742 IAN PHIMISTER during the Boxer upheavals,19 and lacking sufficient financial clout himself,Moreing initially turned to Brussels,where the Compagne Internationale d'Orient had been formed in March 1goo with the express intention of exploiting what it believed to be 'the boundless resources of the Orient'.Backed by the most important people in Belgian and international industry,commerce and finance',its shareholders included the International Bank of Brussels,the Central Bank of Antwerp,the Bank of Outremer,as well as French,German and Russian banking houses.Railway and shipping interests were also prominently represented.They were joined within a year by the Hongkong and Shanghai Bank,and by Japanese investors.The chairman of the Compagnie Internationale was Colonel Albert Thys, at that time chief financial advisor to Leopold II,King of Belgium.20 Moreing knew that the Compagne Internationale had been buying up Chingwantao bonds,but for his part,Thys was not persuaded that Moreing on his own could give legal and financial effect to the CEMC documents in his possession.Thys was,however,prepared to invest in any 'well-formed English group of which the Moreing firm was part'?1 This is where Davis and the Oriental Syndicate came in.Davis and Moreing knew each other from the Westralian'market,and Davis was of course already involved in China through the Pekin Syndicate and the Yangtse Valley Company.Still more to the point,Davis had recently demonstrated an extraordinary ability to raise capital in the most unpropitious of circumstances,securing French backing during the Boxer Uprising for a Pekin Syndicate issue.Subsequently celebrated by his Belgian partners as a man'endowed with a stubborn will and a rare energy,2 it was Davis who carried the thing through from start to finish.In the course of much coming and going between 19 At the Chinese Engineering and Mining Company's Third General Meeting held on 13th September 1904,Moreing told shareholders that 'at that time all the largest firms involved in Chinese affairs were disdainful of this project'. 20 Louis Magne,Kaiping',Le Courrier de la Bourse et de la Banque,26-7June 1904. 2G.Kurgan-Van Hentenryk,Leopold II et les groupes financiers belges en Chine:La politique royale et ses prolongements (1895-1914)(Brussels:Palais des Academies,1972), p.69o.For a wider look at Leopold's business concerns,see N.Ascherson,The King Incorporated (New York:Doubleday,1964);and L.Bauer,Leopold the Unloved.King of the Belgians and of Money (London:Cassell,1934). 22J-M.Frochisse,La Belgique et la Chine:Relations Diplomatiques et Economiques(1839 rgog)(Louvain,1936),p.387:Edmund Davis...doue d'une volonte tenace et d'une energie peu commune.C'est Davis qui reunit la majorite des capitaux indispensables a l'acquisition de Kaiping'.French investment in the Pekin Syndicate is discussed further in King,Heritage of the Boxer Uprising-the Boxer Indemnity and related consequences',unpub.2001
742 IAN PHIMISTER during the Boxer upheavals,19 and lacking sufficient financial clout himself, Moreing initially turned to Brussels, where the Compagne Internationale d’Orient had been formed in March 1900 with the express intention of exploiting what it believed to be ‘the boundless resources of the Orient’. Backed by ‘the most important people in Belgian and international industry, commerce and finance’, its shareholders included the International Bank of Brussels, the Central Bank of Antwerp, the Bank of Outremer, as well as French, German and Russian banking houses. Railway and shipping interests were also prominently represented. They were joined within a year by the Hongkong and Shanghai Bank, and by Japanese investors. The chairman of the Compagnie Internationale was Colonel Albert Thys, at that time chief financial advisor to Leopold II, King of Belgium.20 Moreing knew that the Compagne Internationale had been buying up Chingwantao bonds, but for his part, Thys was not persuaded that Moreing on his own could give legal and financial effect to the CEMC documents in his possession. Thys was, however, prepared to invest in any ‘well-formed English group of which the Moreing firm was part’.21 This is where