Twentieth Century Impressions of Hongkong, Shanghai, and other Treaty Ports of China/Finance
FINANCE.
By the Hon. Mr. A. M. Thomson, Colonial Treasurer.
he Colonial Treasurer is the officer in charge of all financial operations, subject to the Financial Instructions and such orders as may be transmitted to him from time to time. He is also Collector of Stamp Revenue. The staff of the Treasury
is of the usual clerical nature, and heads of departments are regarded as sub-accountants under the Treasurer so far as they are required to transact financial business.
In the early days the Imperial Government bore practically the whole of the expenses of the Colony, voting a sum annually for the purpose of carrying on the business of the Government. During the Governorship of Sir George Bonham (1848-54) this grant, which had been reduced to £25,000, was further reduced to £9,200, and soon afterwards was withdrawn altogether. Two grants of £10,000 each, however, were rendered necessary by public works in 1857 and 1858. Since that time the Colony has been self-supporting.
The revenue for 1907 amounted to $6,602,280, of which the principal portions were derived from the opium farm and assessed taxes. The former is now let at $1,452,000 per annum, and the latter item is practically a general charge of 13 per cent. on rateable property in the Colony, yielding something like $1,397,730 per annum. Land sales form an item of extraordinary revenue, but the amount derived from them in 1907 was only $159,750. Two factors have contributed to the decline in the receipts from this source. In the first instance, most of the vaiuable land in the business centres has been alienated; and, in the second, owing to the general depression of trade during the last two years very little capital has been put into new enterprises for which land might have been required, though there are plenty of suitable factory sites available. For the first few years of the Colony's existence leases were granted for a term of 75 years, but, in accordance with the general wishes of the community, a change was made, and leases were granted for 999 years. About ten years ago, however, the Secretary of State issued a new rule to the effect that the original term of 75 years should again be introduced, and that rule remains in force at the present day. All Crown leases are sold by auction. Hongkong being a free port, there are no customs or excise duties in the Colony.
The rateable value of the city of Victoria for 1907-8 was $8,892,205, a decrease of 3·42 per cent. on that of the previous twelve months, while that for the whole Colony, $10,654,338, showed a falling-off of 2·52 per cent.
The expenditure for 1907 came to $5,757,203, including a sum of $728,650 spent on extraordinary public works, exclusive of the railway to Canton, which is being provided for by advances from a special fund to a special account. The Colony pays a military contribution of 20 per cent. on its annual revenue, exclusive of land sales.
The following table shows the revenue and expenditure of the Colony during the last ten years :—
| Revenue. | Expenditure. | ||||
|---|---|---|---|---|---|
| $ | c. | $ | c. | ||
| 1898 | ... | 2,918,159 | 24 | 2,841,805 | 20 |
| 1899 | ... | 3,610,143 | 25 | 3,162,792 | 36 |
| 1900 | ... | 4,202,587 | 40 | 3,628,447 | 13 |
| 1901 | ... | 4,213,893 | 22 | 4,111,722 | 49 |
| 1902 | ... | 4,901,073 | 70 | 5,909,548 | 51 |
| 1903 | ... | 5,238,857 | 88 | 5,396,669 | 48 |
| 1904 | ... | 6,809,047 | 99 | 6,376,235 | 30 |
| 1905 | ... | 6,918,403 | 85 | 6,951,275 | 26 |
| 1906 | ... | 7,035,011 | 78 | 6,832,610 | 68 |
| 1907 | ... | 6,602,280 | 25 | 5,757,203 | 47 |
At the end of 1907 the excess of assets over liabilities, exclusive of loan liabilities, was $1,444,738, as will be seen from the following statement:—
| Assets. | $ | c. |
|---|---|---|
| Balance in bank | 393,541 | 38 |
| Advances | 168,501 | 50 |
| Crown agents' deposit | 569,897 | 96 |
| Subsidiary coins in stock | 645,521 | 75 |
| Profit on Money Order Office | 10,000 | 00 |
| Suspense account (advanced for railway construction) | 863,271 | 40 |
| Total | $2,650,733 | 99 |
| Liabilities. | $ | c. |
|---|---|---|
| Bills on Colonial Office in transit | 395,876 | 29 |
| Deposits not available | 656,505 | 90 |
| Military contribution in excess of estimate | 64,590 | 00 |
| Pensions not paid | 30,400 | 00 |
| Balance overdrawn in London | 27,503 | 71 |
| Miscellaneous | 31,119 | 23 |
| Total | $1,205,995 | 13 |
The above does not include arrears of revenue, amounting to $88,978·33.
