Chapter categories

With the passage of the Age of Discovery it became apparent that the products of the East were very desirable in Europe. The British in India, the Dutch and Portuguese in the East Indies were the leaders in developing the trade of the area.

With the Portuguese settlement at Macao in 1557 the potential for developing the China trade came closer to reality. Because of the isolationist policy of the reigning dynasty in China it was to be many years before the European powers could gain a viable foothold for trade in China. The product that was to provide the opportunity for further exploitation was to be opium. The British developed a very lucrative trade in opium from India into China sponsored by the East India Co. Opium was illegal inside China but was brought in through smuggling and official connivance.

The Treaty of Nanking, signed August 29, 1842, was to open the China trade by having as one of its terms the opening of the ports of Amoy, Canton, Foochow, Ningpo and Shanghai to foreign trade and residence. The Treaty Ports, as these were called, were the stepping stones upon which general trade was developed. By 1911 there were 50 ports opened for trade in China.

With the development of Western trade in China it was thought necessary by the traders to establish Western banking. The first Western bank in China was a branch of the Commercial Bank of India in Canton in 1851 and later in Shanghai in 1855. The ceding of Hong Kong to Great Britain in 1842 also provided a base for European banking practices. The Bank of Western India established a branch there in 1842.

Various banks of British background dominated the banking scene in China for most of the 50 years following the treaty of Nanking. Then came a German bank in 1889, a Russian bank in 1895, a Japanese bank in 1898, a U.S. bank in 1902, a French bank in 1902, a Belgian bank in 1903 and a Dutch bank in 1904. All of these banks were note issuers at one or more branches. The notes were issued to encourage doing business with that bank in the area represented. The banknotes circulated in direct competition with the regular Chinese issues of the period.

The foreign banks also provided loans for the Chinese government (both for the empire and later for the new republic). Many of these loans were very substantial amounts and required more than one of the foreign banks to accommodate the amount. The notes of the foreign banks circulated until World War II and a number of these banks still maintain offices in Hong Kong.

Issuer Identification

Issuer index compiled from this book’s chapters; original inscriptions retained.