In 1802, Dr. William Jardine was practising medicine on British East India Company vessels sailing between Calcutta and Canton. Under a charter granted in the seventeenth century by Charles I of England, the directors in London's Leadenhall Street held a monopoly on British trade between India and China. It was customary, however, for the Company's servants to conduct a certain amount of private business of their own. In order to regularise this, the East India Company allowed each officer and member of the crew a space about equal to two chests; what the men did with this space was their own business. Using this space, the doctor soon discovered that trading illegal narcotics was far more lucrative than doctoring. It was during these early days that William Jardine found himself onboard a ship captured by the French with all cargo seized. However, what was to become a highly lucrative partnership was formed with a fellow passenger, a Parsee Indian called Jamshet Jejeebhouy. They became good friends, becoming prominent in their respective business fields and forming a trading relationship that was to endure for many years to come.
In Canton, Dr. Jardine met a naturalised Briton of Huguenot extraction named Hollingworth Magniac and learned that there were ways by which, to a small extent, the monopoly of the East India Company could be circumvented. In 1817, Jardine left his first employers and began the struggle towards establishing his own private firm.
In the meantime, James Matheson was in his uncle's business in Calcutta. His uncle one day entrusted him with a letter to be delivered to the captain of a British vessel which was on the point of departure. James forgot to deliver the letter, and the vessel sailed. His uncle was incensed at this negligence, and it was suggested that young James had better go home. He took his uncle at his word and went to engage a passage to England. "Why not try Canton instead?" an old skipper advised him.
James Matheson did try Canton. And it was there, in 1818, that he met Jardine. The two men formed a partnership which included also Hollingworth Magniac and Beale, an English inventor of clocks and automata. At first they dealt only with Bombay and Calcutta, the so-called "country trade," but later they extended their business to London.
The activities of these four men made an important contribution towards bringing to an end, in 1834, the monopoly of the East India Company in China.