The first loan ever raised by the Colony was negotiated in 1886, when £200,000 was borrowed for public works—chiefly the Tytam Waterworks. In course of time this loan was repaid. The existing consolidated loan amounts to £1,485.732. There is a credit of £60,704 (present market value of securities) at sinking fund account, and it is expected that the whole liability may be extinguished about 1943, including the amount which may be advanced from the special fund for railway construction, The first portion of the consolidated loan was raised in 1893, when £342,000, approximately, was borrowed at 3½ per cent. for the purpose of extending the Praya Reclamation, constructing the Central Market, and carrying out other public works extraordinary, in addition to paying off the balance of the 1886 loan, amounting approximately to £142,000. The remaining portion, borrowed in I905, costs the Government £3 13s. per cent, for interest annually, but this last loan was raised to provide an advance of £1,100,000 to the Viceroy of Wuchang, repayable by him in yearly instalments of £110,000, and bearing interest at 4½ per cent. These repayments and the interest on the balance, form the special fund above referred to.
There is a Widows' and Orphans' Pension Fund in existence, on the same lines as in other Colonies, the finances being managed by the Treasurer, There is no Government Savings Bank.
THE COLONIAL TREASURER.—A brief biographical: sketch of the Hon. Mr, A. M. Thomson, the Colonial Treasurer, will be found under the heading “Executive and Legislative Councils,”
MR. HUGH RICHARD PHELIPS, who has been in the service of the Hongkong Government as Local Auditor since December, 1904, was born on January 6, 1869, and was educated at Weymouth College and at Queen’s College, Oxford. He was appointed Local Auditor for the Niger Coast Protectorate, West Africa, in October, 1894, and two years later became Assistant-Auditor of the East Africa Protectorate. He was Local Auditor of Uganda in 1897, and held a similar position in the East Africa Protectorate in 1901. For services rendered to the Government in 1897-9 he was awarded the Uganda Mutiny medal and clasp. Since his arrival in the Colony Mr. Phelips has been made a Justice of the Peace. He is attached to Somerset House, and is a member of the Sports Club, London. Mr. Phelips married, in 1903, Jacquette Edith, youngest daughter of the Rev. George Lambe, of "Highlands," Ivybridge, Devon. He resides at No. 72, Mount Kellet, Hongkong.
THE ASSESSOR OF RATES.—A short biography of Mr. A. Chapman, the Assessor of Rates, appears in the Volunteer section of this work.
CURRENCY.
The currency of Hongkong consists of the dollar, half-dollar, twenty-, ten-, five-, and one-cent pieces, and of cash (or mil) representing the thousandth part of a dollar. The one-cent piece and the cash are of copper,
the rest of silver. The cash is practically never used. Notes of seven denominations, ranging in value from one dollar to $500 each, are issued by the Chartered Bank, the Hongkong and Shanghai Bank, and the National Bank of China. These notes had an average circulation in December, 1907, representing $16,916,166.
Two kinds of dollar are in circulation, namely the British and the Mexican. Formerly coins were issued from a mint that was opened in Hongkong in 1866 on the site now occupied by the Sugar Refinery at East Point, and run for two years at a cost of £9,000 a year, but they are never met with at the present day.
