420 Years Ago, VOC Makes the World’s First IPO

Commerce & Business, Economic history, Financial history

Stock Exchange 1.0
The world’s first known stock exchange is thought to be a market established in Bruges, Belgium, around 1309. This operation was a family concern conducted in the home of textile merchant Robert Van der Burse (or Van “ter Buerse/Buerze”). This type of early market which primarily deals with the exchange of commodities, ie, various agricultural products—and in its modern connotation, also with gas, oil, coal, etc—acquired the name ‘bourse’ from its founder. A bourse (typically European in location) is “a market organised for the purpose of buying and selling securities, commodities, options and other investments” [‘Bourse’, Investopedia, www.investopedia.com]. Another early bourse was located in Antwerp<>.

𝕍𝕒𝕟 𝕕𝕖𝕣 𝔹𝕦𝕣𝕤𝕖: 𝕥𝕙𝕖 𝕠𝕣𝕚𝕘𝕚𝕟𝕒𝕝 𝕓𝕠𝕦𝕣𝕤𝕖

The Van der Burse exchange was the first organised market, before this landmark development such transaction processes were unorganised and informal – sellers and buyers would meet up one-to-one at specific meeting places such as town squares to conduct their trade <> [‘Creation of the first stock exchange’, www.citeco.fr].

The Dutch, pioneers of capitalism
For the first ‘modern’ securities market we need to look to Belgium’s neighbours, the Dutch. The Amsterdam Stock Exchange is the oldest such market, founded in 1602 with the establishment of the Dutch East India Company (Verenigde Oostindische Compagnie or VOC). Amsterdam was the first bourse to deal in securities <c̷>. The VOC was empowered with quasi-government and monopoly status by the States General of the Netherlands, granted a 21-year charter to conduct all Dutch trade in Asia. In so doing, financial history was made…the VOC was a world first, a public company founded by a state government. Hitherto the Dutch trading environment comprised a number of competing private companies known as voorcompagnieën or “pre-companies”. By the 1602 Charter, the government merged those small, private companies into one “nationalistic Goliath”, VOC, creating a proto-megacorporation.

𝟙𝟞𝟘𝟚 ℂ𝕙𝕒𝕣𝕥𝕖𝕣 𝕕𝕠𝕔

Raising capital
At VOC’s commencement of business it held an unprecedented initial public offering (IPO). The company’s directors opened up share-holding to all Dutchmen by subscription (while investing 12,000 guilders of their own money up front). The public nature of the share issue was its revolutionary feature, hitherto predecessor companies (like the Oude Compagnie) had raised capital from a small circle of private investors. Some investors balked at the opportunity offered by VOC, wary of tying up their precious savings for such a long period (ten years). Concessions made by the VOC eased these concerns – in a subsequent amendment to the charter, investors were permitted to on-sell their shares to a third party prior to ten years [‘The world’s first IPO’, Lodewijk Petram, The World’s First Stock Exchange’, 15 October 2020, www.worldsfirststockexchange.com].

𝔸𝕞𝕤𝕥𝕖𝕣𝕕𝕒𝕞 𝕊𝕥𝕠𝕔𝕜 𝔼𝕩𝕔𝕙𝕒𝕟𝕘𝕖 𝕒𝕟𝕕 𝕓𝕦𝕝𝕝

What would NOT have seemed novel to financial market investors of the day was the ‘office’ for doing business…initially lacking a business premises the VOC—after the fashion of the Bourses’ 14th century Bruges exchange—issued an open invitation for would-be investors to come to the private home of the company co-founder Dirck van Os to do the paperwork and deposit their money. Ultimately, by the time subscriptions closed, some 1,143 individuals <> had invested a total of 3,674,945 guilders in the Verenigde Oostindische Compagnie (including Dirck van Os’ own maid!) [Petram].

