From all over free Asia last week, capital flooded into Hong Kong. In the island colony itself, bank withdrawals ran more than ten times normal rates—but not out of panic. Among Asian investors, the rush was on to buy the first public stock offering of the most powerful British trading company east of Suez: 129-year-old Jardine, Matheson & Co. By week's end the 900,000-share secondary issue had been oversubscribed 56 times, and Jardines' stock, which had been distributed at $2.78, was changing hands in private deals at $5.22.
Jardines' shares were no run-of-the-mill investment. Playing its cards close to the vest, the company admits only to assets of $20 million and 1960 profits of $1.5 million. But as Hong Kong agents for 77 major companies, Jardines sluices Western products ranging from machine tools to fine Scotch throughout Asia. In addition, the company owns much of the richest land in booming Hong Kong, controls two of the island's three profitable English newspapers, and has substantial interests in banking, shipping, insurance, utilities, streetcars and airlines. So powerful are Jardines' executives, who traditionally sit on Hong Kong's governing bodies and the boards of its richest banks, that local Chinese call the company "the princely business house.''
Old Habits. "The story of Hong Kong's development." says Historian Harold Ingrams. "is to a large extent the story of Jardines.'' Both stories began early in the 19th century when a pair of thrusting Scots—James Matheson and Dr. William Jardine—cracked the British East India Co.'s trading monopoly with China and, with the aid of a heavily armed clipper fleet, won for themselves 25% of the illegal but vastly profitable opium trade. In 1839, when the Manchu Emperor seized 20,000 chests of smuggled British opium, it was William Jardine who convinced British Foreign Minister Lord Palmerston that this was an indignity to which Britain could not submit. The result was the three-year Opium War, which ended in 1842 with permanent Chinese cession of Hong Kong to Britain.
From its Hong Kong base, Jardines reached deeply into China, laid some of the country's first major rail, lines and brought in Western products in exchange for Chinese silks, spices, teas and minerals. Traders to the core, Jardines' high-living taipans made a practice of getting along with whoever was in power in China —or any part of China. During World War II. British-owned Jardines continued to make beer at its Happy Harmony Brewery in Japanese-occupied Shanghai. When the Communists came, Jardines hoped to do business with them, played an influential part in persuading London to recognize Mao Tse-tung. But by 1954 all of Jardines' mainland assets had been taken over by the Reds—a loss so heavy that the company has never been willing to put a figure on it.