ments. There are, however, now, owing to the vast increase of steam navigation and the opening out and development of new territories and increase of many enterprises, many more ramifications and arteries of trade, which, I think, fully counterbalance the advantages enjoyed during the first-mentioned period, if one understands to take advantage of them, and some have taken advantage of them with good success, and a great many more might have done so, but lacked the spirit of enterprise, &c.

Among the Chinese, also the Arab and Kling population, but especially the former, many large (some very large) fortunes have been made and, as a rule, kept and increased. The majority of such Chinamen were once gambier and pepper planting coolies, or, otherwise, coolieslaborers-and the number of well-to-do people is larger among them than any other class of natives. The Chinese, once getting along well, spend more for a neat, comfortable residence and the comforts of life (advancing gradually to luxuries) than any other class of natives of Asia known to me; but, after all, neither the Chinaman nor any of his Asiatic brethren (generally speaking, admitting unfrequent exceptions) spend as much for living as the average white man. The former can live where the latter cannot; he needs less and cheaper clothing and other necessaries and comforts of life, and is inured to the climate, and the demands of society upon his purse are a mere trifle as compared with those of the European. The average native can live, all told, on from 15 to 20 cents per day, when it costs a poor white man for boarding and lodging alone (in sailors' boarding-houses, for instance,) from 75 cents to $1 per day, if in good health. One need, therefore, not be surprised if the less educated but equally shrewd (if not more so) Chinaman and Asiatic makes a fortune on an average (and in greater numbers) in a shorter time than the white man, and loses it less seldom than the latter. He has many, ever so many, advantages for keeping money which the European is bound-aye, forced-to expend. But for the command or management of enterprises on a large scale he is not equal to, and always yields to, the European; but he can be a very valuable assistant in one way or another.

GENERAL EFFECTS OF CREDIT.

16. What are the general effects of credit?

As regards this colony, the answer to this is easiest found by reading the foregoing; and I may say that they have been on the whole good, and might have been better if more had been given, but on legitimate, i. e., fair, and not rapacious, terms, and for sundry enterprises, such as sugar, tea, coffee, spice, and tobacco planting, and sundry manufactures that could be carried on here at a good profit. If a severe law existed forbidding the exaction of usury rates of interest from among the small traders and laboring classes (anybody), the effects of credit would have shown and still show to far better advantage. This evil of usury I regard as a fester and a curse upon the colony in more than one way. But wherever credit was extended to good people upon fair and solid terms the effects have been manifestly good.

A. G. STUDER,

Consul

Singapore, September 15, 1883.

UNITED STATES CONSULATE,

DUTCH INDIA.

REPORT BY CONSUL HATFIELD, OF BATAVIA, JAVA.

I beg to acknowledge receipt of your circular under date of 15th 21st May last, and the inquiries made in the first mentioned have 1 careful attention.

In reply I beg to inform you, as regards trade in Java, that not o does credit stimulate it but it is a sine qua non in dealing with the tive, Chinese, or Arab trader here; in fact selling for cash is exception and the system of giving long-term credits for imports bought, and vancing funds against produce to be delivered by such traders, is versal.

The people, i. e., the natives, are by no means averse to contract debts, but on the contrary show an especial aptitude for it whenever opportunity presents itself; amongst the Chinese and Arabs, howeve the lealers who stand between the European and the native-the faul not so pronounced, but this simply because they are more advanced ple in both cases, and when engaged in business have more or less reputation to maintain.

Debt amongst the Javanese and Malays is universal, and it is pr ably safe to estimate 90 per cent. at least as owing money in one sh or another.

There is no law nor regulation beyond mercantile etiquette govern credits; it is entirely a matter of private arrangement between buy and sellers, borrower and loaner.

In the import trade, viz, those houses more or less exclusively gaged in disposing of foreign manufactured goods, the giving of cr to their buyers is universal. This also applies to shops and trades generally throughout Batavia, Samarang, and Sourebaya, and the of smaller places in the island.

Tradesmen collect their accounts at the end of each month, but port firms give up to six months' credit if desired, and in some c even nine months' is granted.

Business losses may be said to be confined to Chinese and Ara native traders, and are often considerable. It is very difficult to s what the proportion amounts to, as no data regarding the matter available; but to state that every Chinese dealer fails sooner or late when he finds it most profitable, would not be wide of the mark.

Mechanics, laborers, and servants, i. e., natives, are almost invaria in debt to the Chinese groceryman or tradesman for their month's ply of food. These people have no idea of economy whatever, a they have any balance of wages left after paying their petty accou it is in the majority of cases squandered.

In the wholesale trade cash buyers have the advantage of lower pr as is usually the case elsewhere, but in the case of private individ dealing with tradesmen this advantage is more nominal than real. Interest is not usually openly collected nor charged in time accou but is certainly included in the price.

The bad effects of a universal system of credit and advances are apparent among the native and half-caste population, who in nume cases, especially the native, are completely in the power of the tra

man.

A dealer can buy almost any imported article on credit; sales to European shipping firms of produce, however, are always for cash, and in the majority of cases this has been anticipated by the dealer, who receives large advances against produce to be delivered between stipulated dates, often months afterwards.

Sales of sugar or other native products to shippers by European planters are on a cash basis, but even in these cases the estate is often burdened by loans received from the merchants or banks.

Recorded credits, such as mortgages, &c., are not pevalent among property holders; in fact there have been none since 1877. Amongst Chinese and Arab traders, however, failures to meet engagements are common enough, and losses are at times severe.