ℕ𝔸𝕊𝔻𝔸ℚ (ℙ𝕙𝕠𝕥𝕠: 𝕄𝕒𝕣𝕜𝕖𝕥𝕤𝕎𝕚𝕜𝕚)

Footnote: the VOC’s IPO had profound ramifications, fundamentally altering the nature of investing. Originally intended to facilitate the financing of risky capital-intensive ventures, it “inadvertently created an alternative for investor beyond fixed income investments, marking the beginning of retail investing in equities” [‘World’s First IPO: Dutch East India Co’, Suede Investing, www.suedeinvesting.com].

•°¯`••••´¯°• •°¯`••••´¯°•

<> the most famous bourse today is that of the Paris Stock Exchange

<> including the square in front of the Van der Burse residence

<> printed stocks and bonds, debt and other interests in companies, government and private businesses

<> in addition to the six directors

1898, A Vintage Year for United States Empire Building

Economic history, International Relations, Military history, Political geography, Regional History

 

“God created war so that Americans would learn geography” ~ Mark Twain (attributed)

57CF2EA0-FA5E-4AA4-AF39-0B57CE29E118

The axiomatic nature of the above much-referenced quotation resounds most strongly in the year 1898. In that year the US expanded its offshore territorial acquisitions in different parts of the Pacific and in the Caribbean. It secured the islands of Cuba, the Philippines, Guam and Puerto Rico as a result of a short, opportunistic, one-sided war with a declining European power. At the same time Washington annexing the Hawaiian Islands, closed the door on four years of ‘independent’ republicanism which followed a successful coup by American businessmen against the indigenous Hawaiian monarchy.

479ABB88-FE53-4FE4-BFD2-E82DADFD3B6A
🔺 Flag of the short-lived Hawaiian Republic


What triggered US involvement in a Cuban conflict against far-off Spain? The immediate pretext was the sinking of the American battleship
Maine in Havana harbour. The explosion is generally believed to have been an accident but leading American newspapers (the Hearst press and to a lesser extent the Pulitzer publications) drove the charge of war jingoism within the country, declaring Spain culpable for the loss of life on the Maine. This and the ongoing reporting of the Cuban insurrection which deliberately exaggerated Spanish atrocities against the Cubans—examples of the “yellow journalism” practiced especially by Hearst—helped to create a groundswell of popular support and agitation for war whilst boosting the newspapers’ sales.

23B2A672-415D-4E8D-A691-C1402B32D2D0

🔺 “Remember the Maine! To hell with Spain!” (source: www.pri.org

Humanitarian concern for the Cuban people?
In response to the charge that the US engineered the war as a grab for territory (á la Mexico 1846), apologists for the US intervention clothed the action in the garb of a humanitarian attempt to free the Cuban people from the colonial yoke of imperial Spain [Foner, Philip S. “Why the United States Went to War with Spain in 1898.” Science & Society, vol. 32, no. 1, 1968, pp. 39–65. JSTOR, www.jstor.org/stable/404402321. Accessed 21 July 2020]. The McKinley Administration in Washington DC also justified it as an imperative to act given the political instability in Cuba, so close to US soil, and certainly Washington as the hegemonic regional power with a self-appointed role as regional ‘policeman’ had an interest in ridding the Western Hemisphere of the remnants of an old European colonial power [‘The Spanish-American War, 1898’, Office of The Historian, www.history.state.gov/].

Contemporary criticisms of aggressive US foreign policy
Washington’s rapid trajectory towards war in 1898 drew a skeptical response internationally. Keir Hardie, British labour leader, stated that he “cannot believe in the purity of the American motive”, seeing rather the hand of “trusts and Wall Street financiers intent on extending American dominance over Cuba, Latin America, and the Far East”. The French government agreed that the professed humanitarian concerns were “merely a disguise for (US) commercial desires” to conquer the Caribbean and Latin America. Non-mainstream press in the US  like the socialist The People and the New York Tribune argued that the US government ’s real aim was to ”divert attention from economic evils at home” and to protect the US’s extensive interests in Cuba [Foner, Philip S. “Why the United States Went to War with Spain in 1898.” Science & Society, vol. 32, no. 1, 1968, pp. 39–65. JSTOR, www.jstor.org/stable/404402321. Accessed 21 July 2020].

