The Bridgeport times and evening farmer., 1920-09-10
FOochow
NUMBER 2

George c. Hanson with a part o
This picture was taken i'm the ground
Foochow, China
this sort of combination with Ameri-
can business men. These were of
several sorts. banking, mining. hydro
electric. railway. and waterworks but
1 was not able in most of the cases to
get any Americans interested.
There was one Chinese concern.
though, which about a year ago I was
able to get some American capital in
terested in. IT was the Fooshow E1ec-
tric Company. a model electric light
ing plant entirely owned by a single
Chinese family. 1t furnishes light
for the entire city. probably $4,000
lights. They wished to borrow a mill
lion dollars to improve and extend the
plant and to pay off a mortgage held
by Japanese. I put them in touch
with an American firm which loaned
thm 100000 and will loan them
later as much more. With this they
paid off the Japanese mortgage and in
the loan contract inserted a condition
that they would buy nothing but
American material.
Another element which enters into
business dealings with China which
most Americans have never under
stood or Thought nmpch about and
which makes trade with China take
on something OF the nature of a gam
BILE fs the exchange problem. Since
the war exchange matters are begin
ming to be more Thought of and under
stood by Americans.
China IS a silver currency country.
A. foreigner doing an export business
I'm China pays for Chinese goods in
Chinese silver which he buys with
An1erNan gold. The amount Of silver
which a gold dollar will buy varies
sometimes from day to day and 1T IS
this rise and fall of exchange which
makes the uncertainty in transactions.
Suppose for instance a meScira MT is
buying tea fn China and sending 1t to
the United States. He pays for the
tea In China with silver and sells 1t in
the United States for gold. Beginning
with the silver price of tea as a base
iIe adds a. certadn per cent for profit
and then makes a gold price which
will equal tho two based on the then
rate of exchange, By the time the tea
has reached the United States the rate
of exchange may have changed. 1t
may take more gold dollars to buy the
SILVER. His profits may have de-
creased, may even have gone to a loss.
On tho other hand ne might be able
to buy more silver for a gold dollar
and In that case his profits would be
much Increased.
las the silver exchange rate goes
UP more goods go into China. AS 1T
goes down moro goods come out of
China.
THE demand for silver in China is
increasing, At the normal rate of ex-
cfrangs before the war, a silver dollar
TI<~xI
war the exchange rate was very high,
especially in 1918 when it took SLY
gold to bury a silver dollar, At present
about 70 gold will buy a dollar silver
| IA foreigner is surprised at the
number of different kinds of silver
dollars in circulation in China For
instance in Foochow one finds the old
American trade dollar, two kinds OF
Mexican dollars, old Spanish Pillar
dollars, Hong Kong silver dollars, tire
Chimes silver dollar, the Chinese
Yuan Sa1ih Kai dollar, Philippine peso
Fa-ezreh Indn China dollar and the
japanese silver yen, All of these are
accepted at the banks by weight,
There are no credit agencies ir
China, no Dunn or Bradstreets foi
the foreigner to consult concernine
| the financial responsibility of his Gus
TONER and SO he must refer to for,
| UP method among the foreign firms
of employing what is known as E
| tCemprafore.' The Compradore put
| up a cash bond of any amount ae
| cording to the size Of the firm and
| the business which they do. He passe
on the credit of Chinese customers
! II the latter do not pay the firm
takes the amount due from the
| money which the Compradore fa.
| put up, and it is up to him to get i
from the customers if he can, Need
less to say the Conpradore is prett.
\ careful whom he recommends.
| Usually no bills run in China owe
a year. Every three months most O
the bills are settled but Chinese New
Years is the great settling day. An,
| man who does not arrange to pay al
his bills ON that day might as wei
1 quit for he is estracized if he doe.
/ not Interest rates sometimes go u,
at that time to as high as ten Pc
| cent. per month. It is the only ho1i
| day that the Chinese have in tn,
off and celebrate Then they com
mence an over again.
''China's native banks are amont
| the oldest in existence and China
also was the first to issue bank notes
Marco Polo in the 18th century tell
of Chinese currency written on tn
| bark OF a tree. There are, however
no large native corporations as II
| other countries but each business i
| kept a family affair. The Chimes
banks demand no collateral in max
ing a loan. A mans character is hi
collateral. If he is not though
honest enough to trust he simpl
does not get the money.
THE japanese are peacefully in
filtrating China In the most rem OF
| INLAND towns you will find the Japan
csc small merchant. He has the ad
vantage of a point of view NOR
nearly like the Chinese than an
other foreigner. His written languag
and his methods of living are yer
similar, In all the principal cite
of China there are japanese owne
/ newspapers printed in Chinese.