[This Document is the Property of His Britannic Majesty's Government.]
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The Hong Kong Government would also like to know how the board proposes to deal with the Hong Kong coins, 10- and 20-cent pieces, now in circulation in China,
An explanatory note to section 15 of the currency regulations mentions that a detailed scheme for the redemption of the old coinage will be prepared by the Board of Finance and submitted separately for the approval of the Throne. The publication of this scheme before the issue of the new coinage would greatly assist the Hong Kong Government in dealing with the situation raised by the issue of the new Chinese
currency.
His Majesty's chargé d'affaires would be much obliged for any information in regard to the above points which the Wai-wu Pu may be able to give him for communication to the Government of Hong Kong.
(In the absence of His Majesty's Chargé d'Affaires),
ERNEST SCOTT.
Enclosure 2 in No. 1.
Wai-wu Pu to Mr. Max Müller.
September 7, 1910. (Translation.)
THE board has the honour to acknowledge the receipt of Mr. Max Müller's memorandum of the 23rd August, in which he states. . . . (Quotes memorandum).
The board accordingly addressed the Board of Finance, and have now recoived the following reply:
"In the board's memorial submitting regulations with regard to the coinage, the weight and touch of the standard and subsidiary coins is most carefully defined. Further, section 8 strictly defines the maximum error allowed, while by section 21 measures are to be taken to establish an assaying office, and the coining of debased coins for circulation on the market will certainly not be allowed.
"As regards the regulations of the old coinage, our board, in the memorial which submitted a scheme for dealing with silver and copper coins already coined, stated as
follows:-
"When the new coinage is distributed to the provinces, silver dollars and the subsidiary coins already coined can be permitted to circulate temporarily at the market rate, and, at the same time, the old coins will be gradually redeemed at the market rate and changed into the new coinage.
"When it is calculated that there is sufficient of the new coinage for circulation, a date will be announced in advance for prohibiting the circulation of the old coinage. Old coins can, after that date, still be exchanged for the national coinage in accordance with the real amount of silver or copper they contain.'
"When the time arrives the board will naturally take note and act in accordance with their memorial.
"Silver dollars and silver subsidiary coins not coined by China will, when the new coinage is in circulation, be treated in accordance with the established practice of all nations.'
The board has the honour to communicate the above reply of the Board of Finance.
CHINA RAILWAYS.
CONFIDENTIAL.
[35579]
No. 1.
[October 3.]
SECTION 2.
Mr. Max Müller to Sir Edward Grey.--(Received October 3.) (No. 315.) Sir,
Peking, September 11, 1910. IN continuation of my despatch No. 268 of the 5th ultimo, I have the honour to transmit herewith a translation of the reply of the Chinese Government to my request that the Board of Communications should accept the principle of joint management as the basis of the negotiations for a joint working agreement of the two sections of the Canton-Kowloon Railway.
It will be seen that the Board of Communications for various reasons refase to entertain the proposal of joint management and have forwarded to Mr. Wei Han, who is to continue the negotiations pending the arrival of his successor in the post of general manager of the Chinese Section, Mr. Shih Chao-tseng, a director of the Shanghai-Nanking Railway, counter-proposals based on the principle of through running powers, which is the system adopted by the various Government railways in China. The Board of Communications express the hope that the Hong Kong delegates may be instructed to continue negotiations on that basis.
I took the opportunity of a visit which I received a few days ago from Liang Shih-yi, the director-general of railways, who has been indisposed for over a month, to refer again to the question of the working agreement, and I repeated the arguments which I had embodied in my memorandum in favour of joint management of the two sections. I further said that there was another point of paramount importance to both sections of the Canton-Kowloon Railway, and that was a connection with the Canton-Hankow Railway. I thought it more prudent to avoid all mention of a possible loan from the Hong Kong Government for this purpose. Liang Shih-yi assured me that the Board of Communicatious were fully alive to the absolute necessity of making the short connecting link between the Canton-Kowloon and the Canton--Hankow Railways in the interest of their own lines. He had made the necessary arrangements for the construction of the junction line during his visit to Canton in the spring, and negotiations were already proceeding for the purchase of the necessary land, but as they involved the removal of thousands of graves in the suburbs of the city, they required delicate handling and might take some time, but I might rest assured that the connection would be built. In view of this assurance, it appears to me unnecessary, at all events for the present, to raise the question of the obligation of the Chinese Government to link up the two railways, which was referred to in your despatch No. 199 of the 7th June.
In regard to the question of joint management Mr. Liang's replies were not so satisfactory. In fact he gave me to understand that the objections of the Chinese Government to the adoption of such a system were insurmountable. He did not appear to attack any importance to the financial advantages likely to accrue to the Chinese section from it, but expressed fear as to the complications that might ensue from an international board and the constant references to the two Governments of any points on which the votes of the board were equally divided. He made it quite clear that the Chinese Government have no intention of unnecessarily tying their hands in regard to the administration of their section of the Canton-Kowloon Railway, I pointed out the immense advantages that would accrue to the future trunk line from Hankow in having access to such a port as Hong Kong. Excellency admitted the force of my argument, but replied that it cut both ways, adding that he would instruct his representative in Hong Kong to negotiate in a most conciliatory spirit, but only on the basis of through running powers.
His
I must confess that neither the wording of the loan agreement nor the minutes of the discussions between Tong-Shao-yi, the newly-appointed President of the Board of Communications, and Mr. Bland, the representative of the British and Chinese Corporation, that preceded the final adoption of article 18 of the loan agreement, appear to me to justify our demand for joint management. "Joint working of the two sections" is the expression used in article 18 of the loan agreement, and it is
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Vov.