Sunday, October 12, 2008

"The only thing keeping these banks honest is the other banks"

Wherein oh yeah that's encouraging


Neal Stephenson
Cryptonomicon
There is a lot of heavy bamboo in front of this truck, dozens of makeshift turnpikes blocking their path to the river, for the officers of the U.S. Navy's Asiatic Fleet, and of the Fourth Marines, who dreamed up this little operation forgot to take the Friday Afternoon factor into account. As Bobby Shaftoe could've explained to them, if only they'd bothered to ask a poor dumb jarhead, their route took them through the heart of the banking district. Here you've got the Hong Kong and Shanghai Bank of course, City Bank, Chase Manhattan, the Bank of America, and BBME and the Agricultural Bank of China and any number of crappy little provincial banks, and several of those banks have contracts with what's left of the Chinese Government to print currency. It must be a cutthroat business because they slash costs by printing it on old newspapers, and if you know how to read Chinese, you can see last year's news stories and polo scores peeking through the colored numbers and pictures that transform these pieces of paper into legal tender.

As every chicken-peddler and rickshaw operator in Shanghai knows, the money-printing contracts stipulate that all of the bills these banks print have to be backed by such-and-such an amount of silver; i.e., anyone should be able to walk into one of those banks at the end of Kiukiang Road and slap down a pile of bills and (provided that those bills were printed by that same bank) receive actual metallic silver in exchange.

Now if China weren't right in the middle of getting systematically drawn and quartered by the Empire of Nippon, it would probably send official bean counters around to keep tabs on how much silver was actually present in these banks' vaults, and it would all be quiet and orderly. But as it stands, the only thing keeping these banks honest is the other banks.

Here's how they do it: during the normal course of business, lots of paper money will pass over the counters of (say) Chase Manhattan Bank. They'll take it into a back room and sort it, throwing into money boxes (a couple of feet square and a yard deep, with ropes on the four corners) all of the bills that were printed by (say) Bank of America in one, all of the City Bank bills into another. Then, on Friday afternoon they will bring in coolies. Each coolie, or pair of coolies, will of course have his great big long bamboo pole with him--a coolie without his pole is like a China Marine without his nickel-plated bayonet--and will poke their pole through the ropes on the corners of the box. Then one coolie will get underneath each end of the pole, hoisting the box into the air. They have to move in unison or else the box begins flailing around and everything gets out of whack. So as they head towards their destination--whatever bank whose name is printed on the bills in their box--they sing to each other, and plant their feet on the pavement in time to the music. The pole's pretty long, so they are that far apart, and they have to sing loud to hear each other, and of course each pair of coolies in the street is singing their own particular song, trying to drown out all of the others so that they don't get out of step.

So ten minutes before closing time on Friday afternoon, the doors of many banks burst open and numerous pairs of coolies march in singing, like the curtain-raiser on a fucking Broadway musical, slam their huge boxes of tattered currency down, and demand silver in exchange. All of the banks do this to each other. Sometimes, they'll all do it on the same Friday, particularly at times like 28 November 1941, when even a grunt like Bobby Shaftoe can understand that it's better to be holding silver than piles of old cut-up newspaper. And that is why, once the normal pedestrians and food-cart operators and furious Sikh cops have scurried out of the way, and plastered themselves up against the clubs and shops and bordellos on Kiukiang Road, Bobby Shaftoe and the other Marines on the truck still cannot even see the gunboat that is their destination, because of this horizontal forest of mighty bamboo poles. They cannot even hear the honking of their own truck horn because of the wild throbbing pentatonic cacophony of coolies singing. This ain't just your regular Friday P.M. Shanghai bank-district money-rush. This is an ultimate settling of accounts before the whole Eastern Hemisphere catches fire. The millions of promises printed on those slips of bumwad will all be kept or broken in the next ten minutes; actual pieces of silver and gold will move, or they won't. It is some kind of fiduciary Judgment Day.

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