Black Gold and White Gold: Weaving a Global Network through the Chinese-American Tea Trade, 1815-1842

The research explores the collaboration of Chinese and American traders in the global tea trade and Asia’s secondary monetary market, which eventually led to the First Sino-British Opium War (1839-1842). The United States was the second largest importer of tea from China in the nineteenth century. To settle their account balances or pay for tea, U.S. traders became the major suppliers of silver from South America to China. However, the rise of opium smuggling between India and China from the late 1820s gave Americans a new way of raising funds, because a secondary monetary market grew in Asia as demand soared from British-Indian merchants for more bills of exchange to remit their proceeds from opium sales back to India and Britain. With the endorsement of prominent Chinese merchants, American traders sold millions of dollars’ worth of bills—generated in the trans-Atlantic cotton trade or issued by the Bank of the United States—in Asia, thus dramatically reducing their shipments of silver to China. The structural change in the Chinese-American tea trade, which inflated the American economy and aggravated the silver drain on China, resulted in the Panic of 1837 in the United States, Chinese merchants’ bankruptcies in Canton, and the Qing government’s crackdown on opium, thus providing another stepping stone for the First Opium War in 1839. The development of the secondary monetary market and the breakout of the war, therefore, demonstrate that late imperial China had already been tightly interwoven into global financial and commercial networks before the Opium War.