Even responsible people have often thoughtlessly stated that, as the foreign banks make a very large profit in exchange, they would be the chief opponents of any reform of currency. By constant repetition this statement has acquired the characteristic of truth in the eyes of not a few people. It is, however, a libel. It is not true that the foreign banks make all their profits in exchange, the chief source of their revenue being from the judicious use of their deposits and discounting bills. They are certainly not in a position to regulate exchange as they would like to, because China is not the only factor of the silver market. Again, there is competition among them; when one bank wants exchange high another wants it low, and each and every bank attempts to manipulate the market to suit its own interests. No doubt, as between the speculator and merchant who deal in exchange on the one hand, and the banks on the other, the latter are in a more enviable position; but it does not mean that they have the best of every transaction. It is to the interests of the banks themselves to have a steadier exchange than has prevailed in China for some time past. Because, in such case, there is bound to be a larger growth in the volume of trade, which in itself would be a decided advantage, quite as much to the banks as to the merchants. Further, much of the uncertainty in connection with the variation in rates would be done away with. Above all, gambling or transactions of chance, arising out of exchange fluctuations is not profitable for all time. When once there is profit, there is generally a reaction which is neither pleasant nor profitable. The foreign banks are fully aware of this.

It has frequently been stated that the foreign banks have rarely taken any steps to support the Chinese Government in its several attempts at reform. The statement is true; but the reason is that there was never any co-ordinated scheme, and nothing that foreign trade could safely fall in with. Consequently it is no wonder that they did not want further complication by acceding to ill-judged and half-hearted attempts for the regulation of currency. For one thing, there was never any scheme which the native banks themselves accepted. As apart from the Government transactions, all the Chinese business of foreign banks is with native banks, it is not surprising that the former were chary of taking the initiative. Again, what is the use of minting coins, when the Government is not able to regulate their value or when the Government could not give an assurance that it had completed arrangements for giving coins for all the silver presented at the mint? The Government could only expect help or co-operation, when it adopts, and is able to enforce, a proper scheme of reform.