Sir Robert Hart and the Chinese Imperial Maritime Customs Service
In 1863, an Irishman by the name of Robert Hart became the Inspector General of the Imperial Maritime Customs Service (IMCS) in Qing Dynasty China. For the next 48 years, Hart would act as an official of the Chinese government and lead this service that became known as “the only clean and effective ministry of the Qing government” .
The IMCS controlled China’s maritime customs all along the coast and inland waterways. Its staff served as an unofficial diplomatic corps  that brokered peace between China and colonial powers like Britain, France, Russia, and Japan. The IMCS was even responsible for creating China’s first modern national post service . This fascinating story of political intrigue proves that even the stodgiest of organizational cultures can change when crisis meets opportunity.
Origins: Crisis Meets Opportunity
In 1843, a Hakka man by the name of Xiuquan Hong (洪秀全) from Canton started a new religion. After 4 failed attempts at the Imperial civil service examinations, Hong was despondent and became sick with a fever. In the throes of his illness, he claimed, the God of Abraham came to him and revealed to him that he was God’s other son. Turns out Jesus Christ had a brother. By 1851, this younger brother of Jesus had amassed about ten thousand followers and rose up in rebellion against the reigning Qing Dynasty.
By 1853, the Taiping rebellion would embroil all of eastern and southeastern China. To ensure that trade carries on smoothly, the British and American embassies took charge of the situation and ran the customs checkpoints in Shanghai themselves. The western powers were happy to have peace and order while the Qing government was ecstatic to have revenue coming in from an area that had just been cutoff by rebels. Thus was born the Chinese Imperial Maritime Customs Service.
Expanding Scope and Greater Mission
Soon after the IMCS began, the Chinese governors reported that customs revenue increased several times year-on-year . Not only did the IMCS ensure peace and order during rebellion, it turned out to be more capable and less corrupt that the domestically run customs service ever was. By 1858, the Treaties of Tientsin (天津条约) would stipulate for the extension of the Shanghai customs system to all ports open to foreign trade. This was the first (but definitely not the last) time that the IMCS grew by leaps and bounds.
It was in 1863 that Hart was appointed the Inspector General of the entire IMCS by the newly formed Board of Foreign Affairs (总理衙门). For the next 50 years, Hart would become one of the most influential foreign figures in Chinese history.
Vertical Integration: Statistics and Infrastructure Improvement
Robert Hart was a cautious man who never took a step in advance unless he was sure that the ground was firm . Yet he also quickly brought in international best practices for customs management, which was quite revolutionary for China. Hart setup the first modern department of statistics to record and audit revenues. And he created a Marine Department that was responsible for improving harbors and putting up navigation aids. By 1911, this department was responsible for about 400 lighthouses, buoys, and beacons up and down the coast of China.
Horizontal Integration: Inland River Trade
Until about 1898, maritime customs and interior river navigation by steamers were governed separately. But western powers, motivated by increasing desire for greater market access and demanded permission for foreign steam vessels to trade inland. Hart was asked to draft the relevant new regulations that would 1) satisfy western demands, 2) mollify provincial governors, and 3) defend Chinese sovereignty and interests to the extent possible. He was trusted by both sides because he had long proven his sense of duty to the Qing and he knew China better than any foreign representative. Thus the IMCS came in charge of open ports all throughout Chinese waterways, both coastal and inland.
Horizontal Integration: the National Post Office
The IMCS’ involvement in the postal service began under the Treaties of Tientsin to carry mail for the foreign legations; a supplement rather than replacement of China’s existing yi-zhan (驿站) system. Hart was entrusted with informally supervising this new service and established post offices in customs houses. By 1896, the Qing government completely replaced the old postal services. And by 1911, the IMCS-run postal service achieved something that even the United States Postal Service cannot today — financial independence.
Bigger Mission: China’s Unofficial Diplomatic Corps
Because Hart had the trust of both Qing government and the western powers, he was called upon over his decades of service to broker peace when war broke out. The IMCS often served as China’s unofficial diplomatic corps and greatly expanded its original mission of governing trade taxation.
Perhaps the most important diplomatic engagements for the IMCS was helping the Qing negotiate indemnities after a string of humiliating defeats at the hands of colonial powers that wanted access to China’s market, resources, or land. Hart helped broker the peace after these wars and used IMCS revenue as guarantee for the indemnities that China was made to pay. While this was undoubtedly humiliating for the Qing, Hart always acted in the best interest of China under the circumstances, and always argued against any colonial suggestion of taking away China’s own sovereignty .
Absorbing Native Customs
One particular treaty required the IMCS to extend its scope even more. In order to meet the Boxer rebellion indemnities, the IMCS took over all native customs within a 25-km radius of all the open ports so that enough tax revenue would be placed under IMCS control for the guarantee to be effective. This was Hart’s greatest organizational challenge. The native customs were the original customs system that had existed for centuries. They were bloated, corrupt, semi-independent, and had centuries of ingrained bad practices. To ensure continuity in service and payments, Hart stretched his budget to the maximum and opted to keep as much of the old staff as possible. The IMCS would oversee each native customs and bring in the best practices it had learned over the past half century. As time went on, the native officials slowly adapted to the IMCS system while the total amount of staff was reduced through deaths, resignations, and firing of those proven to be ineffective or corrupt. Hart’s cautious approach proved itself yet again.
By 1908, Hart retired at 73, having spent more of his life in his adopted country than his birth country. In 1911, Hart died in Buckinghamshire, full of honors. China showered distinctions on him; the most coveted of all was the title of Senior Guardian of the Heir Apparent (太子太保), the highest honor for civil servants in all of Imperial China.
Hart had built a service of immense value and scope. And he had cultivated relationships both domestically and internationally. The IMCS continued for another 38 years after his death. From 1854–1950, the IMCS survived and outlasted the 4 civil wars, 6 foreign wars, 4 emperors, the Empress Dowager, several republican governments, warlords, and even the Japanese invasion in WWII. More than anything else this incredible resilience should really be considered the crowning achievement of the IMCS.
Lessons for Modernity
1850–1950 is often considered the century of humiliation for China. A 4000 year old dynastic system was dragged kicking and screaming into the modern world. It was the ultimate innovator’s dilemma trap. The IMCS was one of the more successful experiments in escaping that trap. It began when a crisis precipitated a small team under new leadership that was allowed to peel away from the main organizational body. It provided immediate value by giving the government revenue and gained trust by being one of the only non-corrupt bureaus. When various opportunities arose, it expanded in scope (extending from Shanghai to all ports), invested in metrics for analysis (statistic department), improved infrastructure (lighthouses and harbor improvements), and used its unique advantages to branch out to additional use-cases (inland customs, national post service). As time went on, the IMCS and its leadership proved itself enough that it greatly expanded its entire mission from trade to diplomacy. Finally, due to Hart’s long tenure, dedication, and shrewd politics, the new and modern organizational culture of the IMCS was able to take hold and become resilient enough for almost a hundred years.
The IMCS was by any measure resoundingly successful. It was a major force of stability in one of China’s darkest centuries. Trusted by emperors and presidents, Chinese and foreigners, the IMCS also served as a crucial link between China and the rest of the world. Modern organizations have much to learn from the IMCS experience, and today’s leaders have much to learn from Sir Robert Hart.