Page 351 - Merchants and Mandarins China Trade Era

337.
8
of the American government. But the advantages afforded by

American commercial policy more than outweighed any detriment

to the government. These special benefits for the China trade

ended in 1834� as the Tariff of 1833 discontinued the practice

of deferred payment for customs duties. At this time the

China trade had developed a firm foundation that made such

9
governmental assistance no longer necessary. Federalist
,commercial policy in the 1790's, nevertheless, had helped

American merchants to build the China trade into a profitable

commerce.

For two decades, Hamilton's commercial policy fos-

tered the American China trade. After the War of 1812 the ware­

house and drawback systems attracted a surge of merchants into

China adventures. With governmental subsidization of the tea

trade, merchants discovered they could speculate in China

cargoes with little capital. The constantly increasing num-

ber of Americans involved in the China trade disturbed many

older merchants, whose own enterprises before the War had

benefited from the same policies. Yet the Panic of 1819 and

the ensuing depression did not seem to affect the growing

8
The financial debacle of 1826 in the American China
trade stemmed from the loose credit extended to merchants thr­
ough the warehouse and drawback systems. After the War of 1812
merchants speculated in teas without consideration to customs
duties. When the Treasury Department finally demanded payment
of back-duties in 1826, many merchants had to declare bankruptcy.
Edward Thomson of Philadelphia R whose son was consul at Canton,
went to jail for embezzling money from another house to pay his
duties.
9
Tnis provision in the tariff, coupled with President
Jackson's assault on the Bank of the United States, created a
small financial crisis among merchants in 1833. Myers, Financial
History of the United States, p. 93. Winthrop L. Marvin, The
American Merchant Marine (New York, 1902), pp. 232-33.