b. Russian Banking Facilities.—In spite of Hoshun Credit there is no inconsiderable field for banking facilities in Mongolia, and the Russians, by dint of their commercial treaties with China, might profitably develop sound banking business in the principal Mongolian commercial centres. There were formerly banks at Urga, Uliassutai, and Kalgan, but of late years these have been unable to face the competition of the Chinese merchants and moneylenders, and so they have been closed. It is probable that their failure has largely been due to their lack of study of the economic conditions under which the Russian traders have to carry on their business. Most Russian traders now borrow lump silver from the bank in the spring of each year, and with this silver they trade in Mongolia during the summer, and return in the late autumn or early winter with the produce they have bought. The Siberian banks only allow nine months before the silver loan is to be discharged, and thus they often cause the values of Mongolian raw material to be depreciated by forcing them on to the Siberian markets in the autumn, when better prices might be realized later. If, for instance, the terms of credit were extended to twelve months, much greater facilities would be afforded to the Russian traders in Mongolia. The chief difficulty lying in the way of Russian banking enterprise is, of course, the Hoshun credit system, and in such countries as Mongolia, where racial antagonisms are strong, the Russians, in spite of the privileges obtained by their special treaties with China, are immensely hampered by lack of political influence with the Mongol khans. The revolution may assist the Russian traders in
