measures of retaliation by the Chinese authorities, adversely affecting the trade of the Colony, urged that the Chinese Government should be pressed to reform its currency in the terms of the Mackay Treaty, and that an attempt should be made to secure an undertaking that the Canton Mint would cease coining subsidiary coin until Hongkong and Canton subsidiary coins reached par value, and that thenceforward both parties should agree to restrict minting to actual requirements.
BANKING.
The first mention of Banking in the official summary of the history of the Colony is that a branch of the Oriental Banking Corporation was established in April, 1845—the year in which the first unsuccessful attempt was made to place the currency of the Colony
on a gold basis. The establishment of this institution was welcomed, it being regarded as indicative of the sanguine expectations entertained by the community as to the island's commercial future. Two years later, and before it was chartered, this bank put into circulation over 56,000 dollars' worth of notes, "to the great relief of local trade," as the historian informs us.
The subject of banking from that date onwards, for a period of nearly twenty years, is practically ignored by the records, though there are frequent references to the currency question. The issue of the prospectus of the Hongkong and Shanghai Banking Corporation in July, 1864, is the next mention, and, incidentally, Dr. Eitel alludes to the existence at that time of six banking institutions—the Oriental Bank already referred to, the Agra and United Service Bank; the Central Bank of Western India; the Chartered Bank of India, Australia and China; the Chartered Mercantile Bank of India, London, and China; and the Commercial Bank of India. This list does not appear to be a complete one, however, for some of the older inhabitants of the Colony well remember that there were also in operation the Comptoir Nationale d'Escompte de Paris; the Bank of Hindustan, China, and Japan; the Asiatic Bank; and the Bank of India. In fact, the manager of the French bank, Mr. Victor Kresser, became the first manager of the newly formed Hongkong Bank, and the accountant of the Bank of Hindustan, Mr. John Grigor, its first accountant.
Of all these institutions only three—the Chartered Bank of India, the Mercantile Bank of India, and the Hongkong Bank—actually survive to-day, whilst the financial interests of a fourth, the Comptoir Nationale d'Escompte de Paris, were taken over in 1896 by the Banque de l'Indo Chine. The exact fate of the others has hitherto escaped record for the most part, but they were all severely shaken by the great Bombay crisis of 1866, brought about by the failure of Premchand Roychand's “Back Bay” scheme of reclamation, and of many other companies floated by him, in which millions of money were lost. In the same year the failure of Overend, Gurney & Co., a big London firm, created widespread panic, and in consequence, there was a run on the various banks in the Colony. There was something of a scandal at the time, for in those days, before the advent of the cable, news filtered in slowly, and, in the excitement of the moment, some of the earliest recipients took matters into their own hands, grabbing notes from the bank counters, and in some cases landing themselves by their unseemly behaviour, in the police court. These causes, with the failure of Dent & Co., Lyall, Still & Co., and other firms, added to the general depression in the trade of the Colony which characterised the years 1866-69, led ultimately to the failure or closing of the Commercial, the Central, the Hindustan, the Asiatic, the Agra, and probably other of the banks. Even the Hongkong and Shanghai Bank, with its capital of two and a half million dollars and its influential directorate, passed through unpleasant vicissitudes of fortune, culminating in 1874-75 in its inability to pay a dividend; and it was not until Sir Thomas Jackson, probably the greatest financier the Colony has ever known, assumed the management of its affairs, and there was a revival of local prosperity, that the shareholders' fears were allayed, and the bank fulfilled the promises of its early years.
The banks in existence in the Colony at the present day are the Hongkong and Shanghai Bank (attached to which is the Hongkong Savings Bank), the Chartered Bank of India, Australia and China, the National Bank of China, the Mercantile Bank of India, the International Bank, the Banque de l'Indo Chine, the Russo-Chinese Bank, the Nederlandsch-Indische Handelsbank, the Deutsch-Asiatische Bank, and the Bank of Taiwan. The premises of the more important banks are in close proximity to one another, and are amongst the most imposing buildings in a city remarkable for its architectural features. That Hongkong should have risen to such eminence in the financial world is due, as Alexander Michie points out in his well-known work, not to its local resources, but to its strategical position which has enabled it “to retain the character of a pivot upon which Far Eastern commerce turns.”
The circulation of bank-notes in the Colony, first started by the Oriental Bank in 1847, has risen to an average of something like 17,000,000 dollars' worth, the majority being notes issued by the Hongkong and Shanghai Banking Corporation. The history of their gradual introduction is marked by a curious
