The reasons for the extensive organization of these societies, are those to which attention has been repeatedly called. Every Chinese has constant occasion to use money in sums which it is very difficult for him to command. The rate of interest is always so high, that a man who is compelled to borrow a considerable amount, upon which he must pay interest at two and a half, three, or even four per cent. a month, will not improbably be swamped by the endeavour to keep up with his creditors, a fact of which everyday experience furnishes countless examples. By distributing the payments over a long period, and by the introduction of an element of friendship into a merely commercial transaction, the Chinese is able to achieve the happy result of uniting business with pleasure. Of the measure of success attained we may be better able to judge, after an examination of the processes pursued.
The simplest of the many plans by which mutual loans are effected, is the contribution of a definite sum by each of the members of the society in rotation to some other one of their number. When all the rest have paid their assessment to the last man on the list, each one will have received back all that he put in and no more. The association is called in some places the "Club of the Seven Worthies" (_Ch'i hsien hui_). The technical name for any association of the kind in which coöperation is most conspicuous, is _Shê_. The man who is in need of money (_Shê-chu_) invites certain of his friends to coöperate with him, and in turn to invite some of their friends to do the same. When the requisite number has been secured, the members (_Shê-yu_), assemble and fix the order in which each shall have the use of the common fund. This would probably be decided by lot. Unless the amount in question is a very trifling one, every meeting of the members for business purposes will be accompanied with a feast attended by all the partners, and paid for either by the one for whose benefit the association was organized, or by the person whose turn it is to use the common fund.
At the first feast, given by the organizer of the association, each of the members attends provided with the sum agreed upon, let us suppose 10,000 cash, which is paid over to the headman, 60,000 cash in all, to be used by him, for a certain fixed period, say a year. The next year, the feast is given by the person who drew the second lot; the headman puts 10,000 cash into the treasury, and each of five other members the same sum, all of which is paid over to number three, who in like manner employs it for a year, when in the same way the fourth takes his turn. At the end of six years each of the seven members will have had a turn, each will have received 60,000 cash without interest, and each will have paid out 60,000 cash for which he has likewise received no interest. Each one will have been accommodated with the handling of a larger sum than he could have otherwise obtained, at the end each one has lost nothing in money, but has had six more or less excellent feasts, a matter from a Chinese point of view of some practical importance, however lightly it might be esteemed by a Westerner.