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9. Every bank or firm issuing notes must fill in, on a form prepared by the board, the correct number of notes they have in circulation. The correct amount in circulation is to be calculated as the greatest amount in circulation on any day of the month following the publication of these regulations in each place.
10. Every bank, whether official or mercantile, shall have a reserve fund to the full amount of the notes issued. Such reserve shall consist of 40 per cent. of ready money and 60 per cent. of Government bonds, reliable shares, scrip, or deposit notes. In order to facilitate inspection this reserve fund must be kept separately in the treasury, and the accounts must not be mixed up with the ordinary business of the bank.
11. All banks shall, beginning from next year, withdraw 20 per cent. of their notes from circulation every year, and within five years from that date all the notes must have been called in.
12. Should any bank wish to call in its notes at once without waiting for the time limit to expire, such bank can arrange with the Ta Ch'ing Bank to deposit satisfactory securities and borrow a sum of money which can be repaid in annual instalments at a low rate of interest.
13. In the districts where a new coinage may hereafter be adopted, if there should be any issue of notes injurious to the subsidiary coinage (such, for instance, as cash notes of different sorts and notes in dollar cents), then the board, when the time comes, will make special arrangements to deal with this question.
14. From next year every bank must each month report to the board, on a form supplied by the board, the amount of notes issued that month and the amount of reserve held.
15. The board shall send officials to the official banks to make investigation from time to time, and in the event of their reserve funds not corresponding to the amount of notes issued by them, or their having made untrue reports, or otherwise broken these regulations, they shall be punished by the board.
16. Mercantile banks will be periodically inspected by representatives of the local officials and of the chamber of commerce. If the reserve is insufficient, or the returns inaccurate, or other abuses are disclosed, then the matter will be reported for enquiry by the board.
17. The regulations for periodical inspection will be carefully considered and drawn up by the board for the guidance of all parties.
18. Any slight breach of these regulations will be punished by the local officials by a fine of not less than 100 dollars and not more than 500 dollars. Any serious breach will be reported by the local officials to the board.
19. These regulations are for safeguarding the coinage and protecting commercial interests. If anyone should take advantage of them to extort, then the bank can directly petition the board or the high provincial authorities, who, after a careful examination of the facts, should severely deal with the offender. The banks are also at liberty to petition the local officials to punish severely people who spread rumours and stir up trouble.
20. In the event of any amendments having to be made to these regulations or if they should be suspended or abolished, then the board will consider and deal with the matter.
This Docurrent is the Property of His Britannic Majesty's Government.
AFFAIRS OF CHINA.
CONFIDENTIAL.
[46006]
No. 1,
[December 20.]
SECTION 10 O
3447
* 3 8 ||
India Office to Foreign Office.-(Received December 20.) THE Under-Secretary of State for India presents his compliments to the Under- Secretary of State for Foreign Affairs, and, by direction of the Earl of Crewe, forwards herewith, for the information of the Secretary of State, copy of a telegram from the Viceroy, dated the 18th December, 1910, relative to the Pien-ma expedition.
India Office, December 20, 1910.
(Telegraphic.) P.
Enclosure in No. 1.
Government of India to the Earl of Crewe.
I REPEAT for your information the following telegrams:
1. From Government of Burmah, dated the 16th December:
44
December 18, 1910.
Пpimaw expedition. Please refer to your telegrams of the 9th and 13th December, communicating the decision that the proposal for police posts cannot at present be approved by the Secretary of State, that our future policy on the frontier must be influenced largely by the attitude of China, and that Hertz should be ordered not to collect tribute at present, nor to give to villagers in debatable territory any assurance that British protection will be extended to them. In reply to your enquiry whether this decision necessitates any modification of the instructions issued to Hertz, the object of his expedition, as sanctioned, was to give effect to the announcement which His Majesty's Minister at Peking made to China in 1906, viz., that it was the intention of His Majesty's Government to regard the watershed as the frontier, and that if this were not accepted, instructions to occupy and administer the territory without further negotiations would be issued to the Burmah Government. It was to carry out this intention that the instructions to Hertz were framed; except the description of the force in the third paragraph, they are the same as those enclosed in Burmah letter of the 17th October last. If the new decision summarised above stands it renders futile the whole object of the tour, and it is not apparent to the lieutenant-governor what suitable instructions it is possible to substitute, or how a tour in force in this tract, followed immediately by retirement without having placed it under British protection, can serve any useful purpose. Apart from the obvious futility of the course it would be unfair to the inhabitants, whom the Chinese will call to account, as soon as we have withdrawn, for any assistance rendered to us by them. Kather than send an expedition on such terms it would, the lieutenant- governor considers, have been better to send none at all. It is impossible, however, without great loss of prestige and of money, to stop the expedition, which is now well on its way.
With regard to the objections to the establishment of a post in the tract, there is no danger of attack during the rains upon one of the strength contemplated, and during the dry season reinforcements can readily be sent on the appearance of symptoms of danger. On the other hand, considering the benefits to be derived from the possession of a frontier including the whole drainage of the Irrawaddy, the cost is trifling. With regard to the attitude of the Chinese, the danger of active opposition is now slight; and, as stated in your telegram No. 773, it is practically certain that their efforts will be concentrated on securing a joint delimitation commission, which, so far back as 1900, was shown to the satisfaction of His Majesty's Government to be a futile course.
That the fuit accompli is the only effective reply to China is the conviction of the lieutenant-governor, and this accords with the advice that His Majesty's representatives at Tengyueh have often tendered. He ventures, therefore, to protest strongly against any modification of the orders given to Hertz, and against a change, in any respect, of the objects of the expedition. Pending a reply to this
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