The Washington herald. [volume] (Washington, D.C.) 1906-1939, 1915-08-28
BETTER BANKING
IS CHINA'S need
Inferior Native Institutions Sc
riously Retard Country's
Financial Progress.
IMPROVEMENT ESSENTIAL
Large Foreign Banks Are Adequate
Only Under Normal Con-
ditions.
BY U. s. CONSUL GENERAL GEORGE
E. ANDERSON, Hongkong.

BY U. s. CONSUL GENERAL GEORGE
E. ANDERSON, Hongkong.
The situation in Chinese commercial
circles generally with respect to banking
facilities offered the native dealers by
the native Chinese banks is becoming
more and more serious in its effects
upon trade Of all kinds. 1t is becoming
more evident that before trade matters
in China can resume their, accustomed
course something will have to be done
to rehabilitate the native banks and aid
them in again performing their usual
functions in Chinese trade.
There are in Chinese commercial at
fairs four varieties of banking institu-
tions which have their special part in
Chinese business. The first are the large
foreign banking institutions in the open
ports. some of which are among the most
powerful banking institutions in the
NOrlO nc SSCOuo udllOudl Oduh-
ing institutions established directly or in
directly by the Chinese government for
its own fiscal purposes and serving rs
an adjunct in some ways to the Chinese
treasury on the one Nhand and foreign
banking and financial interests on the
other, the chief Of such institutions now
being the Bank of China. which was es-
tablished by presidential mandate in
1913.
There are, then, two further classes of
native banks proper. one of which en-
braces the larger institutions. which do
a proper banking business. 1. e.. deal in
loans and discounts and handle exchange
as a more or less secondary matter. and
business in loans. but whose chief bust
ness consists in dealing in dollars silver
and subsidiary coins. and in buying and
selling exchange in smah amounts on
interior points.
Banking Services offered.
The large foreign banks, while not do
ing their accustomed volume of business,
are still in position to serve what busi-
ness is offered them under normal ,sondn-
tons. The large Chinese government
bank continues to serve the Chinese gov
eminent and allied interests The two
classes of native banks proper. however,
are badly crippled and are not perform
ing their usual functions. This is partly
due TO general war conditions the world
over, one result OF which has been the
inability of the large foreign banks to
supply the native banks with facilities
they usually have had in advances of
silver and credit and is partly due to
business conditions in China itself. The
trouble, in fact, has been coming on for
some time. and the native bank system
has not been operating in its usual way
since before the revolution of 1911. OF
the general situation in native banking
circles during the past year. the annual
report of the Chinese Maritime Customs
for 1914. just published. says: ,
In the first place. banking facilities, |
upon which the whole trade, both domes- |
tic and foreign. has been built up. were |
greatly restricted. The famous Shansi |
banks. through whose hands nearly all \
government funs formerly passed and |
who were the chief agents for all inter-
provincial remittances. were compelled
to close their doors when the Manchu /