On 1 January 1867, John Swire & Sons, having been established as merchants in Liverpool since 1816, opened the first branch in China at Shanghai under the name Butterfield & Swire. They had in fact, been in business from early the previous year, and Swire publications give the founding date of Butterfield & Swire as 1866. The enterprise later expanded to Hong Kong and all the major ports of China and Japan.
In 1872, the China Navigation Company Ltd under the Butterfield & Swire management was formed and soon spread from a coastal service to much further overseas, including an important trade with Australia.
John Swire had long thought that there was an opportunity to enter the China coastal trade, especially on the Yangtze River, and after failing to persuade Alfred Holt to extend their services in this area, he decided to form the China Navigation Company specifically to develop navigation on the lower Yangtze. Shares were held by Alfred Holt, Ismay of White Star Line and John Scott of the Greenock shipbuilders.
In recognition of the fast growing shipping coastal and international trade in Chinese waters, especially Hong Kong, the company decided that this would justify the establishment of additional owned modern docks and fully equipped machinery and engineering facilities operated by John Swire & Sons. In reaching this decision, it is necessary to step back a little and give a brief overview of the company at this time.
They were well established, with interests in several insurance companies and a miscellany of agencies. These included; Standard Oil Company at a number of ports, Butterfield & Swire held the agency for the Chartered Bank and French bank etc, but one of their major interests was the agency for Alfred Holt’s Blue Funnel Line, of which John Swire spared no effort in promoting. The Scott shipbuilding family of Greenock continued to play an important part in the company, not least in the planning and layout of the future Taikoo Dockyard and Engineering Works at Quarry Bay.
James Henry Scott was the third son of Charles Cunningham Scott, head of Greenock shipbuilding and engineering company at Greenock, and after an apprenticeship at a Glasgow bank in 1866 aged 21, he took a free passage to Shanghai in Alfred Holt’s steamer Achilles, one of the trio of ships built by Scotts at Greenock for Holt. Having such fuel efficient machinery demonstrated the ability to make the journey outward to China without the need to make frequent bunkering calls en route. In James’ pocket, was a letter from Alfred Holt to John Samuel Swire asking him to give the young man a job as a shipping clerk, thus began Scott’s lifelong connection with the firm of Butterfield Swire. Initially hired as a book keeper and general factotum, he soon proved his worth as, despite a 20 year age difference, John Swire came to trust his judgement implicitly.
As an example, it was Scott who was sent to scout out a suitable locality for the Taikoo Sugar refinery, diligently inspecting the site by boat during a typhoon, in order to assess how sheltered it would be in such an event. The Taikoo Sugar Refinery at Quarry Bay in Hong Kong came to play an important part in their business activities. As well as from Swire, capital was provided by some of those financing the China Navigation Company. When well established, by 1884, the production provided, at times, a fluctuating return, but, overall, was a success and also provided substantial freight for the CNC ships.
In the 1880s, when the construction of the Taikoo Sugar Refinery was being mooted, it was noted that the land acquired for the refinery exceeded its immediate needs and the possibility of building a dockyard was put forward on several occasions by Butterfield & Swire, initially to service the needs of the CNC. Perhaps surprising in view of the progressive outlook normally displayed by John Swire, he was adamant in his resistance to such a proposal throughout his life.
His reasons perhaps seem odd. He averred that such an undertaking was foreign to their business, but such fears were not evident when they entered the “foreign” business of sugar refining with no past experience (albeit they were able to count on advice and assistance from family connections in the industry at home on Clydeside). But equally able to provide the same in this new undertaking were his strong connections with the Scott shipbuilders at Greenock. He also was concerned that his reputation would suffer in the event of the venture not being a success. Crucially, he was worried that they could not raise sufficient capital to compete with the Hongkong and Whampoa Dock Co also saying that he did not think that there was room for another dock company.
His partners periodically broached the subject, but to no avail. In 1900, two years after John Swire’s death, primarily due to the urging of James Henry Scott, who was made a partner in 1874, and Senior Partner on the death of John Samuel Swire in 1898, John Swire & Sons applied to the Secretary of State for the Colonies, the Rt Hon Joseph Chamberlain, for an extension of the lease of ninety nine years offered by the Hong Kong Government to a period of nine hundred and ninety nine years to build a large dockyard costing around £250,000. A plea sweetened by the claim that such a large dock may, in the future, be invaluable to the Empire as it would be capable of taking the largest battleship. In fact, when built, it was capable of taking the largest ships afloat.
An illustration of the concern shown by the already established Whampoa Company, on learning of the proposal, was that their shares fell significantly. Taikoo Dockyard’s capital that was registered in a partnership memorandum was £800,000 which was divided into 8.000 shares each valued at £100; the main shareholders were Edwin Durning-Lawrence, Richard D Holt, Charles Cunningham Scott, London broker W J Thompson, John Swire, George Warren Swire and J H Scott.
Following a survey, the likeliest site was determined. The position would be east of the Taikoo Refinery immediately inside Lye Mun Pass, the deep water entrance to Hong Kong and having frontage with deep water on the north and east side. The preparation of plans for the dockyard and associated engineering works was initially carried out by John Scott of Scotts of Greenock, but on his death, in 1902, it fell to his brother R Sinclair Scott. Down the years, Scotts continued their close association with Taikoo with regular transfers of senior staff from their works at Greenock to Hong Kong. Some of them were my workmates during the time I served my marine engineering apprenticeship at Scotts’ and, later, Hong Kong.
At first, the dockyard was known as “the Hong Kong Shipyard”, but in 1908, it was incorporated as the Taikoo Dockyard & Engineering Company of Hong Kong. In 1902, Mr D Macdonald, previously a civil engineer who had been in charge of the Dover Harbour Works, was engaged as Chief Engineer where his previous experience of varied major civil engineering works was most appropriate for the task in hand. He was born in Hong Kong in 1865 to a family originally from Skye, and following education and training in Britain, was involved and supervised the construction of railways, piers, breakwaters and dry docks in various parts of the UK and Ireland.
The preparation of the site was a major undertaking. No less than 20 acres out of the 52 acre site had to be reclaimed from the sea and the remainder excavated from rock. The levelling of the ground entailed the removal of 1,600,000 cubic yards of broken and solid granite. This was a massive construction project, with upwards of 2,500-3,000 local labourers and 35-40 European supervisors involved. However, as is sometimes inevitable in such undertaking, the construction took longer and cost more than originally envisaged and, from the decision being taken in 1899; it was ten years before the dockyard was effectively in operation.
When completed, the site represented a facility having all the necessary steel working, machining, engineering, forging and design and drawing office capabilities comparable to the current state of the art in the industry. In effect, it was, in many ways, a copy of Scotts of Greenock. Looking at the images in a volume published by Swire on the anniversary of 50 years since opening, takes me back to what it was like at Scotts during my time there.