Davis and the Oriental Syndicate came in. Davis and Moreing knew each other from the ‘Westralian’ market, and Davis was of course already involved in China through the Pekin Syndicate and the Yangtse Valley Company. Still more to the point, Davis had recently demonstrated an extraordinary ability to raise capital in the most unpropitious of circumstances, securing French backing during the Boxer Uprising for a Pekin Syndicate issue. Subsequently celebrated by his Belgian partners as a man ‘endowed with a stubborn will and a rare energy’,22 it was Davis who carried the thing through from start to finish. In the course of much coming and going between 19 At the Chinese Engineering and Mining Company’s Third General Meeting held on 13th September 1904, Moreing told shareholders that ‘at that time all the largest firms involved in Chinese affairs were disdainful of this project’. 20 Louis Magne, ‘Kaiping’, Le Courrier de la Bourse et de la Banque, 26–7 June 1904. 21 G. Kurgan-Van Hentenryk, Leopold II et les groupes financiers belges en Chine: La politique royale et ses prolongements (1895–1914) (Brussels: Palais des Academies, 1972), p. 690. For a wider look at Leopold’s business concerns, see N. Ascherson, The King Incorporated (New York: Doubleday, 1964); and L. Bauer, Leopold the Unloved. King of the Belgians and of Money (London: Cassell, 1934). 22 J-M. Frochisse, La Belgique et la Chine: Relations Diplomatiques et Economiques (1839– 1909)(Louvain, 1936), p. 387: ‘Edmund Davis... dou´e d’une volont´e tenace et d’une ´energie peu commune. C’est Davis qui r´eunit la majorit´e des capitaux indispensables `a l’acquisition de Kaiping’. French investment in the Pekin Syndicate is discussed further in King, ‘Heritage of the Boxer Uprising – the Boxer Indemnity and related consequences’, unpub. 2001
BRITAIN AND CHINA 743 London and Brussels between 1901 and 1904,Davis and Thys built up a close working relationship At first,Thys and those close to Leopold were suspicious,going so far as to look for other possible partners. Believing that France is the only country not to view Belgian efforts in China with toojealous an eye',Leopold's circle were initially worried that the English government [would]exert pressure on its nationals, who are involved in the matter,to prevent them from keeping the rather risky commitments that they have undertaken'.But Thys soon enough changed his mind.To some extent,he was left with little choice after his covert approaches to various French and Russian banks were rebuffed,but mainly it was because he too came to appreciate the value of having the CEMC protected by the Union Jack.Between them,Davis and Thys succeeded in winning additional support from a number of German banks and wealthy City investors.The Hongkong and Shanghai Bank was persuaded to increase its stake.23 From mid-1902,Davis and Thys also found common cause in working together against Moreing,whom they suspected of having needlessly further antagonised Zhang Yi.They came to believe that Moreing had profited from the delayed transfer ofbearer shares meant to smooth Zhang's ruffled feathers,and were convinced early in the New Year that Moreing had outlived his usefulness when he made such a poor impression during a meeting with the Foreign Office that he was shown the door.24 Here too it was Davis who succeeded in easing Moreing away from the centre of the CEMC,and eventually out of the company altogether.By 1907,Moreing was completely out of the picture.In return for strengthening Brussel's influence to the point where,by the second half of 1903,the CEMC was practically'Belgian-controlled,even if the Foreign Office was led to believe otherwise,Davis won Compagne Internationale d'Orient investment for his Yangtse Valley Syndicate.As Thys explained to Leopold,the Syndicate had a list of shareholders of the highest order which includes the largest houses in London.It has no interest in the Kaiping Company,but is directed by the same people who are with us,against Moreing....The proposed arrangement,which has a moderate financial commitment on our part,would give us the right to 50%in all the business dealt with by this group and notably in the 2 Emile Franqui to King Leopold,8 August 1901,19 May 1902;Emile Franqui Papers File 108,Archives Generales du Royaume,Brussels. 24 Kurgan-Van Hentenryk,Leopold II,pp.708,711