7CC588E4-A630-40CA-A846-FD9CF23AE9C3

An economics-driven war
In fact economics was the principal driver of America’s intervention in Spanish Cuba. First, the US was massively invested in the island in the 1890s, importing sugar (predominantly), plus tobacco and minerals from Cuba…the US’s Cuban business ventures were valued at about $50 million in 1895 [‘American Business in Cuba 1898-1959: A Brief Overview’, (Lisa Reynolds Wolfe), Havana Project, 17-Aug-2011, www.havanaproject.com]. The Maine was in Havana harbour to protect these same American interests when it met with disaster. So, rather than a humanitarian motive to aid the beleaguered Cubans, the intervention can be seen as pure economic self-interest: “halting a nationalistic revolution or social movement that threatened American interests” and the subsequent withholding of sovereignty to Cubans (and to Filipinos) [Paterson, Thomas G. “United States Intervention in Cuba, 1898: Interpretations of the Spanish-American-Cuban-Filipino War.” The History Teacher, vol. 29, no. 3, 1996, pp. 341–361. JSTOR, www.jstor.org/stable/4944551 . Accessed 21 July 2020].

DD26CA9E-382F-4B55-9AD3-6E64D7BAA8EB

🔺 President McKinley

The contemporary state of the American economy was a factor in America’s timing to act. Economic depression and unemployment was plaguing the country. New markets needed to be found for US goods, this meant not only Cuba and the American ’backyard’, but even extending to the Philippines and the lucrative Chinese market (Paterson). Tom Fiddick argues that the real reason President McKinley backed by the American capitalist class opted for war—having seen Spain‘s failure to pacify the Cuban rebels—was to make certain that the insurectos did not succeed in liberating the island and thereby pose a threat to US business interests in Cuba [Fiddick, Tom. “Some Comments on Philip S. Foner’s “Why the United States Went to War with Spain”.” Science & Society 32, no. 3 (1968): 323-27. Accessed July 22, 2020. www.jstor.org/stable/40401358].

 

9EF5C749-98EE-4106-A3FB-CFCBA860CDB0

🔺 Battle of Guantánamo Bay (Cuba)

US strategy thinking around imperialist objectives was evident prior to the move to war in 1898 – plans were already afoot for the establishment of naval bases in the strategically important Caribbean and in Hawaii, a precondition to expanding economically further into Latin America and into Asian markets. This “game plan” also envisioned US control of the Isthmus of Panama, an objective secured a few years after the victory over Spain (Foner).

Underpinning ideology for upping territorial expansion
The hawkish US foreign policy in 1898 accords with the prevailing 19th century belief of “Manifest Destiny”, a view that settlers in the US were destined to expand inexorably across the continent of North America. Correspondence between key players (T Roosevelt and HC Lodge) disclose that the McKinley Administration was committed—before the outbreak of hostilities—to  “intervention in Cuba as a stepping stone for expansion in the Far East through the acquisition of Spain’s Pacific possessions”. Foner notes that Cuba comprised the ‘fulcrum’ providing the opportunity for US occupancy of the Philippines as “a base at the doorway to China’s markets” for US capitalists. Also shaping this was the influence of Frederick Jackson Turner’s thesis—the idea that American democracy was defined by a moving frontier line—if America’s frontier at home was closing off as was thought by some, then the most viable course may be to seek new frontiers abroad. The increasingly dominant current in international thought, social Darwinism, was also informing American thinking…the national assertiveness shown in 1898 can be seen as a quantum leap in the “deliberate, calculated pursuit of United States’ greatness” (Paterson).

🔻 Battle of Manila Bay (Phil.)