The value of the dollar is not fixed, but varies in accordance with the prevailing rate of silver. The highest point that it has touched during the last twenty years is 4s. 3¼d., in 1877, and the lowest 1s. 6½d., in 1902. The greatest variation in any twelve months occurred in 1890, when the price fell from 3s. 10¼d. to 3s. 0⅝d.
This liability to fluctuation introduces, of course, a serious speculative element into the commercial operations of the Colony, and suggestions have been made from time to time for fixing the value of the dollar, as it has been fixed recently in the Straits Settlements. The insuperable difficulty in the way of carrying out this very desirable reform lies in the fact that Hongkong is little else but a shipping centre between China and the rest of the world, and in China there is no fixed currency. Indeed, in the Chinese Empire taels, or weights of silver equal to an ounce and a third, and dollars that have been cut into sections are accepted at their intrinsic value as a medium of exchange. Silver dollars, therefore, may be regarded merely as a commodity whose value is determined by supply and demand. In these circumstances, even if the dollar were fixed in Hongkong it would not be accepted at its face value in China, and therefore the responsibility of dealing with the exchange question would only be transferred from commercial houses in Hongkong to their representatives in Canton. Under existing conditions, prudent merchants engaged in transactions between Canton and, say, London make arrangements with the local banks for a fixed dollar from time to time, and are thus enabled to quote on a safe basis. As a rule the banks will allow their offers to remain open for twenty-four hours. Although by this arrangement it is often impossible to compete with the trader who is ready to gamble by quoting at the current rate of exchange and calculating upon a fall in the value of the dollar, it is the only safe method of carrying on business.
Since 1863 quantities of subsidiary silver coinage have been minted in London and issued by the Hongkong Government for use in the Colony. The Chinese, finding this subsidiary coinage a much more convenient form of exchange than long strings of copper cash, about 1,000 of which went to the dollar, used it extensively; indeed it is estimated that not more than 10 per cent. of the coins minted by the British authorities remain in the Colony at the present day. In course of time the Chinese Government, recognising the demand that existed for these small coins, began minting them, with the consequence that the importation of British coins received a serious check and the Colony was flooded with the Chinese coinage, which, although of the same weight and fineness as Hongkong coins, are not fractions of a legal standard as the latter are. At the time of writing, both the British and Chinese subsidiary coins are at about 5 per cent. discount; in other words, a British or Mexican dollar will buy 10½ ten-cent pieces. The consequent disarrangement of local trade and the injustice which Chinese coolies suffer by being paid by their headmen in small coinage at the rate of 100 cents to the dollar engaged the attention of a specially appointed committee in the latter part of 1907. While agreeing that the only effectual method of dealing with the question was by Government intervention, since concerted individual action was, in practice, impossible, the committee found themselves hopelessly divided when they came to the formulation of a definite scheme. The majority advocated the prohibition of the importation and circulation of all alien subsidiary coinage; while the minority, fearing that this might bring about a further depreciation in the value of Canton coins and lead to financial disabilities, if not to 
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 passage, as recorded by Dr. Eitel. In 1873, when the value of the notes in circulation had reached three and a quarter million dollars, “the Governor (Sir A. E. Kennedy) received an intimation that the Lords Commissioners of Her Majesty's Treasury disapproved of the issue of one dollar notes on the ground that the notes would be largely in the hands of the poorest Chinese, who might be even more subject to panics than the mercantile classes. The Governor was instructed to order the withdrawal of these notes unless serious public inconvenience should result from such a course. When the Governor accordingly called upon the bank (February, 1874) to show cause why the one dollar notes should not be called in, the whole community took up the matter, and a numerously signed memorial, supported by a special resolution of the Chamber of Commerce, was forwarded to Her Majesty's Government (March, 1874) in favour of the retention of these one dollar notes.”
