[This Document is the Property of His Britannic Majesty's, Government.
AFFAIRS OF CHINA.
CONFIDENTIAL.
(22950]
No. 1.
346
21654
[June 27.]
རྣམ་པ་པ་ནས་ས་
SECTION 1.
5
JU 10)
Mr. Max Müller to Sir Edward Grey.-Received June 27.)
(No. 146.) Sir,
Peking, May 6, 1910. IN Sir John Jordan's despatch No. 307 of the 29th August last a translation was forwarded of certain provisional regulations issued by the Ministry of Finance for controlling the issue of Chinese bank-notes. A circular despatch was at the same time addressed to His Majesty's consuls in China calling for reports as to the operation of these regulations within their respective districts, and as replies from all the more important centres have now been received, I have the honour to sum up below, as briefly as possible, the information thus obtained.
It is evident from the delay in many of the replies, and from the meagreness of the total information furnished as to the working of the regulations that considerable difficulty has been experienced in ascertaining the truth in regard to so complex a question, and the conclusion is inevitable that, however sincere the intentions of the authorities in framing this measure of reform, its practical effect has so far been by no means conspicuous.
The only ports from which a report comes that the regulations have been enforced with more or less success are Chefoo and Chinanfu, in Shantung; Changsha, in Hunan; Nanking and Canton. His Majesty's consul at Chefoo reported in December that, although the banks had petitioned against the enforcement of the regulations, orders were given in August that they must be strictly enforced. The guarantors required by clauses 3 and 4 had been obtained by the note-issuing banks, but the capital had not been collected, nor bad any of the banks been registered in accordance with clause 5; no bank had reported the number of its notes in circulation (clause 9), and none of the banks had a reserve fund to the full amount of the notes issued. For some years, however, the rule had been in force that all banks issuing now notes must have a reserve fund to the amount, and must have all such notes stamped by the chamber of commerce, as a guarantee of their genuineness, before they could be put into circulation. It was stated that the withdrawal of 20 per cent. of all notes in circulation would be insisted upon in 1910. His Majesty's consul at Chinan reported at the same time that distinct and fairly successful endeavours had been made by the authorities, in face of considerable difficulties, to enforce the regulations. He pointed out that silver dollars were practically unknown in the greater part of the Shantung province, and that cash notes had firmly established themselves as the medium for all minor transactions.
Apart from sycee, the use of which was restricted to dealings on a larger scale, the only alternative was the discounted and cumbersome 10-cash piece, and the inconvenience, not to say hardship, involved in the province of Shantung by the new regulations was considerable. His Majesty's consul at Nanking reported in October last that there were three private banks there, each authorised to issue notes to the value of 30,000 dollars against a deposit of 10,000 taels, and that steps were being taken to notify these banks that their notes must be gradually withdrawn from circulation, as provided for in clause 11 of the regulations. Notes were also issued by an official bank at Nanking, called the Yu Ning Bank, with a head office also at Soochow. A report on the note issue of this bank was called for by the local provincial assembly, and the Nanking Bank's report in reply was published in November last. The bank claimed that their notes in circulation were only 20 per cent, of the amount authorised, and that their capital was distributed over the various centres so that the notes were always paid on demand. They proposed to wait until the new notes were issued by the Ministry of Finance and then to purchase these to gradually replace their own. With reference to the security, the bank stated that the daily turn-over of the head office did not reach 200,000 dollars, while the deposits in the treasury never fell below 100,000 taels, which was more than the 40 per cent. required by the regulations. The remaining 60 per cent. was invested in good securities, and there were, moreover, deposits of Government moneys to the extent of 1,793,000 taels
At Canton, according to a report from His Majesty's consul-general, dated the
[2788 dd-1]
B
No comments yet.
Private notes are available after approval.