The foreign and local banks operating in China are the following. I use gold dollars for the table:
| Bank | Capital Paid Up | Reserve |
| Hongkong and Shanghai Banking Corporation | $5,000,000 | $15,000,000 |
| International Banking Company of America | 3,250,000 | 3,250,000 |
| Deutsche Asiatische Bank | 5,500,000 | 3,000,000 |
| Yokohama Specie Bank (Japan) | 10,000,000 | 7,000,000 |
| Lloyd’s Bank (British) | 20,000,000 | 15,000,000 |
| Chartered Bank of India, Australia and China (British) | 4,000,000 | 5,000,000 |
| Netherlands Trading Society | 18,000,000 | 2,000,000 |
| Netherlands-India Commercial Bank | 6,000,000 | 700,000 |
| Russo-Asiatic Bank (Russia-France) | 19,000,000 | 4,000,000 |
| National Bank of China | 1,500,000 | 400,000 |
| Banque L’Indo-Chine (French) | 6,000,000 | 3,000,000 |
| Bank of Taiwan (Formosan Japan) | 1,800,000 | 300,000 |
| Mercantile Bank of India (British) | 5,500,000 | 800,000 |
| Eastern Bank (British) | 2,000,000 | |
| Chino-Belgian Bank (Belgian) | 2,000,000 |
It will be noted that with one exception all of these banks are strong institutions. The hoary patriarch among them, endowed with exhaustless strength still, is the Hongkong and Shanghai Banking Corporation, which has been operating in China since 1865.
There is a movement in Canton to establish an “Industrial Encouragement Bank”. The merchants are anxious for currency reform throughout the kingdom and the establishing of coins of fixed value on the American decimal plan, but going to a lower decimal to accommodate small trade and the lower values of China.
It is also proposed by prominent members of the Nanking Assembly to establish a Sino-American bank, plans for which were laid just before the October, 1911, revolution.
At the height of the revolution in November, 1911, the rebels did a remarkable thing successfully at Shanghai. The loyalists at Peking were unable either with their own imperial Ta-Ching bank, foreign loans, or the immense ramifications of the Shansi Bank guilds, to uphold their credit, and the chief fighter of the Manchus, General Chang Hsun Chung, could not pay his troops. The republicans at Shanghai under Sheng Wan Yung, minister of finance, and Wu Ting Fang, foreign secretary, organized the “Chung Hua” Bank at Shanghai with a capital of 5,000,000 taels. The shops immediately took the money at a high premium, doubtless to give an impetus to confidence. “Chung Hua” is the Chinese name for China. It means “central glory”.
Nothing hampers China’s interprovincial trade more than the absence of a national credit system and commercial paper. Treaty-port China gets long enough loans from the foreign manufacturer. The trouble is that the importer can not collect quickly from his customer, and when he does, the medium is coin, bullion and barter, unnecessarily and clumsily handled, whereas coin, bullion and barter should only be used for the balances. China needs a modern currency system, and a modern credit system as well.