The Hongkong and Shanghai Bank is authorised, in accordance with its Ordinance of Incorporation, to issue up to 10,000,000 dollars’ worth of bank-notes, including notes issued in Hongkong as well as by any of its agencies in any part of the world. Beyond that the Corporation may issue notes to any extent, provided that the actual bullion is deposited previously in the joint custody of the Colonial Secretary and the Colonial Treasurer. The Chartered Bank of India, Australia, and China, is the only other bank in Hongkong authorised to issue notes by charter from the Home Government. Their limit for the Colony of Hongkong under the charter is 4,000,000 dollars’ worth. At the same time if they deposit, dollar for dollar, bullion value, they also may issue in excess of that amount. In 1895 the National Bank of China began to issue notes, unauthorised by the Government either by ordinance or charter, and the result of this was the passing, at a special sitting of the Legislative Council, of Ordinance No. 2 of 1895, prohibiting the issue of notes in the Colony except by permission, but allowing the circulation of any notes actually in circulation before March 20, 1895, a schedule of which had to be supplied to the Colonial Treasurer on application. The National Bank has, therefore, 450,000 dollars’ worth of notes in circulation, though these notes are not recognised by the Hongkong Government.
Two big bank robberies are recorded in the earlier annals. In July, 1862, a huge fraud was perpetrated upon the Chartered Mercantile Bank by an Indian merchant, who, with the assistance of an Englishman in charge of the opium stored in the receiving-ship Tropic, forged opium certificates to a total of $2,000,000. In 1864 and 1865 there was great activity on the part of certain ingenious Chinese burglars who came to be known as “drain gangs.” The godowns of Smith, Archer & Co., and the jewellery store of Douglas Lapraik were raided in 1864, and, emboldened by these successes, a masterstroke was planned early in the following year. The story cannot be better narrated than in the words of Mr. Norton-Kyshe, in his “History of the Laws and Courts of Hongkong.” He writes: “A serious bank robbery took place between the evening of Saturday the 4th and the morning of Monday the 6th of February, when the Central Bank of Western India was robbed of $115,000 in notes, gold, and silver, by thieves who entered the bank’s treasury vaults from the drains. The principal labour seems to have been that of tunnelling a passage of twenty yards from an adjacent drain to a spot exactly below the treasury vault. A perpendicular shaft, ten feet in length, of sufficient diameter to allow the passage of one man, was next made, and this brought the borers to the granite boulders on which the floor of the vault rested. These naturally sank down as they were undermined, and nothing remained but to force up a slab, when ingress became free. Sixty-three thousand dollars in mixed notes were carried off, along with £11,000 in gold ingots marked with the stamp of the bank.” As far as could be ascertained, the gang consisted of nine men, of whom three only were brought up for trial—one being discharged, and the others being sentenced to four years penal servitude. They would be
smart thieves who could effect such a burglary at the present day !
Owing to the fluctuations of the dollar the Hongkong banks do an immense business in exchange quotations. A merchant who purchases in Canton goods for export to England, must have some firm basis upon which to make his calculations, otherwise, if pending delivery of the goods the dollar increase in value, the sterling remitted to him on the completion of the transaction will represent in the local currency something less than he anticipated. For example, if at the time of making the purchase the dollar stood at 2s., the merchant would have to pay $1,000 in Canton for silk which he agreed to sell in London for £100, plus, of course, his profit and the cost of freight, which may be ignored for the purpose of this illustration. On arrival of the goods in London six weeks or so later the dollar might have risen to 2s. 2d., which, in the ordinary way, would mean that when the £100 was cabled out to him he would receive only about $923. In order to guard against this, merchants arrange with their bankers for a fixed rate of exchange, and are thus guaranteed a specified number of dollars whatever may be the fluctuations of exchange. An importer of European goods for the Chinese market, adopts of course, a similar method of insuring himself against loss. The bank's quotations in such cases depend upon whether the dollar is considered likely to become cheaper or dearer.
