CO129-382 - Public Offices - 1911 — Page 276

[This Document is the Property of His Britannic Majesty's Government.]

AFFAIRS OF CHINA.

CONFIDENTIAL.

€

[571]

274

3447

[January 6.]

SECTION 2.

LC2

of 3 FEB I

No. 1.

Sir J. Jordan to Sir Edward Grey(Received January 6, 1911.)

(No. 455.) Sir,

Peking, December 15, 1910. WITH reference to my despatch No. 312 of the 10th September last, I have the honour to transmit herewith the copy of a despatch, with enclosure, from the Officer administering the Government of Hong Kong, calling attention to the detrimental effect which the temporary resumption by the Canton mint of the coinage of 20-cent pieces is likely to have on the financial situation in the Colony.

In view of the fact that the Chinese Government are seriously considering the question of currency reform, Mr. Max Müller did not think the moment opportune for again approaching them on the subject of Hong Kong's long-standing grievance with regard to the depreciated subsidiary coinage of the Kuangtung province. The Canton Government are much more concerned with the relations between the 20- and 10-cent pieces and the copper cents and cash than they are with the relations between the former and the dollar, so that if the temporary closing of the Canton mint has resulted in the appreciation of the silver pieces vis-à-vis the copper, and this is what has apparently occurred, their action in reopening the mint to restore the balance is quite intelligible and probably inevitable under the circumstances. On these grounds Mr. Max Müller informed Sir F. May that he did not see his way to approach the Wai-wu Pu without your instructions.

Mr. Fox, acting commercial attaché, who has recently returned from a tour in the south, points out that the subsidiary coinage of Shanghai is in a similar but worse condition than that of Hong Kong. In November the Mexican dollar exchanged for 11 ten-cent pieces and 5 copper cents, a discount of about 12 per cent. on subsidiary silver. If the state of affairs has so serious an effect on the trade of Hong Kong it is not easy to understand why the trading firms in Shanghai, who might be supposed to be suffering in an even greater degree, have made no protest or complaint.

The issue of bank notes by private Chinese banks without proper security for their redemption appears to me to have no real connection with the question raised in the first paragraph of Sir F. May's despatch, and has already formed the subject of representations to the Wai-wu Pu in relation to the financial situation at Shanghai.

I have, &c.

Enclosure 1 in No. 1.

J. N. JORDAN.

Sir,

Acting Governor Sir F. May to Mr. Max Müller.

Hong Kong, October 24, 1910. WITH reference to your Excellency's despatch of the 3rd June to Sir E. Grey, in which you stated that "the minting of all coins now in circulation was to cease from the publication of the regulations" for the reform of the currency recently issued by the Board of Finance, I have the honour to bring to your Excellency's notice that it is reported to me by His Britannic Majesty's consul-general at Canton, in reply to my enquiries on the subject, that the Canton mint has temporarily resumed the coinage of 20-cent pieces on the 18th instant. It is stated in the public press that this step is in relief of the money market, in which there is much stringency owing to the financial crisis in Canton.

From the enclosed translation of what purports to be a notification by the provincial treasurer, it would appear that the true reason probably is that the reserves of the Ta Ching (Government Bank) are not deemed sufficient to meet a possible run upon it.

But whatever the true reason is, I would ask you to be good enough to more the Chinese Government to suspend the permission at the earliest possible moment in the

[1850 ƒ-2]