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The Secretary of State for War would therefore suggest, for the consideration of the Secretary of State for Foreign Affairs, that an Inter-Departmental Con- ference, composed of representatives of the Foreign Office, India Office, Colonial Office and this Department should assemble at a very early date to report upon the following questions:--

(1) What force should be maintained in Northern China (including Wei-

hai-Wei) and at Shanghai for the next two years?

(2) What should be the constitution of this force?

6) Which Department of the State is to be responsible for its administration

and for the provision of the funds needed?

If this proposal should meet with the concurrence of the Secretary of State for Foreign Affairs, I am to request that His Lordship may be pleased to nominate a representative of the Foreign Office with a view to the niceting of the Conference at a very early date.

I am to aid that the Colonial Office and the India Office are being addressed on this subject.

The Under-Secretary of State, Foreign Office.

I have, &c.,

G. F. WILSON.

127

into circulation in the Yang-tsye Valley, and there is no ground for supposing that it will be otherwise here. The actual difference between the value of the British dollar and the Mexican is slight, the weight of the former being 416 grains and the latter 417.5, while as regards fine- ness they are the same, so that there would not appear to be any very sound reason why the new coins should continue at the present discount. It is generally acknowledged that it would be to the advantage of the trading classes to have the dollars in circulation, but the native banks hold that their successful introduction depends on the foreign banks, while the latter consider that it depends on the former, and both are influenced by the uncertainty of the Shanghai Money Market, which governs the exchange at Chefoo as well as other out-ports."

3. I would suggest that Sir Thomas Jackson, who is now in England, should he consulted on the general question of currency. His long experience of the financial conditions and currency of the Far East may enable him to offer some valuable suggestions.

I have, &c.,

J. H. STEWART LOCKHART,

Commissioner.

38513

38513

No. 117.

PUBLIC RECORD OFFICE

Reference :-

C.O. 882

سائي

SIR,

(No. 40.)

No. 116.

COMMISSIONER LOCKHART to MR. CHAMBERLAIN.

(Received September 15, 1902.)

[Answered by L.F. transmitting a copy of No. 122.]

Government House, Wei-hai-wei, July 31, 1902. With reference to your despatch, No. 29, of the 3rd October last, and to your telegraphic despatch of the 25th instant,† on the subject of subsidiary coinage, I have the honour to inform you that this question, among the other numerous matters which I have been considering, has not escaped my attention. I have already taken steps to encourage the use of Hong Kong subsidiary coins by notifying the people that no other subsidiary coins except those of Hong Kong will be received by Government. As a matter of fact the chief tax here, the land tax, has hitherto been paid in copper cash, which is the standard currency of the whole province of Shantung. When the next period for the payment of this tax arrives, I will try to induce the tax-payers to make payment in subsidiary coins. But any change that can be made in the currency here must be effected gradually. Any attempt to force a new currency on the inhabitants would not only defeat its own object, but would hd to grave discontent.

In my opinion nothing more can be done at, present than to encourage the Filinese to use subsidiary coins. Later on will be possible to see whether, recogniz- mg the great convenience of a subsidiary coinage, they are willing to adopt it in preference to their present currency of copper cash.

2.

With regard to the question of the introduction of the British dollar, the Consul at Chefoo, Mr. Brady, to whom my predecessor, Major Cowan, referred this matter, reports as follows:-

The opinion generally held is that the acceptance of the new coin on a par with the old Mexican dollar, so long in use, must come about by natural means, and can in no way be forced upon the native mercantile commu- nity here. If it is introduced gradually on to the market it may find acceptance as the people get accustomed to it, but if put at once into circulation in large quantities the losses entailed on the local traders will be so great and cause so much irritation, that it will he received with disfavour and suspicion. This is what practically happened when the dollars minted by the various Provincial Governments were first put

* No. 56.

† No. 105.

SIR,

COLONIAL OFFICE to TREASURY.

Downing Street, September 22, 1902. REFERRING to your letter of the 21st of July last,* I am directed by Mr. Secre tary Chamberlain to transmit to you, to be laid before the Lords Commissioners of His Majesty's Treasury, a copy of a despatcht from the Commissioner of Wei-hai- wei, on the subject of the currency of the Dependency.

2. Mr. Chamberlain would be glad if their Lordships would be so good as to cause a draft Order in Council to be prepared, as proposed in your letter under reference, and communicated to this Department. He assumes that in view of the opinion stated in the first paragraph of the enclosed despatch, the question of subsidiary coin will not be dealt with in the Order in Council.

3. A copy of the despatch has been forwarded to Sir T. Jackson, Bart., for his observations.

38513

SIR,

No. 118.

I am, &c.,

C. P. LUCAS.

COLONIAL OFFICE to SIR T. JACKSON. [Answered by No. 120.]

Downing Street, September 22, 1902.

I AM directed by Mr. Secretary Chamberlain to transmit to you, with refer ence to the letter from this Office of the 29th of July last, a copy of a despatch† from the Commissioner of Wei-hai-wei, on the subject of the currency of the Dependency. A copy of the despatch has also been sent to the' Treasury.

2. Mr. Chamberlain would be glad to consider any observations that you may wish to make upon the enclosed despatch.

I am, &c.,

y9

C. P. LUCAS

• No. 133.

† No. 116.

No. 107.

6 PUBLIC RECORD OFFICE, LONDON

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