[Volume XXV
THE CHICAGO BANKER
30
regards both accommodations and staff, being on a generous scale. A permanent building:	will be
erected in the Tartar City, opposite the building of the Imperial Bank.
V*
A. O. Hauge Invents a Form
A new form of commercial paper which will simplify business transactions when generally adopted has just been devised and copyrighted by A. O. Hauge, cashier of the Iowa Trust and Savings Bank, of Des Moines. The new instrument will be placed in the bank for the benefit of the depositors as soon as the engravers can run off the vast number which Cashier Hauge has ordered.
It combines seven different forms in one. It is printed in $10, $25, $50, $100 and $500 amounts. It is of the ordinary size of paper money and can be placed in a folder the same as a bill. The following forms are combined into the new instrument:	Time cer-
tificate of deposit, bank money order, Chicago draft, New York draft, self-identifying check, certified personal check, and a letter of credit.
The new instrument, it is thought, will popularize itself especially with travelers who do not wish to carry a large amount of money around on their person. It can be cashed at any bank without the usual trial of finding someone to identify the holder, as now.
After making deposit in the bank the depositor is handed one of the new notes, at the top of which he signs his name before leaving the bank. This certifies that he has placed so much in the bank, and credit for that amount is given by the cashier. When he wishes to cash the note anywhere all that is necessary is to sign his name at the bottom of the note. The similarity of the two signatures identifies him and does away with finding someone to stand for him at the bank, which is often almost impossible when in a strange town.
The new instrument of deposit as designed for use by Mr. Hauge provides for interest at the rate of 4 per cent for a period of three years. On the margin of the note is the interest computed out for that length of time, so that the depositor is acquainted at all times with the amount of interest that is due on his deposit.
The new instrument also is a draft payable on either a Chicago or New York bank.
If a note should be lost it can be reported at the bank and another issued in its place. Each note has a number on it, removing the possibility of it ever being cashed if once lost. If the note were stolen it would be impossible to cash it any place, as even the cleverest of penmen could not imitate the signature at the top before the eyes of a watchful cashier.
sion will, of course, be unnecessary when the Imperial Bank is vested with the exclusive privilege of issuing them. To compensate for the restrictions imposed on banks the government asserts its willingness to aid with a loan from the Imperial Bank any banking concern involved in special difficulties, if said difficulties can be shown to be of an unavoidable and temporary character. The scope of these laws is sweeping, and if they are enforced all the banking business of the empire will be closely watched by the board of finance.
The industrial banks, provided for in a special series of regulations, may be of private or government origin and are designed especially as an aid to the lower classes. They are to loan money in small amounts on easy terms as regards security. The rate of interest is not fixed. Local officials will, with public funds, aid each bank for the first years of its existence. Ordinary banking business is permitted if confined to a scale accessible to the lower classes.
The need for special laws regulating the conduct of savings banks arises from the fact that ordinary Chinese banks do not engage in this department of banking, as we understand it. The security of deposits in these banks is safeguarded by the compulsory retirement each year of at least a quarter of all deposits and their retention in an available form as a reserve fund. Registration with the board of finance of all banks doing this kind of business, and constant supervision of their affairs by the same board, are henceforth to be compulsory throughout the empire.
Just as the Imperial Bank is the instrument of the board of finance so the Bank of Communications is the organ of the board of posts and communications in its control of railways, telegraph lines and postal facilities. In addition to transacting the ordinary business of a bank, its special function will be to act as place of deposit for the funds of public utilities under the control of the board of posts and communications. It will also care for all funds accumulated for the redemption of the Pekin-Hankow railway, and will have control of all bonds issued by the government to provide for the construction of railways. It will establish agencies or connections wherever conditions demand, but these and the central office will in every essential particular be under the direct control of the board of posts and communications.
As will be observed the changes inaugurated in this new legislation are far reaching. But it is reasonable to expect large developments along these lines. Li Ching-chu, a nephew of Li Hung-chang, and a man of experience in banking, is president of the Bank of Communications. This bank is temporarily located in the southern city ; the equipment as
Government Banks in China
While the currency commission in the United States are thrashing over the various forms of banking in the world and are going to submit to the next session of Congress a definite plan for revising our currency, it is interesting to note that China has already established two government banks. Charge d’Affaires Henry P. Fletcher of the American legation at Pekin, has just entered the following report at Washington :
Two government banks have been established, the Imperial Bank and the Bank of Communications, controlled, respectively, by the board of finance and the board of posts and communications. The board of finance has drawn up and gained imperial sanction for a set of general laws relating to banking, and two sets of regulations for the establishment of special forms of banks, viz., industrial and savings banks. It is to be observed that the effect of this recent legislation is to place the whole banking business of the country under the supervision of the board of finance.
The Imperial Bank, which has hitherto been called the Bank of the Board of Revenue, is a stock concern, capitalized at 10,000,000 taels (haikwan tael—68 cents), of which the government will subscribe one-half. Its existence is limited to 30 years, after which period it may be continued if found profitable. While it will transact all ordinary banking business, the main function of the Imperial Bank will be, as far as the board of finance may deem advisable, to serve as the depositary for all government funds, and the medium through which national financial deals may be consummated. Its other duties will be to act as the instrument of the government in preserving the monetary equilibrium of the empire by means of loans here and there, as circumstances require, and to control the issuance of paper money. At some future date it will have exclusive prerogatives in this particular, but in all of its activities it is to be under the direct control of the board of finance, the power of the shareholders being practically nominal. As its business expands agencies will be established throughout the country, which will also transact ordinary banking business, while serving as the medium through which the bank may affect monetary conditions in the provinces.
The general banking laws are designed to safeguard business conditions by preventing banks from becoming insolvent. To this end strict government for all banks, especially as regards the issue of notes. This latter provi-
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