Financial History 145 Spring 2023 | Page 29

Bills of Exchange in the US-China Trade , 1825 – 32
Dael A Norwood is a historian of 19thcentury America specializing in the global dimensions of US politics and economics . Assistant Professor of History at the University of Delaware , he is the author of Trading Freedom : How Trade with China Defined Early America ( University of Chicago Press , 2022 ). His next book project , The Beginnings of the Businessman , examines the emergence of the “ businessman ” as a potent political and cultural identity in modern America .
Sources “ Cash — Queer Calculation .” Niles ’ Weekly Register . April 17 , 1819 .
Sources : “ No . 26 : STATEMENT of all the bills of exchange on London and Paris , furnished by the Bank to go circuitously ; stating the places they were conditioned by the purchasers to be sent to , and the amount to each place ; the amount each year ; and the amount now unsettled for ” in “ Bank of the United States ,” H . rpt . 460 , 22-1 ( April 30 , 1832 ), 206 and Pitkin , A Statistical View of the Commerce of the United States of America , 303 . Between 1826 – 1832 , £ 1 was on average = $ 4.875 ( https :// www . measuringworth . com / exchange /)
1839 with the outbreak of the Opium War , Britain ’ s invasion of the China coast to force the Qing authorities to pay the cost of opium they had seized as contraband .
The new business realities of bills and opium also affected US politics . When the Bank of the United States came under sustained attack from Jacksonian Democrats in the “ Bank War ,” Biddle and his allies pointed , repeatedly , to East India bills as proof of the good the institution had done . But much to Biddle ’ s surprise , his claims hurt the bank ’ s recharter campaign . The bank ’ s opponents seized on the explanation of how bills replaced specie as evidence of the bank ’ s maliciousness . The bills , critics claimed , were instruments “ dealing without capital ”— the kind of speculation that produced financial crises . Instead of buoying it , Biddle ’ s bills helped sink his bank .
In the aftermath of the Napoleonic Wars , American traders ’ increasing entanglements with British commerce formed new connections between US political economy and global markets . While the links between US cotton and British textiles are well known now , in the moment enough American politicians glimpsed how integral new traffics of silver , bills and opium were to US financial health to make controlling them a public concern , too . Like their counterparts in China , American officials worried that their countrymen ’ s profitable enterprises in Guangzhou were destabilizing the money supply and subverting the state . But , as in China , American policymakers ’ attempts to evade the gyres of world trade had the ironic effect of immersing them more deeply in what one merchant termed the “ the troubled waters of speculation .”
These depths drowned many — but not everyone . As Thomas H . Perkins advised his business partners when the Opium War broke out , crisis could mean opportunity , something he had learned trading sugar and slaves during the Haitian Revolution . “ While the trouble lasts ,” he wrote , “ you will be enabled to do great things — But one such chance happens in a life time — Il faut en profiter [ one must take advantage ].”
Yet , when the simmering conflict between smugglers and officials in China boiled over , Americans found themselves with new questions , as well as opportunities . As they learned how US traders might take advantage of British aggression , debates over slavery , sovereignty and the limits of liberal markets came out into the open through discussions of the China trade — redefining US-China relations and domestic politics . The complex capital flows that had slept in the hold of the Congress would not stay hidden in the new daylight of Americans ’ efforts to understand their relationship with China .
Degrand , P . P . F . “ The Money-Market in the US .” Boston Weekly Report of Sales and Arrivals . May 6 , 1826 . No . 367 .
Downs , Jacques M . The Golden Ghetto : The American Commercial Community at Canton and the Shaping of American China Policy , 1784 – 1844 . Bethlehem , PA : Lehigh University Press . 1997 .
Forbes , John Murray . Reminiscences of John Murray Forbes , Edited by His Daughter , Sarah Forbes Hughes , in Three Volumes , ed . Sarah Forbes Hughes . Boston : George H . Ellis . 1902 .
Nicholas Biddle to P . P . F . Degrand , Philadelphia , April 27 , 1826 , in Nicholas Biddle Papers , Manuscript Division , Library of Congress , Washington , DC , reel 6 , vol . 14 .
“ Report by a Committee of Seven Appointed by the Stockholders ,” in Bank of the United States , Report of the Proceedings of the Triennial Meeting of the Stockholders of the Bank of the United States .
Robert Bennet Forbes to Rose Smith Forbes , Canton , March 10 , 1839 , in Robert Bennet Forbes , Letters from China : The Canton- Boston Correspondence of Robert Bennet Forbes , 1838 – 1840 , ed . Phyllis Forbes Kerr . Mystic , CT : Mystic Seaport Museum . 1996 .
Ship ’ s papers : Congress , April 6 , 1824 – April 2 , 1825 , Nathaniel Kinsman Papers , 1784 – 1882 , Phillips Library , Peabody Essex Museum ( Salem , MA ) and China , America and the Pacific ( Adam Matthew Digital ).
Thomas Handasyd Perkins to Robert Bennet Forbes , Boston , February 14 , 1840 , in Thomas Handasyd Perkins Papers , Massachusetts Historical Society , ser . 1 , Loose Papers , 1789 – 1853 , reel 2 , box 2 , folder 10 , part 1 .
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