The loan houses also need an official authorization. They pay a tax on their operations to the local authorities, and are divided into three classes, according to the importance of their business. Those of the first class receive deposits from the authorities of various sums, on which they pay interest, the administration reasoning that by helping them increase their capital and enlarge their business it will be doing a philanthropic work and assisting the people. These loan offices are not at all like our pawnbrokers’ shops, but are a credit institution, to which the middle class as well as the poor Chinaman has constant recourse. Being conducted on equitable terms and serving their convenience in various ways, they render great services to the Chinese people, and have become necessary to their life, and this explains the departure of the Government from its usual policy of non-interference to supervise and favor them. China has, further, large and small capitalists, and numerous credit establishments very much like ours. They may be classified as exchange offices, banks, and banks of discount. The last are at Peking, where they were founded a few decades ago by some men from Chan-Si. Their single industry is trading notes in all China and some of its dependencies. They have no monopoly, for some of the larger banks and more important traders were all doing the same; but they have regulated the business, extended it to more places, and have almost entirely suppressed the transportation of money in bulk. The banks of exchange perform a variety of functions on a restricted scale, charging two per cent for exchanges, issuing notes without any supervision, and lending money at two per cent a month in normal times. They are not, however, always able to pay their notes at sight, and it is well, therefore, not to keep them too long. In the provinces a bank usually accepts only its own notes. In Peking some well-known signatures are accepted everywhere after examination by an expert, who places his seal on the note he declares good, charges a fee for each verification, and is responsible for his mistakes.