1941-01-20 — Page 136

CHINA MAIL, PAGE 88

HONG KONG CENTENARY NUMBER

1841

"Ocean" From A Private "Pool"

THE Centenary of the Union In-

surance Society of Canton, Ltd., one of Hong Kong's best known companies, was celebrated in 1935. The Society is one of the oldest of the British Dominion and Colonial Companies, and there is reason to believe that there is but one that is older.

During the early part of the Nineteenth Century institutions did not grow with the rapidity to which we have been accustomed in more recent years. Their car- her growth undoubtedly was com- paratively slow, but their foun- dations invariably were well and truly laid and progress But un- eventful.

The Sceuty's history was brief- ly reviewed by the Chairman at the mual meeting in 1935 when he referred to the circumstances that existed in China in the early days, giving rise to the necessity for the establishment of a Cuum- pany such as the Society.

He said: "The East India Com- pany, until 1834, enjoyed in Can tan a monopoly of trade to Eng-

od, but in the begint of the century cert on Butish

duels come to the City to trade tre Ti prodes Lion of foreign Plogs In 1823 there were seven such individuals, including Thomas Dent, who held the pos- tion of Sardinian Comal, and was a member of Davidson & Co. On the retirement of W. S. Davidson the name of the firm was changed In Thomas Dent & Co. Amongst the offer private traders were th two Magniacs (partners in Mag- niar & Co." afterwards Jardine, Matheson & Co.) who were Prus- sian Consul and Prussian Vier- Consul. Mr. Robert Barry the Swedish Consul and Dr. William Jardine. In 1820 the firm of Thomas Dent & Co. had a staff f four, the firm of Magulae & Co. - later Jardine Matheson & Co. SIN. and there were 13 other pr vate British merchants.

East India Monopoly

ately the early records of the So- ciety did not survive the bank- ruptcy of Dent & Co. in 1862. Nevertheless the following firms. who were known to be in exis- tence in Canton in 1834, and who are recorded as contributors to the Society in 1862, were pro- bably among the original sub- scribers:

Messrs. Dent & Co. Messrs, Jardine, Matheson & Co. Messrs. Turner & Co. Messrs. Russell & Co,

The first three of these were British and the last American. Again it is interesting to note that only the second named is still in existence. a though

successors

to the last are in Hong Kong to day.

Pooling Hazards

"The Society appears to have been formed with a view to pool- ing the hazards which each of the founders hat to undertake shipping his experts to the United Kingdom and other part of the World Reads are available to show that the procedure of nori- dating Pie Comp ny at the end of every the 3 which existed am to 174, WAS in free from tr foundation of the Society In this way the Shareholders who weres alro the client of the operated for their own benent.

"Oui documents indeals that the paid up Capital of the original Company

very probably $50,000, lait, as records prior to 1662 were in the honds of the Secretaries, Dent & Co., who fail- ed in the fina..cial crash n 1862. continuous documentary

WIN

is not available.

"A

in

Society,

history

C

"In the fifth year of the Society's existence- that is, in May, 1839--- all British subjects in Canton were ordered to leave for Murao hy Captum Ellot who was the Chief Superintendent of English Trade." The reason for this departure was the deadlock between the British and the local Governments over the question of Guarantees against the smuggling of opium.

considerable quantity P opium days

British and foreign ships in the river had been seized hy the authorities and destroyed. The value was stated to $6,000,000. Immediately after this, the Viceroy at Canton insisted that all foreigners trading in Canton should sign a bond to the effect that they would not deal in opium, and that if they were caught so doing, the opium and the ships would be confiscated and the persons engaged in the illicit trade executed! All the non- British foreigners agreed to sign this band, but Captain Elliot re- fused, on the grounds that the Execution Clause in the bond was in opposition to British law. The Viceroy replied that unless the bond was signed, British sub- jects would not be allowed to trade in Canton, and this led 10 the general exodus to Macao in May.

"It appears that the East India Company, who in earlier had jealously guarded their mon- poly by insisting on the departure of such British subjects as were not employed by them, became more lenient towards the end of the third decade of the century. Their attitude may have been the result of agitation at Home against monopolies generally, and fear that, in consequence,

any action on their part, to insist on' the departure of other Britishers, would endanger the renewal of their Monopoly, which was to-ex- pire in 1834.

"The private merchants how- over, were permitted to trade only under licence from the Company, so that a certain amount of con- trol existed.

"In 1834, the monopoly of the East India Company terminated and the private Britishers who were known as 'Free Merchants' were able to carry on their busi- ness without licence. It is interest- ing to note that the first "Free Ship" from Canton to London, the "Sarah" of 488 tons, was dispatch- ed by Messrs. Jardine, Matheson & Co. on March 22nd, 1834. The cargo consisted of silk, silk piece- goods, nankeens, cassia bark, rhubarb, China-root-and sundries, and the value of the silk and silk piecegoods alone exceeded million dollars...

Dent and Co.

one

"Facilities for the protection of such cargo by Insurance were. available, but there was only one firm which paid claims-under its policies in Canton. In 1835, Dent and Co. decided to found a second, the Union Insurance Society, which was to be under their ex- clusive management. Unfortun

Limited Life

"At a later date the Cantonese authorities ceded the Island of Hong Kong to the British Crown. Although possession of the Island was taken in 1841, this cession was not finally confirmed by the Emperor of China until the Treaty of Nanking, after hostilities. that occurred in 1842. It appears that the business of the Society was carried on for a while in Macao, but as soon as the Colony of Hong Kong was established Messrs. Dent & Co. and the other former Canton merchants arrived from Macao, and thereafter traded un- der the protection of the British Flag

"Records show that twenty years later the Union Insurance Society of Canton' was formed, but it would seem, that a definite limit was put to the period dur-

ing which it could operate, name- ly--for the three years 1862-1864.

