have gone on without any aid from the state,
developing their plans as experience suggested, and so cautiously as
to insure success. This result is, however, far below what has been
obtained by Europeans. In comparison with ours, the banking-system of
China is in a very primitive condition; theirs is extremely limited in
its application, each city restricting itself to its own method; and
while the means of intercommunication are imperfect, there is little
prospect of improvement.

One example may be taken as an illustration of the whole; and we avail
ourselves of a communication made by Mr Parkes to the Royal Asiatic
Society on the paper-currency of Fuhchowfoo, for the substance of the
present article. As in other places, the system was started in the
city of Fuhchow by private individuals, who began by circulating among
each other notes payable on demand. As the convenience of such a
medium became apparent, the circulation was extended, and ultimately
offices were opened for the special purpose of issuing notes; but as
the only guarantee for their security was the character of those who
put them forth, the circulation remained comparatively trifling, until
their credit was recognised and established. Not till the first
quarter of the present century did the use of paper become extensive
or permanent; and now, everybody in Fuhchowfoo prefers notes to coin.

As no licence is required, any one may commence the banking business,
and at first considerable mischief resulted from this liberty.
Speculators who forced their notes largely into circulation, not
unfrequently met with a reverse, with the usual consequences of
distress and embarrassment to their connection. Although this for a
time brought paper into disfavour, it has now recovered, and the great
competition is found to have the effect of mitigating the evils of
failure. Where so many are concerned, individual suffering must be
comparatively slight. The banks, moreover, are not banks of deposit;
the proprietors prefer not to receive deposits, so that private
parties run no risk of a great and sudden loss, beyond that of such
notes as they may hold at the time of a stoppage. On the other hand,
the usefulness of a bank is limited by this arrangement; there can be
no paying of cheques; but very few of the banking establishments can
transact business beyond the city or the department in which they may
be located, and seldom or never beyond the limits of the province.