'The banking establishments in the city and suburbs of Fuhchow,' says Mr Parkes, 'may be enumerated by hundreds. Most of them are naturally very insignificant, and the circulation of their notes exceedingly limited. Many of the outside notes will not pass current inside; and are only convertible at the place of issue. Such branches as these must be entirely superfluous, and might seriously inconvenience or trammel the transactions of the higher ones; but, in order to guard against encroachment from this direction, and as a self-protective measure, several of the leading banks of known stability co-operate with each other to keep up the value of their notes; and thus, by holding a strong check on the issues of those minor parties, effectually continue to regulate the whole system. There are thirty of these establishments inside and outside the city, all reported to be possessed of capital to the amount of from 500,000 to upwards of 1,000,000 dollars.
'These latter establishments command the utmost confidence, and their notes pass current everywhere and with everybody. They contribute mutual support by constantly exchanging and continually cashing each other's notes, which they severally seem to value as highly as their own particular issues. This reciprocal and implicit trust must add greatly to their solidity, and tend to prevent the possibility of failure. The chief banker gained his high reputation by a voluntary subscription, about thirty years ago, of no less than 100,000 dollars to the government toward the repairs of the city walls and other public works, for which he was rewarded with honorary official insignia, and the extensive patronage or business of all the authorities. These large banks are complete rulers of the money-market; they regulate the rates of exchange, which are incessantly fluctuating, and are known to alter several times in the course of the day. The arrival or withdrawal from the place of specie to the amount of a few thousands, has an immediate effect in either
raising or lowering the exchange. The bankers are kept most accurately informed on the subject by some twenty men in their general employ, whose sole business it is to be in constant attendance in the market, and to acquaint the banks with everything that is going on, when they, guided by the transactions of the day, determine and fix upon, between themselves, the various prices of notes, sycee, and dollars. Their unanimity on those points is very remarkable; and they are all deeply impressed with the salutary conviction, that their chief strength consists in the degree of mutual harmony that they preserve, and the confidence they place in one another. These reporters are also very useful to new arrivals, in affording them guidance on matters of exchange, or in introducing them to the best bankers; and the allowances that the stranger makes to them for their assistance, and the banker for procuring him custom, constitute the gains of their calling. They have also to report the prices of silver every morning at the Magistracy, which, from its daily increasing value, has become an object of especial attention.' Twenty years ago, much discontent was expressed that silver, which had been worth 1000 cash per ounce, rose to 1500; now it is over 2000, owing to the continuous drain of the metal from the country.
Still, with all this, failures are rare. The petty banks are most liable to this reverse; and on such occasions, they generally contrive to arrange the matter quietly among themselves; but the whole property or lands belonging to the defaulters may be seized and sold to satisfy the claims of the creditors: the dividend is usually from 10s. to 12s. in the pound. Wilful fraud is seldom practised; the heaviest instance known, was for 70,000 dollars; from the year 1843 to 1848, there were but four bankruptcies, and three of these were for less than 6000 dollars. The defaulters frequently escape punishment owing to the high cost of prosecution. The large banks are safe; but at times, from false or malicious reports, are exposed to a sudden 'run;' a great crowd besets the doors when least expected, and numbers of vagabonds seize the opportunity for mischief and plunder. These outbreaks grew to such a pitch, that the magistrates now, whenever possible, hasten to the threatened establishment, to repress violence by their presence and authority. The rush, however, is so sudden, that before they can arrive on the spot, the mob has improved its opportunity for destruction, and disappeared.
Forgery is not often attempted, probably because it does not pay, owing to the fact of its being extremely difficult to circulate any but notes of small value. The penalty for this offence is transportation to a distance of three thousand le about a thousand miles; or imprisonment or flogging, according to circumstances. We question if such an instance as the following ever occurred out of China:'A forger of some notoriety having been several times prosecuted by the bankers, and with but little success, for he still continued to carry on his malpractices, they conferred together, and agreed to take him into their pay , making him responsible for any future frauds of the kind. He continues to receive a stipend from them at the present time, and is one of their most effective safeguards against further imposition, as it devolves upon him to detect and apprehend any other offender.'