Feb. 17.
Wininin the past year or two, Jand.even for longer, a very strong tendency has been to re-; gard the China New Year settlement as something: very different from what it was in the past. In Shanghai conditions have greatly changed from other years, and a it has often been. concluded that the timechonoured, definitive settlement on the part-of the Chinese merchants ut their New Year was by no means the same as formerly, In fact there was a suggestion prior to the celebration now closing that a settlement of accounts should take place some weeks beforehand,—long before even the preliminaries—leaving this as a holiday pure and simple, but nothing came of it, Formerly China New Year called for an absolute squaring up of accounts, cash being produced by the merchant against securities held by the bank, tand so shore was no question as to where a firm stood. This pos tion has certainly been modified; and what we are especially interested in is such modification in Shanghai and how or whether acts elsewhere in China, It is, well recognized that the banking system of Shanghai has by. now developed far beyond the practice of the former Native Bank custom, and, having a vanced on Western lines, it ives different and in some'cases improved facilities to its clients. The question which ought to be studied by business men is whether such facilities can be held to extend boyang Treaty Ports, whether these methods are impinging upon the general banking system of the country and how far they assisted in producing an easier settlement at the present China New Year, "The growing, importance of. Shanghai as a Chinese banking centre is fully realized—in fact it is already marked out as the great financial metropolis of the countiy—but there is no reason why We should not show a proper concern with the affairs of to-day.
Had 1925 been a year of normal trading, this easy settlement of the present Chinese New Year might possibly have been hailed a triumph of the Western banking system adopted by so many Chinese financial houses, The year, however, was not normal, because after certain more or less disastrous settlements in the past a very great degree of caution was observed all round in granting trading facilities, As, however, many unstable merchants had been eliminated at previous settlements and the rule of caution was more rigidly enforced, the position, so long as all banks acted with caution, became sounder. Margins were kept small and speculative trading was generally reduced to a iainimum, Certain arrangements were made to carry merchants whose previous standing had been beyond reproach, and on the whole the financial losses which had to be adjusted were reduced to a minimum, Accordingly there was what might be described as a comfortable settlement here, and we have pointed to certain features aiding this which locally have superseded the hard and fast rule formerly in operation, The wreat fact, however, which stands out above all others is that there has been a very great amount of money in Shanghai for the settlement, and as a consequence interest has been only about one-third of what is usually the case at such a season of the year. It has meant more than all other factors, but such may not always be the case, and we must consider the fact that the port is indissolubly Linked up with the interior and its banking. system,
Text read from the printed page and cleaned; old type leaves the occasional error.