Australia’s reliance on coal as a source of energy, both for domestic use and as an export to numerous ports around the world, has continued unabated for over two centuries. Stumbled upon by some of the earliest convicts to New South Wales (NSW), the little black rock1 provided a boon for that colony in its early days, specifically as a viable export commodity throughout the second half of the nineteenth century. From the early 1860s, the coal mining industry of NSW expanded greatly. The coal mined in the colony of NSW, during the 1860s and 1870s, was exported to markets throughout the world. NSW coal reached such ports as Port Natal in South Africa and Portland, Maine, on the east coast of the United States of America.2 The two principal overseas destinations were New Zealand and China.3 Thus, for those who worked and managed the collieries of the Hunter Region north of Sydney and the Bulli and Bellambi coal fields south of the colony’s capital and those who shipped the coal overseas, the little black rock provided worthwhile profits.
The importance of coal to the world cannot be understated. W. Stanley Jevons declared the second half of the nineteenth century to be the “Age of Coal.”4 The rise of the steamship both for naval and commercial interests required constant scientific
1
I have taken this label for coal from a recent article in the Guardian. Bob Briton, “Coal’s last gasp.”
Guardian (Sydney) No. 1703 23 September 2015: 5.
2
For a complete list of ports where NSW coal was exported to, see Appendix 4.
3
China, in this instant, encompasses Hong Kong. Australian colonial government records tended to merge statistics for Hong Kong within a general China classification and thus, throughout this Chapter, unless otherwise stated, China will cover all Treaty Ports, plus Hong Kong.
4
Walter Stanley Jevons, The Coal Question: An Inquiry Concerning the Progress of the Nation and the
improvements in the engines that drove these metal vessels.5 However, while the new versions of boilers and furnaces created faster ships, they also made easier, simpler and more economical usage of the coal that took its place as the workhorse of steamer shipping. Thus, as Jevons stated in 1865: “Coal, in truth, stands not beside but entirely above all other commodities.”6 Coal was the primary material of energy, not only for water-borne transport but also nearly everything that was done on land as well. NSW’s place in the world’s coal industry was only minor at the commencement of 1860s, an annual production of barely a third of a single per cent of that of Great Britain.7 Yet, its prominence as an exporter of coal in East Asia, and particularly China, developed throughout the 1860s and 1870s to eventually overtake the previous dominant exporter to China, that being Great Britain. By the end of the 1870s, the landscape of coal imports into China had altered dramatically. Not only had NSW broken Britain’s stranglehold on coal exports to China, but so had other nations, including Japan.
The Chinese ports were havens for competition where complex market structures existed and where the NSW companies struggled to find a market for their products. Numerous hindrances were placed before the commission agents of Hong Kong and Shanghai, the two dominant ports of entry for overseas coal, as they tried to gain the best for the NSW exporters. Freight rates, inferiority of NSW coal to Welsh coal and later to the cheaper Japanese and Formosan coal, together with over-supply were only a subset of the problems that beset NSW’s portion of the overall Chinese coal trade. For the NSW coal exporters, as much as their representatives in China, overcoming these
5 Ramon Knauerhase, "The Compound Marine Steam Engine: A Study in the Relationship between
Technological Change and Economic Development." The Journal of Economic History 27, no. 4 (1967):
616; Ramon Knauerhase, "The Compound Steam Engine and Productivity Changes in the German
Merchant Marine Fleet, 1871–1887." Journal of Economic History 28, no. 3 (1968): 390; Charles K.
Harley, "British Shipbuilding and Merchant Shipping: 1850–1890." Journal of Economic History 30, no. 1 (1970): 262-63. See also discussion in Chapter 2.
6 Jevons, The Coal Question: viii.
adversities amidst intense competition became a building block in the development of their maturity as international merchants. By 1880, these merchants had established their reputation as traders in the NSW - China coal trade, that reputation extending to the general Asian economy of the nineteenth century.
