The Chinese Cornerstone of Modern Banking

Frederic Delano Grant, Jr., J.D. (1983), Boston College Law School, and Ph.D. (2012), Leiden University, is a Boston, Massachusetts lawyer who has written extensively about the business and legal history of China’s maritime foreign trade.

Acknowledgements ... ix
List of Illustrations ... xii
List of Tables and Charts ... xiv
Note on Spelling ... xv
Glossary ... xvi

1. Introduction ... 1
1.1 Subject and Framework .... 3
1.2 Previous Research ... 8
1.3 The 1829 Crisis in the State of New York ... 13
1.4 The Crisis in the Chinese Port of Canton: 1829 ... 15
1.5 The 1829 Crises as Prologue ... 16

2. Sources of the Canton Guaranty System ... 18
2.1 Conquest and Pacification ... 18
2.2 The Organization of Merchants Engaged in Maritime Trade ... 31
2.3 Official Roots of Collective Responsibility ... 39
2.4 Collective Responsibility in Chinese Tradition ... 47

3. Evolution of the Canton Guaranty System ... 54
3.1 Official Management of Maritime Foreign Trade ... 54
3.2 The Security Merchant System and Origins of Collective Responsibility ... 60
3.3 The Formal Regulation of Maritime Foreign Trade ... 71
3.4 Debt Collection Under the Canton System ... 93
3.5 The 1780 Crisis and Imposition of the Collective Guaranty ... 111

4. The Fund is Drained, 1780-1799 ... 126
4.1 The Hong Merchants, 1780-1799 ... 127
4.2 The Demands of Government, 1780-1799 ... 129
4.3 Trading Conditions, 1780-1799 ... 132
4.4 The Collective Guaranty of Debt, 1780-1799 ... 138

5. Three Plagues: War, Piracy and Litigation, 1800-1814 ... 146
5.1 The Hong Merchants, 1800-1814 ... 148
5.2 The Demands of Government, 1800-1814 ... 151
5.3 Trading Conditions, 1800-1814 ... 154
5.4 The Collective Guaranty of Debt, 1800-1814 ... 157
5.5 The Abortive 1810 Receivership of Gnewqua II and Ponqua ... 159
5.6 The 1813 Receivership of the Junior Hong Merchants ... 163

6. Years of Rebound and Opium, 1815-1828 ... 166
6.1 The Hong Merchants, 1815-1828 ... 166
6.2 The Demands of Government, 1815-1828 ... 170
6.3 Trading Conditions, 1815-1828 ... 171
6.4 The Experience of Conseequa, 1796-1823 ... 173
6.5 The Collective Guaranty of Debt, 1815-1828 ... 184

7. The Last Years of the Canton System, 1829-1842 ... 192
7.1 The Hong Merchants, 1829-1842 ... 194
7.2 Trading Conditions, 1829-1842 ... 202
7.3 The Collective Guaranty of Debt, 1829-1842 ... 207

8. From Safety Fund to Bank Deposit Insurance ... 218
8.1Joshua Forman ... 221
8.2The Power of Suggestion ... 224
8.3The Banking Crisis in the State of New York ... 226
8.4The 1829 New York Safety Fund Statute ... 230
8.5Early State Bank Guaranty Programs ... 237
8.6Implementation of National Deposit Insurance in the United States ... 240

9. Eighty Years of Bank Deposit Insurance ... 252
9.1Federal Deposit Insurance in the United States ... 253
9.2The International Progress of Bank Deposit Insurance ... 257

10. Epilogue ... 263

Appendices
Appendix 1.The Original Five Regulations (1760), Modern Translation ... 283
Appendix 2.The Original Five Regulations (1760), Contemporary Translation ... 286
Appendix 3.The Eight Regulations (1831) ... 291
Appendix 4.The Eight Regulations (1835) ... 301
Appendix 5.The Eight Regulations (Per W.C. Hunter) ... 312

Bibliography ... 315
Index ... 333