1. CHINA HOUSES AND THE BANK OF ENGLAND CRISIS OF 1825.
- Author
-
Cheong, W. E.
- Subjects
FINANCIAL crises ,FINANCE ,NEGOTIABLE instruments ,INVESTORS - Abstract
Between the end of the Canton Crisis of 181-15, and the Bank of England Crisis of 1825, the financial usages of European houses in China had become better defined. Increased reliance and valuations upon negotiable paper instruments of finance were apparent. Quite apart from the extensive use of the East India Co.'s remittance paper as negotiable in India and China, the provision of private credit facilities for private trade in India and China were now explicit. Records of short-term lending on the spot and deposit accounts were now in evidence. The individual consigner of Indian cottons and opium who surveyed on a large scale for the China market could now also obtain direct credit backing from China agencies, albeit at the exorbitant rate of ten to 12 per cent. Indian agents of the China houses were also encouraging and financing groups of small investors under joint consignment accounts. In turn, the China houses now had sizeable credit accounts with their London, England, agents, which they covered by the periodic hypothecation of China goods to the United States. For a good many years the London money crisis of 1825-6 was slowly but clearly building up. In the build-up of the crisis conditions, the Bank of England was not above blame. Some China houses had not yet reached this level of rationale in their financial affairs, but the new mood of independence was symptomatic of the important changes through which the system was undergoing.
- Published
- 1973
- Full Text
- View/download PDF