ધ શેડો અજ્ઞ by T
May 15. 1909.]
CURRENCY IN CHINA,
MEMORANDUM BY SIR CHARLES DUDGEON.
In December last the following Memorandum, prepared by Sir Charles Dudgeon, Chairman of the London Committee of the China Association was submitted to H.M. Secretary of State for Foreign Affairs :-
Had Lord Palmerston interested himself in the question of Chinese currency, he might have propounded an even better conundrum than that of "What is a Pound?" and floored the the House of Commons (and everyone else) with the question of "What is a Tael?"
In a report upon the "Revenue and Expendi- ture of the Chinese Empire," prepared by Mr. George Jamieson, late Consul-General at Shang- hai, he states that he was explicitly informed by a Chinese Official that (for revenue purposes anyway) "a tael was not a tael in the ordinary sense of the word, but was such a sum as would enable the local authorities to lay down a tael of the standard weight and purity in Peking, and, consequently, included a meltage fee, loss on melting, freight, and costs of transmission, and general office expenses!"
And for currency purposes, the information given to Mr. Jamieson is pretty nearly correct also, for there are very few people in this world who can say what sort of a tael any given tael really is what is its weight, its fineness silver, and what its exchange value.
**
an
CHINA OVERLAND TRADE REPORT.
fixed neither in itself nor in relation to other units."
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enjoyed in the past, should permit reckless dealing of this nature with the currency of the country, more especially with the money of the millions, the standard in which wages and all small retail transactions are settled, but so it is;
control these issues, China will eventually be if stringent measures are not taken to
large portion of her currency being composed face to face with all evils attendant upon a of inconvertible paper."
of the confusion now prevailing in financial The recommendation of remedies, in presence questions, is a matter of extreme difficulty; some hope for the situation may, however, Shangliai perhaps be found in the belief expressed by "that Chinese bankers and officials foreign advice, owing to the stringency of the are becoming more and more amenable to
by Shanghai in the following suggestions: native money market." Such advice is offered
(1) The issue of an Imperial Edict, prohibiting controlling the terms of issue shall have been any further issue of bank notes, until regulations
obedience, which should be made a criminal (2) Severe penalties to be imposed for dis- offence.
A most serious question of the moment is that of the new copper coinage, for it has to be borne in mind that copper is the coin of the people, copper coinage strikes at the very foundation and that consequently any juggling with the upon which the trade of the Empire is based. The last three or four years have witnessed a most far-reaching revolution in the copper provincial mints over the length and breadth of coinage of Chins, through the opening of the Empire, the main industry of which has been the coinage of the ten cash copper pieces above issue has been it is impossible to say with any referred to. What the actual amount of such
be conservative, which has been prepared by Sir degree of accuracy, but an estimate, believed to
issue at the enormous amount of 9,000,0 0,000 Alexander Hosie for the years 1905-06 puts the coins. The issue of this new coin of ten cash on right direction towards a stable copper coinage an honest basis, was welcomed as a move in the intended to gradually supplant the old cumber-published. coins were honest, the discs being mainly some copper cash, and in the beginning the imported from Europe of a purity of 95 parts copper, 4 parts zinc and 1 part tin-the same, in fact, as the Eritish penny. It was cupidity of the officials was aroused, very inclin. not long. however, before the
provinces for the service of the ed thereto by the heavy calls made upon the indemnity; in any case, however, discs speedily (5.) The immediate appointment of a Board of standard, until the intrinsic value of the coin at least one foreign expert adviser would be of began to be imported of lower and still lower Currency. (The engagement of the services of
The profits to the provincial mints were was depreciated to less than half of its face value.great advantage to China.) immeuse-hence no doubt the enormous propor. tions which the issue assumed-but far more enormous has been the loss to the people, for depreciation on the new coins, but as all previous not only have they had to bear the loss of the issues are affected, there is the loss of the de- preciation on those issues to be faced as well. To show what this depreciation means, it needs the minting of 10 cash pieces commenced) the only to be stated that whereas in 1905-06 (when cash exchange of the Shanghai tael was between 1.100 aud 1,120; to-day it is 1,68, while a recent mail from China advises that in Hankow the cash exchange of the Hankow tael (Sh. Tl. 1.02) has risen 1,885.
