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THERE are several backgrounds to the picture of my life in China that now began; one is the story of Shanghai; another is that of the Customs Service. If I tell the latter first it will help towards the former. A full story of either would be a matter of historical research running into many volumes. All I can do is to give an impression of those features which are most salient to me, and in the case of the Customs those features are its birth and early growth.



In 1853 the Taiping Rebellion against the Manchu dynasty was in progress, and the rebels dominated more than half the country. In that year the walled city of Shanghai was captured by an independent rebel faction; they held the city only, and the imperial troops invested it. Down river from the city wall lay the foreign settlements, which with the harbour were, owing to the fighting going on, declared neutral by the three treaty powers, Great Britain, France and America, and which the foreigners were determined to defend.

With the Government offices in the hands of rebels, with the imperial officials in the settlement as refugees and prohibited by the treaty powers from acting either there or on the river, the collection of the Customs imposts on foreign trade due to the Imperial Government became hung up. For certain reasons this stoppage of a normal function caused an embarrassing confusion. The situation was eventually met by an arrangement under which three delegates of the treaty powers superintended the collection; and, in effect, that was the beginning of the Chinese Imperial Maritime Customs Service.

The result of the honest and efficient administration of these delegates was such that in 1858 the Imperial Government extended the system of its own free will to all the treaty ports, and placed it in charge of Mr. Horatio Nelson Lay, who had been the British delegate at Shanghai, and who was now lent from the Consular Service. It should be noted that at the time of his appointment there was a lull in the war which for the past three years England had waged against China; but it soon broke out again, and two years later — in 1860 — Peking was occupied and the Summer Palace destroyed as a punishment for a monstrous outrage by the Chinese Government.

Yet Lay maintained his post; and in 1861 when in connection with the payment of a war indemnity it became necessary for the Chinese to organize a consolidated Customs Service as an imperial instead of a provincial affair — which it had hitherto been — Lay was appointed its Inspector-General. His appointments were the more extraordinary inasmuch as when — immediately before he got the first of them — he was acting as interpreter to Lord Elgin in the peace negotiations at Tientsin, he treated Chinese high officials with notorious truculence and indignity. It was doubtless his ability and his honesty in raking in dollars for the Chinese authorities and his exceptional knowledge of their language that caused them to have confidence in him — for a time — in spite of his extraordinary attitude; for he viewed the Chinese as barbarians and held that it would be preposterous for a gentleman to work under them though he might work for them; and holding that view it was his ambition to be China's guiding spirit. Lay had a great capacity for work, organization and administration; but his wild obsession about his relationship to his employers doomed him to a monstrous failure.

In 1862 he went home on leave suffering from a serious wound sustained while fighting as a Shanghai volunteer against a band of marauders. It is now that Robert Hart comes into the picture. He was an Interpreter in the British Consulate at Canton, and when in 1858 the new Customs Service was in the making the high officials there wished him to be the local Commissioner; but placing himself in the hands of Lay he resigned the Consular Service and took the post of Deputy Commissioner at that port. Four years later Lay went home on leave, and Hart was appointed to take his place ⁽¹⁾ — not by Lay but by the Peking Government. It appears that Bruce, the British envoy, nominated him; but it can be presumed that the appointment was also due to the influence of the high officials at Canton.

1 — The Shanghai Commissioner, Mr. Fitzroy, was appointed jointly with him, but does not appear to have materially functioned.

At the time that Lay went home on leave the Taiping rebels were at the zenith of their cause — it was in the succeeding year that Gordon took command of the Ever Victorious Army — and a scheme was mooted to form a navy manned by foreigners to assist in fighting them. Lay being in England, it was in his hands that the Chinese placed the matter; and the instructions of the Government were forwarded by Hart. Whatever those instructions were in detail, they must have left a lot to Lay's discretion; for there were factors in the problem that were anomalous and complicated. Obviously what was needed was a fleet of gunboats to operate on the waterways as the Ever Victorious Army operated on land; nominally under the orders of, to some extent independent of — by reason of the prestige of English officers-the Chinese high command. That nothing else was practically possible was a fact so obvious that it is likely it was not specifically mentioned.

Lay entered with zest into the business of ordering a fleet — eight vessels including some monitors with heavy guns — of equipping them and engaging officers and men. He was properly accredited, was supplied with ample funds, the British Government put its imprimatur on the business, and the Queen conferred a C.B. on him.

And now we come to Lay's monstrous escapade, to his gigantic bluff. He had engaged a naval captain, Sherard Osborn, to command the fleet, and he drew up an agreement with him, of which two clauses only need be quoted to show its nature:—

' Osborn undertakes to act upon all orders of the Emperor which may be conveyed direct to Lay; and Osborn engages not to attend to any orders conveyed through any other channel.'

' Osborn, as Commander-in-Chief, is to have entire control over all vessels of European construction, as well as native vessels manned with Europeans, that may be in the employ of the Emperor of China or — under his authority — of the native guilds.'

