Most people have heard a great deal of the high standard of commercial honour that prevails among the Chinese. Testimony to this characteristic has been given so often by English merchants and others that it seems unnecessary to insist upon it. I will only say, in passing, that nearly all business transactions between Chinese and Chinese, even those involving considerable sums of money, are in Weihaiwei still carried out by word of mouth. The point to be emphasised here is that the commercial honesty of the Chinese is to a great extent dependent on and the result of their theory of the relationship between the individual and the family, which theory is in turn based on the social doctrines (such as filial piety) which Confucius taught or sanctioned.
The Western individual who owes money and cannot or will not pay can always shoot himself or abscond or go bankrupt. He may leave a stigma on his family if it is known who his family are, but the debts were his own and his relations cannot be held responsible. But the identification of the interests and obligations of an individual with those of his family have in agricultural China this peculiar and socially beneficial result, that a man cannot dissolve his liabilities by such a simple process as going bankrupt or dying.[82] His rights are inherited by his sons: so are his liabilities. The law, it is true, limits a man's liability for an ancestor's debts to the extent of his own inheritance: but the rule of custom is sterner than the rule of law. In 1907 a man whom we will call Ku brought me a petition in which he stated that in the seventh year of Chia Ch'ing (one hundred and five years earlier) an ancestor of his had contracted a debt of three _tiao_ (a sum which at the present day is worth five or six shillings) to a man Liu. Liu's descendant, rummaging among the family archives, had recently chanced to come across documentary evidence of this debt (the grimy little scrap of paper was produced in court) and he forthwith brought it to Ku, who had never heard of the transaction, with the suggestion that final settlement of this long-standing little bill was now eminently desirable. Principal and interest together then amounted to something like twenty times the original amount.