The fact of such a dealer having gone under does certainly not debar him from commencing again as soon as his creditors have accepted a settlement, nor is there any obstacle beyond this settlement to a resumption of business. In cases where a settlement has not been effected the law does not permit the same person or firm to recommence, but Chinamen, Arabs, and natives usually get around this if they desire by using the name of a relative upon which to build.

Amongst non European dealers bankruptcy is certainly far from unusual.

It is customary among European firms to relieve a bankrupt and permit him to go on when they are satisfied that the settlement offered by the debtor is honest, and that the failure is not the result of an attempt

to make money.

Speaking in general terms, however, creditors are not usually satisfied with the statements presented, and the fear of imprisonment has at times a most wholesome effect.

Fortunes are not readily made in the East any more, but it is not unusual here for those who have accumulated more than a competency to lose it in speculation or find it dwindle away in the costly experience of managing an estate; this is especially the case with wealthy Chinese.

The general effects of the credit system as in vogue in the Dutch East Indies may be summed up in two words-most pernicious.

Attempts have from time to time been made by foreign firms to form a combination to sell for cash only, and thereby force dealers who are unsound to fail, but this scheme has never resulted satisfactorily. Either small firm refuse to join the syndicate, or secret sales are made.

It seems incredible that in a comparatively small community combined action concerning all, on a matter of the utmost moment, cannot be secured, yet experience has proved that in Java at least it cannot be done.

Natives go into debt upon every occasion in their power, and if allowed stay there; the lower class of Eurasians or half-castes, have a little compunction about the same thing, and altogether the state of society broadly understood may, in this respect, well be called rotten. To failures on the part of Chinese and Arabs it is not unusual to hear dishonesty implied. Chinese traders keep their books and accounts in their own language, and when they become bankrupt an official translator is necessary, should the creditor desire an insight into how the failure came about. To begin with, this is costly, but the expense must either be paid or the debtor's statement accepted as he furnishes it. It needs no comment to show what an opening there is in this for corrupt practices. Less than two years ago the Government was petitioned to oblige alien tradesmen, i. e., Chinamen, Arabs, &c., to write their as68A-No. 43-22

sets in Malay, a universally understood tongue, but for some inexplicable reason the application was denied and the state of affairs allowed to remain unchanged.

OSCAR HATFIELD,

Consul.

UNITED STATES CONSULATE,

Batavia, Java, July 28, 1883.

SIAM.

REPORT BY CONSUL-GENERAL HALDERMAN.

Referring to Department circular under date of May 15 of the present year, just now received, I have the honor to return the following replies to the interrogatories therein presented.

Does credit stimulate trade?

Yes; immensely, in Siam.

Are people averse to contracting debts?

By no means, so long as persons in business will trust them. Are there any sumptuary laws or regulations concerning credits? Not that are generally known. Arbitrary orders curbing display have been issued where it was considered that the rank of the party did not warrant such display. Persons may eat and drink what they will, ad libitum, if they purchase of licensed dealers.

To what extent does credit prevail in proportion to the volume of business?

As ten is to one.

To what extent do losses incidental to business prevail?

As one is to five.

Do tradesmen extend credit to mechanics and laborers readily?

Yes; the person or the buyer being responsible for his debts inspires confidence.

What advantage have cash buyers?

With Europeans, a trifling; with the native dealers, little or none. Is interest demanded on time accounts?

Yes; at the rate of 12 per cent. per annum on the part of Europeans. The native dealers charge 15 per cent. at the least, and as much more as they can get.

With what class are the evils of credit most conspicuous?

With the nobility and gentry, who buy very many useless articles which strike their fancy, at enormous prices, which otherwise they would do without.

Are credits of record (mortgages, judgments, &c.) prevalent; and, if so, among what classes?

To a large extent. They are not confined to any particular class. When a person in business has once failed or has been discredited, can he resume, and what are the obstacles to such resumption?

If under native jurisdiction, he can. There are no material obstacles, if he has retained the confidence of his creditors. If under consular jurisdiction, the case is varied according to the laws of the eleven countries represented.

Is bankruptcy frequent?

It's not uncommon.

To what extent do relief acts-in bankruptcy prevail?

There are no bankruptcy laws as we understand them. When a man's assets fall short of his liabilities, he either compounds with his creditors or leaves the country hurriedly. If taken, his own person and those of his family may be held until the debt be paid.

Are fortunes readily made and lost?

Not now; formerly, yes.

What are the general effects of credit?
Not good.

I have endeavored to answer the interrogatories contained in the circular-letter of the Department of State of May 15, 1883, respecting the question of credits, but the condition of things is so different at Nagasaki from that of the cities of Europe and America, that I cannot see that they have any bearing on the conduct of business in this locality. Business here is very primitive. The natives bring their produce and

receive cash payments.

Among the Chinese merchants and the natives there is a good deal of the barter system in their transactions. Among foreigners trade is conducted under their home laws, and the regulations of credit are the same as in their respective countries.

1. BUSINESS TRANSACTIONS BETWEEN THE CHINESE.

Business among the natives is conducted partly on a cash basis and partly on credit, the bulk of the business, however, being for cash, or as near an approach to it as can be arrived at in a country without other currency than a copper one, the alternative being sycee or bullion in lumps, which, except for hoarding, is seldom in the hands of the merchant. Payments are in most cases made by orders on a native bank at five or ten days after date, which for security is generally countersigned by the bank on which it is drawn. These banks are, without exception, private institutions, deriving their funds partly from their own accumulations and in part from the deposits of wealthy mandarins