The Washington herald. [volume] (Washington, D.C.) 1906-1939, 1915-08-28

banks. with a few notable exceptions. be-
ing unable to collect money due to them
on account of advances. ceased doing
business. The few that remained show
ed extreme caution and engaged only in
transactions involving no risk whatever.
The foreign banks. upon whom the Chi
nese banks at the ports are chiefly de-
pendent for their supply Of silver. were
compelled to abstain from giving to the
Chinese banks the facilities customary
before the revolution. Chinese dealers
therefore found many impediments to
their business; more especially was II
difficult to arrange for remittances and
for sending money into the interior to
buy produce. But. while the restriction
Of banking facilities greatly hampered
trade, it is generally felt that the disap-
pearance Of so many mushroom banks.
engaged rather in speculation than in le-
Ultimate banking transactions, has placed
business on a safer and sounder basis"
With the outbreak Of the war in Europe
last summer, the situation in South
China became acute and for a time near
ly all the native banks in Canton and
Hongkong closed their doors. Gradually
there has been something Of a readjust-
ment. but the situation is far from~satis-
factory. There are in Hongkong twenty
three Of the larger class of native banks
as compared with thirty-five before the
outbreak Of the war. This class of bank
usually advances money to the Chinese
traders, but since the war they have re-
stricted credits so greatly that advances
are now made upon gilt-edged securities
only. OF the small class of banks there
are now thirty in operation In the COL
the war. These banks no longer pretend
to make loans, but are combining their
operation only to speculation in silver
and subsidiary coins and to exchange for
small amounts on interior points.
In Canton there are now in operation
seventy-four of the larger-sized banks.
as compared with about R5 before the
war. There are seventy-two of the
smaller class banks in operation. as COM
pared with about $50 before the war. the
exact number in operation before the war
being unknown. The Canton banks do
the same sort of business the Hongkong
banks do in their respective classes.
Perhaps the worst feature OF the sit
uation is that by reason of commercial
conditions generally the large foreign
banks are not in a position to advance
silver or credit to the native banks. and
since this state depends largely upon
commercial conditions. the whole situa-
ton represents a circle which seems diff
ficult to break.
So long as the war and its commercial
continue there Is little
likelihood Of general credits loosening up
Until general credits in this
field are more liberal many lines Of ac-
tivity on which Chinese prosperity de-
ponds will be restricted. Any general
in the market abroad for
Chinese produce will justify more gensr-
Gus advances to Chinese industry and
will lead to marked improvement all
around. However. q complete revamping
of the native bank system will be neces-
sary in any event, and the extraordinary
development Of the Chinese government
bank above mentioned indicates that this
need is not confined to banks serving the
small business man only.
New Banking Institutions.
1t is significant that practically every
scheme for the advancement of CONNER
cial intercourse between China and
the United States put forth by Chinese
chambers Of commerce and business men
generally include, If, indeed. they do not
consist Of. the establishment of Chino
American banking institutions. 1t il a
part of the plans of the japanese govern
ment and japanese commercial interests,
as reflected in policies following the
signing of the treaty between Japan and
china and all having to do with the ad-
vancement of japanese interests in China
as a result Of concessions granted by
China following the taking Of Tsingtau.
that new banking facilities be establish
ed in all Japan's sphere of influence for
the development of that country's busi-
ness with China. Much Of the further
Of an adequate banking
system for China depends in a ;measure
upon the reform of the country's none |
AIRY currency; but some improvement |
over present means Of accommodating
native dealers interested in foreign trade |
s necessary for the needs Of the present |
and the immediate future In Chinese |
hada