The evening times., 1900-02-19
BANK METHODS IN China
The Operations of the Hongkoug
and Shanghai Company.
The Issuance of Notes in Excess of
the Legal Amount ON the Deposit
Bills Not Legal Tenders-SiIVcr
Dollars Bought Like Merchan,iise.

In reply to the enquiries by member
of Congress respecting banking and cur
rency in China. Consul General Goodnow
writes from Shanghai, December H. 1899,
as follows:
The Hongllong and Shanghai Banking
Company was incorporated July 90, 1867.
under an ordinance of the colony of Hong
kong. The first Incorporation was for
twenty-one years. On May 1. 1887 the in
corporation was continued for second
term of twenty-one years.
The paid-up capital on June so, 1899.
was so, 900 COO Mexican. The reserve fund.
at the same time. was $40. .0eC eco Mexi-
can. The current accounts were sS5. .2l7,-
44i9i Mexican and fixed deposits 6s.S4l. =
1916 Mexican.
The issue of notes was as follows: Au-
thorized issue against securities deposited
with the Crown agent for the colonies. sl0,-
O00. 600: additional issue authorized by a
Hongkong ordinance of 1899. against coin
lodged with the Hongkong government
IS. go go; total note circulation. SlS, ,622 69j
Mexican. The amount OF coin lodged with
the Hongkong government against note
circulation in excess of $40. COG. eco is equal
to s. ,00O, 600.
The ordinance of 1899 allowed the issue
of certain notes in excess of the legal
amount as stated above. but only on the
deposit of coin with the Hongkong govern
ment to cover the amount of such notes
and any probable or possible depreciation
bills was made necessary by the increasing
business along the coast requiring currency
and the exigency of supplying some circu
lating medium less bulky than the coined
silver.
While there is no statement on the
subject. | cannot see that these hank notes
have any legal-tender quality. Under
extraterritoriality, each defendant. in case
of a lawsuit is entitled TO the law OF his
own nationality. Notes given a legal
tender quality by one nationality would not
have that quality with any other nation
ity, except by positive enactment.
The branches of this bank are so wide
spread (thus making it easy to transfer
its notes into silver, and its notes are so
generally accepted. and the banks repu-
tation is so thoroughly good, that in prac-
tice these notes are received by everybody
in payment for debt. Branches and agen-
cies OF the bank are at the following
places; Hongkong, Shanghai, New York,
London. Calcutta, Bombay. Fuchau Hi
ogo. Saigon. Hankau, Annoy, Manila. San
Francisco. Singapore. Lyons. Tientsfn, Pc
kin. Iloilo. Penang. Batavia. Bangkok,
Hamburg, Nagasaki, Rangoon, Colombo,
and Soerabaya
'At the present time, the bank pays
per cent per annum to depositors on daily
balance, 3 per cent per annum on fxet
deposits for three months, per cent per
annum on fixed deposits for six months,
and 5 per cent per annum on fixed de
pcsits for twelve months.
Each branch issued its notes payable
to bearer on demand at the place of issue,
and in coin lawfully current at such
place. Notes issued in Hongkong are pay
able in the currency of HOngkong, con-
sisting of British dollars (Which do not
circulate throughout China) and chop
ped Mexicans. The limited area of cir
culation of the first and the damaged con-
dition of the second reduce their value
as compared with the clean Mexican dol
lar, in which the notes of the SGang al
branch are payable. The Hongkong dol
lar today is worth 71.2S tael cents, while
the clean Mexican dollar is worth 75.5SS
tael cents.
The theoretical money of this country
Is tne ldeI, WHICH iS d SniHeSe OuHCe VI
silver. The value of this tael Tin other
words, the weight of the Ounce) differs in
almost every port. and the value Of any
of these taels varies with the value of
silver bullion.
THE real standard money Of the peo-
pie in China is copper cash, which are
worth about one-twentieth of gold cent
each.
1.-The actual money of circulation for the
trade of foreigners in central and north
ern China is the clean Mexican dollar.
In southern China. il is the chopped
Mexican dollar, worth from to per cent
less than the clean dollar. In Hong
kong, 1t is the British dollar and the
chopped dollar
Coined dollars are bought and sold pre-
cisely as any other article of merchandise
Their price varies not only according to
the true value-that is. the amount of
bulk silver ins them-but according to the
demand for them in any particular place
for the purposes of trade.
The Hongkong and Shanghai Bank, /
have stated, has a reserve fund of ten
millions. The net profit of that bank for
the half year ended June 30. 1899, amount
ed to $3,447. .579.6S, after making provision
for bad and doubtful debts and deducting
all expenses and interest paid and due.
"At the last mentioned date 81, ,000 900
was transferred from the profit-and-loss
80 In fInd