fees, exactions, and peculations are practiced to satisfy the cupidit the officials that little is left for the creditors. Creditors thus keep c of any official interference except in cases of undeniable fraud and cality, and then the object is rather the punishment of a criminal t the collection of dues. Such bankrupts can never operate again in gions where they are known. Credits of record are numerous, mostly confined to mortgage of property. I do not find that "judgments," as known in civilized co tries, are known. A mortgage to be of value must be accompanied the original deed, which must be examined at the magistrate's offic test its genuiness. Deeds are often forged, and probably more for ones exist than genuine, and mortgages are often negotiated on for deeds, through neglect of the money-lender to investigate the vali of his security, which would cost him a fee. The true deed holds mortgage that it accompanies, and other mortgages on the forged de are paid from surplus of value, if any exists, on the property. T mortgages are mostly among the trading classes, officials ordinarily needing their aid, and the coolie class being too impecunious to ha them. Tradesmen do not credit mechanics and laborers. The resources well as needs of these are very small, and their purchases are made literal "cash." The trade with foreigners is in effect for actual cas The great interest in Hankow is tea, which, as far as the Chinese concerned, is strictly sold for cash. It is collected in the interior f the producer in small quantities, by native brokers who pay on de ery. These brokers make up the lots, or "chops," from these collecti shipping them to Hankow, paying lekin, freight, customs dues, &c., putting the tea on the market. The sales are made to foreigners, pay at once for their purchases by bills on London, negotiated her the agencies of foreign banks. As a rule, these foreign buyers are brokers for friends at home. As a rule, I learn that the native br in selling the tea requires an advance of about 40 per cent. over first cost paid the producer, in order to cover all the costs in get the tea to market. In the same way other native produce for exp as silk, hides, white wax, and other articles are collected and paid in cash. The collectors doubtless sell on credit, for generally only tives are owners and traders in these articles. All freights are also able in cash, on bills usually presented at the end of calendar month. CHINESE BANKING SYSTEM. The banking system may be properly noted as coming in as an junct to the business system. There is no such thing as a bank prope all China. The Government gives no official sanction to any institu of the kind and coins no money except the copper "cash." All ba are, therefore, mere private affairs, and, properly speaking, not ba at all. Their operators are mere private bankers. The immense lections of the foreign customs are thus deposited in private hands standard firm, who farm the privilege of using, receiving, and pay these funds from the Government. The largest banks are said to their capital from retired officials, who are expected to amass fortu during their terms of office. These are, in fact, the bankers, and t emoluments are from the profit of the business. These large ba lend out their funds to smaller ones, who deal in turn largely v brokers, who lend to traders mostly on personal security. Sometin but rarely, real property is mortgaged as collateral. The rates of in est at the banks vary as in other countries. Long loans on good names can be obtained at 8 per cent. Short loans from 10 to 36 per cent., according to circumstances and customers. I have seen it stated in American newspapers that a failure of a bank in China is never known. This is true in one sense, for there is no bank to fail. But failures of socalled banks are very common. I have known of several in Hankow I have the honor to acknowledge the receipt of dispatch of the honorable Assistant Secretary of State, dated May 15, 1883, addressed to the consular officers of the United States, submitting certain interrogatories prepared by the Board of Trade of Scranton, Pa., and requesting answers thereto. In reply, I have to say that if the interrogatories are applicable to the Chinese, their rules and regulations and their method and system of doing business are so intricate and entirely different from those prevailing in any other civilized land, it is impossible to give intelligent answers. If, on the other hand, they are intended to apply to foreigners here, this is not a port of direct shipment, and Shanghai is the great commercial center for North China, and there are located the banks of the country. It is only within the last two years that we have had a bank at this port. The business in the hands of foreigners here is confined to one American firm and some half dozen German, English, and Russian firms, who are doing chiefly, if not entirely, an export business. At this port we have no board of trade, chamber of commerce, or other association through which any data can be obtained, and as the business is almost entirely done by the Chinese, it is vain to look in that quarter for information. The business transacted among the Chinese, when credit is given, is considered a debt of honor, and, according to their custom or usage, all these debts must be canceled at the end of the year, or the defaulting party lose caste. Bankrupt laws are not known, as they have none such in China. The merchandise bought at this port for export is paid for in cash, the purchaser drawing on his consignee against the shipments. The chief articles of export to America are straw braid, goat-skin rugs, camel's hair, and feathers. The chief articles of import from America are drills, jeans, sheetings, and kerosene, and, latterly, canned fruits and flour are being imported to some extent, but only for foreign consumption. UNITED STATES CONSULATE, Tien-Tsin, September 4, 1883. JAS. C. ZUCK, Consul. CONTINENT OF AFRICA. CANARY ISLANDS. REPORT BY COMMERCIAL AGENT M'KAY, OF TENERIFFE. The circular of May 15 last, asking for information as to the cre system and its influence on business in these islands, is before me, a replying in approximate order to the various queries, I beg to repo I find that credit stimulates overtrading, and that people are averse to contracting debts, owing, in fact, to want of stringent la in respect thereto. Trading on credit probably reaches 60 per cent. of the business do and as credit leads ignorant and inexperienced people to engage business beyond their mental and metallic capacity, the losses throu it are probably as much as the gains. Merchants do not readily trust mechanics and laborers. Cash buyers have from 3 to 5 per cent. advantage over time buye