For some historians, like K. H. Burley, NSW coal shipping to China was nothing more than an assumed requirement for shipping on their return journey to Britain.8 Termed by
Burley as “back trade,” it came out of the need to find a load to return to England, whether direct from Australia or via another port, including Hong Kong or Shanghai.9 The transport of NSW coal, Burley further declared, was for tramp shipping, vessels not requiring speed. Burley replayed a commentary in the Newcastle (NSW) newspaper of 1864, which stated that vessels at that time enquired for freight, lest they travel to China in ballast in the view of “procuring loading for Great Britain.”10 The desire for the “back trade” thus defined the needs of the ship’s captains once they had unloaded their cargo in an Australian port. Burley sums up his findings by stating that in the mid-1860s even “with the decline of exports to China, however, the part played by N.S.W. coal shipments to the Asian sector remained essentially that of providing freight-earning cargo for vessels which otherwise would have cleared in ballast.”11
Burley completely overlooked the part various elements, including coal companies, exporters, importers, commission agents and others, played within the NSW coal export industry. Each of these elements were vital for the NSW coal trade to China. Thus
8
K. H. Burley, "The Overseas Trade in New South Wales Coal and the British Shipping Industry, 1860- 1914." The Economic Record 36, no. 75 (1960): 394-95.
9
Burley, “The Overseas Trade”: 401.
10 NCHRDN 10 February 1864: 2.
understanding what each role the elements played is important in analysing why NSW coal fulfilled that need and how the remittances were made.
Contrary to Burley’s statement, the amount of coal traded from NSW to China was not insignificant. It surpassed the two major coal exporters to China at the time - Great Britain and Japan. Further, coal as an export commodity from NSW to China provided a significant proportion of the export trade from NSW to international ports for the 1860s and 1870s. The coal traded to China was used both to power steam engines and as fuel for furnaces to develop iron and other products. NSW coal also attained a strong reputation, such that by the 1870s the British Royal Navy commonly mixed it with Welsh coal or used it directly. The trade of coal from NSW to China was a rather complex arrangement affected by numerous factors, both internally and externally to NSW and one which provides much value to an understanding of the overall trade relationship between Australia, as a whole, and China.
The analysis of the NSW coal trade of the 1860s and 1870s generates a number of questions that are put forward throughout this chapter. First, why did China require such a large amount of coal and how did NSW producers and traders situate themselves to meet this demand? Next, do the statistical data of the coal trade divulge a more expansive analysis of the trade? Thirdly, how can the statistical data be better explained through the qualitative material available, including correspondence and government official documents? Finally, how were the remittances in relation to the coal trade completed? Using archival materials, the chapter analyses the general trade and offers an explanation of the role of coal from New South Wales within the larger trade relationship between China and the Australian colonies. This chapter, thus, queries Burley’s conclusions.
China’s demand for coal
Coal was an important commodity delivered regularly to China from various foreign ports.12 Yet, what is unusual for this specific item is that the consumption of the steaming coal, and a portion of the coking variety, was not for Chinese end users per se, but for Western companies based in China for use in their own steamers or those vessels the Westerners chartered. The Chinese had little need, or interest, for steaming coal above what they already procured from their own mines.13 The first steamer built in China was the Huanghu in 1865.14 Further, the first Chinese owned steam shipping company, the China Merchants’ Steam Navigation Company (CMSN), was only established in 1872.15 Thus, there was little or no demand for steaming coal by the Chinese in the 1860s and for a good portion of the 1870s.16
Western firms held an important role in defining the requirements of importing foreign coal into the Treaty Ports of China. During the 1870s, British and American shipping made up over 80 per cent of all ocean-going and coastwise traffic in Chinese waters.17 Firms such as JM&Co., Russell & Co., Trautmann & Co. and others competed with
12 Robert Hart, "China. Trade Statistics of the Treaty Ports, for the Period 1863-1872." Shanghai:
Imperial Maritime Customs Press, 1873. (Compiled for the Austro-Hungarian Universal Exhibition, Vienna, 1873): 28-29. For example, in 1872, coal as a single import commodity was only behind opium, cotton and wool. That said, it was only between 1% and 2% of the total value of imports.
13
Jenny Huangfu Day, "From Fire-Wheel Boats to Cities on the Sea: Changing Perceptions of the
Steamships in the Late Qing, 1830s-1900s." Australasian Journal of Victorian Studies 20, no. 1 (2015):
60. Day concludes that the Chinese were inquisitive of the usages of steam yet took decades following the Opium Wars before they took advantage of it.
