The Failure of the Compradore Registration System and the Charge of the Export Sales System in Shanghai during the 1860s

After suppressing the Taiping rebellion, the Qing government restored its control over trade and commerce. By depending upon the Chinese merchants' guilds and local officials, they gradually excluded foreign merchants and their native agents from the inland market and contained them within major treaty ports. Although foreign merchants fiercely resisted this policy, they could not break the containment system. Dealing with two civil cases, "E-kee ν. Jardine Matheson & Co." and "Yew-kee and others ν. Preston Breuell & Co.", and the following diplomatic negotiations, this article reveales what took place in the relationship between Westen merchants and Chinese dealers after the economic crisis of 1866. The key issue of the two civil cases was how to deal with the native agents of foreign merchants, i.e. compradores. Like nowadays, there was no concrete definition of a compradore ; he was regarded as a "servant", middleman', or "broker" at each transaction. Taking advantage of their ambiguous legal status, compradores could carry out private business with the native drafts which should have been changed into their employers' fund for their overseas remittance, and left the damage and loss to their employers when the credit system collapsed at the end of 1866. Due to the economic crisis at that time, foreign merchants and Chinese dealers, who both relied upon the compradores to carry out their business, competed with each other in order to collect the profit from their trade partners and to avoid the obligation of payment. Since it was impossible for foreign merchants to collect any loss from the Chinese dealers, the compradores, and their sureties, a British consul in Shanghai, C.A. Winchester, proposed a system which obligated all compradores to register at a public service. On the contrary, the Chinese dealers, who were aware that the foreign merchants were trying to abandon the business relations with them whenever it turned out to be unfavorable, never admitted his scheme. The Shanghai Silk Guild, the leading organization of the Chinese dealers, set new rules making it impossible to carry out their business with the compradores. Although the new rules were not made to be suitable for trade customs according to the system of the documentary credit system, Winchester's proposal was rejected and the new rules were put into effect. Consequently, foreign merchants were compelled to carry out their export business with great inconvenience until the 1870s.