Matthew Lockhart is the man Sally has always known as her father. He was killed before the beginning of the story, presumably drowned at sea but actually murdered by Ah Ling/Van Eeden. He was killed to stop him from interfering in an illegal opium trade.
Lockhart was once in the army, serving in India in Agrapur. He was given a Ruby by the Maharajah in return for his protection in the Mutiny, but the Maharajah was killed anyway. Lockhart exchanged the Ruby for Marchbanks' baby, Sally. He wanted to make sure the baby was brought up properly, away from drugs, and given a good chance in life. He cared about this more than the jewel. He has been a good father to Sally, and she still considers him to be her real father at the end of the story, even though she now knows that he is not her biological father.