Evening star. [volume] (Washington, D.C.) 1854-1972, 1905-04-15
CHINESE BANKS.
They're Lucky if They Pass New Year
Dav in Safety.

The Chinese banks have survived the
crisis of the Chinese New Year, and have
commenced the year with prospects of sue
cess The significance of this statement
lies in the fact that the celebration of the
Chinese New Year is usually attended by
financial panic throughout the celestial
kingdom. ITO apprehend the position of
Chinese banks at New Year" says United
States Consul Anderson at Hangchau, in
a recent report, sit is necessary to appre-
ciate the position New Year holds in the
business as we'll as the social economy of
the Chinese people. The Chinese New Year
is the great holiday of the empires
people. All business ceases for several
days each year to celebrate it. This year
the celebration proper will cover four days,
and during that period there will be no
mails into the interior from the coast. all
steamship and mail connections between
Hangchau and Shanghai will cease daily
newspapers will not be delivered, if they
are published at all. and everything will
be given over to celebration. The official
celebration will last for two weeks and
the offices of the provincial governments
are closed during that period or longer.
But more than this, in business way, 1t
Is a rule of Chinese business and society
that all debts shall be paid at the Chinese
New Year. Possibly they will have to be
paid through the contraction of new debts,
but paid in some form they must be- The
attempt Is, of course. to pay them in money.
The drain upon all banks Is something
enormous. 1t is very much as 1t would be
in the United States If all debts were made
payable at the same time and banks should
refuse credit until they knew what the out
come Of the situation was to be. The ex-
change between Hangchau and Shanghai
ordinarily Is about 40 cents on 800. For
ten days previous to the Chinese New Year
1t has been 81 on 500, the promise being
that 1t will return to the old rate after
the New Year is past. Interest rates de-
manded Of the patrons Of banks for loans
over New Year will run as high as 20 per
cent month. AS matter of fact loans
among natives at from 4 to per cent a
month are common at all times. There is
not enough money in China to properly
transact the business Of the empire, and
what money there is does not go as far as
1t ought to go because of the inadequate
means of communication and the extortion-
ate rates of exchange.
Ranking business in China Is hazardous
at best, and when the pressure of a custom
like that surrounding the New Year comes,
1t takes skillful management to keep a con-
Germ going and at the same time make
money. The business of China generally is
subjected at all times to drains and tolls
to discounts and exchange charges on the
part of banks. which would not be tolerated
In other countries, and this trouble, as well
as the financial distress which surrounds
the Chinese New Year, will not be done
away with until the empire has monetary
system which will make ruinous discounts
between varieties of money impossible
and which will allow the augmentation
of the actual metallic monetary volume
in the nation with paper currency of sort
now impossible. One of the chief anxieties
of business people in some of the larger
cities in China at the close of tbs year is
to weed out of their collections notes of
native banks which are expected to fail"