Page 91 - Merchants and Mandarins China Trade Era

77.

the investment failed, the Chinese merchant often had no way to

pay his debts. Although the Consoo Fund existed to cover debts

incurred by Hong merchants, they usually dared not resort to it

in these circumstances. Above all they desired to keep the matter

hidden from local officials, as adventures in foreign trade

were forbidden. Usually the Co-hong sought to cover the debts

of its fellow members to prevent any official investigation

and action. But the situation created problems for foreign

houses which often had debits as much as one hundred thousand

46
dollars listed on their ledgers as a loan to a Hong merchant.

If the merchant went too far in debt, the Co-hong could pres­
sure him to retire. The wealthier Hong merchants could not

continually afford to pay others' debts in addition to their

own assessments.

Although the American merchants at Canton sporadically

complained of the restrictions of the Canton system and the

monopoly of the Co-hong, for the most part they praised the

honesty of the individual Hong merchants and the efficiency of

their system of trade. The major problem the Americans faced

was deceptive practices in packing merchandise. Especially in

the beginning years of trade, American discovered that some

46
For discussions of investments and financial difficul­
ties of various Hong merchants, see Letter, Bryant & Sturgis to
J.P. Sturgis & Co., Mar. 6, 1823, Harvard Business School, Baker
Library, Bryant & Sturgis MSS; Letter, T.T. Forbes to T.H. Perkins,
Nov. 1, 1824, Harvard Business School, Baker Library, Forbes MSS;
Russell & Co. to S. Richards and S. Russell, Dec. 9, 1836, Heard
MSS. The Governor-general of Liang-Kwang memorialized the Emperor
on the practice of foreigners lending money to Hong merchants,
see "English, Americans, and Prussian Merchants Lent Money to
Two Hong Merchants, Nov. 29, 1810," in Fo Lo-shu, A Documentary
Chronical of S:ino-Western Relations, 1644-1820, The Association
for Asian Studies: Monographs and Papers, No. XXII (Tucson, 1966),
pp. 380-81.