[This Document is the Property of His Britannic Majesty's Government,
CHINA TRADE,
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CONFIDENTIAL.
C
[35090]
(No. 307.) Sir,
No. 1.
[September 20
SECTION 2.
626
Sir J. Jordan to Sir Edward Grey.-(Received September 20.)
copy
Peking, August 29, 1909. IN my despatch No. 197 of the 27th May last, I had the honour to transmit of a note addressed to Prince Ch'ing by the Diplomatic Body urging the necessity of currency reform in China, and especially of the immediate suspension of the further issue of bank-notes and copper currency.
As regards bank-notes, reports have recently appeared in the press indicating that the Chinese Government were taking some measures to exercise control over the issue in the provinces; but the first authoritative indication of the policy of the Central Government in this matter is afforded by the publication in the "Gazette" of the 29th ultimo of certain "Provisional Regulations issued by the Ministry of Finance, with the Imperial sanction, for controlling the issue of Chinese bank-notes," translation of which I have the honour to forward herewith. These regulations insist on the provision by all banks issuing notes of a reserve fund equal to the full amount of the notes issued, 40 per cent. of such fund consisting of ready money, and they also provide for the complete withdrawal of notes from circulation within 5 years.
It is too soon to say whether the Government will succeed in practically enforcing these regulations, but the issue of them is, at least, a step in the right direction. It is, I have reason to believe, the first step which the Chinese Government have taken to meet our demand for currency reform, as a condition precedent to any consideration of the question of increasing tariff dues.
Inclosure in No. 1.
I have, &c.
J. N. JORDAN.
Special Regulations issued by the Board of Finance, with the Imperial sanction, for controlling the issue of Chinese Bank-notes.
(Translation.)
THE notes affected by these regulations are bank-notes, whether printed or in writing, for integral sums, containing neither the name of the payee, nor the date, nor place of payment, i.e., currency notes.
2. Notes in writing, which include fractional amounts or which bear name of payee and the date and place of payment, i.e., cheques and drafts, do not come under these regulations.
3. Before any bank is allowed to issue currency notes, five substantial guarantors must be obtained in the shape of other banks, who will be bound to make good the value of the notes in the event of any loss. But officially established banks are not thus restricted.
4. Cash-shops with sign-boards, which issue cash-notes as well as other sorts of notes, are allowed temporarily to continue as before issuing notes, provided they can obtain five reliable mercantile firms to guarantee, in case of loss, to make good the value of the notes issued, But such cash-shops, in addition to sending in reports to the local officials for transmission to the Board as required by the rules of the Exchange Bureau, must obey the new regulations as regards all matters affecting the issue of
notes.
5. All banks at present issuing bank-notes and not registered, shall, within six months from the date of the receipt of the despatch, at once take steps to collect the capital, and must apply to the local authorities for registration at the board. After the expiration of the time limit, the banks which have not thus applied for registration will be compelled to withdraw all their notes from circulation within a stated period, and will be fined by the local officials in accordance with Regulation No. 18.
6. All firms, other than banks, now issuing bank-notes must gradually call in their whole issue by the end of the 5th moon of 1910. Those firms who have bee
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