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Franco-Russian loan of fr. 440,000,000 (£15,820,000) was raised in Paris. Two Anglo-German loans, each of £16,000,000 (one in 1896, the other in 1898) were raised through the Hong Kong and Shanghai Bank. The Franco-Russian loan bears 4% interest, the first Anglo-German 5%, the second 4½%. The foreign loans contracted up to 1900 amounted altogether to £54,455,000. The charges for interest and sinking fund, which amounted to over £3,000,000, were secured on the revenue of the maritime customs, and on the likin taxes of certain specified provinces. The net income from these two sources amounted to over taels 24,000,000, equivalent at existing rate of exchange to £3,400,000, which was amply sufficient.

Between 1899 and 1907 (both years inclusive) £12,200,000 was raised on loan for railway purposes. The charges on the first loan—for £2,300,000—were secured on the revenue of the Imperial Northern railway, the interest being 5%. The same interest was secured on the other loans, save one for £1,000,000 in which the Hong Kong government was concerned, which bears 4% interest.

The foreign debt also includes the indemnities exacted in 1901 by the powers for the Boxer outrages. These indemnities, secured on imperial revenue, are divided into five series amounting altogether to £67,500,000, the amount payable on these indemnities (at 4% interest) in 1907 being £2,824,425. The burden of meeting this amount was apportioned between the eighteen provinces—the sums allocated ranging from taels 2,500,000 for Kiang-su to taels 300,000 for Kwei-chow. In 1909 the grand total of China’s indebtedness exceeded £140,000,000 and the interest called for the payment of £7,427,450 in gold.

Banks and Banking.—Native banks for purposes of inland exchange are to be found in most large cities. They are private banks using their own capital, and seldom receiving deposits from the public. The best known are the Shan-si banks, which have branches all over the empire. They work on a small capital, seldom over £50,000 each, and do a small but profitable business by selling their drafts on distant places. None of them issues notes, although they are not debarred from doing so by law. They lend money on personal security, but do not advance against shipments of goods. In some places there are small local banks, usually called cash shops, which issue paper notes for small sums and lend money out on personal security. The notes never reach more than a very limited local circulation, and pass current merely on the credit of the institution. There is no law regulating the formation of banks or the issue of notes. Pawnshops occupy a prominent position in the internal economy of China. They lend on deposit of personality at very high rates, 18 and 24%, and they receive deposits of money from the public, usually allowing 6 to 10%. They are the real banks of deposit of the country, and the better class enjoy good credit. Foreign Banks do a large business at Shanghai and other treaty ports, and a Government Bank has been established at Peking.

Currency.—In the commercial treaty between Great Britain and China of 1902 China agreed to provide a uniform national coinage. An imperial decree of October 1908 commanded the introduction of a uniform tael currency; but another decree of May 1910 established a standard currency dollar weighing 72 candareens (a candareen is the 100th part of the tael ounce) and subsidiary coins of fixed values in decimal ratio. This decree properly enforced would introduce a much needed stability into the monetary system of China.

