CO129-392 - Governor Sir May - 1912 [9-10] — Page 200

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any means even for soldiers to force an exchange at par and about 84 a month for their messing. The balance was not sufficient for their incidental expenditure. A quarrel between 2 of Lung's men and some shopkeepers over a question of exchange led to the arrest of 2 of the soldiers who were only saved from being shot by the intervention of the Governor-General. This brought matters to a crisis and Lung declared his intention of leaving Canton if matters did not improve. Lung declared that he would go into the country to prospect for mines, and it appears from a paragraph in a Hongkong Chinese newspaper dated the 15th. of September that he is to start on a mission in which prospecting for minerals a subject in which he is said to have had some experience and the location of detachments of troops to control robbers on the North River, are to be combined.

3.

I am informed that at a meeting between offici- -als and merchants, the merchants, to save the situation, said that they would accept the notes of the present issue. To ensure that no further issue is made they asked that the plant for making notes should be handed over to them. This the Government would not consent to, owing to the loss of "face" entailed, and some com- -promise was arrived at under guarantees that no new notes should

be issued.

4.

Thereupon a stringent notification (copy translation enclosed) was issued by the Comissioner of Finance

commanding that, under pain of fine or heavier punishment, notes

shall be accepted at par. Money Changers are however permitted,

with the consent of the party to the transaction, to charge a

discount of $2 per $1,000 in changing notes for silver. A further

notice was also issued (copy translation enclosed) forbidding the

export of silver coins from Canton to rural districts with the

object of forcing the use of notes outside the limits of the City.

nclosure 2.

nclosure

3.

A