CO129-331 - Public Offices - 1905 — Page 147

This Document is the Property of His Britannic Majesty's Government.]

C. O.

145

CHINA TRADE.

CONFIDENTIAL.

No. 1.

25353

July 4.

RECE

SECTION

REG 19 JUL 05!

Sir,

Hong Kong and Shanghae Banking Corporation to Foreign Office.--(Received July 4.)

31, Lombard Street, London, July 1, 1905.

I BEG to thank you for your letter of the 26th ultimo, inclosing, for our confidential information, a copy of a despatch from Ifis Majesty's Minister at Peking regarding the reform of the currency in China.

It is encouraging to hear that the Board of Revenue in China are seriously considering this matter, but it seems unfortunate that they should in the meantime have permitted the establishment of mints in several of the provinces of China, and the coinage by those mints of subsidiary coinage, without first having established a coin representing a unit of value in which such subsidiary coinage could be generally redeemed.

It would appear that any effective reform of the currency can only be carried through by a strong Government, competent to devise an effective reform, and strong enough to enforce the carrying out of it in all the provinces. And, judging by what has occurred since the Peking Government undertook to attend to this matter, it may well be doubted whether these necessary conditions now prevail.

The first essential would appear to be the establishment of a universal unit of value, and, in view of the difficulties of altering established customs in China, it may well be considered too great an undertaking to establish a gold standard at the present time, and more practicable for the present to undertake to establish a standard on a silver basis, represented by a silver coin for universal cirenlation in China of one uniform design, value, and standard, in which all subsidiary coinage should be

edeemable at a value fixed by the Government.

Any such silver coin should only be coined under the direct supervision of the Government, and it would be very desirable that foreigners of high standing should have a position of responsibility in the regulation of the mint operations, and specimens of the coinage should be sent periodically to the English and American mints for trial and testing.

At present the various mints appear to be coining silver dollars of different valnes and designs, but their chief work seems to be the turning out on an enormous scale of absidiary copper coinage; but, unless this coinage is regulated in relation to a standard silver coin, and redeemable in such coin, it would appear to be wanting in the necessary stability for value.

The coinage of a unit of value should precede and not follow the issue of the subsidiary coins.

The present methods appear to be only adding to the already existing confusion in be currency.

I

am, &c.

(Signed)

A. M. TOWNSEND, Manager.

[2084 d---1]