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Issue 57 - The Family Business

Scotland Magazine Issue 57
June 2011


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The Family Business

Gavin D. Smith looks at the rags to riches history of James Matheson

This is the story of a drugs dealer. But not one who ended his days behind prison bars, shot by rivals, or hooked on his own merchandise. Instead, James Matheson became a highly respected millionaire Member of Parliament and a baronet.
While many tales concerning prominent Scottish commercial figures feature a ‘croft to mansion’ element, Matheson did not emerge from rural poverty, though he was born in October 1796 in the remote Sutherland community of Shiness, near Lairg. His father was a successful trader in India, and James was educated at Edinburgh High School and the University of Edinburgh.
After completing his studies, he followed his father into the trading business, going on to form a partnership in 1828 with fellow Scot William Jardine, a medical doctor who worked on board ships for the British East India Company. While in the employ of the company, Jardine discovered that trading opium was much more lucrative than medicine, and branched out on his own as a trader in 1817. The following year, in Canton, he met James Matheson, who had previously been employed by his uncle in Calcutta, and the pair began to work together, going on to form Jardine, Matheson & Company Ltd in 1832.
At that time, the British East India Company enjoyed a monopoly on trading between Britain and China, but that monopoly was broken by the British government in 1834, and soon after, Jardine, Matheson & Company Ltd had become the most important British-based firm trading with Asia, exporting tea and silk to the UK and selling opium from India to the Chinese.
When the Emperor of China attempted to ban the trade in opium, due to its harmful effect on the population, Jardine, Matheson & Company Ltd lobbied the British government to force China to compensate them for confiscated opium. This led to the outbreak of the First Opium War in 1839.
Britain duly won that conflict in 1842, re-opening the floodgates for trading of the highly profitable narcotic into China, and Jardine, Matheson & Company Ltd established its head offices in the newly-colonised island of Hong Kong. Another island was significant to James Matheson around the same time, as 1844 saw him return to his native Scotland and acquire the Outer Hebridean island of Lewis.
Matheson purchased the entire island from the Mackenzie Trustees for £190,000 and set about creating a grand residence for himself on the outskirts of the island capital of Stornoway. The imposing, ‘Tudor Gothic’ Lews Castle was designed by the leading architect Charles Wilson and construction work on the £60,000 project began in 1847, taking seven years to complete.
In addition to the capital sum spent building the castle, a further £49,000 was devoted to the creation of woodlands and private gardens, which were duly planted with many imported species of flora and fauna.
During his time as owner of Lewis, Matheson acted in a responsible and fair manner, developing a number of social and economic projects to benefit the community and provide employment, including drainage and road-building schemes, in addition to funding food relief programmes during times of potato famine. It is estimated that by 1850 Matheson had spent £329,000 on Lewis. These benevolent activities did much to allay the initial fears of locals when existing tenants were ‘cleared’ from their land and roads re-routed during the creation of Lews Castle and its grounds.
Matheson also assisted the emigration of no fewer than 1,771 people from the island, and, unlike the ‘clearances’ in many parts of the Highlands and Islands, these emigrations seem to have been undertaken on a voluntary basis. In 1851 Matheson was rewarded for his efforts on behalf of the people of Lewis by being created Sir James Matheson, 1st Baronet of Lewis.
James Matheson had previously acted as Member of Parliament for Ashburton in Devon from 1843, succeeding his late business partner, William Jardine, but 1847 saw Matheson give up the seat, going on to serve as MP for the constituency of Ross & Cromarty from 1852
until 1868.
He was followed in that role by his nephew, Sir Alexander Matheson, who was a partner in Jardine, Matheson & Company Ltd before retiring at the age of 36, having already made his fortune. Like his uncle, he returned to Scotland and purchased land, going on to ‘improve’ it from an agricultural point of view, providing more viable employment for his tenants. Alexander Matheson spent the vast sum of £773,020 purchasing some 220,000 acres of the county of Ross, establishing Dalmore distillery on the shores of the Cromarty Firth during 1839.
In the west, Alexander Matheson bought the Balmacara Estate in Lochalsh, and built Duncraig Castle at Plockton as his personal residence. He was instrumental in the establishment of the Highland Railway line to Kyle of Lochalsh, and the line survives to this day, as does Dalmore distillery, which provides a highly regarded single malt whisky for owners Whyte & Mackay Ltd. As was the case with his uncle James, Alexander Matheson was created a baronet in 1882, taking the title Sir Alexander Matheson of Lochalsh.
Meanwhile, Sir James Matheson died in France during 1878, aged 82, leaving no direct heir, and his estate subsequently passed to his wife Mary, and then to his nephew Donald and grand-nephew Colonel Duncan Matheson. However, financial imperatives forced the sale of the estate, and in 1918 it was bought, along with the rest of the Lewis estate, by industrialist Lord Leverhulme, who subsequently gifted it to the people of Stornoway in 1923.
Having been put to a variety of uses, including a college, school and student accommodation, Lews Castle has been unoccupied since 1996 and the ‘category A’ listed building is currently in need of significant structural restoration, being on the ‘Buildings at Risk’ register, although the grounds remain open to the public. There are now plans to develop Lews Castle into a cultural and heritage centre, and Heritage Lottery Fund and Scottish Government support should ensure a viable future for the building.
Meanwhile, the company established by James Matheson and William Jardine continues to thrive as a multi-national corporation, trading as Jardine Matheson Holdings Limited, being incorporated in Bermuda and still based in Hong Kong.
Its origins in the opium trade are a very long way in the past now, but the folk of the Scottish Highlands have long memories, and in recent years there have been attempts by a number of people to have portraits of James and Alexander Matheson removed from Dingwall Sheriff Court on the grounds that the pair were really no better than drugs barons, whose wealth was created by inflicting misery on thousands of people in 19th century Asia.
Whatever the modern morality ‘take’ on the activities of James and Alexander Matheson and their business associates, it remains incontrovertible that they created a network of profitable and enduring trading ventures at a time when Scots were at the heart of so many bold, global commercial enterprises. Perhaps somewhat surprisingly, they were also comparatively enlightened estate owners, in an era when all too many of their fellow landlords in the Scottish Highlands treated ‘natives’ less well than the sheep by which they were so often dispossessed.