384
TRIEDNI
CURRENCY IN INDIA AND CHINA
THE HONGKONG WEEKLY PRESS AND rearranged; the possibility is, however, so slender that little thought has been ex- pended on the subject.
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(June 1, 1903.
THE YUNNAN REBELLION,
(Daily Press, 25th May)
The labour of exchange prior to the adop tion of the single standard acted as a heavy break on every mercantile transaction So much for the currency; the more wherein India engaged. Friction can only (Daily Press, 23rd May,) It will be seen from what we wrote regard- important question for the world at large be encountered by a wasteful lose of energy, ing the notion of the Indian Government in still remains. What has been the effect on yet that friction had to be incurred in closing the Mints without giving previous trade and on the financial position of the every transaction, however trifling, between notice that the Government was at once, country generally? Here Mr. ROBERTSON India and foreign countries, whether east or "State-west. Between India and Europe this one whether it liked it or not, placed in opposi- makes some pertinent remarks.
cause, perhaps of all the heaviest, of fric- tion to the banks. The banks had been doing ments," he says, "have been circulated very
widely in both the English and the Indian tion, has been removed, and in consequence their best to render the scheme of the Govern- mentimpossible, and the Government equally "Press that the Government, in order to the body of business, which under a falling keep up the rate of exchange for their exchange grew sickly, is recovering, and determined, had in effect cornered the
payments in gold, have sacrificed the trade and prices look upwards. This is the banks. The situation was, unfortunate for
"interests of the trading, the agricultural, outcome of the aet of the Indian Government both, but the Government feeling that it
in bringing its currency within limits as could not afford to upset the current trade "andindustrial classes. Fortunately, though
"these statements are vague, they are cap compared with the trade for which it is re- of the country by a paralysis, however tem-
"able of being brought to a complete test."quired. Any other currency is subject to the We need not to be told porary, of its banking facilities, came to a
same general laws. compromise, and relieved the banks of What do Indian products, then, command sufficient silver to coin twenty million under the new system, and do they the effects of a depreciated paper currency;
any indication
of diminishing? why should we expect others when silver is It is possible that the step taken show
The same, though in a less rupees.
he truly adds, "the whole the medium? was in the long run advantageous but its "Almost,' immediate effect was near being disas- influence that currency can exercise in marked degree, would take place did the trous A second step is not so easily a country working on civilised methods, is over-issue take place in gold.
"to raise or lower the average prices to be explained; for what reason does not appear,
obtained for commodities, or what is the the Government withdrew from the currency
"sume thing, to make money more abundant reserve another 20 million rupees, which it at once put on the open market. The effect" or less abundant." Taking the rupee as was to inflate a currency already in excess, the standard, and calling prices obtained as well as to stultify its previous action. for the leading articles of Indian production The Government, following up the remainder in 1873, 100, we find them in 1900-02 at of its project, instead of as usual providing 107-08. True, in 1893 they were counted for its sterling needs by selling in London at 120, but the rupee in 1900 worth 16d. the usual amount of rupee bills payable in was in 1893 worth less than 14 d. The India, met its indebtedness by sterling loas product is practically identical. But 1983 at home. There is no doubt that had the was an exceptional year, the highest of the Indian Government had the courage of its whole series. Again, exceptiou might be taken to this as a reduction to a gold convictions, and refused to issue any more rupees under 1s. 4d. the usual wear and standard, and it might be alleged that tear of the circulation would have quickly owing to the appreciation meanwhile of brought about the artificial scarcity looked gold fewer commodities could be purchased Here for, and at once induced an upward ten-in return for these Indian goods. dency; the issue of the 40 million rupees again the balance though slight is distinctly In the ten years 1867- over and above requirements produced in favour of India. something approaching a panic. For four 1877 the selling value of the 43 articles years the rupee constantly and persistently most in demand in London was calculated fell. The Government found too that the at 100, in 1901 it was 70. The rupees withdrawal of the sales of government worth of Indian goods would actually paper in London had a detrimental effect on exchange for 30 per cent. more Euro- the exports from the Indian ports, so that pean goods than 30 years before. Even it had to begin again selling its bills at any in 1893, the worst absolutely for com- rate the market would allow. The conse-parison, the London arbitrated rate was quence was that it was not till the close of 1897 that the effects of the suicidal over- issue passed off, with a loss meanwhile to the Government certainly approaching 40 millions sterling. It would in fact have been far cheaper for the Government to have purchased the forty million rupees from the banks at its own rate of 18. 