THE BRITISH COLONIAL BANKS AND THE STERLING BILLS
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概要
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The price of silver began to fall after 1873. The silver question was one of the most difficult problems facing British colonial banks in the 19th century. British colonial banks, whose operations involved financial transfers between Europe and Asia, suffered from constant fluctuations in exchange rates. This paper is an attempt to investigate how British colonial banks coped with this problem.<BR>The violent fluctuations in exchange rates were undermining their business with all silver using countries by introducing into it a strong element of speculation and uncertainty. Under these circumstances, the nature of China's foreign trade, especially the import trade, was undergoing a cmplete change from the late 1880s to the early 1890s, The very unsettled state of exchange rates had been compelling foreign importers to alter their mode of doing business, the socalled "Indent trade". Under this "Indent trade", a good deal of the import business passed into the hands of chinese merchants, while foreign importers were becoming merely commission agents. After the Indian mints stopped producing silver coinage in June 1893, the bulk of the "Indent trade" changed from a silver basis to a sterling basis. At this stage, it became possible for manufacturers in Manchester to quote for their piece goods in sterling and to obtain payment by drawing bills of exchange payable sterling on chinese indentors. In this system, the exchange risks inherent in the trade were transferred to chinese importers.<BR>As a result, sterling bills came to be widely used in the East and most of the "Indent trade" was conducted on a sterling basis. Through this mode of business, British colonial banks were able to carry on exchange operations on a stable basis, and to make remunerative profits.
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