This is a study of the Chinese
idea that inspired the first bank deposit insurance statute, New York’s
Safety Fund law of 1829. It examines the origins of financial collective
responsibility in China through to its use by the Imperial Household
Department in the management of businesses monopolized for the benefit
of the Qing court. Collective liability among members of the hong
merchant guild of Canton, China for the foreign debts of guild members,
enforced 1780-1842 (the “Canton Guaranty System”), was taken by New York
as its example. The study examines the evolution and regulatory
practice of the Canton Guaranty System (itself a component of the
“Canton System”). The study examines the history of the New York Safety
Fund and other American state guaranty funds through to the adoption of
national bank deposit insurance in the United States in 1933. The eighty
year history of deposit insurance in t he United States, and the
history of bank deposit insurance as it has expanded worldwide, are
briefly sketched. The study argues that the Canton experience, never
previously examined, anticipates certain major problems with modern bank
deposit insurance. It offers some lessons drawn from the Chinese
prehistory of bank deposit insurance.LEI Universiteit LeidenColonial and Global Histor