01525635-9648-42D7-BF1B-EF66B29C285E

Hawaii, a foothold on the “American Lake”
The groundwork for the US’s absorption of the Hawaiian islands as part of the Manifesto Destiny credo was laid five years earlier when a group of American sugar planters under Sanford B Dole overthrew Queen Liliuokalani, replacing the monarchy with a provisional government with Dole as president. The coup was tacitly recognised by the US government (with US marines despatched to Hawaii to protect US citizens), although President Cleveland tried unsuccessfully to reinstate the monarchy. His successor William McKinley, recognising the strategic importance of Pearl Harbour as a naval base in the war with Spain, “rubber-stamped” the formal annexation of the islands by the US in August 1898 [‘Americans overthrow Hawaiian monarchy, History, www.history.com/].

B7C50276-E620-4C17-84B8-6C52BC337A3D
🔺 US sailors and marines in Honolulu c.1894

Footnote: A “Spanish-American War”
Thomas G Patterson notes the exclusionist nature of the name given to the 1898 conflict – the omission of reference to Cuba and Philippines in the title—in effect “air-brushing” the native populations out of the conflict—was (Paterson suggests) an attempt by the victors to obscure uncomfortable truths, the denial of full-fledged independence to Cubans and Filipinos once freed from Spanish control, and to try to avoid America’s role in the affair being labelled as ‘imperialist’ (Paterson).

🔻 1900 map (Source: Pinterest)

C55B5EB1-390A-49E2-931E-EED7885D15EB

PostScript: The Filipino insurgency
After the Spanish defeat Filipino nationalists under Emilio Aguinaldo asserted the Philippines’ independence (proclaiming the First Philippine Republic) in 1899. This action was opposed by the US and a conventional-cum-guerrilla war ensued until 1902 when US forces finally subdued Aguinaldo’s army and the Philippines were made an unincorporated territory of the US (although a number of splinter groups of local insurrectos continued to fight the US military occupation for several years) [‘The Philippine-American War, 1899-1902’, Office of The Historian, www.history.state.gov/].

🔻 Flag of the República Filipino


944C1388-069B-4A34-A100-6ED21BB33247

◤◢◤◢◤◢◤◢◤◢◤◢◤◢◤◢◤◢◤◢◤◢◤◢◤◢◤◢◤◢◤◢◤◢◤◢◤◢◤◢◤◢◤◢◤◢◤◢◤◢◤◢◤◢◤◢◤◢◤◢◤◢◤◢◤◢◤◢◤◢◤

 this famous but elusive quote has also been attributed, in slightly modified form, to Ambrose Bierce

  the US government paid Spain $20 million, compensation for the loss of infrastructure in the Philippines  

characterised by sensationalism (eg, eye-catching headlines) typically with scant regard for accuracy

US business giant Standard Oil for instance talked about its ”Manifest Destiny being in Asia” (Foner)

  calling themselves the “Committee of Safety”

Ewo and Taikoo: Two of the Legendary Free Market Hongs of British Hong Kong (The “Movers and Shakers”)

Commerce & Business, Economic history, Regional History

(Image: www.travelsfinder.com)

No organisation has left a larger footprint on Hong Kong‘s long colonial experience under the British (1841-1997) than the hongs (see Endnote). And one British hong that has been especially significant in shaping the course of British (and beyond) Hong Kong has been Jardine, Matheson. The company under the direction of Scots William Jardine and James Matheson arrived in Hong Kong on the ground floor, securing lot No. 1 on Hong Kong Island in the initial land sale by the British colonial administrators in 1841 [‘Jardine, Matheson – company history’, www.jardines.com].