BRITAIN AND CHINA 743 London and Brussels between 1901 and 1904, Davis and Thys built up a close working relationship At first, Thys and those close to Leopold were suspicious, going so far as to look for other possible partners. Believing that ‘France is the only country not to view Belgian efforts in China with too jealous an eye’, Leopold’s circle were initially worried that ‘the English government [would] exert pressure on its nationals, who are involved in the matter, to prevent them from keeping the rather risky commitments that they have undertaken’. But Thys soon enough changed his mind. To some extent, he was left with little choice after his covert approaches to various French and Russian banks were rebuffed, but mainly it was because he too came to appreciate the value of having the CEMC protected by the Union Jack. Between them, Davis and Thys succeeded in winning additional support from a number of German banks and wealthy City investors. The Hongkong and Shanghai Bank was persuaded to increase its stake.23 From mid-1902, Davis and Thys also found common cause in working together against Moreing, whom they suspected of having needlessly further antagonised Zhang Yi. They came to believe that Moreing had profited from the delayed transfer of bearer shares meant to smooth Zhang’s ruffled feathers, and were convinced early in the New Year that Moreing had outlived his usefulness when he made such a poor impression during a meeting with the Foreign Office that he was shown the door.24 Here too it was Davis who succeeded in easing Moreing away from the centre of the CEMC, and eventually out of the company altogether. By 1907, Moreing was completely out of the picture. In return for strengthening Brussel’s influence to the point where, by the second half of 1903, the CEMC was ‘practically’ Belgian-controlled, even if the Foreign Office was led to believe otherwise, Davis won Compagne Internationale d’Orient investment for his Yangtse Valley Syndicate. As Thys explained to Leopold, the Syndicate had ‘a list of shareholders of the highest order which includes the largest houses in London. It has no interest in the Kaiping Company, but is directed by the same people who are with us, against Moreing ... . The proposed arrangement, which has a moderate financial commitment on our part, would give us the right to 50% in all the business dealt with by this group and notably in the 23 Emile Franqui to King Leopold, 8 August 1901, 19 May 1902; Emile Franqui Papers File 108, Archives G´en´erales du Royaume, Brussels. 24 Kurgan-Van Hentenryk, Leopold II, pp. 708, 711
744 IAN PHIMISTER tramways of Singapore and Hong Kong'25 Quite what were British' or Belgian'companies by this stage was increasingly a moot point. Certainly it had no apparent bearing on wildly speculative shifts in both Kaipings',as CEMC shares were called,and Pekins',the term for shares in the Syndicate of the same name,as the market was pulled in one direction and then another.26 As early as July 1902,the China Gazette reported that Kaipings were pushed up as rapidly as the rest,only to sustain a horrid drop of 80 percent'as insiders banged' the market.27 Manipulated market movements of this kind infuriated The Times'well-informed Peking correspondent,Dr G.E.Morrison. After some initial hesitation,he developed a pronounced dislike for Davis.During and after a visit to Tsientsin and the Kaiping Collieries in May 1904,Davis had tried hard to ingratiate himself with the influential Morrison,but to no avail.Presenting himself as a champion of purely British interests opposed to Belgian schemes to 'completely shut out British trade',Davis denied any interest in the Pekin Syndicate,even as he offered to keep Morrison confidentially appraised of financial issues affecting China.It was an offer that Morrison found easy to refuse.He also ignored an invitation to join the Davis party on a tour of Japan.28 Instead,Morrison took a close look at the operations of both the Pekin Syndicate and the Chinese Engineering and Mining Company.What he saw appalled him. By early July 1905,Morrison was confident enough of his facts to describe the Pekin Syndicate as 'a dirty business altogether.... The shares have been boomed by lying circulars till the value of the property stands at f2,720,000.There is not the faintest chance of the railway paying,...