[This Document is the Property of His Britannic Majesty's Government.]
CHINA TRADE.
CONFIDENTIAL.
[6147]
No. 1.
110
0.
1183
RECE
14 MAR 08
[February 22.]
SECTION 1.
(No. 11.) Sir,
Sir J. Jordan to Sir Edward Grey.-(Received February 22.)
Peking, January 6, 1908.
WITH reference to my despatch No. 443 of the 17th September on the subject of currency reform in China, I have the honour to inclose a translation of a Decree issued in the "Peking Gazette" of the 30th December, calling for an expression of opinion from the provincial authorities within one month as to whether the national coinage should be on the basis of a tael or dollar unit.
This Decree certainly favours the former alternative, and it is an incontrovertible fact that the Chinese, as a nation, continue to base all their calculations on cash and taels in spite of their familiarity, during the past few decades, with the dollar and its subsidiary coins.
One of the main arguments in favour of the tael, from the Government's point of view, appears to be that taxes are collected in that denomination; and in regard to the land tax it has been pointed out that, if there were a tael piece, the peasants would pay their tax in silver coin instead of being subjected to an arbitrary rate of exchange between copper cash and silver sycee, which is at present exacted from them by the district magistrates. The exchange should be 1,500 cash to the tael, but they always or "transmission have to pay 3,000 or more, under the name of "melting fees," expenses." The appearance of a tael coin would relieve them of this extortion, and would therefore be popular. But it had pertinently been asked, what would become of the district magistrates?
The Chinese Government, as you are aware, have always been reluctant to meddle with the land tax, and the individuals who now favour a dollar currency suggest at the same time a means of increasing the land revenue indirectly. The peasant has now to pay 3,000 cash for each tael of land tax, and it is urged that the national dollar could be "decreed" to be worth one-third of this amount. Three dollars would be worth two taels, and the land revenue would then be doubled at a stroke.
The above remark with regard to the magistrates would be equally applicable in this case. By the first proposal the "squeeze" now appropriated by the collector would go to the benefit of the peasants, while under the second it would be diverted to the public exchequer.
The above are specimens of the views which I have heard expressed on this question. The adoption of a dollar currency would of course appear more favourable from a foreign point of view, since it would harmonize at once with the Mexican and British dollars. But I imagine that uniformity is the chief thing to be desired, and that little advantage can be gained in attempting to influence the choice of unit.
I have, &c.
J. N. JORDAN,
(Signed)
Inclosure in No. 1.
Decree addressed to Provincial Viceroys and Governors.
(Translation.) (Telegraphic.)
December 30, 1907.
THE present is a time of general administrative reform, and one of the most important questions is that of the national currency. Suggestions have been recently made by metropolitan and provincial officials, on the one hand, that pure silver coins weighing one tael and one-half tael respectively should be struck as units of currency, and 900 touch silver coins of one mace and five candareen weight as subsidiary coins. In support of their contention they point to the fact that other countries have a monetary system according to the particular usage of each.
The custom of China has hitherto been to use silver in the form of a tael weight. In this form have been reckoned all land taxes, li-kin charges, official salaries, and military expenditure, as well as foreign customs duties and indemnities. The use of the tael by all classes has all the force of a long-established national custom.
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