The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1901-07-22

pleteness. They do not, as a rule, re-
ceive deposits from individuals, though
some banks receive money on a fixed
deposit and keep current or drawing
accounts with individuals and mercan-
tile houses.
A small interest of 4 or 3 per cent is
allowed on fixed deposits by such banks
as accept them Financial business
is sometimes done for the government
AS already referred to, they loan money
to local banks or cash shops and mer-
camille firms. which they do, not on
collateral, but personal security. In
such cases, the signature of third
party as a surety is sometimes re-
quired, though quite as often only two
parties figure in the transaction. IN
stances are not wanting of large loans
made on verbal pledges, without even
the formality of a promissory note. ]
mention this to illustrate the peculiar
practice among Chinese bankers and
business men. and not to dilate upon
their high commercial honor, which
has been generally and favorably spo-
ken Of by foreigners who nave had
actual experience with them.
Exchange brokerage does not exist as
a distinct branch of business In fact,
China can hardly be said 10 nave any
exchange
desires to mako remittance by draft. Il
sends d clerk to several exchange banks
to ascertain their respective quotations
and then deals direct with the bank OF Its
choice As every line of trade has its
own guild OF association, so the eXchangs
banks have guild, which exercises y
general supervision and controlling 1ntlu-
ence over Its members and safeguards
their common interests This guild mas
been enormously compared to the clear
ing house OF your cities out the prac-
tice of canceling Indebtedness between
the various banks at or through the
clearing house is, | think, not known to
exist in any city of China.
The rate of interest charged by these
banks on loans varies from per cent to
12 per cent, according to the state Of the
money market, the terms required and
the commercial standing Of the borrower
The most noted and numerous among
this class of banks are those of Shansi, a
province of northern China. Centuries OF
training and rigid discipline have turnei
out q class of sound and shrewd finan-
ciers, respected all over the empire Tor
their high integrity and ability.
9 g 81
There is a small class OF licensed bank
ers who do business principally with and
for government authorities. such as. for
instance, district magistrates and others
banks Is in aSsaying and refining silver
and casting 1t into ingOts, for which q
small percentage is allowed for commits
sion or Seign1Ordge. THESE inZOtS bea1
the official stamp Of the banker aud ths
percentage of ffneness The weight Is
marked with ink only, as wear and tear
in handling necessitates constant weigh
ing. All other banking establishments OF
whatever class are private concerns. ANY
person or number of persons may es-
tablish bank.
Savings banks have yet no existence
among the Chinese. The fact that ths
want has not been felt is due. in a great
measure, to the general practice among
them of forming mutual loan and saw
! ings associations, which afford a means
Of saving money as we'll as way Of OBJ
tanning loans when required.
They are peculiar in China, and I an
not aware they are in vogue in any othel
country These associations are com
posed OF an agreed number of shares of Z
certain amount each, TO be paid BY all tn,
shareholders to the associa ton at statet
periods IN as many instaliments as ther'
are shares To illustrate the working o
sucn an association, let US assume that !
is composed of ten shares of 500 each, L
be paid up by ten equal monTnIy install
ments of SO each. The contributions from
tue ten shares, therefore, amount to $40
each month. The head or chairman of tn
association. who organized it and con
ducts its affairs from beginning to end
mas the right or privilege of using tn,
money collected on the first installrnen
without bid On a fixed day of the fol
/ lowing month, when the members Assem-
bic. the chairman collects from each tn
amount due on his share for that month
The total amount of contributions Gn
Guiding the chairman 81. which amount 4
S10o. is drawn for by each of the MIR
members and the member offering tn
highest interest in his bid is awarded tn
| drawing.
To insure perfect fairness. the bids ar
/ submitted to the chairman in writing
/ simultaneously, and in the presence of tn
assembled mem bers- The amount OF tn
contributions Tor the month is then uai,
/ to the successful bidder bv the cfafrnnan
/ after deducting therefrom the amount o
/ his bid, X hich covers or represents tn
entire interest due on his loan for the bal
ance Of the term
The interest is then distributed By tn
chairman among the other shareholder
or, rather. deducted from their RESPECTIVE
/ contributions, which amounts 10 tn
/ same thing On the stated day of eaci
month thereafter the same process !
/ gone through Until the last drawing whel
/ every other shareholder. having mad
drawing, the remaining one is entitled 4
receive his without bidding for ii eacl
( share being entitled to only one drawine
! W hen every shareholder has been q ward
( ed drawing and has practically receive
4 back all the different Sums contribuf 9.
by him. the Germ of the association -
Dires by limitation.
The chairman. in compensation for hi
/ lab0rs in behalf of the association an
/ the responsibility assumed BY him for ia
/ good faith Of the members and the pune
tuality Of each payment by them. is ex
/ empted from paying any interest for tn
use of the money loaned 10 him at tn
outset Of the association. As. acco-dtn
/ to the regulations, every shareholder
entitled to receive interest until he Ia
drawn loan. the first successful biddei
/ ln this supposed case. pays interest o
t48ht shares. ana so on until the las
I drawing when no interest = paid. becaus
the amount received by the last share
hoider IS not a loan, but in reality a re
I rund Of the money he has been paving on
every month. Thus. the shareh0laSr VIII
has the last drawing receives the lar.-es
amount Of interest. It viii be seen fro7
the above description that thkS8 4ssf
cations serve the double purpose of al
i fording a convenient means OF rafsfn
leans as wen as Of saving money
Mean Nan.
! lEfaraar-s A1.a,azir,ss