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reorganize their finances, to centralize their revenue by an increased tariff in lieu of likin, and to follow the example of other countries in providing a national coinage, a Conference such as he had suggested might doubtless prove of considerable use,
I have, &c.!
Your Highness,
(Signed) J. N. JORDAN.
Inclosure 1 in No. 1.
Doyen of the Diplomatic Body to Prince Ch'ing,
March 30, 1909. IN November last the attention of the Chinese Government was called by the diplomatic body to the dangers involved in an uncontrolled and unguaranteed issue of banknotes by Chinese banks in Shanghai and the Province of Chekiang, and on the 18th December your Hight ess replied stating that the Board of Finance was considering new regulations for the limitation and control of such issues, and that a further communication would be made when their arrangements were completed.
I have the honour to enquire, on behalf of the foreign Representatives, what progress has been made in the three months which have elapsed since that date, towards giving effect to the recommendations contained in the note to your Highness of the 28th November.
At the same time I have to invite the serious consideration of the Chinese Government to the necessity of coming to a decision, at as early a date as possible, on the question of introducing a uniform coinage throughout the Empire.
I need scarcely remind your Highness that six years have already passed since China engaged to take the necessary steps for the introduction of this reform, which is of vital importance to the general interests of commerce, and without which the reorganization of the national finances cannot be accomplished with success.
Since, therefore, Decrees have already been issued commanding a thorough reorganization of the Chinese financial system, and the first essential towards that end is uniformity of coinage, it is earnestly urged in the interests of foreign commerce and the stability of Chinese credit, that no further time should be lost in determining on an early date for the issue of a national coinage in lieu of the numberless curren- cies now in use. From representations of the Tien-tsin Consular Body it appears that the condition of the currency there is particularly confused. The original standard, kuown as "hua-pao" sycee, 992 fine, can hardly be obtained, having been driven off the market by debased metal passing for the "hua-pao" standard; while the dollars issued by the Provincial Mint, which have been sent to the "Laboratoire de la Monnaie "
of Paris for assay, show a steady deterioration in quality from year to year. The money of the common people, the 10-cash piece, though nominally the 100th part of a dollar, stands in reality at a discount of about 25 per cent., while it takes eleven 10-cent pieces to make a dollar, and a Chinese Imperial postage stamp of the face value of 10 cents costs one 10-cent piece, with 1 copper cent added to supplement the lack of silver in the 10-cent piece, and 4 brass cash to supplement the lack of copper in the cent.
The condition of the currency is too well known to your Highness' Board to require further criticism in detail on my part; and in now addressing your Highness on the subject, I have the honour to request that the foreign Representatives may be informed as soon as possible of the date upon which it is intended to introduce a uniform national coin.
I avail, &c.
(Translation.)
Inclosure 2 in No. 1.
Extract from the "Gazette" of March 26, 1909.
Decree and Memorial respecting Currency.
THE Government Council (Cheng-wu Chu) have memoralized that in view of the importance of the question of a national currency, upon which they were commanded to report, it is necessary to devise a complete measure; and they therefore recommend
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that the Board of Finance should be directed to establish an office for the purpose of investigating the subject. They have also memorialized the throne, reporting on the recommendation made by Ch'en K'uei Lung (Viceroy at Wuchang), that in deciding the question of a currency it is first necessary to guard against dangers, and they request that the Board of Finance should be directed to take this Memorial into consideration at the same time.
Both these Memorials of the Government Council are hereby approved.
Memorial of the Government Council reporting on the Memorial of the Board of Finance on the Question of a National Currency.
The Board of Finance having represented in a Memorial of the 4th February that in view of the importance of the question of a national currency, it is necessary to devise a complete measure; and this Council having been commanded to report upon this Memorial, after due deliberation; the Council now find that the question of a national currency demands a profound and minute study of various systems, and involves the consideration of advantages and disadvantages of an extraordinarily complicated nature. The changes made under previous reigns in the copper coinage resulted in the continual occurrence of illicit minting, rendering uniformity impossible, and, moreover, in these days of general communication with other countries of the world, necessitating the use both of gold and of silver, the importance of the question is still greater than ever, and the differences in values still more pronounced.
But at a time when the prevailing confusion is already of long standing, it is not possible to devise at once a complete system which would inspire general confidence. In our previous Memorial upon this subject, we struck a mean between the various views of the different Viceroys and Governors, but in consideration of the fact that they did not agree on the question of value, we did not venture to form a decision. A Decree was thereupon issued appointing a period of years within which a uniform national silver coinage was to be instituted.
From this it may be seen that the Throne appreciated the importance of the question, and sought to secure the general and lasting circulation of the currency rather than a momentary success.
The Board of Finance now represents that of the three questions of minting, placing into circulation and uniformity, there is still much difficulty involved in the questions of value and weight.
Now the common difficulty in all occurrences is that if the touch of the coins is high they are liable to be melted down for fraudulent purposes, while if the touch is low illicit minting ensues. So the ancients, such as K'ung Ch'i, Yeh Shih, and others, advocated the. liberal use of copper, together with fineness of work in turning out the coins, as the best safeguard. Though silver and copper are not the same thing, yet the principle is evidently the same. Now when Japan reorganized her currency, the Minister of Finance established a currency investigation bureau which held more than thirty conferences, and issued a compendious report in two large volumes, before a decision was finally made, and when the change was made from the old to the new system, many difficulties were experienced before success was achieved.
The Board of Finance is now reorganizing the finances of the provinces, and is occupied in establishing offices and appointing officials for this purpose. If the Board in the course of their investigations were to make a study of this question also, a means of introducing a new system would be found, and two results would be attained by the one course of procedure.
The Government Council is unanimously of opinion, therefore, that the question of currency is extremely obscure and that it is essential to gather the views of the people before a true consensus of opinion can be reached; and the Council requests that the Board may be commanded to establish a Currency Investigation Bureau, and be given a liberal period of time within which to make a searching investigation, so that by the engagement of specialists from all parts they may pass under review The result of their inquiries the whole situation before a definite decision is made. will then be submitted to the Throne for action to be taken,
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