This Document is the Property of His Britannic Majesty's Government.
263
e. o.
CHINA TRADE.
CONFIDENTIAL.
[45565]
No. 1.
4135
[December 31,1
SECTION 3. Rrst 4 FEC 09
Sir J. Jordan to Sir Edward Grey.-(Received December 31.)
(No. 558.) Sir,
Peking, December 11, 1908. THE Shanghae General Chamber of Commerce has, for some months past, been concerned at the issue of dollar notes by Chinese banks without any restriction or control on the part of the Government.
At the request of the Chamber, the Consular Body addressed inquiries to the Shanghae Taotai in April last as to whether certain native banks were authorized by the Imperial Government to issue notes, whether such issues were limited, and what reserves were held against them.
The Taotai's reply showed that although official sanction appeared to have been given, there was no check upon the native banks whereby the Central Government could control the issues of paper. It seemed essential to the Chamber of Commerce that more stringent regulation of this new element in the confusion of Chinese currency should be sought for, and they formulated the view that the Imperial Government should guarantee the issue of all native bank-notes, that they should publish the names of the issuing banks, regulate and control their reserves in coin, and periodically publish statements of the same; and finally that all unguaranteed or uncontrolled issues should be withdrawn,
As soon as fuller information reached the Diplomatic Body, it was decided that joint action should be taken with a view to secure the ends desired by the Chamber of Commerce and the foreign banks. The note, of which I have the honour to inclose a copy, was accordingly addressed to Prince Ching on the 28th November, while on the 3rd December, I followed this up by banding in a Memorandum to the Wai-wu Pu in similar terms. A few days later I furnished the Board with a copy of the inclosed Memorandum, drawn up by the Shanghae Chamber of Commerce, and impressed upon the Ministers present the urgent necessity of dealing with a situation fraught with danger to the credit of China.
1 was informed in reply to my representations that the doyen's note of the 28th November and my Memorandum of the 3rd December were at once communicated to the Board of Finance with an appeal to take the matter into earnest consideration without delay. That the apprehensions of the Shanghae Chamber of Commerce are well founded may be seen from their Memorandum, which discloses the fact that the Provincial Bank at Hankow, of unknown capital, has a note circulation of over 20,000,000 dollars, that a private bank at Shanghae has issued notes equivalent to its paid-up capital, that another at Hangchow has notes of a face value more than three times in excess of its paid-up capital, and that two other institutions, at Soochow and Nanking, with no paid-up capital, but with a guarantee from the Provincial Government, have placed in circulation notes of an aggregate face value of over 2,000,000 dollars.
I have, &c. (Signed) J. N. JORDAN.
Inclosure 1 in No. 1.
Your Highness,
Doyen of Diplomatic Corps to Prince Ch'ing.
November 28, 1908. I HAVE the honour, on behalf of the foreign Representatives in Peking, to bring to the notice of your Highness representations of the Shanghae General Chamber of Commerce, which have been communicated by the Senior Consul, on the subject of the issue of dollar bank-notes by various Chinese banks in Shanghae and in the Province of Chekiang. It appears that in April last, the Shanghac Taotai complained to the Senior Consul that the foreign banks had agreed together not to accept any bank-notes issued by Chinese banks other than the Imperial Bank of China. The Taotai maintained
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