(This Document is the Property of His Britannic Majesty's Government.]
CHINA TRADE.
CONFIDENTIAL.
No. 1.
491
[October 6.]
SECTION 1.
Draft Memorandum for communication to the Shanghae Merchants by His Majesty's Legation at Peking.
ON the 3rd May, 1905, the following telegram was received by His Majesty's Principal Secretary of State for Foreign Affairs signed by certain British merchants at Shanghae :-
"British merchants draw Government's attention to fact that China ignores Mackay Treaty, rendering same ineffective in most essentials. China actively opposes currency, mining, taxation, navigation stipulations. Beg British Government insist on Treaty being made immediately operative. Signed seventy British merchants, care of Consulate."*
It has since been ascertained that this communication was prompted by the publication at Shanghae of a Reuter telegram in which Lord Percy was represented as having stated in answer to a question in the House of Commons that no information had reached His Majesty's Government as to China having ignored the terms of the Mackay Treaty.
Lord Percy had, of course, said nothing of the kind.
On the receipt of the telegram from the Shanghae merchants, His Majesty's Minister at Peking was requested to obtain, and forward to His Majesty's Govern- ment, a detailed statement by the Signatories in amplification of their complaints; and such a statement is inclosed in a despatch recently received from Sir E. Satow.
The questions with which the statement specially deals are:
(a.) Currency.
(6.) Mining.
(c.) Taxation.
(d.) Navigation.
With regard to (a) the facts appear to be in accordance with the account given by the merchants, but it may be observed that to reform the currency system of China so as to bring it into conformity with that prevailing in most civilized countries is a task of very considerable magnitude, and the negotiators of the Mackay Treaty wisely fixed no limit of time within which the reform must be accomplished.
What has actually occurred in the matter is briefly as follows:--
Not long after the signature of the Mackay Treaty, the United States, at the request of Mexico and China, appointed a Commission of experts to confer with leading European financial authorities, official and non-official, with regard to the best method of harmonizing the currency systems of these two silver-using countries with those of the countries which possess a gold standard.
The Commission reported in 1903, and, early in 1904, Professor Jenks, a prominent member, paid a visit to China, in the course of which he discussed with the leading authorities, both provincial and metropolitan, an elaborate series of proposals for the regulation of Chinese finance and the adoption of the gold standard. Reports of his proceedings appeared in the local press and at one time there seemed some reason to hope that he would succeed in his endeavours to persuade the Chinese authorities to accept his proposals. The Chinese Government, however, eventually decided against the acceptance of Professor Jenks plans, owing to the necessary initial expense of adopting a gold standard, and it is understood that they have resolved to begin with the reform of the copper currency, and then proceed to the intro- duction of a Board of Revenue dollar, and the Regulation of the coinage of silver dollars by the provincial mints.
As the Signatories of the statement are no doubt aware, the Chairman of the Shanghae General Chamber of Commerce has addressed to the Diplomatic Body at Peking a letter, giving information with regard to the provincial copper mints and
* Memorial: Inclosure 20 in Sir E. Satow's No. 242, July 11, 1905. [2214 --1]
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