So far as the public is concerned, the function of these banks would be mainly to control currency, and on no account should these banks be permitted to compete with existing native banks in ordinary business. It would be obligatory on the part of these banks to pay out coins or paper for all the bullion presented to them, according to the nature of the demands made upon them. They might also receive deposits from private individuals. But they should, on no account, do other business like lending out on mortgages, etc., to private individuals. It might be asked that, as these banks have shareholders and are primarily business concerns, besides being the regulators of currency, how they are going to pay dividends. First of all, the capital is so small that, as I will show later on, the profits are sure to be big, in view of the temporary control of large sums of money belonging to the Government. Secondly, as in the case of semi-state banks, like the Bank of England or the Bank of France, the object of these institutions is not to obtain dividends. From the point of view of the Government, who would be the biggest single shareholder, the object would be to regulate and adjust currency. Towards the native banks, the district banks would perform the same function as the Bank of England does to the several joint-stock banks in England, the Bank of Japan to the Japanese banks, or the Presidency Banks in India to the other Indian banks. The native banks that are shareholders would obtain working capital from the district banks on a purely business basis. Good commercial bills, which the management of the banks consider safe, would be discounted. In the interior of China, buyers and sellers of produce are both Chinese. Supposing the buyer has not sufficient money to pay for the full consignment of silk he wishes to take delivery of. At present the native banks lend money, on personal credit, to the buyer, who brings the silk to the ports and sells it again for cash. Business is thereby considerably restricted, because the native bank cannot wait for the long periods of three or six months, for which credit is usually given by the foreign banks. Supposing the buyer is able to sell the goods to a dealer in the ports who pays him with a three months bill on a bank in some other part of China, which has, however, a good reputation. The district bank would easily discount it, if such bill had the guarantee of two or three of the native banks, that are its members. In the same manner, much of the business that is being badly done or given up by the existing native banks, could be done better with, of course, the guarantee of the native banks. Following the example of the foreign banks in the ports, especially in Shanghai, the district banks could lend out call money to its shareholders, the amount to depend upon the credit and capacity of the several native banks. The usual business of lending money, or, financing trade in detail, should be performed by the native banks as at present; and as they have to be in the good books of the district banks, in order to have a regular supply of capital, there is little doubt that they would be more circumspect in their business than they are to-day. Another advantage, so far as business is concerned, is that each native bank would not only obtain capital from the district bank whenever necessary, but also deposit its surplus with the district bank; and, not improbably, this surplus would be availed of by another native bank, which, under the present state of affairs, could not obtain such capital. Thus the district bank will not only be the bank of the state, but also the bank of banks in each district. At the same time, the existing banks in the each district would take every step to ensure the success of the district bank, because they would have a not unimportant voice in the management of the latter.