L
14
223
[8762]
(No. 68.) Sir,
No. 28.
Sir J. Jordan to Sir Edward Grey.-(Received February 24.)
Peking, February 7, 1913. IN my despatch No. 27 of the 20th ultimo, I had the honour to report the decision taken by the Diplomatic Body in respect to the disposal of the surplus customs revenue available for the indemnity, namely, that it should be remitted pro rata to the various Governments for so many months as the sum should be sufficient to cover, with compound interest at 4 per cent. per annum.
Instructions to this effect were duly telegraphed by the Inspector-General of Customs, at the instance of the Wai-chiao Pu, to the Commissioner of Customs at Shanghai, and the latter immediately consulted the International Bankers' Commission with a view to giving effect to this decision. As a result of this consultation the bankers telegraphed to the Diplomatic Body suggesting that the exchange for remittance of the indemnity payments should be settled weekly at the rate of one month's instalment per week. They pointed out that this arrangement would be advantageous to the Chinese Government, and would avoid upsetting the exchange markets which would be seriously affected by the purchase of so large an amount of gold on one day.
A formal proposal to the same effect having been addressed to the foreign representatives by the Wai-chiao Pu, the question was considered at a meeting of the Diplomatic Body held on the 3rd instant, and a telegram was dispatched to the bankers' commission stating that we had no objection in practice to the proposed arrangement, provided it was understood that it was not to be regarded as a precedent, and that the compound interest at 4 per cent. was paid on the iustalments until the date of transfer.
Copies of correspondence exchanged with the Wai-chiao Pu on this subject are enclosed herewith.
I understand from the Shanghai press that the first payment was made on the 31st ultimo, exchange having been settled on that day for the instalments due for November and December 1911.
Enclosure 1 in No. 28.
Wai-chiao Pu to Sir J. Jordan.
I have, &c.
J. N. JORDAN.
Sir,
Peking, January 30, 1913. WE have the honour to inform your Excelleucy that a report has been received from the Revenue Council to the effect that they have received the following communi- cation from the Ministry of Finance :—
"Instructions bave already been sent to the Inspector-General of Customs to take without delay the steps which may be necessary in connection with the proportional payment of the indemnity. The Inspector-General has now verbally informed this Ministry that a telegram has been received from the Commissioner of Customs at Shanghai to the effect that gold exchange is now very stable: the sterling which must be purchased for the payment of the indemnity, however, amounts to several million pounds, and as a result the price of gold would certainly show a sudden rise, and it is to be feared that a panic might ensue among the mercantile community; the international banks have now under discussion a scheme for periodical purchases of gold at intervals of about ten days or one week, thus avoiding sudden fluctuations in the price of sterling and disturbances of the market."
>>
It is requested that this proposal should be communicated to the Diplomatic Body. It would appear that the price of gold is now very stable, but that, if the purchases of gold at one time were too heavy, the price of sterling would suddenly rise, which would certainly react upon the prosperity of foreign and native trade; it appears to us, therefore, that the Inspector-General's scheme is designed for the protection of the Inarket and in the general interest, and that there is no intention of causing obstruction.
:
No comments yet.
Private notes are available after approval.