It is in accord with manners and business accuracy when at a fair you are informed that an article will cost you a thousand coins (cash) to say: “I’ll pay you 500 good coins.” If you had a thousand counterfeits you could elect to pay with them, but never be so bucolic as to pay a thousand good coins when a thousand coins are asked. As suggested by America, China’s new coinage will have a silver dollar, half, quarter, dime, nickel, two cents, cent, half a cent, and one-tenth of a cent, all minted in government mints, and alone accepted as legal tender in taxes, telegraph, railway, telephone, customs, likin, stamp and other charges. Very slowly the old system of using provincial coinage of debased value, bullion (sycee) exchange, private bank notes, etc., will pass away. A central bank, like the Ta Ching, helped by a four-nations foreign loan, backed 40 per cent. by the government, and 60 per cent. by private subscriptions, with about $6,000,000 capital, could make a good beginning in taking care of the new system. Although a silver coinage, the government, like Japan’s, stands to guarantee the fixed value of the coinage as equal to half its face in gold; that is to say, the central bank will hold reserves so as to redeem or guarantee a silver dollar at fifty cents gold. The silver is to have a fixed purity standard, like the Philippine peso, or the American dollar. Japan stepped into Korea and refused to accept the old coinage. It immediately became copper bullion, and had no other value. For safety’s sake, the Japanese insisted that the coins, worth nominally one-tenth of a cent, should be broken at the square hole in the center. The steamer Seneca, in 1912, brought 1,400 tons of these broken Korean coins to New York, whence they were shipped to Chrome, New Jersey, to be smelted. China can not be so rigid, as she has not the police or army, but if she could safely be rigid, nothing would clear up the coinage question better than copying this Japanese example. Since the adoption of the gold standard in Mexico, the government has to accept the old Mexican dollar as legal tender for one dollar gold, which gives a profit of 100 per cent. to the lucky holders of these silver dollars. There are many of them in China; indeed the Mexican dollar was for many years the monetary standard in China, and the thrifty Chinese are smuggling the unchopped coins into Mexico as fast as they can be gathered up from the Shansi, Kwangtung and other bankers. The Mexican government anticipated this move, and placed a duty on Mexican dollars returned from abroad. The honors are even along the Rio Grande boundary; Mexican dollars are smuggled southward, and Mexican Chinese are smuggled northward! Most of the Mexican dollars in China, however, have been chopped in the banks and fan-tan houses, and the thrifty Chinese shroffs groan when they contemplate that by egotistically sinking their chop into the face of the Aztec eagle and the Texoco snake, they have now lost 100 per cent. profit. Moral: never mutilate the coin of a realm, whether it is your own country or not.
As illustrating the irregularity of the currency, let us cite the situation at Newchwang in 1912 for instance. National taxes are paid in Kuping taels; provincial taxes in Manchurian dollars. Customs duties are paid in the usual Haikwan taels; local octroi in small silver. The national post-office will only accept Mexican dollars. The national telegraph office will only accept Manchurian dollars. The national Chinese railway cashiers must receive payment of freight bills in either Peiyang or Kiauchou (German) dollars. The pursers of the national China Merchants’ Steamship Company demand payment of fares in either Mexican dollars or Newchwang taels. The Japanese, who run a railway, a concession, public utility works and a hotel here, demand payment of their bills in the Japanese silver yen (dollar). On their railway line they demand payment in the Japanese gold yen. The Russian demands payment in his paper ruble note. The Americans and the English demand payment respectively in eagles and sovereigns. All of these concerns will discount other moneys at a heavy profit, so that they, and the money changers, in the multiplicity of standards, soon shave the dollar down till its pride and distinction of stamp are humble and thin enough! A tael, the old monetary system, is a Chinese ounce equal to 1⅓ ounces avoirdupois. The Haikwan tael, the standard of fineness accepted by the Custom House, is rated at 100, in comparison with which are the Tientsin tael at 105; the Hankau and Newchwang at 108, and the Shanghai at 111. When new silver arrived at the old provincial mints, it was refined or adulterated to conform with these grades. The edict of October 5, 1908, suggested that if the standardization of silver was successful, a gold standard might be looked for. This would probably slightly raise wages and costs in China, and slightly decrease them elsewhere.
The national customs, heretofore called the “Imperial Customs”, managed from Peking in succession by the British knights, Robert Hart, Bredon and Aglen, continue to be the financial pillar of China, the basis of foreign loans, the payer of the hated indemnities, the provider of armies, pensions, and nearly all the machinery of government and even “graft”. Until a reorganization of the taxes is effected, the customs might be raised to double what they now are so as to get China on her feet. The department has been honestly managed, and is a monument to the late Sir Robert Hart, the sinologue. Where a missionary or a Buddhist monk is not at hand to take care of a needy traveler, there will be found a national customs cadet, generally a Briton, an American or a German.