One of my all-time favorite books is a novel by James Clavell, Tai-pan. It’s the second book in his series of six novels known as The Asian Saga—a fictional account of historical facts.He tells the story of a wealthy merchant receiving a letter from his banker back in Scotland.
Tai-Pan tells the story of Western, and especially British, traders at the time of the Opium Wars with China. The story starts right after the British have defeated the Chinese Empire in the First Opium War and claimed a barren island in the Pearl River delta as a British possession—Hong Kong.
“We regret to inform you that, inadvertently and momentarily, credit was overextended and there was a run on the bank, started by malicious rivals. Therefore we can no longer keep our doors open. The board of directors has advised we can pay sixpence on the pound. I have the honor to be, sir, your most obedient servant…”There are people who say great timeless truths can't be learned from fiction like James Clavell's, calling them exaggerations and romanticized. It sounds like that's where you find most of the truths that you can learn without losing blood. (H/T Zero Hedge)
And we hold close to a million sterling of their paper. Twenty-five thousand sterling for a million, and our debts close to a million pounds. We’re bankrupt.
Great God, I warned Robb not to put all the money in one bank. Na with all the speculating that was going on in England, na when a bank could issue paper in any amount that it liked.”