Jardine’s original business premises on Causeway Bay

Jardine, Matheson Co Hong Kong replaced the firm’s previous base in Canton (Guangzhou). From Hong Kong (which soon become Jardine, Matheson’s headquarters) and from the startup of it’s Shànghâi operation a couple of years later, the company laid the foundations of it’s fortune initially from a highly profitable trade of smuggling opium (as well as tea, silk and cotton) into mainland China from South Asia. Jardine, Matheson quickly diversified into more ethical and legal enterprises, adding steamships to their portfolio from the 1850s (China Coast Steam Navigation Co, Indo-China Steam Navigation Co, Yangtśe Steam Navigation Co) which serviced the trade routes to Japan, Singapore, Calcutta, Manila and Vladivostok [‘Jardine, Matheson & Co. Steam Nav. Co / Indo-China Steam Nav. Co / Yangtse S.N. Co.’, www.theshipslist.com].

Taipan Wm Jardine

Jardine Matheson, a ubiquitous hong
Over the years Jardine, Matheson (JM Co) continued to diversify—cotton mills, property, breweries, insurance, financiers (of the first railway in China), sugar plantations, etc. All the while extending it’s trade links – Europe, Africa, Australia, America. Later JM Co got into hotels, motor vehicles, food and hygiene product wholesaling and so on. They functioned as Far East agents – for gunmakers amongst other manufacturers. JM Co even acted in a para-government capacity for consuls for foreign powers doing business in the region, as did other hongs [Jan Morris, Hong Kong: Epilogue to an Empire, (2000)].

Hong Kong Island

Butterfield and Swire
This particular British hong was something of a latecomer to Hong Kong compared to the pioneering Jardine, Matheson Co. The B&S trading house arrived on the Island in 1869. But Butterfield and Swire did not waste any time in developing into one of the most powerful players in the territory. The driving force behind the company was John Samuel Swire. Previously, Butterfield, Swire and his brother William, had started a shipping and trading business in Shanghai. The Swire hong’s road to riches was predicated, not on the illicit drug trade like JM Co, but on a combination of shipbuilding, sugar-refining, banking, insurance, mining, railroad building and other later entrepreneurial pursuits in the Far East, such as bottling Coca-Cola for Asia’s markets. Swire’s diverse subsidiaries have included the Taikoo Sugar Refinery, Taikoo Dockyard – which built mainly steamboats for the China Navigation Co, another Swire subsidiary. Since the 20th century another star in the business stable of the Swire Group is the leading Asian airline Cathay Pacific. Early on Swire’s was also an agent for the Blue Funnel cruise ship line [Morris; ‘Butterfield and Swire’, (School of Oriental and African Studies, London University), The National Archives, http://discovery.nationalarchives.gov.uk].

Taipan JS Swire, “the Senior”
(Photo: www.industrialhistoryhk.org)

JS Swire’s leadership and business style was unequivocally ruthless and uncompromising, he was very much of the “take-no-prisoners”, old school of business. Under “The Senior” Swire, the company played a telling part in driving some of the other Hong Kong frontier merchants into eventual business oblivion – as happened with two pioneering hongs, Dent and Co and Russell and Co (Morris).

Jardine, Matheson v Swire/Ewo v Taikoo
Swire‘s great and enduring rival in Hong Kong (and in the East) has been JM Co. For both hongs in the formative years the main game was about buying and selling in China for the European market. As both firms added more business pursuits to their respective China Sea empires, they came more into competition with each other. Swire’s Quarry Bay Taikoo Dockyard and sugar refinery for instance was in stiff competition with Jardine’s Kowloon Whampoa dockyard and refinery [‘Taikoo Sugar Refinery’, Wikipedia, http://en.m.wikipedia.org].

SS Shuntien, built at Taikoo Docks

Dynastic hongs with staying power
The Jardine presence in Honk Kong and at the helm of the company continues to this day through the Keswick family, ancestors of founder William Jardine’s sister. In a similar vein, the Swire name retains a connection with the present Swire Group (current conglomerate chairman Barnaby Swire is a descendent of John Samuel Swire and there are other ‘Swires’ in the management hierarchy).

