The Savannah morning news., 1901-11-30

who have had actual experience with
them.
Exchange Brokers Almost Unknown.
Exchange brokerage does not exist as
a distinct branch OF business. In fact.
/ China can hardly be said to have any
exchange brokers at all. When a firm
dc sires to make a remittance by draft
il sends a clerk to several exchange
banks to ascertain their respective
quotations, and then deals direct with
the bank of it's choice. The rate of
interest charged by these banks on
loans varies from 8 per cent. to Il per
cent, according to the state of the
money market. the term required and
the commercial standing of the borrow
er.
There is a small class of licensed
bankers who do business principally
with and for government authorities.
such as for instance, the provincial
treasurer, customs taotai, district mag
istrates and others. One of the sources
of income of these banks is in assay
ing ana refining silver and casting it
into ingots, for which a small percent
age is allowed for commission or seig-
niorage. These ingots bear the official
stamp of the banker and the percentage
of fineness All other banking estab-
lishments, of whatever class, are pri-
waite concerns.
To give you an idea of the abundance
of banking houses in China / may
take, for instance, the cities of Pekin
and Tfen- Tsin. A recent investigation
places the number of banks in Pekin
at nearly four hundred, and the num-
Der In Tten-Tsln at about three hun
dred. These figures may seem large.
but by far the majority of these banks
are cash shops with limited capital.
Substitute for Savings Banks.
Savings banks have yet no existence
among the Chinese The fact that the
want has not been felt is due in a
great measure, to the general practice
among them of forming mutual loan
and savings associations, which afford
a means of saving money as well as a
way of obtaining loans when required
These associations are composed of an
agreed number of shares of a certain
amount each, to be paid by all the
shareholders to the association at
stated periods in as many installments
as there are shares.
To illustrate the working of such an
association let us assume that it is
composed of ten shares of 500 each, to
be paid up by ten equal monthly install
ments of $40 each. The contributions
from the ten shares. therefore, amount
to 500 each month. The head of the
association who organizes 1t and con-
ducts its affairs from beginning to end,
has the right or privilege of using the
money collected on the first Install
ment without bid. On a fixed day OF
the following month, when the mem
bers assemble, the chairman collects
from each the amount due on his share
for that month, The total amount OF
contributions Gncluding the chair
man's), which amount to $40, is drawn
for by each of the nine members, and
the member Offering the highest inter-
est in his bid is awarded the drawing
To insure perfect fairness, the bids are
submitted to the chairman in writing
simultaneously and in the presence of
the assembled members. The amount
of the contributions for that month is
then paid to the successful bidder by
The chairman, after deducting there
from the amount of his bid which COW
ers or represents the entire interest due
on his loan for the balance of the term
This interest is then distributed by
the chairman among the other share
holders, or, rather, deducted from
their respective contributions, which
amounts to the same thing On the
stated day of every month thereafter
the same process is gone through, until
the last drawing, when every other
shareholder having had drawing, the
remaining one is entitled to receive his
without bidding for it, each share being
entitled to only one drawing. When
every shareholder has been awarded a
drawing and has practically received
back all of the different sums contrib
uted by him the term of the associa-
ton expires by limitation.
As, according to the regulations,
every shareholder is entitled to receive
interest until he has drawn a loan,
the first successful bidder, in this sup
posed case, pays interest on eight
shares, and so until the last drawing,
when no interest is paid, because the
amount received by the last share