Until the advent of foreign commerce the Shansi bankers performed most of the functions of the Government treasury besides facilitating the commerce of their own province in salt, iron and silk. When China began to have foreign commerce of sufficient magnitude these banks played a still more important part. They were the only institutions that had branches or correspondents in every part of the country; and their drafts and acceptances were received anywhere, even by the Government treasury, without question. They became the only media through which money could be dispatched from one province to another or from one port to another, at the cheapest cost. The Government was availing itself of their services and the traders naturally did not hesitate to make use of them. They also encouraged the growth of native banks and kept a sort of watch over them. As a matter of fact during the closing years of the nineteenth century the native banks did anything they liked so long as they were in the good books of the Shansi bankers. When inter-provincial business increased year after year, the Shansi banks, which had branches everywhere, were slowly giving up local business in favour of the local native banks, whom, in many instances, they helped to establish. When in almost every port or city, the local business was being done by the native banks the Shansi bankers confined themselves to inter-provincial business and the supplying of funds to the native banks. To put it plainly, the native banks did local credits, mortgages, received deposits and took charge of such business as pertained to local trade. For a long time the local native banks depended entirely upon the Shansi banks for working capital in spite of the deposits and other business they had. Lately, however, since the increase in foreign trade and banking during the past forty years, the native banks obtained supplies of capital from foreign banks, through the medium of what are commonly known as chop loans. Also the officials, with a view to profit to themselves, deposited money not only with the Shansi banks, as had been the custom for centuries, but also with the native banks. Thus although up to their closing their doors in 1911, the Shansi banks were the only mediums of inter-provincial trade, they were certainly losing their prestige in the last three or four decades of their existence. To explain this I have to go in detail into the growth of banking in China during the past fifty years.