European market as a serious
borrower. The sum of L6,635,000 was raised in 1894-1895 in four small
loans at 6 or 7% interest. In 1895 a Franco-Russian loan of fr.
440,000,000 (L15,820,000) was raised in Paris. Two Anglo-German loans,
each of L16,000,000 (one in 1896, the other in 1898) were raised
through the Hong Kong and Shanghai Bank. The Franco-Russian loan bears
4% interest, the first Anglo-German 5%, the second 41/2%. The foreign
loans contracted up to 1900 amounted altogether to L54,455,000. The
charges for interest and sinking fund, which amounted to over
L3,000,000, were secured on the revenue of the maritime customs, and
on the likin taxes of certain specified provinces. The net income from
these two sources amounted to over taels 24,000,000, equivalent at
existing rate of exchange to L3,400,000, which was amply sufficient.

Between 1899 and 1907 (both years inclusive) L12,200,000 was raised on
loan for railway purposes. The charges on the first loan--for
L2,300,000--were secured on the revenue of the Imperial Northern
railway, the interest being 5%. The same interest was secured on the
other loans, save one for L1,000,000 in which the Hong Kong government
was concerned, which bears 4% interest.

The foreign debt also includes the indemnities exacted in 1901 by the
powers for the Boxer outrages. These indemnities, secured on imperial
revenue, are divided into five series amounting altogether to
L67,500,000, the amount payable on these indemnities (at 4% interest)
in 1907 being L2,824,425. The burden of meeting this amount was
apportioned between the eighteen provinces--the sums allocated ranging
from taels 2,500,000 for Kiang-su to taels 300,000 for Kwei-chow. In
1909 the grand total of China's indebtedness exceeded L140,000,000 and
the interest called for the payment of L7,427,450 in gold.

_Banks and Banking._--Native banks for purposes of inland exchange are
to be found in most large cities. They are private banks using their
own capital, and seldom receiving deposits from the public. The best
known are the Shan-si banks, which have branches all over the empire.
They work on a small capital, seldom over L50,000 each, and do a small
but profitable business by selling their drafts on distant places.
None of them issues notes, although they are not debarred from doing
so by law. They lend money on personal security, but do not advance
a