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This Document is the Property of His Britannic Majesty's Government-j
CHINA TRADE.
CONFIDENTIAL.
C. O.
30808
rc [August 12
SECTION 1.
?
Sir,
No. 1.
China Association to Foreign Office.-(Received August 12.)
159, Cannon Street, London, August 10, 1905.
IN the interview between the British Minister at Peking and the Chinese Minister of Finance as recorded in the despatch of Sir Ernest Satow of the 2nd May, 1905 (copy of which you courteously sent to this Association), there seems to have been a want of appreciation of the financial difficulties which will more than probably result from the unlimited issue of depreciated copper coins by the Provincial Mints; there is also no indication of the fear of a consequent financial crisis, such as is agitating the minds of the best-informed bankers and merchants, and which was considered by the Shanghae General Chamber of Commerce to be sufficiently grave to necessitate their Chairman visiting Peking in order to represent the position personally.
From the speech of Earl Percy on British policy in China, as reported in the "Times" of the 4th instant, we gather that the opinion of His Majesty's Government is that the reform in the Chinese coinage called for by the Mackay Treaty is under the consideration of the Chinese Government, and will begin after the establishment of a Central Administration at Tien-tsin is sanctioned by the Throne. This view does not seem to be justified by what is now taking place in the Provincial Mints, or it may refer solely to the silver coinage which the Chinese Finance Minister states to be in contemplation.
The copper coins now being issued in immense quantities are not uniform, but to our knowledge the discs from which they are struck contain alloy varying trom 5 per cent. to 20 per cent. ; and, being a source of great gain to the Provincial Treasuries or Governors, the coins are likely to be issued as long as any profit accrues. When the profit decreases by the coins gradually falling to their intrinsic value, there is every probability of their being still further debased by the addition of larger proportions of alloy.
This Association cannot help regarding this unlimited issue of copper coins of irregular value by Provincial Mints as adding further confusion to the present deplorable state of the coinage in China, as likely to cause serious and widespread financial trouble, and to constitute a distinct evasion of the Article in the Mackay Treaty calling for a uniform coinage. They have the honour to ask the earnest atten- tion of His Majesty's Government to the matter, in the hopes that a stop may be put to the issue of any description of coin by the Provincial Mints in China, unless under control which is satisfactory to His Majesty's Government, who, they trust, will continue to press for the thorough reform of Chinese currency as stipulated for by the Treaty.
The results of a previous issue of "large cash" in Peking, which are now only taken by shopkeepers and traders at their intrinsic value and no longer at their face value, should be an object lesson to the Chinese; and the knowledge of these results is sufficient reason for the action desired by the Shanghae General Chamber of Commerce, a desire with which this Association fully sympathizes.
A rate of exchange between provinces for the new 10-cash pieces is already apparent the 10-cash pieces of one province being worth only 8 cash in a neigh- bouring province. This is an illustration in itself that the coins are not considered a national coinage of uniform value throughout the Empire.
I have, &c. (Signed) JOSEPH WELCH,
Hon. Secretary.
[2140 m-)
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