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the Association are added. A committee has been appointed to attend to the flotation of the company, the whole of the Association having agreed to the incorporation. It is stated that some of the owners are not in a position to be content with receiving shares in the new com- pany. They are in want of cash, and how money will be raised for such requirements will be determined afterwards—whether by foreign loan or by preferential shares.
The Acting British Consul at Manila, we learn from one of our contemporaries in that city, has taken steps to reduce desertions from British vessels arriving at Manila, and in a circular letter issued to local stevedoring firms and shippers, attention is called to an act passed by the Philippine commission providing for the arrest of, deserters from foreign vessels in these islands. It is urged that masters of all British vessels due to arrive at Manila be informed that it is their duty to notify the office of the British Consul of any desertions at the port in order that an application for arrest may be issued. Vessel masters should give particulars of any such deserters appearance, specifying his age, nationality, height, and appearance and forward the official log book with entry of such desertion. It is further a'ated that should any vessel flying British colours leave this port without the master making an application for the arrest of any men that may be missing before her departure, he will be reported to the Board of Trade.
THE HONGKONG WEEKLY PRESS AND
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CONVENTIONAL AND INTRINSIC VALUE,
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It is true as a principle that the coinage | of any country is worth the value of the metal contained in it and no more, subject to the exception that subsidiary coins are maintained at a conventional value by regulation. Now regulation is a thing repugnant to the Chinese
mind; regulations they can appreciate, but the abstract idea of gulating a conventional arrangement be taken in only so far as the concrete shall appear manifested. This mental limita- tion hampers them in dealing with coins, for the reason that they have never had inter- changeable coins, of which at all times and in all places so many of one kind shall exchange for so many of another, as 12 pence exchange for one shilling. For the past score of years the Chinese mints in the several provinces have issued the dollar and its fractional parts. Even here, where they had a foreign model and foreign names with a system already established, they have found it impossible to think in terms of coins; and the very mint which is the official guardian of the purity and stability of the coinage has permitted itself to issue fractional currency at a discount limited only by the relative intrinsic value of the coins. The Englishman may fancy the Mint in London giving out 35s. for a sovereign if thereby it might make 58. seignorage.
DEPRECIATING THE COPPER COINAGE.
When 30 years ago the depreciation in the value of silver began, copper became relatively appreciated; and malefactors of all conditions braved the terrors of the law-which decrees CURRENCY PROBLEMS IN CHINA. coin of the realm-and the fine full-weight the death penalty to those who melt down the
THE COPPER COINAGE.
The following illuminating contribution appears in the latest commercial supplement of the London Times. It was written by a corres- pondent at Shanghai :
One of the most serious of the internal prob- lems before the Chinese Government rises out of the depreciation of the copper coinage. the currency of the people. From time immemorial China has bad a coinage, and by the year 680 B.C. it was well regulated in weight and shape. The earliest round coins date from the fifth century B.C., and since that time China has never been without her round copper coin with a squire hole-a respectable life of twenty-five centuries. At various times there have been temporary changes of size and weight, but on the whole the coins have been unaltered in both respects for many centuries. The present writer between 1870 and 1880, before the melting down begav, found among strings of common cash in daily
circulation numerous specimens of the time of Queen Elizabeth, many of Plantagenet times, not a few dating back to the Norman Conquest, and some even as early as the time of Alfred- all, in this pocketless land where coins are strung in rolls, in perfectly serviceable condition.
THE CURɩENCY OF THE PEOPLE.
Many people have said it, but it must be repeated until it is fully understood, that this is the currency of the people, in which the daily transactions of four hundred millions are carried on. The importer and the exporter have an exchange question ever present; the wholesale dealer buys and sells with oances (taels) of silver bullion; but the artisan and the farmer sell the products of their labour for a sum in copper coin, and in the same coin buy what will suffice for their daily needs. And this coin is not the sturdy penny, but one of which it would take close upon 10,000 to equal the value of one pound sterling. This infant of a coin, frail as it appears, has satisfied the need of the Chinese people for, as we have seen, 25 centuries. The coinage itself is in a fearful state of degeneration, but the system Las stood the test of time and is good; ît only needs regu- lation so that there may be recognized and fired connection with other currencies, those of the wholesale dealer and of the outer world. The copper coins, which in the past 30 years have depreciated in quality fully 30 per cent, have in the same period appreciated 30 per cent in their relation to the tael of silver; 30 years ago the tael of silver exchanged for 1,800 copper coins weighing about 15lb., and now for 1,200 such coins weighing not over 6lb,
coins of the 18th and previous centuries began to find their way to the melting pot. Twenty years ago a deficiency in the circulating medium was noticeable, and by Imperial order all the miuts took steps to supply the demand; this was done from pure patriotism or loyalty and at a loss, and since then the minting of single cash pieces has not sufficed to make good the wastage. Matters became critical, there was a real stringency in the copp. r copper coin market, and discontent of the kind that leads to riot and rebellion became rife. Then the mints discovered that there was a demand to be supplied, and that in supplying that demand there was the prospect of considerable profit; quite naturally they stepped into the breach, and in benefiting themself benefited also the nation clamouring for coin. To meet the demand for "cash" they issued token coins of the face value of ten "cash," and under proper regulation these would have continued to meet a real need of the people; but it is precisely regulation which has been lacking.
