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led the way the Chartered Bank of India, Australia and China (now the Chartered Bank), which opened a branch in 1863, and the Hongkong and Shanghai Banking Corporation, which was founded the following year. To importers and exporters the banks granted credit or loans against bills of lading, an ancient document of title invaluable to traders whose capital was invested in cargo. In a similar manner banking facilities were essential to the develop- ment of shipping companies. Using the British Shipping Registers maintained in the Colony a shipowner was able to offer his vessel as security for a loan from a bank or from any other mortgagee.
In 1866 Mr Alfred Holt founded the Ocean Steamship Company and dispatched a vessel to China via Hong Kong, thus forging the first link in the chain that still connects the well-known Blue Funnel Line with Hong Kong. With the expansion of trade between the United Kingdom and China which took place toward the end of the eighteen-sixties the Blue Funnel Line had five steamers on its Far Eastern service, and by 1872 these were joined by another seven. The freight rate charged by the Ocean Steamship Company in-1866 averaged £6 a ton. Passage rates between the United Kingdom and Hong Kong averaged £60.
Before 1870 there were three major shipping companies calling regularly at Hong Kong the P&O, the Blue Funnel Line and Messageries Maritimes. In the early eighteen-seventies these firms were joined by the Glen Line and the Castle Line, and competition on the Far East route became extremely keen. To rationalize the situation the liner firms decided to enter into an agreement to equalize freight rates, and formed the Far East Conference under the chairmanship of Mr John Samuel Swire who had been closely connected with the China trade since 1866. Swire was the owner of a Liverpool merchant firm, Messrs John Swire and Sons, which had originally conducted business with America and Australia but which had been forced to seek other outlets due to the American Civil War. Seeing the potential trade in China, Swire decided to enter into partnership with Mr Richard Butterfield, a Bradford woollen merchant, and trading under the name Butterfield and Swire they opened offices in Shanghai in 1866 and in Hong Kong in 1870. The China Navigation Company, which still operates a large and very efficient fleet of steamers from Hong Kong, was