[and although]the Syndicate have not yet extracted a pound of coal yet they are advertising their exhibit of coal at the 25 Thys to King Leopold,12July 1g02;Archives du Cabinet du roi Leopold II- documents relatifs au developpement exterieur de la Belgique,File 253,Archives du Palais Royal a Bruxelles;Franqui to Leopold,1o December 1go2,Emile Franqui Papers File 108,Archives Generales du Royaume;Joostens to Favereau,3o December 1903,Kaiping Mines,File 2821,Archives du Ministere des Affaires Etrangeres, Brussels;and A.Barry to G.Detring,1 May 1g03,W.S.Nathan Papers,Bodleian Library. 26 Informed contemporaries believed that London is in it only for other float- ations tinkering with the funds to make windfall profit...[while]Belgium believe in the thing is solidly in it for dividends';see unsigned,List of CEMC shareholders', 1o June 1904,Nathan Papers. 2 China Gazette,25July 1902. Davis to Morrison,19 May,6 October 1904;Morrison Papers,ML.MSS 312/48, and MSS 312/232,Mitchell Library,Sydney
744 IAN PHIMISTER tramways of Singapore and Hong Kong’.25 Quite what were ‘British’ or ‘Belgian’ companies by this stage was increasingly a moot point. Certainly it had no apparent bearing on wildly speculative shifts in both ‘Kaipings’, as CEMC shares were called, and ‘Pekins’, the term for shares in the Syndicate of the same name, as the market was pulled in one direction and then another.26 As early as July 1902, the China Gazette reported that ‘Kaipings were pushed up as rapidly as the rest, only to sustain a horrid drop of 80 percent’ as insiders ‘banged’ the market.27 Manipulated market movements of this kind infuriated The Times’ well-informed Peking correspondent, Dr G.E. Morrison. After some initial hesitation, he developed a pronounced dislike for Davis. During and after a visit to Tsientsin and the Kaiping Collieries in May 1904, Davis had tried hard to ingratiate himself with the influential Morrison, but to no avail. Presenting himself as a champion of purely British interests opposed to Belgian schemes to ‘completely shut out British trade’, Davis denied any interest in the Pekin Syndicate, even as he offered to keep Morrison confidentially appraised of financial issues affecting China. It was an offer that Morrison found easy to refuse. He also ignored an invitation to join the Davis party on a tour of Japan.28 Instead, Morrison took a close look at the operations of both the Pekin Syndicate and the Chinese Engineering and Mining Company. What he saw appalled him. By early July 1905, Morrison was confident enough of his facts to describe the Pekin Syndicate as ‘a dirty business altogether ... . The shares have been boomed by lying circulars till the value of the property stands at £2,720,000. There is not the faintest chance of the railway paying, ...[and although] the Syndicate have not yet extracted a pound of coal yet they are advertising their exhibit of coal at the 25 Thys to King Leopold, 12 July 1902; Archives du Cabinet du roi Leopold II – documents relatifs au d´eveloppement ext´erieur de la Belgique, File 253, Archives du Palais Royal a Bruxelles; Franqui to Leopold, 10 December 1902, Emile Franqui Papers File 108, Archives G´en´erales du Royaume; Joostens to Favereau, 30 December 1903, Kaiping Mines, File 2821, Archives du Minist`ere des Affaires Etrang`eres, Brussels; and A. Barry to G. Detring, 1 May 1903, W. S. Nathan Papers, Bodleian Library. 26 Informed contemporaries believed that ‘London is in it only for other floatations & tinkering with the funds to make windfall profit...[while] Belgium believe in the thing & is solidly in it for dividends’; see unsigned, ‘List of CEMC shareholders’, 10 June 1904, Nathan Papers. 27 China Gazette, 25 July 1902. 28 Davis to Morrison, 19 May, 6 October 1904; Morrison Papers, ML. MSS 312/48, and MSS 312/232, Mitchell Library, Sydney