Native banks in Shanghai have been dominating for years in the. establishment of official rates. for local dollars, native. interest and domestic "exchange. The control thebe three features in the money' market gives them a unique privilege from which their profits largely" end upon. "Although tael is. the popular medium of exchange for import and export trade in Shang-hal, dollar is still widely' used in connection. with numerous other common. daily" transactions. "The native banks determine: in their meeting at the Association twice daily at 830 am, and 12.30 pam, the official market rate for jocal dollars fu relation to taels, Their profit lies in the conversion of taels into dollars and vice vere by adding or subtracting one half to one point on from the official rate of the day. It is estimated that the profit from this source alone in sufficient. to cover their annual office expenses, 'The determination of the daily native interest rate is entirely under the control of the Native Bankers' Atsociation, Tt corresponds to the interest rate for call loans in Europe and Ameria. It is also quoted twee daily in candareens per is. 1,000) per day. "If the quotation for' example.is 10 candareens, it corresponds to 8.66 per cent. per annum te multiply the official rate by 360 days. Native interest rate is deter-tinea by factors of supply and demand for short term loans. Tt serves an excellent barometer indicating the conditions "of local" money market. The rate varies from zero to 70 candareens per Tls. 1,000 per day. After Chinese New Year for 4 period of one month or ao,, when business is not in full swing, native rate-of interest scarcely exceeds 10 candareens. It gradually rises cor-Tesponding to the demond for funds finance products from interior cities such as cocoon, rice, ten, cotton and other kinds of produce." 'According. to the existing' regulations of the Native Bankers' Astociation, the highest limit is 10 candareens Which is equivalent to 25.55 per cent, annum, Of course, auch high ate "happens only when money market is ina state of ante, Native interest rate of Shanghai is of great importance to the ecanomie life in whole China. All interior cities Keep a close eyo on Shanghat for the reason that should they find a higher rate of interest la offered here for short term loans than they can invest locally, they will transfer their funds to Shanghai to earn bet ter returns on their investment.
Another quotation: which fs under the influence of the native banks the rate for domestic exchange. As a rule all important cities such as Peking, Tientsin, Hankow, Canton and other cothmercial centres have constant requirements in buying and! selling Shanghai taels, on account of Shanghai being the most important distributing centre for import and export trade in China. Therefore each of tham hag an active market for Shanghai taels, Functions and Facilities of Native Banks native banks may be divided into three principal categories: deposits, ovenirafts and loans, and inter-pro-
Fixed or time deposits are accepted from three tg twelve months at a rate of interest to be mutually agreed upon. In the case of current de-Posits, there is no established rate Of interest. It is determined by the average monthly native interest rate, which is decided and officially quoted by the Native Bankers! Association, five per cent. of which is deducted for service charge. This means depositors of current account are entitled to receive 85. per cent. of the average monthly native inter-tst for the month. However, according to the regulations of the Association, the minimum rate of interest payable on current deposits Tls. 2 per Ti. 1,000 per month i. 24 per cent. per annum.
Loans are divided into two kinds, overdrafts and fixed Jeans for long
Text read from the printed page and cleaned; old type leaves the occasional error.