(Photo: www.hkland.com/)

1984 and beyond
After several years of tortuous negotiations between the UK Thatcher government and China agreement was finally reached to hand over Hong Kong to Beijing in 1997. This left Swires and Jardines, two of the British hongs with most at stake, with the thorny issue of whether to stay in the erstwhile British colony or not under the hard-to-predict communists. Swires, who had earlier pulled its businesses out of China four year after the communist takeover (to later return), chose to keep its operational base in Hong Kong. Swires sought to work with the Chinese regime, entering into airline deals to give the PRC an interest in Cathay Pacific and secure a domestic foothold for itself. The Jardines conglomerate opted for a different strategy, choosing in 1984 to cut and run, switching its legal domicile from Hong Kong to Bermuda and delisting on the HK Stock Exchange in favour of London and Singapore. This move earned Jardines the ire of Beijing. Even after the ink was dry on the hand-over decision, JM Co continue to lobby the British government hard (with Simon Keswick particularly vocal) to keep the territory out of Beijing’s clutches [Felix Patrikeeff, Mouldering Pearl: Hong Kong at the Crossroads, (1989)].

By the turn of the 21st century JM Co had regained ground from a successful drive into Southeast Asia markets and had once again firmly secured a beachhead on mainland China [‘A tale of two hongs’, The Economist, 30-Jun-2007, www.theeconomist.com ; ‘Jardine Matheson Returns to China’, The Economist, 02-Jul-2015, www.theeconomist.com].

Postscript: Tension between government and the merchant class
Officially, Hong Kong was run during the British era by a succession of governors, appointed from Whitehall. However a fundamental difference in raison d’être existed between the governors and the taipans. The governors were about the Imperial interest of Britain, in practical terms they sought to raise sufficient revenue to fund the colony’s administration. The sole concern of the plutocrats, the merchants, was self-enrichment and their natural inclination was to resist all efforts of the governor to raise taxes…this made for a generally very rocky relationship between the Crown Colony’s two power blocks with antithetical interests (Morris).

Endnote: Hongs and taipans

The term hong’ (major foreign trading houses based in Hong Kong to trade with China) derives apparently from the Chinese word cohong, used to describe the guilds of Chinese merchants operating Canton’s trade with the West prior to 1842 (the “Thirteen Factories” or Canton System). In British Hong Kong each hong was headed up by a taipan (or series of taipans) who was the top boss man in the trading company. The hongs employed native (Chinese) personnel, called compradors, who acted as local “go-betweens” to facilitate business for the firms.

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

“the Butterfield” in the partnership didn’t last long in Hong Kong with the autocratic Swire edging him into retirement within a short time
both trading houses adopted Chinese business names: Ewo (JM Co) means ” State of happy harmony”; Taikoo (Swire) means “Great and ancient”
China already held a long-lingering grudge against JM Co … company principal William Jardine was one of the main advocates for Britain to take action against the Chinese Empire in retaliation for it closing down the lucrative opium trafficking trade (leading to the First Opium War)

Inter-war Shànghâi: A Cocktail of Espionage, Rapid Wealth Creation, Opulent Grandeur and Glamour—in a “United Nations“ of Competing Interests

Economic history, Economics and society,, Inter-ethnic relations, International Relations, Regional History

Shànghâi by the late 1920s, and 1930s, was an exemplar of cosmopolitanism. The city’s pluralism, including a significant interracial element, made it stand out not just from the rest of a largely homogenous China, but from just about anywhere else on the globe. A key ingredient in Shànghâi‘s cosmopolitan character at this time was the trifurcation of the city. As a consequence of the city’s vicissitudes in the 19th century, Shànghâi, notwithstanding China’s retention of sovereignty over the city, was formally divided into three sections, two of which were foreign controlled.

French Concession

The smallest section was the French Concession (Fàguó zūjiè), in the puxi (west) part of the old city (roughly corresponding to the districts of Luwan and Xuhui in contemporary Shànghâi)—best known today as a prized residential location and the stylish centre of retail fashion in the city. The French, following suit from the British, extracted a concession from the territorial governors in 1849 and engaged in extra-territorial expansion over the ensuing decades. The French Concession had a consul-general appointed from Paris and maintained its own force of gendarmes. 

