ABSTRACT
This chapter examines the claims of French citizens, the creditor groups and the strategies that were employed to recover monies advanced to Chinese citizens. The crisis of 1779-1780 arose from loans that had been made by private European lenders to Chinese merchants over approximately the fifteen preceding years. The crisis broke at a vortex of monopolies, yet it had nothing to do with monopoly. The cry of British creditors was that the funds lent to hong merchants were the proceeds of fortunes they had made in India. Loans to hong merchants attracted foreign lenders because they seemed safe, and offered an above-average return. They were banned under trade regulations promulgated in Canton in 1760, and the collection of interest in excess of the amount of principal advanced was prohibited under the Qing statutes. The claims against the hong merchants were allowed in a reduced amount in accordance with the well-known statutory cap, and directed to be paid accordingly.
