This Document is the Property of His Britannic Majesty's Government.)
CHINA TRADE.
CONFIDENTIAL.
[6682]
No. 1.
REC C.O. 9617 [February 24 REGS 20 MAR 06] 203 SECTION 2.
(No. 441.) Sir,
Sir E. Satow to Sir Edward Grey-(Received February 24, 1906.)
Peking, December 15, 1905. IN continuation of my despatch No. 417 of the 5th instant, on the subject of currency reform in China, I have the honour to forward to you herewith copies of two Memorials of the Financial Commission and the Board of Revenue to the throne, the first requesting that restrictions be placed on the output of copper coin from the provincial mints, the second reporting the hurried exportation of copper coin from Chekiang and Fukien in contravention of the Regulations, and requesting the punishment of the officials responsible.
It is evident that the representations which have been made to the Central Government on the subject of the dangers to be expected from the unlimited coinage of the new ten-cash pieces have begun to bear fruit.
I have, &c.
(Signed) ERNEST SATOW.
(Translation.)
Inclosure 1 in No. 1.
Memorial.
MEMORIAL of the Financial Commission and Board of Revenue, requesting that Restrictions be placed on the Output of Copper Coin from the Provincial Mints.--(From the "Pei Yang Pao" of the 4th December, 1905.)
A HUMBLE Memorial requesting that restrictions be put on the daily increasing output of copper coin from the provincial mints, in order to remedy the confusion in the currency and to introduce uniformity.
All foreign countries regulate the coinage of their gold, silver, or copper currency according to the current requirements, so as to steady the exchange and to maintain free circulation. In a former Memorial on this subject your servants observed that the expediency of provincial minting should be constantly considered, and if it is found that sufficient coin has been struck, the Board should, if it appear desirable, order the temporary cessation of minting. Your Majesties graciously approved this suggestion and it has now been carried out.
At present there is no restriction on the minting of copper in the provinces. The extension of old and the establishment of new mints was stopped by the previous Memorial of the Board of Revenue, but the number of mints now working is large, and some provinces possess more than one. For the Provincial Governments, seeing the large profits to be made out of the copper coinage, are anxious to extend its use so as to be able to use those profits to relieve their financial difficulties. Its output is, therefore, daily increasing, and while this province endeavours to export its coin, that province strictly forbids its importation, and the feared over-production is already becoming apparent. If merely for the sake of revenue, present gain is sought, every effort will be made to increase the profits of the mints. All mints will increase their output and sell the coin at a discount, with the result that the price of copper and alloy will advance and the exchange of the coin will fall. An example of this is furnished by the old Peking ten-cash pieces which now only exchange for two cash. Not only is it probable that these profits will diminish, and the mints eventually be worked at a loss, but prices will rise with the fall of exchange, the people will suffer loss and the local revenues be indirectly injured. We fear that very serious troubles will result from injury done to the public revenues and to trade by the confusion in the currency and the fluctuations of the exchange,
[1878 an--
-2]