Imagine that astounding act ! He had been authorized to make whatever arrangements might in his judgment seem desirable; and on the strength of that, appointed himself, in effect, as Lord High Admiral of all the Chinese fighting craft — by whomever owned or commanded — and with subordination only to the Throne. It was a case of riotous ambition — of administrative piracy. There is the mystery of a missing letter in this affair — a letter, following on his first instructions, which, stating the intention to appoint a Chinese officer of high rank to act with Osborn, clearly indicated what was expected.

Lay said that he never got that letter. If he did not, it left the situation as already stated; if he did, it made it infinitely worse.

In due course that fleet of gunboats arrived in China; and then the fat was in the fire. Lay boldly made his claims and, according to the Chinese, added to them by demanding independence in revenue collection and, as a residence in Peking, a palace of the type reserved for members of the royal family.

The Government took prompt action; it dismissed Lay from his post but treated him financially with the greatest generosity.

Osborn, imbued with Lay's ideas and hampered by his contracts with his officers and men, paid off his crews and returned to England; his conduct in the matter being generally approved. So ended a great fiasco; but it was one which purged the young Customs Service of a very serious evil.

In the meantime — for two years past — Hart had been in charge of the Service, and by his tact and ability had won the regard of every one; and now the fiasco of that fleet consolidated him in his position. There is room to wonder about those two years as locum-tenens: what was his relationship with Lay? How much did he know of what was being done about that fleet? He must have been aware of Lay's character; how, although he had laid the foundations of the Customs Service with great ability, he had become a grave danger to it, and had become obnoxious to all the foreign communities of China.⁽¹⁾

1 — Concerning this Sir Francis Aglen writes: — ` Sir Robert Hart placed on record in the archives of the Inspectorate-General at Peking a complete account of his action in connection with the Sherard-Osborn fiasco. It took the form of a copy of a personal letter to Mr. H. N. Lay concerning all the ground of this deplorable affair from start to finish. This letter was unfortunately destroyed with the rest of the Peking archives in 1900. My recollection of it is that it was a most masterly exposition, and, although after so great a lapse of time I can remember no details, the impression left on my mind was that Hart, at his end of a most delicate affair, had been throughout loyal and helpful to Lay.

I tell this early history of Hart's appointment as Inspector-General because to me it is the most interesting and pregnant feature of his life. Lay's failure did more than give the post to Hart; by an antithetic process it gave an object-lesson which guided him thereafter, and it threw up in relief that tact and wisdom in his dealing with the Chinese which made his great success, and which, in effect, gave him for a long time by means of leadership instead of driving the greater part of what Lay had aimed at.

With the foundation of the Service already soundly laid by Lay, with his own expert knowledge of revenue collection and with the clean slate and the practically unlimited authority he now possessed, the further building of the Revenue Department must have been comparatively simple. A great judge of character, he chose as his Commissioners men who could take a part in that construction and who could be quasi-diplomats to meet the quasi-diplomatic status which circumstances forced upon the Consuls.

And so the Service came to be a mighty thing. Here was this great country with its three thousand miles and more of coast and many thousands of miles of navigable rivers, with ports open to foreign trade increasing steadily in number; and a rapidly increasing foreign shipping. All kinds of official action were needed of which the Chinese by themselves were quite incapable. There were dealings with the Consuls on revenue affairs — fines, confiscations, legal proceedings — there was the matter of harbour control, pilots and aids to navigation and hydrography, and later there came the subject of a postal service. All these functions became incorporated in the Foreign Customs, as it was called for short. Still later there came the hypothecation of the revenue collected by the Foreign Customs for the service of the many loans which had been raised. Into this great business the Inspector-General — of a later day — was perforce drawn.

The structure that he built has now an age of over sixty years.

It is difficult to see how China could have done without it, and she cannot do without it for some years to come; but it has reached, I think, its zenith. In due course must come the end of its great purpose, and it will be left a memory in history, which will be an everlasting monument to Hart.

There is another chapter to the story of his early days. It has been said that the building up of the Revenue Department would be to him a comparatively simple matter; there, with his expert knowledge, he would make no mistakes; but what about those needs of shipping on that great extent of coast? Here he had to build for a purpose which he could not fully understand and with unknown factors in the problem; and because the technicalities of it lay outside his field of knowledge, it would have the greater fascination for him. It is here we reach that part of the Customs history which affects the story of myself, and which so far has never been recorded.

Owing to those unknown factors in the problem of a Marine Department, the design of the building was altered several times, and in the end there evolved a very strange affair, a hotchpotch thing, a patchwork, resulting from many failures; indefinite in structure and in function, subordinate in form, weak apparently in position. But these qualities, apparently so detrimental, lent themselves later to a curious freedom of scope. Indefiniteness? A little moral jujitsu could make it elasticity. Nominal subordination? The same means could get from it far more consideration than from equality.

For nearly twenty years I controlled either the larger half or the whole of the Marine Department, and looking back I see things as I state; though I did not always do so at the time.

