CORRESPONDENCE
HHOUGHTS ON THE CURRENCY
QUESTION.
THE ID OR OF THE DAILY
Hongkong, 26th March.
818 An the resplation to submit our cur- naby question to the Straits Commiss on was ried the other day; it will doubtless be duly arded to the proper quarter. It may not altogether a waste of time now that the contention is over, to examine a few of the oints atzisano and to see why that resolution did not carry the support tf so many of the most powerful trading interests in the Colony. We all agree that low exchange is disagree- able to the foreigner, but there seems to be in the minds of some a feeling that the banking interests are responsible for the low exchange and are revelling in enormous profits brought about thereby. Is not the chief reason the enormous indemnity extracted from China, who from being a possible consumer of silver is turned into a constant seller of it, in order to meet her gold liabilities? Are we not being
THE HONGKONG. WEEKLY PRESS AND
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be added af the, Colony's expense. An the idea of incontrovertible på
misted, People will not have it unlèm at a discount, and in time of trouble it would not be negotiable. The gold must be held, to be with. drawn as required, and is this Còlony 'If credit strong enough to go on borrowing to replsos the gold as it is withdrawn?--If the gold were in London the notes would be a favourite form of remittance home and would be cushed there so the gold might as well be here.»But would
would sal it not at times tend to disappear into China F' customers not tend to And if the supply ran hort, we would have | tion of this sort! But to go on borrowing to replace it. The chief-traders are foun annual cost to the Colony would be great. Banks may be very libera Would not the taxation required tend to shareholders and dopori:ors to increase the cost of living ?____A gold standard" } would it not be possible that if they in Japan has done that." Why should we fare movement to treat them in the way fore differently?
ed by Mr. Osborne, that they would their loans Might not this produce a ford realisation of securities which would render proposed change a curse rather than a blessi or they would offer their debtors the alternative of changing debts into gold debis at an ex change and interest which the Banks would chose, not the debtor Would those having |, verdrafts feel any happier with a gold debt at 6 per cent., and the value of money falling owing to importations of home moner investments, and content with 4 per cent. absorbing anything good iu the way o That the banking inferen.`would have to Chinese is generally admitted. ' Let them go more to a closer point of contact, with the say some. But that means a withdrawal capital, and men with brains and money will leave the place. Where is the "Colony's ad- vantage in that?
I have taken £2,000,000 as a basis for the gold required as it is the smallest estimate put forward. It allows for no expan ion in trade, which if it takes place (as we all hope and think it will) would necessitate further loans and increased cost to the Colony. There may be some other ways of providing the gold, but those advocating this great experiment have not put them forward.
Is it advisable P As this Colony produces ground between the upper and nether millstones nothing and the source of profit fog al trade in of European rapacity and Chinese foolishness? the Chinaman, we must base our calculations in Would it not be better to bring this forward the first place on the metal he has to pay with- and make a general attempt to place China which is silver. All our society with its pro- herself on a gold basis, which a conference of all fessional and literary elements is a superstructure the Chambers of Commerce on the Chins coast, based upon the trace. If that diminishes they in Shanghai, might do something towards! must suffer with it. Let us suppose for a If the governments of the world are brought moment that we are put on a gold basis to realise that their efforts to improve the and that money from home is brought here status of their subjects have resulted to their for investment. A great deal is - here detriment; they might by international agree- already in the shape of money advanced by ment succeed in placing China cn a gold basis, banks who use their sterling deposits for that There are schemes already afloat to that effect. par, ose, but that is often lost sight of. For this Colony to refuse to attempt any Another one or two million pounds would reduce general policy such as th's and to prefer isolated interest to 3 per cent.or 4 per cent, so that the action before ever attempting it, seems selfish investment of savings would be considerably and shortsighted. The principle of a locally reduced as far as the rate of interest goes. It restricted and protected currency is opposed to must not be forgotten that it is always a matter all the free and liberal traditions upon which of free choice to every one as to whether they the Colony has risen and flourished; and will invest their savings in gold or silver. If it pay? The whole question boiled down man prefers to remit monthly or annually what produces two queries:-1. Is it possible ? 