To the Editor of the "NontH-CuiNa Datty News."
Sim—In to-day's issue of Journal you have been publishing an article under the above caption. 'The with a subject claiming attention and requiring. special understanding, Had the: author deemed it.expedient to sign [the article, I should have privat written to' him, pointing out. that the substance of his essay is incorrect and that his deductions therefore are fallacious. Under the circumstances, and moreover because the discussion of the subject is of vita} interest to the trading com munity of Shanghai, I reluctantly have Tecourse to the correspondence [column of your paper.
Your contributor is wrong when ing that "the of native banks, which assist them in their' financing by permitting him to draw bills, caited "native orders," upon the motive bank payable usually after a period of ten days!
This definition is erroneous. it were correct, the present attitude fof the-native banks could not be criticised. The problem would then] resolve itself into the treatment of post-dated cheque which has been drawn ona native bank. Even if the latter "would have consented previously to honour such cheques Up to a certain limit (overdrawn feurrent account), it could revoke its former credit limit in the presence:
termed force majeure'.
conditions which can justly be 'A native order is a negotiable instrument, payable on or after a fixed inscribed date to bearer upon, presentation (usually through the cleaving similar to a crossed foreign, cheque). It is invariably issued by 'a native bank and represents there fore an unconditional promise to ay. Even when a native order has od lost or stolen, or when ing, ought to cause sympathy antongst the public.
Many merchants who owe money to them are Unable to meet their obligation, while others have left Shanghai and cannot even be approached. Others have substantial holdings in real estate and. bonds which cannot, ing conditions, quickly be turned into cash. But under such conditions they ought not to have issued comparatively recently new native orders which cannot be vnilgd of, except for deposit with the clearing native banks.
ans that "the fonds. are Practically ocked up.
These are the main points on which your contributor hat erred Inistakes which ough to be correct Slats time when a trae version casentials I trust that myers eavonre will be taken ta the tree fciendy" spirit in which: they are tendered.
While-on the subject 1 should pact the common belief pre-walling amonget the Shanghai pub:
thst wherever one of the native Wanks falls the other memo fers are liable for the defi. "The Falig on this question in quite clear and Nontrary "to. common belief 'The remaining members of the na: five banks guild are not tio for the lores eased by the insolvency bankruptcy of any one of their fulld "members, There have Entce when wei Tew banke' orders were lest unredeemed {Vi thevcase of the Yue Fong: Native Bank).
The carver of Native Banks China "is distinctly interesting. Those concerned with the subject are referred {0 an essay of mine Published in the China Year Book 1925 (or 1926), or to a much better narrative published by Mr. Percy the columns of the "North ina Daily News" on March 27 and 28, 1928.
Kann,
Text read from the printed page and cleaned; old type leaves the occasional error.