Hong Kong
Chinese Memorial against recent Legislation, and Governor's Reply.
Enclosure N.1 in Governor Sir Richard Graves MacDonnell's Despatch of 134 of 12 October 1866.
h 11430
The Daily Press- Thursday, October, 11th, 1866.
COMMERCIAL INTELLIGENCE.
Hongkong, Wednesday Evening.
It is naturally the case that those who have money to lend, like those who have "pork to sell," would desire to get as much for it as they can, but another important consideration is always before the capitalist, in letting out his money namely, that his security for the loan is good and sufficient for the value with which he parts. When the only security that can be offered is dependent for its value upon the fluctuations of an uneasy and irregular market, the lender looks with distrust upon the borrower and merchant, very much preferring to be able to feel his cash, and know that it is safe, than the knowledge that the changes of an hour may deprive him of all.
It is very much this feeling of timidity and distrust that is now operating among the Chinese merchants and capitalists, and producing the stagnation that is noticeable in almost every department of trade. There are many large hongs in this colony whose entire business is carried on upon borrowed capital which they obtain for short periods according to the extent, and nature of their business at the time, and for which they are obliged to pay high rates of interest, but at a period when values are so irregular and so unsettled, with so many influences tending to depress them as at present, the capitalist takes the alarm, refuses to let his money go out of his hands and thereby brings the merchant to a dead halt. He sees a risk that he is not prepared to take, in accepting as security for his money, an article whose value is so liable to fluctuation as that of cotton. A lesson has no doubt been learned by them in the Tea speculations of the last season, and the disadvantage of having 4 lacs of dollars locked up, as there actually is now in Canton, in an article they are obliged to hold to realize even the interest on their investment, is seen and felt in a forcible manner.
The news of the large shipments of cotton and opium sounded the alarm to these people, and the late large arrival confirmed their fears, they were thrown into a kind of panic, and disregarding and refusing to recognize the interests of their clients—that is the commercial public—as their own, knowing that money was scarce in Canton as well as here they hastened to withdraw what they could that was already out, and refused all tenders for any new transactions, or to supply money at any rates. The Chinese merchant is thus forced out of the market by no other reason than simply that he has no money, and cannot obtain it. Until a feeling of confidence and trust is therefore restored between the capitalist and merchant, sustained by a firmness in the market, the latter cannot be in a position to trade,
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