The actual currency (1910) consists of (1) Silver, which may be either uncoined ingots passing current by weight, or imported coins, Mexican dollars and British dollars; and (2) Copper “cash,” which has no fixed relation to silver. The standard is silver, the unit being the Chinese ounce or tael, containing 565 grains. The tael is not a coin, but a weight. Its value in sterling consequently fluctuates with the value of silver; in 1870 it was worth about 6s. 8d., in 1907 it was worth 3s. 3d.[1] The name given in China to uncoined silver in current use is “sycee.” It is cast for convenience sake into ingots weighing one to 50 taels. Its average fineness is 916.66 per 1000. When foreign silver is imported, say into Shanghai, it can be converted into currency by a very simple process. The bars of silver are sent to a quasi-public office termed the “Kung K‘u,” or public valuers, and by them melted down and cast into ingots of the customary size. The fineness is estimated, and the premium or betterness, together with the exact weight, is marked in ink on each ingot. The whole process only occupies a few hours, and the silver is then ready to be put into use. The Kung K‘u is simply a local office appointed by the bankers of the place, and the weight and fineness are only good for that locality. The government takes no responsibility in the matter, but leaves merchants and bankers to adjust the currency as they please. For purposes of taxation and payment of duties there is a standard or treasury tael, which is about 10% heavier than the tael of commerce in use at Shanghai. Every large commercial centre has its own customary tael, the weight and therefore the value of which differ from that of every other. Silver dollars coined in Mexico, and British dollars coined in Bombay, also circulate freely at the open ports of trade and for some distance inland, passing at a little above their intrinsic value. Carolus dollars, introduced long ago and no longer coined, are retained in current use in several parts of the interior, chiefly the tea-growing districts. Being preferred by the people, and as the supply cannot be added to, they have reached a considerable premium above their intrinsic value. Provincial mints in Canton, Wuchang, and other places have issued silver coins of the same weight and touch as the Mexican dollar, but very few have gone into use. As they possess no privilege in debt-paying power over imported Mexican dollars there is no inducement for the people to take them up unless they can be had at a cheaper rate than the latter, and these are laid down at so small a cost above the intrinsic value that no profit is left to the mint. The coinage has in consequence been almost discontinued. Subsidiary coins, however, came largely into use, being issued by the local mints. One coin “the hundredth part of a dollar” proved very popular (the issue to the end of 1906 being computed at 12,500,000,000), but at rates corresponding closely to the intrinsic value of the metal in it. The only coin officially issued by the government—up to 1910—was the so-called copper cash. It is a small coin which by regulation should weigh 116 of a tael, and should contain 50 parts of copper, 40 of zinc, and 10 of lead or tin, and it should bear a fixed ratio to silver of 1000 cash to one tael of silver. In practice none of these conditions was observed. Being issued from a number of mints, mostly provincial, the standard was never uniform, and in many cases debased. Excessive issues lowered the value of the coins, and for many years the average exchange was 1600 or more per tael. The rise in copper led to the melting down of all the older and superior coins, and as for the same reason coining was suspended, the result was an appreciation of the “cash,” so that a tael in 1909 exchanged for about 1220 cash or about 35 to a penny English. Inasmuch as the “cash” bore no fixed relation to silver, and was, moreover, of no uniform composition, it formed a sort of mongrel standard of its own, varying with the volume in circulation.

(G.J.; X.)

V. History

(A)—European Knowledge of China up to 1615.

China as known to the Ancients.—The spacious seat of ancient civilization which we call China has been distinguished by different appellations, according as it was reached by the southern sea-route or by the northern land-route traversing the longitude of Asia. In the former aspect the name has nearly always been some form of the name Sin, Chin, Sinoe, China. In the latter point of view the region in question was known to the ancients as the land of the Seres, to the middle ages as the empire of Cathay. The name of Chin has been supposed (doubtfully) to be derived from the dynasty of Ts‘in, which a little more than two centuries before the Christian era enjoyed a vigorous existence, uniting all the Chinese provinces under its authority, and extending its conquests far beyond those limits to the south and the west. The mention of the Chinas in ancient Sanskrit literature, both in the laws of Manu and in the Mahābhārata, has often been supposed to prove the application of the name long before the predominance of the Ts‘in dynasty. But the coupling of that name with the Daradas, still surviving as the people of Dardistan, on the Indus, suggests it as more probable that those Chinas were a kindred race of mountaineers, whose name as Shinas in fact likewise remains applied to a branch of the Dard races. Whether the Sinim of the prophet Isaiah should be interpreted of the Chinese is probably not susceptible of any decision; by the context it appears certainly to indicate a people of the extreme east or south. The name probably came to Europe through the Arabs, who made the China of the farther east into Sîn, and perhaps sometimes into Thîn. Hence the Thîn of the author of the Periplus of the Erythraean Sea, who appears to be the first extant writer to employ the name in this form (i.e. assuming Max Müller’s view that he belongs to the 1st century); hence also the Sinae and Thinae of Ptolemy.

It has often indeed been denied that the Sinae of Ptolemy really represented the Chinese. But if we compare the statement of Marcianus of Heraclea (a mere condenser of Ptolemy), when he tells us that the “nations of the Sinae lie at the extremity of the habitable world, and adjoin the eastern Terra Incognita,” with that of Cosmas, who says, in speaking of Tzinista, a name of which no one can question the application to China, that “beyond this there is neither habitation nor navigation”—we cannot doubt the same region to be meant by both. The fundamental error of Ptolemy’s conception of the Indian Sea as a closed basin rendered it impossible but that he should misplace the Chinese coast. But considering that the name of Sin has come down among the Arabs from time immemorial as applied to the Chinese, considering that in the work of Ptolemy this name certainly represented the farthest known East, and considering how inaccurate are Ptolemy’s configurations and longitudes much nearer home, it seems almost as reasonable to deny the identity of his India with ours as to deny that his Sinae were Chinese.

If we now turn to the Seres we find this name mentioned by classic

  1. It must be remembered that the Haikwan tael is here indicated.