A Study Of Hongkong And Shanghai Banking Corporation In Late Qing Dynasty (1865-1894)

Hongkong and Shanghai Banking Corporation (HSBC) is the third-largest bank in the world. It is also the representative bank in China's modern financial history. It has been more than 140 years since the establishment of HSBC in Hong Kong and Shanghai in 1865. Based on the historical materials, this paper adopts economic and financial theory, through researching the initial period of HSBC from 1865 to 1894, to explore the elements effecting the early development of HSBC by use of textual research, comparison, statistical techniques, integration of theoretical analysis and case analysis, and integration of qualitative analysis and quantitative analysis, and therefore reveal how HSBC draw on the advantages and avoid disadvantages, and became more and more prosperous. It will give financial enterprises some advices how to adjust and strengthen themselves in the situation of the changing politics and economy.Bank is an institution of circulating funds. Among the forms of funds in the late Qing dynasty, silver occupied the core position. Therefore, the fall of silver price after 1870s influenced the development of HSBC largely. At the same time, the early HSBC developed in the decline of the early companies and the gradually rising of the colonial banks. In this paper, the first chapter is about the creation and development background of HSBC.As a financial business entity, bank has certain form of existence. HSBC's English name was from its operation place, its Chinese name means "remittance-rich". HSBC were established in accordance with the British Companies Act of 1862 and the rules for colonies banks, and gradually achieved full legitimacy. At targeting local banks, the collection shares were guided by the principles of international cooperation, absorbed Chinese shares, continued to expand the capital. Its corporate governance structure included shareholders, board of directors, managers, supervisors. It implemented the total branch system, and continued to perfect their organization system. Chapters II and III described the creation form of HSBC and its organizational structure.In accordance with the flow direction of the funding, the paper described in chapter IV HSBC's funding sources, namely, issuing currency notes and depositing. Because note issuance is limited by the issuance decree, in addition to its own capital, the deposit taking has become the main source of funding. From the comparison chart of notes and deposit data, we can see that the deposit amount is much higher than bank notes in circulation, especially in 1880s, the deposits and banknotes increased greatly, but the gap between the notes and deposits became larger.Chapter V of this article is about the use of funds business in HSBC, the exchange and loans. Exchange includes the international exchange, domestic remittances and overseas remittances. Loans are divided into business dealings with the companys, the chop loans, and the loans to Qing government.From the comparison chart we can find that before 1880s the exchange has been much higher than the loan amount, which is the reason that "HSBC" bank is named. After 1880, loans and exchange rate are growing rapidly, but loans are almost the same as exchange.The conclusion summarized the elements that affect the development of HSBC Bank from 1865 to 1894. The elements include strategy and tactics, decrees system, technology exchange rate, current affairs needs of the home country support. It teaches the present financial institutes should combine its own characteristics and the characteristics of the times, adjust and improve the organizational structure and business area so that they can become consolidation and stability.There by the whole financial industry can become stability.