Road to Disillusion

For Jardine, Matheson & Co. and other big British traders in Red China, the road to disillusion has been a way of travail. After the Reds won the China mainland, such firms as Jardine's, Butterfield & Swire, and Hong Kong & Shanghai Banking Corp. had the rosily misguided notion that they could do profitable business with Mao Tse-tung. It was in part because of their illusions and their influence that Britain's Labor government of the time recognized the Mao regime.

For a short while matters went well; then the Reds began the big squeeze. By taxes, confiscations, bans against layoffs, exchange restrictions and other punitive edicts, Peking turned British profits into losses. When the firms tried to pull out, they found they could not. Peking pinned down assets and even employees, forced them to keep going at great loss.

Last week, after months of ignominious pleading and haggling with Peking (which has still not recognized Britain), Jardine's took inconspicuous ads in the Hong Kong papers stating that it has "ceased to act as general managers" of Ewo (Happy Harmony) Cotton Mills. Jardine's hoped also to withdraw from Ewo Breweries and from the big Shanghai & Hongkew Wharf Co. Shareholders would get little for the privilege of withdrawing their managers, except cessation of paying tribute for them. So ended trading in China of the firm with the biggest British investment east of Suez.

This file is automatically generated by a robot program, so reader's discretion is required.