(The SMC flag, with a motto which preached ‘togetherness’)

Shànghâi International Settlement

Originally both the British and the American Wàiguó rén (foreigners)—the Shanghailanders as they styled themselveshad their own separate concessions, but the two enclaves merged in 1863 to form the International Settlements. The international communities, in the main dominated by the British and to a lesser degree the Americans (but also comprising smaller communities of other nationalities, mainly Germans, Italians, Dutch and Danish) who had their own police and fire services. The British and American expats, when they felt that their highly lucrative interests were threatened (as was the case in the 1927 political crisis), did not hesitate to call in the British Army and the US Marines. Both the British/International and French jurisdictions relied heavily on local Chinese for the bulk of their forces [‘The Shanghai Settlements’, Wikipedia, http://en.m.wikipedia.org].

Chinese Greater Shànghâi

The third and largest section was the area given over to the Chinese themselves and run by the Chinese Municipality of Greater Shànghâi. Basically, this area surrounded most of the foreign concession territory (especially to it’s south and west) and comprised the parts of Shànghâi that the British et al and the French were not interested in, having already had their pick of the prime locations for themselves, close to and along the Bund [‘The Shanghai International Settlements’, Wiki].

(Cartography: Bert Brouwenstijn, VU University, Amsterdam)

 A fourth concession, the “Japanese concession”

In effect, the large and increasing numbers of Japanese living in Shànghâi by this time (including armed garrisons), had resulted in the creation of an unofficial ”Japanese Concession”. This de facto concession was located in the Hongkew (now Hóngkôu) district of Shànghâi (just north of the Whangpoo’s (Huangpu’s) confluence with the Soochew (now Suzhou) Creek). Ultimately, after the Pearl Harbour attack, the Japanese extended its hold over the rest of Shànghâi except the French Concession which Nazi Germany allowed it’s Vichy French ‘puppet’ allies to retain (until 1943 when the Vichy were forced to hand it over to Imperial Japan).

Shànghâi, the fabled metropolis

By the early 1930s Shànghâi had established itself as one of the most exceptional and distinctively dazzling societies on earth. It’s population had hit three million (making it the fifth largest city in the world[𝕒]), of which somewhere between 50,000 and 70,000 were foreigners. The Thirties also witnesses two huge influxes of refugees into the city—European, mainly German, Jews fleeing the murderous repression of the Third Reich and reactionary White Russians fleeing Bolshevik retribution in Stalin’s Soviet Union and republics. Both of these ’stateless’ exo-groups were the fortunate beneficiaries of Shànghâi’s status as an open door city…neither passports or visas were required to enter the city [‘Shanghai in the 1930s’, World History, http://world history.us].

🔺 Sassoon’s ‘Cathay’ , a Bund icon but a slightly(sic) over-the-top self-comparison (Source: P Hibberd, The Bund Shanghai: China Faces West (2007))

Economics and architecture: A modern city

The early ‘30s, the Great Depression may have been ravaging the world but Shanghai was prospering…Shànghâi’s flourishing affluence meant rapidly made fortunes and a privileged lifestyle – for some at least within Shànghâi society…most notably and obviously for the advantaged foreigners. Businessmen such as Victor Sassoon (financier and hotelier) and the Renwick brothers (Jardine Matheson), profited from cheap local labour, laying the foundation for their fabulous stores of wealth[𝕓]. Brits like Tony Renwick and Anglophile American Stirling Fessenden also controlled the Shànghâi Municipal Council ensuring that local public policy in the Internationals’ concession would be favourable to Anglo business interests [‘Shanghai Municipal Council’, (International Settlement 1863-1941), www.links4seo.com/].

A further, external factor which allowed Shànghâi to prosper was that, unlike the rest of China which was divided up between different regional warlords, the city was monopolised by the foreign merchant class (World History). The warlords (and Republic of China leader Chang Kai-shek) were not able to penetrate this localised power base.

