Hu Yuanhai

Hu Yuanhai’s father, Hu Liwei was born in Luling, Jiangxi, to a large but impoverished agricultural lineage. He and his kinsman, Hu Shiyun, came to Ziliujing in the mid-Jiaqing reign (1796-1820), lured by the already strong links between Jiangxi merchants and the salt-producing regions of this distant province. Liwei married in Sichuan but died soon after, leaving a wife and son, Hu Yuanhai, who were forced by poverty to return to Jiangxi.

When Hu Yuanhai grew up, he borrowed some money from a relative and returned to the site of his father’s dreams. Here he joined other members of the Jiangxi guild in selling cloth. Yuanhai made enough money to open a shop of Xinjie (New Street) in Ziliujing; soon after, the owner of the new Yuanhe shop married the daughter of a fellow provincial named Wang.

Together, Hu Yuanhai and his wife built a strong business, and with the money he made selling cloth he first entered a partnership to drill for brine. When this venture succeeded, he used the well’s profits of more than eight thousands strings of cash to buy a piece of agricultural land yielding eighty piculs (about four thousand kilograms) of rice a year in rents. Far more important in the purchase was the apparently barren waste land and river-bank land that adjoined it. Here Hu Yuanhai opened his first gas and brine wells, and on the bank of the river, at the foot of Zhaizi hill, he moved his family and built his business offices.

In mid- century none of these families had sufficient resources to expand their operations on their own. With a prospering cloth business to fall back on, Hu Yuanhai was alone among the early salt giants to remain relatively independent in his business activities. After his first successful partnership, Hu tended to develop his wells on his own land. His method, using the profits from one well to build another well, was a conservative business strategy ideally suited to an economy short of venture capital. Even if the new venture failed, the investor’s original capital was safe. This same method protected another salt capitalist, Huang Zhiqing, from bankruptcy, despite an investment of almost seventy thousand taels in a well that was finally abandoned after drilling for eight years.

For Hu Yuanhai the method not only guaranteed profits but also promised to relieve him and his descendants of the complications that partnerships could bring. Nevertheless, it did limit the scope of his endeavors. Unlike his fellow magnates, most of Hu Yuanhai’s wells produced low salinity yellow brine, albeit of good quality. The wells tended to be shallow and took relatively little time and money to drill. By time of his death, Hu had accumulated an estate consisting of five brine wells and gas wells yielding enough fuel to evaporate thirty pans a day, agricultural land yielding two thousands piculs of rice in rents, and liquid assets amounting to several tens of thousands of taels.