Boxer
A currency tael may perhaps be defined as a varying weight of silver of varying fineness, the variations of both weight and fineness being governed by topical conditions and custom, as well as by the nature of the transactions in which it is employed; for the tael weight current for the purpose of buying (say) a bale cotton goods, may be, and indeed often is. quite different to that required for buying a picnl of salt. A good illustration of this is given-by Mr. Morse in his recent work, "The Trade and Administration of the Chinese Empire," in which he instances the conditions obtaining at Chungking, in Szechuen, where the taels in use
are of three different degrees of fineness, with about a score of different weights. 80 that there
at are "
least sixty currencies possible in this town alone! The chaos of the tael is not, however, the least
Seeing that these ten cash pieces are now part of the currency confusion, for there are
circulating at about their actual value, the profit current in China"nineteen different kind of dollars of different exchange values, as well as
on minting them has disappeared, and the deluge of spurious coins has been checked. In these newly-coined taels, Chinese rupees, and circumstances a infinite variety of copper coins and brass cash,"
new expedient has been hit the debased subsidiary coinage being issued, of the issue of native bank tael and dollar notes,
for apon
raising the wind in the form though not accepted, at its face value by the in a few instances issued by recognised banks Government issuing it (Pekin telegram to the of the local governments, but in others by merely
Times, 19th September, 1908). The chaos private institutions of currency conditions are well summed up by authorised by the Imperial Government, and ; these issues are not Mr. Morse, in his work referred to above:—they are neither limited, nor have they any
In China the currency is at the top a weight pure and simple, in the middle a combination of weight and token currency, and at the bottom a coin which stands on its own feet, and neither receives support from, nor absolutely gives it to, any other unit in the series. At the top is the tael (call it the ounce, and it will be better realised), in which payments are made in precisely the same way that delivery is taken of a lot of silver bars. Then comes the dollar, which, though a coin, is nowhere legal tender, and of which the specimens from the Chinese mints are inscribed, not generally dollar or 'Yuen," but merely 72 hundredths of a tael; though so inscribed, dollars of silver are nowhere fixed in terms of taels of silver, but are quoted at rates which vary from day to day according to the demand and supply. fluctuating within a range of six to more per cent. Then come subsidiary coins, fractional to the dollar, but subject to a fluctuating rate of exchange, such that the dollar may this
change for 110 cents, and next year for only 95 cents in small coin. Next comes the copper cent. inscribed at the mints of some Provinces as worth one hundredth of a dollar.' and of others as worth "ten cash,' but never treated as correlated to the dollar; whether considered in its relation to the dollar or to the. cash, it is a token coin worth intrinsicially less than half its nominal value. Last comes the copper cash, the currency of the people. Here we have a series of non-related currencies, each unit of which is a state of unstable equilibrium,
year
proper cash reserves behind then. Appended to this Memorandum is a statement received from Shanghai regarding this (note issue; the state- ment lays no claim to be complete or authori- tative. it has been compiled from the most reliable native sources available, and there is every reason to believe that the ramifications of the note issues are even more wide-spread than they are represented to be therein."
the large circulation of notes representing Shanghai further states that "in addition to taels and dollars, there have been issued within representing copper cash; we have been unable the last two years an immense number of notes
the individual banks, but the estimates made of to get any details as to the amounts issued by the circulation in the various provinces are said to be on a conservative basis. Not only have between nine and ten thousand millions of ten cash pieces been struck by the mints, but about fifty-six million tael's worth of copper eash notes have been issued during the same period, which at 1,650 cash to the tael would represent over another ten thousand millions of ten cash pieces, The estimate is given as follows:- Year of Issue. Province.
Manchuria Hupeh...
(3) Regulations based on the experience of foreign banks should be drawn up forthwith. conform to the regulations should be withdrawn (4) Issues now in circulation, which do not within a specified period, on penalty of the issuing banks being closed or wound up.
(6.) The appointment, under the Board of Currency, of an Imperial Master of the Mint, who should have control of all the mints in the Empire. (The interest and co-operation of ard of sycee in the past, might be enlisted in the Chinese banks which have maintained the stand- management of the mints.)
of the mints, the further issue of subsidiary (7.) Pending the establishment of the control
until they circulate at par; the par rate for silver coins and copper cash to be suspended, copper cash to be definitely fixed.
The Imperial Decree issued on the 5th October last, ordaining the introduction of a uniform silver currency throughout the Chinese Empire is a welcome (though tardy) recognition by China of her obligation to "provide for a uniform national coinage" in terms of Article II. of the Shanghai Treaty of 1902; had China paid earlier attention to this Treaty obligation it is probable that of the few fears might have been obviated. It is currency chaos which has arisen in the past earnestly to be hoped that the Decree will not be allowed to remain a dead letter, but that it is action, and expresses a real earnestness of in- an admission of the necessity for immediate tention to rectify the almost hopeless confusion into which currency matters of China have been allowed to drift.
meet with general approval, but it is to be The provisions of the Edict will, no doubt, remarked that no indication is given whether the new coins are to be issued solely from mints under the control of the Board of Finance -a very necessary proviso-nor is any mention made of a fixed ratio between the new coinage first importance. It is understood that both and the copper currency-another matter of points have attracted the attention of His Majesty's Minister at Peking.
The arguments in the Memorial which of the Kuping Tael as the national coin in accompanies the Edict, favouring the adoption preference to the dollar, do not appear to be very convincing; the opinion in the provinces is admittedly divided, and it is difficult to understand such pleas in favour of the tael, as that from the point of view of China's national dignity she ought to try to stand alone, that she cannot afford to throw away her sovereign rights-(how are they affected ?)-in order to gratify the wishes of others, nor change the A mount.
tradition of the country for the convenience of Tls. 30,000,000 the open ports or trading marts. While it is Tls. 10,000,000 hardly to be supposed that the open ports will Shantung Tls. 7,000,000 meet with mich sympathetic consideration, it Canton
Tls. 5.000.000 might reasonably be suggested that the interest Hunan... TIs. 4,000,000 of China's own trading marts is a matter of Shanghai's comment is as follows: "It prime domestic importance. seems almost incredible that a country with a sound financial reputation such as China has
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higher standard unit will tend to increase the There is much force in the argument that the