In the European banks the whole of the Chinese business is controlled by a compradore, a Chinaman of considerable financial standing, who has to lodge a large sum of money with the bank as guarantee. The compradore acts as an intermediary between the bank and its Chinese clients. If a native bank or a substantial Chinese Government official or merchant wants a loan, the compradore, having satisfied himself as to the financial soundness of the applicant, negotiates with the manager of the bank for the required amount, and enters himself as surety for its repayment. In other respects the compradore has much the same functions as an ordinary general broker, buying and selling sterling bills, sovereigns, telegraphic transfers, &c., always standing as guarantee to the bank for the bona fides of the contracts.
In addition to the European banks, there are upwards of thirty native banks, chief among them being the Yuen Fung Yan, the Soy Kut, the Hong Yue, the Shing Tak, and the Yue Fung. Some of them are substantial concerns, having their own compradores, and capital sums ranging up to two or three lakhs of dollars. Theirs business lies chiefly in receiving money on deposit and in lending money against security of goods. They also conduct a large remittance business between Hongkong, Canton, and the interior of China, where none of the large European banks have agencies; indeed, as far as Chinese business is concerned, they act to a large extent as feeders of the European banks. Like all the other establishments they speculate a little on exchange.
THE CHARTERED BANK.—The distinction of being the oldest established banking institution in the Colony belongs to the Chartered Bank of India, Australia, and China, its Hongkong branch having been founded nearly half a century ago. Its business is that of an exchange bank. The head office is in London, and there are branches in New York, Hamburg, and numerous places in the East. The paid-up capital is £1,200,000, and the reserve liability of the proprietors is £800,000. No less a sum than £1,475,000 has been set aside as a reserve fund, so that the financial soundness of the concern is assured. The manager of the bank is Mr. John Armstrong, who has been in the service of the bank in the East for about twenty-four years. The bank’s premises form part of the handsome row of similar institutions in Queen’s Street Central, and the site on which the building stands is the property of the Corporation.
HONGKONG AND SHANGHAI BANKING CORPORATION.—Largely owing to able management and to the foresight of successive directors, the Hongkong and Shanghai Banking Corporation is to-day the premier bank of the East. Its history is one of extraordinary prosperity, and though at one time heavy losses were encountered, the tide soon became once more favourable, and upon it the Corporation has been carried to its present strong position in the financial world.
The bank was started in 1864 with a paid-up capital of $2,500,000, in 20,000 shares of $125 each, and amongst its founders were men whose names are associated with some of the largest undertakings of the last half century, Business was commenced in 1865, shortly before the opening of the Suez Canal revolutionised the trade of the Far East, and incorporation was granted in 1866. The prosperity anticipated by the shareholders was fully realised for some years ; then came losses, and for 1874 and the first half of 1875 no dividend was paid. In 1876, Mr. Jackson (now Sir Thomas Jackson, Bart.), was appointed chief manager, and from that time onward the progress of the bank has been most marked.
In 1874 the Imperial Chinese Government contracted a loan with the bank of £600,000. Since then the Hongkong and Shanghai Banking Corporation has been the means of placing many Chinese Government loans on the markets, and has also assisted in the flotation of Government loans for Japan and Siam.
Sir Thomas Jackson finally retired from the chief managership in 1902, and was succeeded by Mr. J. R. M. Smith, the present chief manager.
To-day the paid-up capital of the Corporation is $15,000,000. The authorised note issue is $15,000,000. The sterling reserve fund amounts to £1,500,000, which at exchange of 2/- is equal to $15,000,000, invested in sterling securities (mainly Consols standing in the books at 82), and the silver reserve fund to $13,500,000—a total of $28,500,000. The reserve liability of the proprietors is $15,000,000.