"In the Articles of Agreement dated 1st January, 1802 the fol- lowing section is of interest-

"That the said shareholders verally and respectively shall and will at all times during the continuance of the sald Society use their best endcavours and ut- most diligence to carry on, im- prove and increase the business and promote the interests of the Society, by all lawful ways and means for their and advantage."

ance Association, Ltd., and in this connection 24,000 new shares were Issued, bringing the total shares Issued up to 135,000 of which £4 per share was paid up, and this is the issued Capital to-day.

(wyned mu al benent

"Another agreement was com to for the period 1885 to 1867, and, at the end of the last year, a fur- ther agreement for one year only - that is, 1868. In September of that year however, al Extra- ordinary General Meeting altered the Articles of Association to pro- vide for the Society's continuance in operation until the end of 1870. At this meeting a certain amount of opposition by a minority of the shareholders was apparent,

and

Mr. Delanco asked 'Why not make the office a permanent chrzy If this was done, he would with- draw alt that he had previously seid (regarding the proposed al- terations). Mr. Lemann ta Direc- tor) explained that the Somety was not formed for the purpose of making profit out of insurance, but for the mutual benefit of the merchants who formed and who contributed business to it."

New "Offices"

"During these triennial periods the allotments of shares in new ffices' as they were called were made in accordance with the con- tributions made by Shurcholders to the former 'Oflice.' We read in 1871, for instance, of complaints by shar: holders that they had not bon allutted the number of shares applied for and their complaints were answered by the Directons that the allo'ments had been made as indicated above.

"In 1879, the policy of the S- ciety changed, in that the three year period was abandoned, and new Arveles of Association werz drawn up,

which included 110 period of duration.

"In January, 1874, a Branch Office was opened in London, From this time onward tre Society made rapid progress as is shown by the fact that the assets which were, $345,000 at the end of 1875, rose to over $1,000,000 by the end of 1877 and to nearly $1,500,000 at the end of 1882.

Growing Assets

"At the end of 1913.-the assets exceeded $12,000,000 and reached $17,000,000 at the end of the first years of the Great War. In 1916, an amalgamation took place with The China Fire Insurance

Co., Ltd., and the Capital of the So- ciety was increased to $4,000,000 by issuing 3,600 shares ($100 paid up).

"In 1919, the Capital of the Su ciety was converted into Sterling. the nominal Capital being £2,000,000 divided into 200,000 shares of £10 each. This is the nominal Capital of the Society-to- day, The issued Capital was 96,000 shares of £10 eaph, of which 24 was paid up. In the same year an amalgamation ́ ́ with ́ the North China Insurance Company, Limit ed, took place and for this pur- pose the Society issued a further 15,000 shares.

"In 1922, the Memorandum and Articles of Association were re- drafted, one change being that authority was granted the Society to carry on all classes of insur ance other than Life Insurance

Amalgamation

in

"The foregoing brief history is of interest, but no mention is made therein of the Society's fortunes in the conduct of its business of insurance. To grow from a small Company, brought into existence by a group of merchants in Can- ton, to ย world-wide business by shareholders resident practically every Continent, needed foresight and initiative. That this was not lacking in our predecessors is evidenced by dia position to-day. The initial step towards extension everseus was taken in 1868 by the opening of a Branch in Shanghai. This was a momentous move, for to extend beyond the conflues of one's owil territory in 1868

i maller calling for much more considera- tion and enterprise than is the case in 1935. Furthermore, as t affected the Society, it market definitely a policy of expansion. -- a policy that was to lay the foun- dation of a business the pioneers of those early days could visualise.

was

Shanghai Start

Whit

"It is recorded that Mr. Samuel Brown was the first representa tive of the Society in Shanghai. but as in the case of many per- sons connected with our early days, there is unfortunately record of Mr. Brown other the 12 that he was the first representa- tive outside of Hong Kong. It does not need much imagination how- ever, to conclude that Mr. Brown would be surprised if he cound see Shanghai to-day, with a popu- lation of more than 34 million. people; with ships of from 15 t 20 thousand tons, of all 'nation- alitics, moving daily up and down the Whangpoo River-right to the famous Bund with its modern buildings-one of which is that of the Society.

"The Society's husmess on the coast and in the interior of Chine has developed to a point that wou'd certainly be a revelation to Mr. Brown could he see it. In every coast port there are agents and representatives, and in Tien- Asin, Hankow, Peiping and Canton the Society's Branch Offices are engaged in developing the busi- ness that Mr. Brown started in such a small way.

Bold Step

In the days to which reference is now being made, London, as now, was the centre of the com- mercial world, so it was only a matter of a short time after the establishment of.. the Shanghai Branch that the active, officers controlling the Society realised the necessity of going even fur- ther afield than they at first con- templated.

The establishment of a branch in London in 1874, was nevertheless a bold step, for there were many large and influential Companies caring for, the Insurance require- ments of that great City, and a young Company from a far off land could not hope immediately. · to make its presence felt. The cour- age that lay behind, this step has been well rewarded, for to-day the- Society has its staff housed in its own splendid building in Corn- hill with its Underwriter's Office in Lloyd's Building.

suc-

The ability displayed by suc-. ceeding Underwriters, the cessful outcome of their opera- tions and the sound condition of the financial structure, have won for the Society a place in the In- surance world of which all asso- tookciated with it have every reason

to be proud.

"In 1925, an amalgamation place with The Yangtsze Insur

1941