Spirit of the age. [volume] (Woodstock, Vt.) 1845-1913, 1894-10-17
CHINESE BANKERS.
Their Banking System Dates Back
Thousands of Years.
BankruptS Are BaniShed and
Sometimes Decapitated.

lhe banking system of China, writes
Frank G. Carpenter, is the Oldest
known to man. According to Chinese
records there were banks of discount
and deposit there as far back as 1900
b. g., and the interest laws of China
were made long before Columb dis
covered America. There were Shy
locks here thousand years before the
real ShyIock was born in the mind of
Shakespeare. and nowhere on earth
~>.lg civilized people, will you find
higher rates of interest paid, more
money borrowed and more debts con-
scientiously paid. The legal rate of
interest in many of the provinces of
China is 30 per cent, and i'll others 1t
is 80 per cent. Still millions are lent,
| an told, in the shape of call loans III
the seaport towns Mt and 6 per cent,
and all sorts Of money transactions are
entered into. China had n system of
building and loan associations long be-
fore We began to exist as II nation, and
all over the empire there are associa-
tions for the loaning of money,
in which the different members
pay SO much n month and the
Joint capital is passed from one mem
Der to another from year to year, so
that each gets Il chance to use it for n
part of the ten years during which
such associations usually run. There
is no place in the world where capital
combines more readily than in China.
The bankers have their guilds or asso-
ciation, which fix all their rates of
credit and interest. Every city has
its clearing house, which settles Up
the business between the banks at the
close of each day, and the native banks
issue circular letters of credit to
travellers going through the empire.
Thcreare big banks who push Chinese
patent medicines, and little ones who
loan ont sums which we Americans
would hardly think worth while bor-
rowing. There are trades, unions, of
all sorts, and even the beggars club
together and are bound by the rules
of their union. Farmers combine to-
getaer to buy cattle, pedlers buy and
sci the custom of particular streets
to their fellows, and a man who wants
to get r""rriod and has perhaps not
enough money to buy wife will go
into one of these loan associations to
get it.
tried to buy some pictures at
Kiukiung, but found the dealers store
shut and was told that he had closed
until he could get enough money
from his friends to pay his last year $
debts. All firms here have to settle
M at the close of the year, and it is
the greatest disgrace to go into bank
ruptcy. Bankrupts often commit sui
eide and the son feels bound to pay
his fathers debts. 1t is the same
with other relatives. The debts of any
member of family are disgrace to
the whole family, and rich men, hav,
ING failed, will go to work at the most
menial occupations in order to pay
up. Big failures are always punished
by law. If the amount is from 81, 50C
TO s., 900 the bankrupt is banished
and if it runs above that amount hi
haad is taken off. There is not mucl
discussion about the matter, and tn,
law is that the bankrupt who becomes
such from unavoidable circums 'ances
is decapitated just the same as the
fraudulent one. There are no lawyer
and no juries, and the judges and Off
cials of the town pass the sentences
Sometimes the bankrupts carr,
heavy chains for weeks through
the streets At others they ar,
put in the cangue and not infrequentl,
they lose their heads. If, however
the bankrupt carl save enough out o
the failure he can sometimes buy of
the Judges, thus saving his head. II
many cases the creditors forgive thei
customers their debts, and many
man at the annual settlement day
which always comes at the close of TIN
year, has his friends come togethe
and start him anew, clear of debt,
If he cannot clear himself in som
way, his shop is kept shut until he an
nounces his failure or gets the fund
to continue. This prevents ther
ever being great panic in China. Th
actual standings of the different mer
chants and business men are know
at least every twelve months, an
there is no chance for man to con
tinue long career of fraud and fail
ure.
Ia Esarht