2. he is able to save he can keep his capital in gold If it is possible, is it advisable? Let us take all the time. Or if he wishes to have money at them in order. If we go on a gold basis hand, he can remit half in gold and keep we must get the gold from somewhere. half in silver and so hedge against a big The ides put forward by Mr. Osborne was loss owing to falling exchange. That to have a supply of gold in London and work people have in many instances failed to away with shillings and pence and incontrovert take that very reasonable precaution is hardly able paper notes. But how to get the gold ? a reason for a revolution in the standard of and how much would be required? Some say value, which many think would have great £2,000,000, How they arrive at that amount elements of danger to the trade of the Colony I can't say the present notes issued amount to We are entirely different from a great produc- nearly $20,000,000 and would be more if there ing country which has exports of its own. were* more - issuing banks. But let us take If they like to saddle them with a high £2,000,000 for the sake of argument. We standard of value they have at least something are not going to get that as a gift from the to put the saddle on; whereas we have British Government. We must raise it our-nothing. selves. What security has the Colony to offer for such a loan? What undiscovered sources of revenue have we got to enable us to pay the interest, much less return the principal At 35 per cent. the annual interest would be £70,000; allow £30,000 for sinking fund, that means £100,000 a year or an increase of about $1,300,000 per annum to our taxation. And would we be able to borrow all this gold? The bounty of nature has given this Colony a fair anchorage and nothing more. India and the Straits can largely pay for the cost of changing their standards by making large profits on the silver tokens which they circulate. But in those countries there are millions of people, and being self-contained they can protect themselves better than we can against the introduction alee coins. In any case the amount of silver tokens to be used here by the 200,000 to 300,000. sidents would not produce enough profit to fally reduce the cost of the loans required us on a gold basis and the full weight of we must therefore be prepared to face. the introduction of false coins rht be in every respect as good as, coins and still show a big profit to rs, would be an impossibility: here I approach the subject in the spirit of urg" constant communication by junk, enquiry, but will any reasonable man say that teamer to all the surrounding there is no risk of those things happening? India”, the false coinage Take the Dock Co. Does not this sufor hought to be considerable✨and | enough already from competition with Shang- kŋown › to be so. The cost of hai? Would its position be improved by paying ant protective service would have to labourers in gold ?
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If Shanghai and other ports a1e-working against us with a silver currency, it is reasonable to expect that they can put work through cheaper than we can with a gold one. Will not the tendency be for them to supply the needs of customers who always go to the cheapest market? It is practically as cheap to send goods from Shanghai to Amoy, Swatow, Foochow, and Formosa as from here, and might not these ports draw their supplies from there, instead of here? Have we even such a firm hold on Canton? Steamers of very considerable size can go to Whampon, or Lintin, or Namtao, and godowns for the storage of goods could vory easily be erected there. Take the Japanese coal trade as another example. Coolies are largely used instead of machinery for handling this enormous trade, but if your coolies are paid in gold, surely mechanical appliances would replace them. Is there not even a risk that the trade might go a short way up the river, where silver still prevailed and the thousands of coolies and many cargo-boats at present em- ployed leave the Colony for good?
"The loan_taxes would always remain for those left behind to pay "
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That Hongkong will always remain a place of
great importance from the Imperial standpoint tion may be enacted. But will i continue to is beyond question whatever currency légiala- throb with its present activity, and will its streets re-echo with a hurrying multitude bent on peaceful avocations? Some men who are not entirely foolish think in this separa- tion from China there is grave risk, and their opinions are worth some consideration. There may be those who are hopeful enough to think that England will give us the money to effect this change; but why should she? There are more trading Englishmen in Chins out of Hongkong than in it, and it does not matter to people at home at what` port the Empire's China trade is done as long. as it is done. If home articles are sold in Shanghai or Amoy the home operative is as well employed -as if they are sold here. · If China commodities: are sent home sa required, the port of shipment is amatier of indifference to the consumer, ^and --it `bus never been England's principle to give bounties to her colonies.
and to legislate from a feeling of irritation, This is not a question to be lightly decided however annoying the causes, is a thing to be avoided. By what magic power oen we now Let us be careful that we are not led by a crop in silver and reap the harvest in gold P will-o'-the-wisp into a position where " fusion may become worne confounded.”
wade through this lengthy statement they Perhaps if some of your readers have patience may be able to demonstrate to the “Doubters" that the light which the “Reformers" bold up
to
—Yours, eles
is a true one.—-
TO THE EDITOR OF THI
812,---I have read, the somewhat uncon vanced by a cor 28th instant, tinuance of currency in i
Inter alia, approach the
Hon
con
G. STEWART.
* DAILÝ PRESS.
ཀྑུ ཀྑུར ཏི