2
that as the Chinese merchants did not differentiate between the notes issued by foreign banks, there should be reciprocity of treatment, in the interests of trade.
About the same time the Shanghae General Chamber of Commerce drew the attention of the Consular Body to the fact that the notes issued by certain Chinese banks were not accepted by the foreign banks as legal tender nor by the Municipal Council in payment of taxes, and the Chamber therefore desired the Consular Body to ascertain from the Chinese authorities whether the issues in question were authorized by the Imperial Government, whether they were limited, and what reserves were held against them.
The Senior Consul thereupon applied to the Taotai for the desired information, in a note dated the 18th April of this year. No reply having been received, a further application was addressed to the Taotai on the 2ud June, and on the following day an answer was received, affording the information that certain of the banks in question conducted their business under the sanction of the Kiangnan authorities, while others were established under Imperial Decree or with the approval of the Board of Commerce. The Taotai also furnished a statement of the amount of notes issued and the amount of dollars in reserve of one of the banks concerned.
This reply was duly communicated to the Shanghae General Chamber of Commerce, who, after careful consideration, still deemed it essential that the issue of all such notes should be guaranteed by the Imperial Government, and that the names of all banks authorized to issue notes should be published by the Imperial Government together with a statement of the reserves in coin, which should be regulated and controlled by the Government with a view to periodical publication; and further that all uncontrolled and unguaranteed issues of notes should be withdrawn from circulation.
It will be evident to your Highness that the uncontrolled issue of bank-notes without the security of properly regulated metallic reserves is a serious danger to the commercial community, both foreign and Chinese, and that the growth of such a system must ultimately impair Chinese credit. The suggestions of the Shanghae General Chamber of Commerce will hardly fail to impress your Highness as having been conceived in the interests of international trade, and I have the honour to request, on behalf of the foreign Representatives in Peking, that they may receive early and favourable consideration by the Chinese Government, whose views upon the question I hope to learn without undue delay.
'I avail, &c.
!
!
Inclosure 2 in No. 1.
Memorandum by the Shanghae General Chamber of Commerce,
The Issuing of Bank-notes by Native Banks.
IN the beginning of the current year, the attention of the Chamber was drawn to the fact that dollar bank-notes were being issued by certain Chinese banks in Shanghae and the Provinces. Representations on the subject were made to the Consular Body, and the opinion of the exchange banks was also ascertained, as the matter was considered of vital importance, inasmuch as the new departure tends to add to the complications of internal currency, and to affect trade and credit. The various issues are not authorized by the Imperial Government; and they are neither limited nor have they reserves held against them. The uncontrolled issue of these notes, without the security of properly regulated metallic reserves, is a serious danger to the commercial community and the growth of such a system of finance, which must ultimately impair and seriously affect the credit of China, is viewed with grave concern. The problem, if energetically and intelligently tackled, may still be capable of solution now, but should time be lost, the difficulties which are steadily increasing may at no distant date grow beyond remedy, Investigations as to the standing, reserves, capital and note circulation of the various banks, have brought to light the information which is appended on the following table :--
KW LAM
Bank.
Head Office.
Capital.
Paid-up.
Note Circulation.
10,000,000 taels
7,000,000 taels
200,000 taels
Ta Ching Government Bank (a semi-official | Peking concern)
Hupoo Bank (Hupoo Government Cash Bank). Hankow
Unknown
Unknown
Sun Chun Bank of China (shares owned by Shanghae private Chinese shareholders)
1,000,000 dollars
750,000 dollars
20,100,000 dollars
(a.) 400,000
(7.) 350,000
Übekiang Shing Nih Bank (or, Shing Nih Hangchow Chartered Bank)
1,000,000
46
250,000
(@.) 200,000 (b.) 600,000
Yue Soo Imperial Bank (nominally designated Soochow Bank, though issue only provincial)
200,000
Nil
(a.) 300,000 (6.) 800,000
Bank Nauking (nominally designated Nanking Bank, Kiangnan Yu Ning Government though issue only provincial)
Sin Nee Bank (a doubtful and private Hankow concern)
Yue Sheng Bank (started September, 1908, Shanghae owned by Mr. Sheng Kwei Sun, sou of
Ni Kung Pao;
in Poking) Commercial Bank (erontol by Ningpo | Shanghae merchants; registored in Peking)
..
..
200,000
16
Nil
(a.) 300,000 (0.) 800,000
Unknown
Unknown
50-75,000
Not begun,
1,000,000 dollars
300,000 dollars
but intended.
1,500,000
750,000
"!
Not begun,
but intended.
Remarks.
100,000 taels of note issue and probably more is in circulation in Shanghae. The limit of issue is to be fixed at a later date. Half capital is subscribed by the Board of Finance, Peking, and half by Chinese 20,000,000 dollars in Hankow and other parts, 100,000 dollars in Shanghae. shareholders,
way line, chiefly Soochow, Nanking, and Chinkiang.] [(a.) Shanghae; (8.) Along Shanghae-Nanking Rail- These notes are freely accepted by the Chinese. [(a) Shanghae; (6) Frincipally Chekiang Province.] This bank was founded in order to save the Chekiang Railway, though the notes are not liked in Shanghae, they are readily accepted in the province of their origin, especially along the route of the railway.
This bank was started by the Governor of Soochow,
who loaned 200,000 dollars to this concern in order to start it, and withdrew this sum shortly after- wards. No special reserve is kept. Notes are guaranteed by Governor.
started by the Viceroy of Nanking, who loaned [(a.) Shanghao; (8.) Yang-tuze ports.] This bank was 200,000 dollars and withdrew it afterwards. No reserve kept. Notes guaranteed by the Nanking Viceregal Government.
in Shanghae. These notes are in circulation at Hankow and the The bank is said not to be registered at Peking. Note issue pushed by means of newspaper advertise- ments, expounding the strength of the concern. Yang-taze ports; are not
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