The Bund‘s modernity

And the wealth realised was certainly of the conspicuous kind, one glance down the Bund (Wàitān), the riverfront promenade, confirmed that. It was replete with grand financial and trading houses, hotels and nightclubs, many in elegant Art Deco or Neo-Classical style [𝕔]. The Bund symbolised the city’s new wealth and modernity – and contained Shànghâi’s version of ”Wall Street”. Shànghâi, even at this time, had more skyscrapers than anywhere outside of the US (World History). In nearby Nanking Road (now Nanjing Rd), was the commercial heart of Shànghâi, housing the leading retail merchants of the city such as the Sincere Company Ltd and Wing On. Fashion in Shànghâi echoed the city architecture’s modernity, the latest in-vogue styles were all the rage for the Shanghainese [‘Shanghai History’, Lonely Planet, www.lonelyplanet.com].

Nightlife and recreational pursuits

Shànghâi’s business nouveau rich, when they weren’t celebrating or listening to jazz music at one of the Bund’s many nightclubs, Ciro’s, Casanova’s, the Paramount Dance Hall or at the Canidrome Ballroom in the French Concession (originally a greyhound racing track!), could often be found at the Shànghâi Jockey Club racecourse betting along with thousands of others, Chinese and foreigners, on “the strange little Mongolian ponies” especially imported for racing (World History).

Espionage in Shànghâi: something of a free-for-all

With so many different nationalities in Shànghâi at the same time, all with competing and vested interests, it is hardly surprising that the city was a hotbed of espionage especially as the Thirties drew on inexorably towards world war. Spies and counter-spies abounded…most of the main players were actively working on the ground (or under it) in Shànghâi at this juncture – the British Secret Intelligence Service (MI6), as well intelligence units from Russia, Japan, France, Germany and the US [Bernard Wassermann, Secret War in Shanghai: Treachery, Subversion and Collaboration in the Second World War (2017, 2nd Ed.)].

In the next blog piece I will turn my attention to the other, seamier side of the Shànghâi story of the interwar period – the city’s association, you might say preoccupation, with sin and crime, another face of Shànghâi’s decadence in the Twenties and the Thirties.

Footnote: Shànghâi, location, location …
Foreign trading powers like the British had initially preferred the port of Canton[𝕕] to Shànghâi, but by the late 19th century the latter had become the big trading nations’ principal “treaty port” in the Far East. Shànghâi‘s geographical position was fundamental to its eventual prominence: it had become by this time “the central clearinghouse of waterborne trade between the entire Yangtse River system and the rest of the world”, accounting for 50% of China’s foreign trade. It’s port comprising 35 miles of wharves could accommodate >170 ships and 500 sea-going junks at a time (Wassermann).

 

Canidrome Ballroom🔺(“canine track”)

 

⟼⟻⟼⟻⟼⟻⟼⟻⟼⟻⟼⟻⟼⟻⟼⟻⟼⟼⟻⟼⟻⟼⟼⟻⟼⟻⟼

[𝕒] behind London, New York, Paris and Berlin

[𝕓] the wealth of the Shanghai foreign elite had its genesis in the aftermath of the Opium Wars. The European and North American powers used the springboard of the “unequal treaties” to extend their existing privileges to their countries’ merchant classes. Within the designated enclaves foreigners could carry out their business in accord with their own laws, free from Chinese taxes and with the added bonus that the Chinese courts and bureaucracy couldn’t interfere with or impede their commercial activities (Wassermann).

[𝕔] the line-up on the Bund included the Jardine Matheson Building ( early opium traders), Sassoon House, (Standard) Chartered Bank, H & S Bank (now HSBC), Union Building, APC Club, the Shànghâi Club, the Cathay Hotel, Paramount Dance Hall and the French, US, German and British consulates

 [𝕕] modern day Guangzhou