4d, and sold them afterwards at any loss, than to have permitted them to have gone to swell the already overloaded currency. At last in the year 1898 the long expected goal was reached; rupees once more stood at 1s. 4d. and for all practical purposes the evil of fluctuating exchange, which for so many years has reduced all trading in the East to the level of a gamble was, so far as India is concerned, eliminated. The exchange, thanks to the better arrangements now made by the Indian Government, has become automatic. The Rupee can only
rise
a fraction above 164. because the Government is always ready to release rupees from reserve on the payment of the equivalent amount of gold, which may be done as well in London as on the spot, the Government agents at once telegraphing out the amount deposited. As there is no possibility of obtaining coined rupees at any cleaper rate the coin can likewise only fall a fraction below the selling rate. Of course if from any unexpected cause silver were to rise in the open market to its old rates, the settlement would have to be
68, so that absolutely no change of level had occurred since the closing of the Mints But the selling prices of two of the most important of Indian exports, tea and indigo, have seriously fallen in India since the closing of the Mints, and that, of course, has had a tendency to reduce the average value of exports. True, but has the alteration of the currency had anything to say to either? The causes which have affected each are simple, and well known.. Indigo has fallen in price because now it has to compete against an artificially manufactured article, not because the change of currency has had, any effect in lowering the home price. Tea, like all recently introduced articles of trade has been suffering from over-stimulation. Twenty years ago China had a practical monopoly of the tea trade; India found better than that she could compete on equal terms, and the export went up year by year by leaps and bounds. But China is no longer a competitor, and there are no more realms to conquer: the time for leap- ing had past, but India did not at once appreciate the fact and continued the in- The inevitable followed, and India crease. has either to curtail ber export, or open To be able to maintain other markets. under these circumstances the present high average level of prices for her products is strong proof that Indian trade has advanced under the improved currency. This is, in fact, what reason would lead us to expect.
The announcement made by REUTER in his message of the 22nd instant of an outbreak in Yunnan may be of importance, but it can hardly, we imagine, prove of a or less chronic in Yunnan very serious character. Rebellions have been more during the past half century, and the last great Mahomedan rising taxed the resources of the Imperial Government to suppress it. Nevertheless it was put down, and with remorseless severity. The Imperialist General made a desert aud called it peace. Whole districts were laid waste, towns and cities were depopulated and destroyed, and the prosperity of the province set back for at least a generation, if not longer. Wide areas of fertile laud went out of cultiva- tion, several industries were lost, the population was decimated, and the survivors impoverished to a degree unprecedented. And yet we find a dynastic The memory of that period is not likely to die out. outbreak now being vigorously engineered in Yunnan. Truly it is strange, but too often the fact, that the teachings of adversity and the lessons learned by suffering are like soon lost or forgolted. The city of Lin-an is in the south-eastern portion of Yunnan, and is probably not more than eighty miles from the Tonkin frontier. It is about 'balf that distance from the city of Mengtsz, the only town in Yunnan now open to foreign trade. This place was opened to trade under the stipulations of the additional convention to the French Treaty of Tientsin of the 25th April, 1886, and it is in Mengtsz that the French Consul- General resides. It is built on a cultivated plateau about twenty miles long by some twelve miles in width, 4,580 feet above the It has level of the sea, and is surrounded by pic- turesque and beautiful mountains. only about 12,000 inhabitants at the present time, but prior to the Mahomedan rebellion it was a city of much importance. Lin-an is, we believe, only a moderate sized place, but it is walled, and the rebels will probably entrench themselves there as it is appar ently of some strategic value, being suffi ciently near to the head of the navigation of the Red River to enable them to get control of it. The district is a turbulent one, and this is not the first time that the appearance of foreigners in Yunuan has caused a rio. On the 22nd June, 1899, a riot occurred in the place, in the course of which the Custom House and French Consulate were looted. The FrenchConsul naturally feel salarmed at
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