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stipulations with regard to them in the Treaties with foreign Powers. His Excellency the Governor has repeatedly communicated with me complaining of the large quantities of these 10-cash pieces which have been imported from other provinces, and which have caused heavy fluctuations in the price of silver. The provincial finance has been seriously affected by these conditions, and his Excellency has issued instructions that the import of the coins be strictly forbidden. The instructions also state that any merchant who intends to ship coins will provide himself with a certificate and official pass.

On the arrival of the coins at Chefoo, I am therefore to send a representative to inspect the papers and find out from what port they have been shipped, and to take steps at once to have them returned to the port from which they came. If the merchants have not the proper papers, the coins will be confiscated, and they will be fined one-half of the value of the coins.

On the receipt of these instructions I at once issued a Proclamation forbidding merchants to transport the 10-cash pieces, and at the same time I communicated with the Commissioner of Customs requesting him to take steps to see that the restrictions were enforced.

At the same time that these instructions were sent to me, his Excellency addressed a letter to Mr. Lockhart, the British Commissioner at Wei-hai Wei, requesting that he would co-operate with him in preventing this influx of copper coins from the mints of other provinces, and Mr. Lockhart at once promised that he would take steps to assist the provincial authorities. I may mention also that a case of this nature has already been dealt with in Kiao-chou, and that the Customs authorities there have imposed a fine of one-half the value of the coins upon offending parties.

This question appears to be one of purely internal administration, and, in view of the stringent orders which have been issued by his Excellency, I regret that I do not see my way to release the thirty-five cases as you request. I trust that you will reconsider the matter, and that, under these circumstances, you will excuse the attitude which I have adopted. The Tien-tsin authorities have already found it necessary to impose restrictions on the transport of coin owing to the large influx of 10-cash pieces, and we have been obliged to take precautionary measures of a similar nature in Chefoo.

Compliments from Ts'ai Hui Ts'ang.

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uniform national coinage, and it is equally in contravention of the Regulations approved by the throne in response to the recent Memorial of the Finance Commission and Board of Revenue. If each province is to be allowed to act in this manner, as if they were independent States, there will be eighteen different currencies in China instead of one, and foreign trade will be subjected to greater difficulties than ever before. I have the honour to request, therefore, that the Shantung provincial authorities may be called upon to remove the prohibition against importing copper coins which are accompanied by the proper certificate provided for by Treaty in respect to the movement of copper cash from one port of China to another; and I would suggest that, if real occasion arises for temporarily prohibiting such movements, it should be done by the Central Government, and not by the independent action of any province.

I avail, &c. (Signed) ERNEST SATOW.

Inclosure 3 in No. 1.

Your Highness,

Sir E. Satow to Prince Ch'ing.

Peking, November 4, 1905.

HIS Majesty's Consul at Chefoo has reported to me that in August last the Customs Taotai wrote to him stating that the Governor had given instructions to prohibit at once the import of 10-cash pieces from other provinces, and requesting that notice should be given of the fact to the British merchants of Chefoo.

To this His Majesty's Consul replied that he could not comply with the request, as he knew of no Law or Treaty Regulation empowering him to place such a restriction on British firms.

The firm of Messrs. Cornabe, Eckford, and Co. have now imported thirty-five cases of copper coins from Shanghae, which the Customs authorities refuse to release. In reply to representations from His Majesty's Consul, the Taotai stated that the finances of the province were seriously affected by the importation of coins from other provinces, and that the Governor had therefore issued instructions strictly forbidding further import. Consignments which arrive under the proper certificate were to be returned to the port of shipment, while those without certificates would be confiscated, and a fine would be inflicted of one-half the value of the coins.

In referring this matter to my consideration, His Majesty's Consul states, in conclusion, that the real reason of the Governor's prohibition is that the Provincial Government have recently purchased a large supply of copper for the purpose of minting 10-cash pieces for circulation in the province, and that it is for this reason alone that they desire to stop the importation of coins struck in other mints.

The action of the Governor of Shantung in thus prohibiting the importation of the new copper coins from other provinces is far from being in accord with the Treaty engagement of the Chinese Government to take the necessary steps to provide for a

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