14
Hsien-Chun Wang, "Discovering Steam Power in China, 1840s - 1860s." Technology and Culture 51,
no. 1 (2010): 47-51.
15 Kwang-Ching Liu, "Steamship Enterprise in Nineteenth-Century China." The Journal of Asian Studies
18, no. 4 (1959): 436.
16
There was no railway in China until a line from Wusong to Shanghai was opened in 1876. Railways were seen as a threat by the literati to the established order of transporting goods to inner-China. Richard
C. Rapier, Remunerative Railways for New Countries; with Some Account of the First Railway in China.
London: E. & F. N. Spon, 1878: 19; Percy Horace Kent, Railway Enterprise in China: An Account of Its Origin and Development. London: Edward Arnold, 1907: 13; Shellen X. Wu, Empires of Coal: Fueling China's Entry into the Modern World Order, 1860-1920. Stanford, CA: Stanford University Press, 2015: 13.
17 Han Qing, "Western Steamship Companies and Chinese Seaborne Trade During the Late Qing
each other for the lucrative Yangtze River trade as well as the coastal routes between Hong Kong and Shanghai.18 Overseas shipping companies, including P&O and the
Pacific Mail Steam Ship Company, similarly relied on available imported coal reserves when their steamers arrived in the Treaty Ports.19 The other major contributors to coal imports were the governments of the foreign powers that maintained concessions in China.20 The interests of the governments lay in the development of a combination of their military, political and commercial concerns in the East Asian region.21 NSW coal
was imported for each of these parties and, to a lesser extent, by the Chinese throughout the two decades of the 1860s and 1870s.
By the 1860s, coal usage in Chinese waters grew at a rapid rate. Interest in improving transport speeds along common passages and the increasing use of steam ships drove the requirement for coal and sustained an influx of coal to the primary ports. The development of the Yangtze River trade through the opening of the Treaty Ports along the river from the late 1850s created new routes for steamers, as a replacement for junks, to ply.22 As soon as the port of Hankow was opened to foreign trade, foreign steamers became the major carriers of merchandise, both for local and international trade.23
When combined with the existing coastal trade and the increasing tonnage of shipping for international trade, together they advanced the gradual change from sail to steam in
18 Howard W. Dick and S. A. Kentwell, Beancaker to Boxboat: Steamship Companies in Chinese Waters.
Canberra: The Nautical Association of Australia Inc., 1988: 3-5; For a list of those founded prior to 1882, see: Liu, "Steamship Enterprise”: 435.
19 Letter from JM&Co. to Henry Moore Esq., 21 September 1861 General Letters from Shanghai JMA
C46/21. P&O used steaming coal from the Bellambi mines.
20
Letter from JM&Co. to Thacker Daniell & Co., 1 May 1860 Letters to Europe JMA C11/27.
21
Shinya Sugiyama, Japan’s Industrialisation in the World Economy: 1859-1899: Export, Trade and
Overseas Competition. London: Athlone Press, 1988: 170.
22
Joseph Earle Spencer, "Trade and Transshipment in the Yangtze Valley." Geographical Review 28, no. 1 (1938): 116-18.
23
William T. Rowe, Hankow: Commerce and Society in a Chinese City, 1796-1889. Stanford, CA: Stanford University Press, 1984: 85-86.
the Chinese waters.24 While the coastal and river trade were directed by the movement of goods locally, a number of external factors increased the appearance of steamers in Chinese waters. The opening of the Suez Canal in 186925 and the trans-national railway across the United States26 in the same year created an eventual new influx of steam shipping for both the transport of goods and delivery of mail to the ports of the world.27 Coal from NSW helped feed this ever increasing appetite of new steamers that traversed between the Treaty Ports and overseas destinations.
