As I have pointed out already, the capital of all these banks need not be uniform. The amount must depend on local trade, currency demand and the capital that the native banks in the locality are able to supply. Performing the functions which I have detailed above, these banks need not necessarily have a large capital. In an ordinary banking institution, the subscribed capital forms an important part of the working capital, only during the first few years; but when a bank increases in prestige and is well trusted by the public that it serves, the subscribed or paid up capital of the bank is a very inappreciable part of the working capital obtained through the public deposits. In ordinary business, a bank which has a million pounds capital, without prestige, would possibly have a million pounds of deposits and thus work with 2,000,000 of working capital. On the other hand, a bank with only half a million pounds of capital, if it is well trusted, would have 10,000,000 of deposits and thus have 10,500,000 to work with. It naturally follows, therefore, that the initial capital is not usually a criterion of the credit, prosperity or profit of a bank. It would be advisable to have small initial capitals for the several district banks, because these banks start with the prestige and support of the Government. In the usual course of business, not only would the bank be a collector of taxes for the state but would also perform the functions of bankers of the Government. It is understood, of course, that within their respective districts, these banks should have branches in all the different administrative headquarters of the different districts in the provinces. The functions of these branch offices would be similar to those of the head offices - although the future of these branches should be decided upon, after the Government has established proper treasury offices in the different districts of the several provinces. So far as the relation of the state to the bank is concerned, the scheme would work as follows: In each administrative district the official taxes in money would be paid into the bank as soon as they are received by the Government officials. Payments would be made through the bank for all necessary administrative expenses. The credit balances would be remitted to the headquarters of the district by the banks; if it should happen at any time that money is brought into the district from the provincial capital, this would be done through the agency of the banks. The head office of the district bank would not only receive all the Government monies sent by ' these branches but also customs duties, the salt revenue and other receipts directly under the control of the Central Government. All Government disbursements would be made by them. Thus, by means of these banks, the Government would have some sort of a check over provincial finance, while at the same time the provincial authorities would not feel the control irritating, as would be the case if a central bank from Peking or Shanghai should exercise the same amount of control.