The Court of Directors is composed of Mr. G. H. Medhurst (of Messrs. Dodwell & Co., Ltd.), Chairman ; the Hon. Mr. Henry Keswick (of Messrs. Jardine, Matheson & Co., Ltd.), Deputy Chairman ; Messrs. G. Friesland (of Messrs. Melchers & Co.), A. Fuchs (of Messrs. Siemssen & Co.), E. Goetz (of Messrs. Arnhold, Karberg & Co.), C. R. Lenzmann (of Messrs. Carlowitz & Co.), A. J. Raymond (of Messrs. E. D. Sassoon & Co.), E. Shellim (of Messrs. David Sassoon & Co., Ltd.), R. Shewan (of Messrs. Shewan, Tomes & Co.), H. A. W. Slade (of Messrs. Gilman & Co.), and H. E. Tomkins (of Messrs. Reiss & Co.).
Branches and agencies of the bank are established at Amoy, Bangkok, Batavia, Bombay, Calcutta, Colombo, Foochow, Hamburg, Hankow, Kobe, London, Lyons, Manila, Nagasaki, New York, Peking, Penang, Rangoon, Saigon, San Francisco, Shanghai, Singapore, Sourabaya, Tientsin, Yloilo, and Yokohama.
The London and County Banking Company, Ltd., act as the London bankers of the Corporation.
The bank premises occupy one of the best business sites in the Colony. The main entrance is in Queen’s Road, Central, to which the bank has an imposing frontage, whilst the back of the premises opens on Des Voeux Road. The banking hall is one of the finest in existence, with desks and counters on either side, and covered by a spacious dome of pleasing proportions.
The Corporation also conducts the business of the Hongkong Savings Bank.
BANQUE DE L’INDO CHINE.—The Banque de l’Indo Chine, which represents French interests in the Colony of Hongkong and throughout the Far East generally, was established in the Far East in 1875, by special charter from the French Government, with a capital of Fr36,000,000 and a reserve fund of Fr24,000,000. The Hongkong agency was opened in 1896, and took over the financial interests of the Comptoir Nationale d’Escompte de Paris. In 1900 an agency was also started in the neighbouring Chinese city of Canton. The Hongkong branch is managed by Mr. L. Berindoague, and the Canton agency by Mr. G. Garnier. There are other branches and agencies of the bank at Saigon, Haiphong, Hanoi, Tourane, Pnom-Penh, Nouméa, Shanghai, Hankeau, Bangkok, Pondicherry, Battanbang, Peking, Tientsin, Papéete, and Singapore.
THE YOKOHAMA SPECIE BANK, LIMITED.—When Japan forsook her policy of isolation and allowed her subjects to have free intercourse with the outside world, a tremendous impetus was naturally given to the trade and commerce of the country. Great business corporations sprang into being, and the rapid advance made, from the commercial and industrial point of view, by the people of the Empire has been a cause of astonishment to all nations. There are many financial houses now conducting operations upon an extensive scale, and one of the most important of these is the Yokohama Specie Bank (Yokohama Shokin Ginkō). Founded in 1880 with an authorised capital of Y3,000,000, it was entrusted with the management of several million yen of the Treasury reserve, and thus had an ample capital at its disposal for discounting foreign bills of exchange. In 1889, however, this support was withdrawn, and in place of it, the Bank of Japan was ordered to re-discount foreign bills of exchange on demand of the Specie Bank, to an amount not exceeding Y20,000,000, at the rate of 2 per cent. per annum. In 1887, when the special ordinance respecting the Specie Bank was promulgated, the capital of the bank was raised to Y6,000,000. The consequent extension of business necessitated in the same year, a further increase of capital to Y12,000,000, and in 1899 the capital was again doubled. The business carried on by the bank consists of foreign exchange; inland exchange; loans; deposit of money and custody of articles of value; discount and collection of bills of exchange; promissory
notes and other cheques; and exchange of coins. The bank has authority to buy and sell public bonds, gold and silver bullion, and foreign coins. It is also entrusted with matters relating to foreign loans and with the management of public moneys for international account. The head office is at Yokohama, and there are branches and agencies in Tokio, Kobe, Osaka, Nagasaki, London, Lyons, New York, San Francisco, Honolulu, Bombay, Hankow, Chefoo, Tientsin, Peking, Newchwang, Dalny, Port Arthur, Antung, Lioyang, Mukden, Tieling, Chang-Chung, Hongkong, and Shanghai. The London office is the agency of the Bank of Japan. At the fifty-fifth half-yearly ordinary general meeting held in Yokohama in September, 1907, it was reported that the paid-up capital amounted to Y24,000,000, and the reserve to Y15,050,000. The gross profit for the half-year was Y12,171,077, from which Y9,266,018 were deducted for current expenses, interest, &c., leaving a balance of Y2,905,058 for appropriation. An additional Y500,000 was added to the reserve fund, a dividend of 12 per cent. was declared, and a balance of Y1,055,058 was carried forward to the credit of the next account. The Hongkong branch of the bank is situated in Prince’s Buildings, and is managed by Mr. Takeo Takamichi.