The British Royal Navy was a major consumer of coal imported into China. Located primarily in Hong Kong, though also venturing to other ports in China, the British Navy required high-quality coal, coal that burnt to a maximum energy per ton, did not deteriorate when bunkered and burnt cleanly thus avoiding continuous cleaning of engines.28 The Navy had, up to the early 1870s, worked with primarily Welsh coal, considered the “best steam-coal in the world”.29 Maintaining the Navy was essential for the protection of Britain’s, and through that Australian, trade and commerce.30 However, by the 1860s and 1870s, a need for a reduction of costs altered the view of the Admiralty in Britain as to the makeup of the coal to be used by the British Navy in East Asia. Certain coal from the mines of NSW became more popular and part of a mixture with Welsh coal used by the Royal Navy in China.31 Thus, in a sense, the coal delivered
24
Wang, “Discovering Steam Power”: 45-46; Bert Becker, "Coastal Shipping in East Asia in the Late Nineteenth Century." Journal of the Royal Asiatic Society Hong Kong Branch 50 (2010): 245.
25
Max E. Fletcher, "The Suez Canal and World Shipping, 1869-1914." The Journal of Economic History 18, no. 4 (1958): 558-59.
26
John H, Kemble, "The Transpacific Railroads, 1869-1915." Pacific Historical Review 18, no. 3 (1949):
332; E. Mowbray Tate, Transpacific Steam: The Story of Steam Navigation from the Pacific Coast of
North America to the Far East and the Antipodes, 1867-1941. London: Cornwall Books, 1986: 23.
27
Sugiyama, Japan’s Industrialisation: 172-73.
28
Steven Gray, "Imperial Coaling: Steam-Power, the Royal Navy and British Imperial Coaling Stations Circa. 1870-1914." PhD. University of Warwick, 2014: 141.
29
Gray, "Imperial Coaling”: 156.
30 Donald M. Schurman, Imperial Defence 1868-1887. London: Frank Cass, 2000: 24.
by Australian vessels to the Royal Navy was being used, in some cases, by the Navy for the protection of the very same coal deliveries.
The port of Shanghai, by the 1860s, attained a prominent position for coal imports. At that time, the major exporters of tea and other goods, including silks, for the British and American markets were companies based in Shanghai.32 Shanghai’s geographical location gave the city a strong position as a transition port. Based at or - at that time - near the mouth of the Yangtze River meant further trade was thus available inland for the goods imported into Shanghai and similarly for goods shipped to Shanghai from such ports as Hankow, Chenkiang and Nanking heading for overseas markets.33 Further, the Chinese foundries in Shanghai required increasing amounts of quality coking coal which was produced by both mines in America and New South Wales.34 Thus,
merchants in Shanghai were importers of both Australian steam and coking coal.
The other element of steamer traffic in China was that of the river trade. Primarily, the steamers of the Yangtze River trade consumed coal obtained from the mines of northern China. That coal was transported to the primary trading port along the Yangtze River, Hankow.35 Unlike coal imported into Shanghai, the northern Chinese coal was not used for steamers traversing the coastal and international waters. It was seen as unaffordable, owing to a combination of high transport costs and heavy government taxation.36 Thus
32
I base this assumption on the fact that exports of tea and silk from China were nearly all from Shanghai and not from the southern ports. See Prices Current AH P945 Cartons 31-33.
33
Hart, "China. Trade Statistics” – Shanghai: 6; W. L. G. Smith, Observations on China and the Chinese. New York: Carleton, 1863: 124. At that time Shanghai was small in size and not located on the Yangtze River, but connected through the port of Woosung.
34
T. L. Kennedy, "The Establishment of Modern Military Industry in China 1860-1868." Bulletin of the Institute of Modern History, Academica Sinica (1974): 796.
35
Rowe, Hankow: 58.
36
Elspeth Thompson, The Chinese Coal Industry: An Economic History. London: Taylor and Francis,
2003: 8. Commercial Reports from Her Majesty’s consuls in China, Japan, and Siam 1865-66. House of
the coal delivered to Hankow was used for river traffic only.37 That usage varied throughout the 1860s and 1870s. Initially, during the period of instability owing to the Taiping Rebellion of the 1850s and early 1860s, only foreign steamers could traverse the river safely.38 Following the retaking of Nanking from the Taipings in 1864, junks became the preferred method of transport of goods along the river, primarily for cost reasons, thus relegating the steam traffic to rare services.39 However, by 1871 Chinese shippers started to dominate the Yangtze trade route. Following the opening of a branch of the CMSN in Hankow, trade altered such that the Chinese steamships were able to