THE BEGINNINGS OF CREDIT FINANCE ON THE CHINA COAST: The Canton Financial Crisis of 1812–1815.

The article presents information on the beginning of credit finance on the China coast. The volume and area of the Chinese trade in private hands expanded as the English East India Company abandoned its Indian trade monopoly in 1813 and its China trade monopoly in 1834. The market for Chinese goods in the United States also developed, at first on the initiative of the American houses on the Atlantic seaboard and then with the connivance of English agency houses. Western finance on the Chinese Coast at the time was confined almost exclusively to the entrepreneurial context of trade, hence it was from the extension of trade that advances were made in methods of finance. The eastward expansion of the China trade to the Atlantic seaboard of the United States brought China traders into the financial orbit of Philadelphia (in the twenties) and New York. The crisis of 1812-1815 forced the China houses to experiment with private bills and, after the crisis, to develop their use. It also illustrated the main elements upon which the earlier China trade was based, and the weaknesses of large scale and expanding trade operations entirely based upon bullion movements.