In the earliest days of his appointment as Inspector-General, Hart was taking passage in a coasting steamer. As he walked the deck he would be thinking of his problems; and mostly perhaps of the scheme of a Marine Department, for the steamer would remind him of the needs of shipping — needs, so far, almost entirely unmet. Lighthouses to be built, the sites to be selected, an engineer to build them; buoys and beacons in the approaches to the harbours; a fleet of vessels with officers to tend these aids to navigation; a pilot service for the several ports and Harbour Masters and Harbour Regulations; a host of things to arrange for and get organized — things which in other countries had grown for centuries but which here were non-existent. Of course he must have a man — a seaman — to undertake the technicalities, and who under guidance would co-ordinate his branch to that of the Revenue Department.

He had already got that man — Captain Forbes, R.N. — for Marine Commissioner, but he wanted another two to fill the posts of Divisional Inspectors.

Now the master of that ship was A. M. Bisbee, an American, and from that stern-faced man of great reserve, Hart, in his quiet-mannered way, extracted all there was to know about him. He came of a family of sailors who were born, who were married, and who hoped to die at the New England port where the deep-sea sailing ships that they commanded had been built and registered. A race of sailors who considered that to command a sailing ship was the finest thing in all the world — a ship of those days with a vast poop and palatial accommodation; the Captain's wife on board, her maid and a piano; his children born on board perhaps; a floating home in fact. Pride? There never was such a virile pride as that of those old-time sailing skippers. Bisbee was among the last of them. He had followed in his father's footsteps, had commanded a great sailing ship at an early age, had married young so that he might see his sons ship-masters. Then came the cruel realization that he must be the last of that sea-brood.

British steamers were driving the American sailing vessels off the seas, and the future loomed with the coming decadence of sail. So Bisbee took to steam — how and when I have forgotten.

From his tale and how he told it in that crisp way of his with no words wasted, the Inspector-General gauged the value of the man — his strength of character, his integrity and his intelligence; and so he made his offer that Bisbee should be one of those Divisional Inspectors. But Bisbee said he was not competent; he had gone to sea at fourteen years of age; a post such as that offered required an educated man who could meet others on terms of full equality; it required also special technics — marine surveying, for example — and some knowledge of administration suited to the purpose of the post. And Hart replied: ` No answer could have pleased me better; it shows that I made no mistake in my selection. Your difficulties can easily be met. Competence? Go and get it.

I'll appoint you at once and give you two years' full-pay leave; use that leave to go to school in any way you like.'

Hart told Bisbee about the Marine Department he had planned, a self-contained department working side by side with the Revenue Department and, though separate, yet co-ordinated with it. He told how Captain Forbes had been appointed as Marine Commissioner to build up and control it; he spoke of its need, its functions, and the fine future for the men engaged in its great purpose.

Now of those early days, when Bisbee returned to China and took up the Divisional Inspectorship, he told me very little, for it was a sore that rankled in his mind and never healed, but I gathered something. The great fiasco of Captain Forbes's failure happened, I think, about the time of that return. He failed egregiously; he was insubordinate to the Inspector-General — as if he had caught the Lay-Osborn megalomania. I have no knowledge of how the I.G. felt, but it can be imagined: keen disappointment at this failure of his plan; resentment against the sailor who had let him down; mistrust of sailors generally for constructive administrative purposes; a revulsion of feeling against his offspring, of which he had hoped to be so proud. Revulsion and resentment — it was shown later when the rank of Bisbee and the Engineer-in-Chief was reduced from that of Commissioner to Deputy Commissioner, owing to a quarrel with a Revenue Commissioner for which the latter was by far the more to blame. But there was more to it than Forbes's failure. There was the quite recent fiasco of that gunboat fleet. Sherard Osborn could have averted it and turned events to his own and China's benefit; but he did not rise to the occasion and adhered to his claim to be a kind of naval satrap. And then came Forbes's failure; so one cannot be surprised if Hart came to the conclusion that if you let a sailor have his head he would bolt and smash things up.

Thus the great department was a myth; it could never now materialize; the functions it would have had were scattered among the Revenue Commissioners; its chiefs, in its new attenuated form, were little more than mere advisers. And Bisbee felt it bitterly.

In due course what was left of the Marine Department was placed in charge of Bisbee — as Coast Inspector — and the Engineer-in-Chief. Bisbee was permanently disgruntled, but in a sort of sullen way was vastly keen. He had the character and the ability to make his job — such as it was — successful; and, by the time I joined him, the Engineer-in-Chief had built a string of lights on those thousands of miles of coast as good and up-to-date as any in the world. So the needs of ships were met; and on the whole I think that what was built on the ruins of that first idea was more efficient than the other could have been; for in the circumstances of the treaty ports the connection between revenue collection and control of shipping proved to be most intimate, and two independent departments must have fallen foul of one another. So good, once more, came out of evil. Certainly that loose-knit organization, when later I took charge of it, suited my purposes far better than could have any more normal but more rigid thing.