The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1901-03-24
CHINESE MONEY CUSTOMS CUSTOMS
FOREIGN EXCHANGE A SOURCE OF
MUCH ANNOYANCE TO
FOREIGNERS
TEN KINDS OF DOLLARS
Trade Involves Discounts Both Ways
Few Railroad Routes In the
COuntry-Time Does
Not Count.

Shanghai Cor. New York Times.
reforms in currency and in transporta-
ton are hardly less important to foreign
interests in China than is the UpSetting
OF the present oftice-holding class Sci
entiGc treatment of both subjects has
made accessible an understanding of
their shortcomings, perhaps without
leaving concrete impressions of what
may befall one doing business or having
occasion to travel in China. One simply
cannot use his own money without pay
ing heavy toll on it going and coming
W hlle the native system gets the blame
for this condition. the fact is that the
system is one Of the first principles, ami
ca bic of easy adjustment Tor it is
has directly on the value of bullion
Dollars make the muddle, and they are
of foreign Introduction and growth.
Therefore, it VIII be desirable to remove
notes during the process of extracting
beams.
Ten kinds of dollars find currency.
The banks established avowedly for the
benefit OF foreign trade would probably
like It Well enough il the number We're
doubled, for when merchants from locali-
ties employing a different mintage meet,
trade always involves discounts both
ways, and bank toll is never light i
one wishes to trade where he resides.
the number of dollars that will enable
nm 10 complete the transaction at the
time may be insufficient if he waits to
THINK 1t over; or if he closes at once he
may find the next day that by waiting
over night a less number of dollars
would nave represented the same value
one bows as matter of course to the
eNactiOnS of that puzzle known as ex-
change. but when it subjects him to a
ulscount OF or per cent on perfectly
good money, he concludes that 1t is time
to increase profits or to buy bank stock
That is what happens with letters of
credit and bills of exchange. They must
be turned into taels, with a commission
OIL, ana as tael accounts are not general
~ kept, another commission must be
Paid for computing them in dollars.
A foreign bank in China is so keen for
commissions that it has no hesitancy In
dlscrediting itself to get them. One ex-
perlence Will illustrate this point An
English visitor came to Shanghai last
May and deposited a draft for ESQ
equivalent to something less than $3.50
Mexican. 1t suffered from the usual va
garleS OF the abacus, and when in June
he wished to transfer it to a branch
Cf the same bank at Tien-tsin, it had
dW1ndled about 7 per cent, through no
expenditure of his own, the bank having
enjoyed its use for s per cent loans mean
w IlIG NE INFORMED the llen-tSln branch
that he would probably draw very light
ly against it for several months, thus
virtually advising the bank that it was
safe account to let out. He withdrew
$1,000 and did not touch the account
again until November when he decided
to return to Shanghai He had a bal
ance of $500 at Tien-tsin, and in order
to have that account transferred back to
the banks branch here, he had to paw
the Tien-tsin branch per cent, or $500
The privilege of keeping on continuous
deposit for six months 5000 in two
branches Of the same bank cost him
475. or $3.50 Mexican
Had the depositor left his money in
Shanghai, he could not have disposed Of
drafts on the account without a large
discount, and as he did not know but
that he might eventually have use in the
North for all of the deposit, he saw no
other way to keep money near him. Even
if he had obtained Mexican dollars here
for mis- deposit, he would have needed a
small packing case and a cart to carry
the load. Mexican dollars were accepted
at Tien-tsin in the summer only at a
discount although usually that is the
one coin which passes at all the treaty
ports When he made his Tien-tsin
deposit he could draw out only dollars
used in the North, which suffer from 5
to 10 per cent discount II presented LOT
payment anywhere else.
No computation is possible Of profits re-
sulting from exchanges in different
branches of the same banks. The case
cited is perhaps exceptional, for the de-
position was uncertain as to his plans and
had to take such punishment as the bank
to which he fell victim chose to inflict;
but business houses which have branches
we'll scattered must put up with high
charges for all sorts of accommodation,
Considering the impetus to foreign trade
which settled conditions will furnish, it
is not likely that the banks will assent
to the establishment of a uniform cur
rency and to such other fiscal reform
as will make their own methods less pro-
vocative of general complaint. Mean
while their dividend and surplus accounts
may be safely relied on to show that they
suffer no hardship from doing business in
a land several centuries behind the
times It need not be thought that the
foreign business houses would do with
out the banks in spite of the eXtortions.
They serve commercial convenience in
MANY ways Strides that trade has made
in the last twenty years are largely due
to the facilities the banks have been able
to extend.
NATIVES BEAR THE BURDENS.
The frailty that minimizes benefits and
magnifes mishaps no doubt accounts for
the phrase commonly heard here among
the foreigners that they are done in the
eye" in everything relating to money. 1t
would never be supposed from the style
of life in the foreign settlements that the
process worked discomfort. Some one has
said that life here is much like that in
London, only more comfortable and blue
Sky most of the year, a remark not de-
void of point or truth. What the bust
ness house loses to the bank it makes
w from its customers, the native mer-
chants, who in addition to paying that
bill must give their own bankers, who
arrange their credits or stand behind
them otherwise, at the yearly rate at
from 20 to 40 per cent for that service.
If the native merchants are to continue
in business they must make profits out
of their customers, and that is where the
eye doing at last falls. Burdens can be
so widely distributed among the millions
who work for copper cash that they
probably do not realize what bills they
are footing.
Natives who work in the settlements.
indeed, besides paying extravagantly FOR
foreign merchandise, submit to a process
with their money which amounts to a
demonstration that all the parts do not
equal to the whole. Ten Decent pieces do