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Much has been made of differences of design, weight and composition in the coins issued by the various provinciai mints, but in the main these differences may be disregarded. In general the "ten cash" coins have been found on assay to contain 725 grammes of pure copper, and at £58 a tou the copper in 100 of them has an intrinsic value of 12d.; in the exchange equivalent the token coin has an intrinsic value about half that of the standard, since in 1,000 ordinary cash of to-day the intrinsic value of the copper and spelter is about 25d. The same thing is seen in England, where the shilling, of an intrinsic value of 5d to 6d exchanges everywhere and at all times for 12d and is always worth one-twentieth of a sovereign; and under the same conditions there is no reason why token coins should not have a steady exchange value in China as in England. In China, however, the stream has flowed in one direction only. The mints have been pouring out their steady flow of the coins and a few months ago saw in one of the provinces the establishment of a second competing mint. In Fukien the Tartar general, titular upholder of the Manchu conquest, dissatisfied at seeing the profits rolling into the Viceroy's treasury, has set up his own mint to issue these coins.
There has been much talk, too, of over-issue, but in fact there has been none as yet. In 1903 the output was less than in 1900, snd in the latter year it has been estimated at 1,75,000,000 pieces, 4 per capita, of about a penny a head for the whole Empire of China; it is probable that the total output to the end of 1905 will not exceed 6,000,000,000. The whole output was readily absorbed, as it came to supply an actual
[March 10, 1908: deficiency. At the end of 1933 the variou provincial authorities were restricting - shipment of the coin outside their own jurisdi. tion, and were at the same time making ever offort to encourage its introduction from othe provinces, the reason for both measures being statesmanlike desire to relieve the money stringency pressing on the poorer classes. All that has changed; at the end of 1905 it is on the introduction of the coins that restriction is imposed, not because the need does not exist, bat because the authorities in each province. now stand ready to supply that need.
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CONDITIONS NECESSARY FÖR STABILITY........ What are the conditions necessary for stability of exchange value in a subsidiary coin P Of the vital conditions only three need be named-(1) That there shall not be over-issue (2) that behind the issue shall always stand either a sufficient reserve fund, or the guarantee of a solvent Government of good credit; and (3) that the Government which issues the coin shall always be ready to take it in at face value, with- in the legal tender-limits. None of these con. ditions are met in China. There has been { no over-issue as yet, but it is periliously near, not because the real needs of the people have been satisfied, but because the other conditions have not been fulfilled The seignorage on this coiuage may be put at 50 per cent., and as mat- ters stand in China, with a Government of good credit in financial circles but not re- gardful of its responsibilities, the whole of this seignorage, certainly tho entire accumu- lation of the past three years, should have been set aside to form a reserve fund, to and to make good the loss to the Government maintain the value of the coin in the market,
in receiving it for taxes. Instead of this, the seignorage has been regarded as recurring income; we have seen memorials and ediots referring to the allocation of revenus from this source for certain specified public purposes; we havo seen a viceroy commanded to restrict his output to a million pieces a day, and pleading in reply that his public commitments required him to exceed that amount, because he had counted on the revenue therefrom; and it is generally known that the whole of the seignor- age is at once absorbed. Then, for the third condition, it is probable that the issuing mint. would at once admit it own liability to receive the coins at the same rate as it paid them out; but a mint issues and does not take in, and in China no office is under much of an obligation to any other office, and it is very certain that· the coins will not be received at face value in payment of taxes.
SERIOUS OBJECT LESSONS IN SHANGHAI.
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Shanghai bas had an object lesson in this during the year. The arsenal was supplied with much of its funds in the new bronze coin, which it used for the purpose of paying the workmen coin was poured in more than sufficient for this purpose, and the Director-General announced to the Mint that he would in future receive it only at 10 per cent. discount; he probably saw no reason why he should not have, at least, a fifth of the seignorage. When this beosme known, the exchange market at once responded and the coin was depreciated throughout Shang- hai, the rate for the silver dollar going in twenty-four hours from 88 to 96; the decline has gone s'eadily on; and the rate is now at 107 or 108-within six months a coin which filled an actual need and which was popular, but which hart not before been put to the test, has depreciated 18 per cent. Here we have a situation of great gravity. Let us transfer the case to England. An exaot counterpart is to suppose the penny always to have a constant value of one-two-hundred and fortieth of a pound sterling, and that the shilling is a token ojin with a face value of 12 pence, but an intrinsic value of less than sixpence. The farm labourer receives 18s. a week from which to pay rent and feed and clothe his family; six months ago he exchanged his 18s. for 216d., but to day only for 177d.; and with depreciation once set in, there is no natural reason why it should not go on until his 18s. are worth only 1008. Pennies are deficient in supply and payments must be made in shillings. Then transfer this English labourer to a land of abject poverty and chronic unrest, in which the ruling dynasty is regarded, as the Ɛaxon serfs regarded their Norman conquerors, from all parts of which come to-day constant reports of