Financing a Steam-Navigation Company in China, 1861–621

Russell & Co., the Boston partnership which had long been prominent in the China trade, found its business as commission agent in a state of serious decline by 1861. Therefore Edward Cunningham, a junior partner resident in Shanghai, conceived the idea of founding a steamship line to operate up the Yangtze River. This venture would require a capital far exceeding that used by Russell & Co. in its commission business. The head of the firm, Paul Sieman Forbes, who lived in New York and Newport, spurned the project in favor of more lucrative and secure investments in the United States. Cunningham then showed his promotional abilities by raising the necessary capital in China. Not only was the resultant Shanghai Steam Navigation Company profitable in itself, it also brought much commission business to Russell & Co. This article, based mainly on the manuscript records of the Forbes family, contributes to a more realistic estimate of the amount of American capital in the Far Eastern trade and to a greater appreciation of the administrative problems and methods involved.