of their flocks, generally at most exorbitant rates of interest, and thus the Chinese traders take the place of the khan as feudal lords and slave-drivers. Instances have come to light in which a loan to a Mongol khan of six lian per head of each of his subjects has only been satisfied by the payment of 100 lbs. of wool by each flock-owner to the Chinese merchant. This is equivalent to sixty-six per cent. interest. In fact all credit transactions with the Chinese merchants are transacted under very harsh conditions. Thus one brick of tea on loan for one year is frequently repaid by a one-year-old ram the next year, and by a two-year-old ram the following year. This is equivalent to one hundred per cent. interest. The sale of a brick of tea on credit in exchange for wool is carried on at rates varying from forty to one hundred per cent. interest. Therefore, since the advent of the Chinese traders, whole tribes of Mongols have sunk more and more into the condition of economic serfdom. The loans of the Chinese traders are backed by the feudal authority of the khans, the Lamas and the Chinese authorities, all of whom are interested in oppressing the tribesmen. Russian traders, who have not the same political prestige with the Chinese officials and the Mongol khans as the Chinese traders, are by this system of Hoshun credit utterly debarred from direct dealings with the Mongols. But in the forested regions of the Siberian-Mongolian frontier, where this oppressive system of Hoshun credit does not exist, the influence of the Russian traders is decidedly beneficial for the Mongols, since the legal rate of interest chargeable through the Russian Empire is never more than twelve per cent., and this holds good over Russian subjects in Mongolia.
