lives flooded into the port city, looking to escape death at the hands of the rebels. An estimated 350,000 refugees swarmed into Shanghai, swelling its already crowded streets. The majority of these escapees moved to the Old Chinese City; however, it rapidly became obvious that the Chinese heart of the city could not contain such an influx of people. Quick to see an opportunity, the taipans and their compradors began to buy up large tracts of land and threw up hastily-erected terrace houses, moving tenants into them even before they were finished. Rents doubled and re-doubled in the boom and once grand estates were carved into ghettoes in order to maximise business opportunities.

The blatant gouging of tenants was bad but it was about to get much worse: an offshoot of the Taipings, the Small Swords, acted to oppose foreign interests by occupying the Old Chinese City. The fear that this move generated only increased the land grab, as refugees within the Old City fled to find safety in other areas of Shanghai. Even after the Green Gang kicked the Small Swords out of their temporary residence, the property boom went on, becoming the safest investment in Shanghai, only to be surpassed by a new money-spinner:

Cotton

Cotton and silk, were not exactly new in Shanghai – the Chinese had been trading these products out of the port city for centuries. However, the fan kuei took awhile to catch on to its lucrative power and it wasn’t until the ramifications of the American Civil War hit home that they began to invest heavily in the enterprise. Textiles were produced abundantly across the northern plains of China and most of them funnelled into Shanghai to be exported across the globe. After buying up existing production sites, the taipans installed new technologies to boost output. These factories worked day and night with rotating shifts of workers enduring appalling conditions to ensure requisite output levels. Injuries due to exhaustion or a lack of training were common but few spoke out for fear of losing their employment in the overcooked economic atmosphere of the port city.

Another trade also boomed as a result of the interest in cotton, one that was swiftly capitalised upon by the Chinese – the fashion industry. With a growing foreign community – especially in terms of its female constituents – a demand for the latest fashions from Paris, New York and London steadily grew. Local tailors were often brought pictures of the latest dresses and asked to replicate them using the local cloth; soon, they were producing their own versions of these Western clothes, for men and women, Celestials or foreigners.

Gunboat Diplomacy & Capitalism

 

“It is my business to make a fortune with the least possible loss of time. In two or three years at farthest, I hope to realise a fortune, and get away; and what can it matter to me, if all Shanghai disappear afterwards, in fire or flood? You must not expect men in my situation to condemn themselves to years of prolonged exile in an unhealthy climate for the benefit of posterity. We are money-making, practical men. Our business is to make money, as much and as fast as we can – and for this end, all modes and means are good which the law permits.”

-Western Taipan, before the Boxer Rebellion

Now that the taipans had commodities to move, the obvious area to move into after production was transport. Shipping, insurance of freight and licensing became a whole new realm to exploit. Goods couldn’t move without the proper permits (called ‘sclew’ in Pidgin) and the presence of rebels and pirates in the waters around China made the industry hazardous at best. Following on from the heady days of the First Opium War, many taipans built transport companies that resembled small private armies, complete with gunboats and set about enforcing their will upon whoever was in need of their services – invariably, everybody.

Chinese "cash" - the local currency - fresh from the casting process, before being broken down into individual coins. This form of currency was used for everyday purchases within the city.