The constitution of Chinese banks is not likely to undergo any serious change for a long while to come; whatever change is desirable should come from within and should not be forced on them. The best banks remain proprietary concerns, generally with two or three partners at the most. So long as the idea of joint-stock business is not properly understood there is little hope of properly conducted joint-stock banks in this country. Two conditions are essential for the success of joint-stock business. The first is that the people should have sufficient surplus profit in their usual avocations of life, to risk a part of their savings, to the exclusive care of others; secondly, there should be some sort of control by a public authority over a joint-stock institution, to prevent the management from unnecessarily hazarding the money which belongs to others. Underlying the two is the element of trust, of which, however, China has enough, looked at from the viewpoints of her social, economic and political conditions. The two conditions that I mentioned above are not generally prevalent in this country. Wages and profits are low, and saving is very difficult, except in very rare cases.

Although there is not such a wide gap between the rich and poor in this country as there is in India or the United States, there are very few men who could really be called rich, even in the sense in which wealth is computed in India or Japan. The majority of the people, who have even small amounts to dispose of, are not in a sufficiently strong position to risk it; and the few that are able to risk it are already in the trade, either as dealers or as bankers. The nature of the Government also is such as to afford no protection against malfeasance of funds by those to whom the public could entrust its money. It may be said, of course, that even in countries like England and the United States, the majority of the shares of the so-called public companies are held only by a few rich men; and that similar combinations could be brought about in China, to the benefit of the country. There is a modicum of truth in this; but no tangible result could be achieved, unless the Government is able to frame adequate laws for the control of banking and commerce, and has besides power to enforce them. A discussion on this subject is beyond the scope of this book; all that I can say at present is that the progress of joint-stock banking in China is not likely to be rapid, nor is it desirable that it should be quick.