What were the processes involved in the dispatch of money from Canton to the interior, or from the interior places to Canton Let me take, for example, a single transaction each way. Supposing, for example, the East India Co., which had practically the monopoly of foreign trade up to 1833, wanted to buy 100 piculs of silk available only at Shanghai. As a matter of course, the order was given to one of the hong merchants in Canton and he immediately placed a certain amount with the native bank with instructions to have that money sent to Shanghai to a correspondent of his in order to buy the requisite quantity of silk. The native bank in its turn paid the money out to a branch of one of the Shansi banks in Canton, with instructions to have the money dispatched to Shanghai. The reason for the native bank approaching the Shansi bank is apparent. Even up to recent years native banks have continued to be almost exclusively provincial - although there have been exceptional cases in which powerful native banks have had branches throughout the country. The Shansi bank in its turn intimated to its branch in Shanghai or one of its correspondents that a certain amount had been placed to the credit of the person in Shanghai mentioned by the hong merchant, who dispatched the money from Canton. As soon as it received instructions, the branch of the Shansi bank in Shanghai issued an order on one of the local native banks to pay a certain amount to the party named. The correspesdent of the hong merchant in Shanghai received the money, bought the goods and dispatched them to Canton. Considering the extreme difficulty of transporting money it is extraordinary that the charges of the Shansi bank for sending money from one province to another should have rarely exceeded 3 per cent. But money was not actually dispatched with each order; for, otherwise the cost would have been as much as 20 to 30 per cent, of the amount thus sent - the cost increasing proportionately to the distance of the place from Canton. What actually happened was that one transaction was set against another. It so happened that while the East India Co., bought silk from the party in Shanghai it sold wool to somebody else in Kiukiang; thus while money had to be sent to Shanghai to buy silk money had to be received for the sale of wool. Through the medium of the Shansi bank, it was possible to arrange in such a manner as not to necessitate the dispatch of money from Canton to Shanghai or from Kiukiang to Canton. The Shansi bank had branches in all the three places; one transaction was set against the other if the respective amounts were equal; otherwise the process was simplified by dispatching the balance from Kiukiang to Shanghai or vice versa, or possibly by setting that amount against some other transaction between Kiukiang and Shanghai. In principle, of course, this process is just about what is taking place in everyday transactions in modern civilized countries; but in China this process was existent long before it was properly understood in Europe. Also, the dispatch of money to and fro involved so many difficulties before the final destination was reached, or final balance was struck; and it is simply surprising that all such transactions should have proceeded so smoothly.