Interest is seldom exacted on time accounts, even when collected af due date. The evils of credit are mostly seen in the small retail dealers. Almost all the agricultural products are sold for cash, wine being only article sold on time to any extent. Credits of record are almost unknown in their scarcity. The Spanish code rules in mercantile failures, and only in case gross fraud is a man prevented from engaging in business again. Bankruptcy appears to be more frequent in proportion to the busin done than in other countries. As before remarked, the Spanish code governs mercantile failur and only to the extent it allows do relief acts prevail. We have no great fortunes among us, but in as far as our wealth g fortunes are very seldom suddenly made, whereas they are more quently lost in a short time, the balance against the province going i the pockets of foreign creditors. A judicious system of credit would probably be beneficial in the 1 run, but, as now exercised, chiefly through traveling salesmen fi Europe, whose object is to sell all they can, it leads to overstocking market and ultimately to the ruin of the greater part of the traders H. B. MCKAY, Commercial Agen CONSULATE OF THE UNITED STATES, LIBERIA. REPORT BY CONSUL-GENERAL SMYTH. In reply to circular dated May 15, 1883, in which you are pleased state that it has been represented to the Department by the Bo of Trade of Scranton, Pa., that reports on the system of credits wl prevail in, and their relation to and effect on the general prosperity of, the several countries would be greatly appreciated by the financial and industrial interests of the United States," I have the honor to submit, respectfully, the following in way of report: I may say that I am indebted for the principal facts to Col. R. A. Sherman, one of the leading and most respected merchants of the Republic. 1. Does credit stimulate trade? It does to a great degree in Liberia. Quite three-fourths of the business of the country is done on the credit system. Trade has been greatly developed within the last eighteen years on this system. As an illustration of this, eighteen years ago there were four small steamers of 900 tons burden running from Liverpool, and they called once a month at only one port in Liberia, namely, Cape Palmas, to land nails and to get Kroomen; but now there is a fleet of more than forty steamers, with an aggregate of 60,000 tons, running from Liverpool, London, and Hamburg, calling at all the principal ports in Liberia, not merely to bring mails and get Kroomen, but to bring and carry freight. 2. Are people averse to contracting debts? Some few persons are, but a very large majority of them are not, but are willing to accept credits on liberal terms. 3. Are there any sumptuary laws or regulations concerning credits? There are no sumptuary laws existing in Liberia. Each man expends according to his income or circumstances, there being no legal restrictions other than are by circumstances imposed. 4. To what extent does credit prevail in proportion to the volume of business? This may be regarded as answered in No. 1, where I state that threefourths of the business is done on the credit system. 5. To what extent do losses incidental to business prevail? This question may not with certainty be answered. There is no record kept of losses, hence nothing more than an approximate answer can be given. It may be safely stated that the failures do not exceed 20 per cent. 6. Do tradesmen extend credit to mechanics and laborers readily? Mechanics and laborers rarely require much credit, but the farmers, by far the largest class, get considerable credit from the merchants on their crops of sugar, coffee, ginger, &c. 7. What advantage have cash buyers? In general they are allowed a discount of 21 per cent. on cash payments. 8. Is interest demanded on time accounts? Interest is never charged on book accounts, but always on notes of hand after maturity. 9. With what classes are the evils of credit most conspicuous? These are not confined to any particular class, but exist among all classes-merchants, farmers, and native African traders. 10. What kind of produce or manufactured articles command cash returns? Cash returns are had from rubber, palm kernels and oil, camwood, coffee, and ivory. 11. Are credits of record (mortgages, judgments, &c.) prevalent; and, if so, among what classes? Mortgages are seldom given, because rarely demanded, but when traders or farmers are anxious to secure credit and cannot get it other68 A-No. 43—23 wise they mortgage their real estate. Few chattel mortgages are given. Mortgages and judgments are recorded. 12. When a person in business has once failed, or has been discredited, can he resume, and what are the obstacles to such resumption? When a person in business fails he must make an assignment of all his property, except one bed, one table, two chairs, cooking utensils, and so much wearing apparel as is privileged from execution, for the benefit of his creditors, and appear before some court of competent jurisdiction and make oath that his assignment is true and correct; and he must enter into bond with good sureties, and he cannot resume business for three years after the assignment. 13. Is bankruptcy frequent? Bankruptcy is seldom heard of among Liberian merchants. 14. To what extent do relief acts in bankruptcy prevail? This is answered in No. 12 as fully as it can be answered. 15. Are fortunes readily made and lost? Fortunes are not readily made in Liberia, but they are readily lost. Men of sufficient energy and experience often accumulate a competence after a few years of hard labor. 16. What are the general effects of credit? The country at large is benefited by judicious credit, which enables the merchant to extend his business operations, the farmer to enlarge his agricultural interests, and thereby develop the natural resources of the country. In a word, it assists all branches of industry, and without credit three-fourths of the entire business of the country would become paralyzed. Yes; always. 2. Are people averse to contracting debts? No; the people seem anxious to contract debt. 3. Are there any sumptuary laws or regulations concerning credits? None whatever. Such laws would be contrary to the genius of the Portuguese people. 4. To what extent does credit prevail in proportion to the volume of business? It is impossible to answer this question exactly. Roughly, I should say three-fourths of the business of the place is done on credit. 5. To what extent do losses incidental to business prevail? To a considerable extent. There is no means of ascertaining to exactly what extent. 6. Do tradesmen extend credit to mechanics and laborers readily? No. 7. What advantage have cash buyers? Absolutely none. |