[This Document is the Property of His Britannic Majesty's Government.]
AFFAIRS OF CHINA.
CONFIDENTIAL.
[35300]
No. 1.
[September 29.]
SECTION 1.
244
Mr. Max Müller to Sir Edward Grey.-(Received September 29.)
(No. 312.) Sir,
Peking, September 10, 1910. IN a despatch to the Secretary of State for the Colonies, No. 242 of the 29th July last, on the subject of the new Chinese currency, a copy of which was forwarded to me, the officer administering the Government of Hong Kong made certain suggestions with regard to the manner in which the issue of the new currency should be carried out, and in particular asked for information as to how the Chinese Government proposed to deal with the Hong Kong subsidiary coinage now circulating in China.
As the regulations issued by the Board of Finance, translation of which I had the honour to enclose in my despatch No. 188 of the 3rd June, are in many respects ambiguous and lacking in detail, it occurred to me that the natural interest taken by the Hong Kong Government in the question of the reform of the currency in South China afforded a good opportunity of endeavouring to obtain from the Wai-wu Pu some more definite information on the subject. I accordingly embodied the points raised in Sir F. H. May's despatch in a memorandum to the board, copy of which, together with translation of their reply, I have the honour to enclose.
The Wai-wu Pu's memorandum does not, it will be seen, add much to our knowledge as to how the Chinese Government propose to cope with the financial difficulties attending the substitution of the new coinage for the present depreciated
currency.
Vov
I have, &c.
W. G. MAX MÜLLER.
Enclosure 1 in No. 1.
Mr. Mox Müller to Wei-wu Pu.
Peking, August 23, 1910. THE Wai-wu Pu is aware that a large proportion of the subsidiary coinage circulating in Hong Kong is Chinese, and that the serious inconvenience to trade caused by the depreciation of these subsidiary coins has on repeated occasions during the past two years formed the subject of representations to the Wai-wu Pu by this legation, acting on behalf of the Hong Kong Government.
His Majesty's chargé d'affaires has now received a despatch from the Acting Governor of Hong Kong, in which the latter, after expressing his gratification at the approaching issue of a national coinage in China, states that he trusts that the innovation will be carried out with a strong hand, guided by expert financial advice, as otherwise the new coinage is likely to aggravate rather than improve the existing unsatisfactory condition of the currency both in China and in Hong Kong.
The manner in which the new coinage is to be substituted for the old, more especially in the case of the subsidiary coins, is a most important point as far as Hong Kong is concerned, and the governor will be much obliged if the Wai-wn Pu will ask the Board of Finance to furnish some more precise information on this subject than is contained in the regulations.
The Hong Kong Government are strongly of opinion that as long as the present silver coinage issued by the Canton Mint remains at a discount none of the new subsidiary coinage should be put into circulation in the province. If, however, this procedure is not feasible, what steps will the board take to prevent the debased coinage driving the good coinage out of the market, according to the well-known rule that if good and bad money are in circulation side by side, the former invariably is obliged to give way to the latter ?
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