THE BANK OF TAIWAN, LTD.
century, extended its operations to Hongkong in February, 1906, taking offices in Queen's Buildings. The bank was established at Amsterdam in 1824, and has a capital of £3,750,000 with a reserve fund of £417,000. The head office in the East is at Batavia, but a large business in the Far East is transacted through the Singapore office. In its early days the Society was more interested in trading than in banking, but at the present time it is concerned only with banking and exchange business. The manager at Hongkong is Mr. J. L. Van Houten, who served with the bank for several years in the Straits Settlements and Sumatra.
NEDERLANDSCH-INDISCHE HANDELSBANK.—This financial house—the Netherlands-lndia Commercial Bank—which has its head office in Amsterdam and its chief agency in Batavia, was established in 1863 with an authorised capital of £1,250,000 (£1,040,000 paid up). Since its formation it has been largely concerned in the sugar industry of the Dutch colonies, especially in Java. It owns eight large plantations with factories, and finances about fifteen others. The eight plantations and factories referred to are operated by the Nederlandsch-Indische Landbouw-Maatschappij—Netherlands-India Agricultural Company-the whole of the shares in which are held by the bank. During recent years the sugar trade of Java with Japan and China has been very large, and with the object primarily of facilitating business the bank extended its operations to Hongkong and established a branch at 16, Des Voeux Road, Central, on November 1, 1906. Mr. J. Boetje, who has been for ten years in the bank's service, is the manager at Hongkong.
THE BANK OF TAIWAN, LTD.—Any account of the financial institutions of the Colony would be incomplete without some reference to the Bank of Taiwan, Ltd., a large and influential house with its headquarters at Taipeh, Formosa, and branches and agencies at Amoy, Swatow, Newchwang, Darien, Foochow, Keelung, Kobe, Osaka, Tokio, Yokohama, Moji, Nagasaki, London, New York, San Francisco, Shanghai, Taichu, Tainan, Takow, Tamsui, &c., established some eight years ago, it is the Government bank in Formosa, and is incorporated by special imperial charter. Two years after its foundation it extended its operations to Hongkong, and the business carried on under its auspices has increased steadily month by month, until now it holds a prominent place in the commercial life of the Colony. The capital amounts to Y5,000,000, of which Y3,750,000 is paid up, and there are reserve funds amounting to Y830,000. The statement of accounts published in June, 1907, showed a net profit for the half-year of Y299,450. Mr. Kazuyoshi Yagiu is the president, Mr. Totaro Shimosaka, is the vice-president, and Messrs. Muneyoshi Tatsuno and Isotatsu Kajiwara, are the directors of the Company. The Hongkong offices are in Princes Buildings, and the branch is managed by Mr. D. Tohdow, who has been in the service of the bank since its formation. He has the assistance of an excellent general staff and a Chinese compradore.