CO129-451 - Public Offices - 1918 — Page 170

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

"This Government still recognises that Li Yuan-hung is still the President of the Republic of China, and the National Assembly is still in existence. It shall strive to combat, remove, and destroy all those causes which have hitherto disabled President Li and the National Assembly from functioning and discharging their respective duties. It will cease to exist as soon as the objective it aims at is fully attained, namely, when the rebellious Tuchuns are suppressed, President Li Yuan-hung is re-established, and the National Assembly is reassembled,

"This Government is directed by a Generalissimo, assisted by three Field-Marshals. Under the Generalissimo are the heads of six Ministries functioning as the executive of the Government. Dr. Sun Wen is the Generalissimo, and Generals Lu Jung-t'ing and Tang Chi-yao are two of the three Field-Marshals. The six Ministers are:

"For Foreign Affairs, Dr. Wu Ting-ting; Home Affairs, Sun Hung-yi; Finance, Tang Shao-yi; Army, General Chang Kai-ju; Navy, Admiral Cheng Pi-kuang; Communications, Hu Han-min.

"They are all elected by the National Assembly now holding extraordinary session in Canton."

CHINESE LOANS AND CONCESSIONS.

CONFIDENTIAL

[229809]

(No. 297.) Sir,

No. 1.

167

[December 3.]

SECTION 2.

Mr. Alston to Mr. Balfour.-(Received December 3.)

Peking, September 21, 1917. IN my telegram No. 428 of the 15th instant I had the honour to forward to you a telegram from the British, French, Russian, and Japanese group representatives respecting the proposal of the Minister of Finance for a loan of 20,000,0002. for currency reform.

I have the bonour to enclose herewith copies of two memoranda from the Ministry of Finance on which that telegram was based.

In accordance with the instructions contained in your telegram No. 348 of the 15th instant, I am not taking any steps to encourage this project.

I have, &c.

B. ALSTON.

i

Enclosure 1 in No. 1.

Memorandum on proposed Loan received from Minister of Finance.

THE whole proceeds of the loan to be used for the unification of the monetary system on silver basis and redemption of depreciated paper.

Amount of the loan, 20,000,0001.

Bonds of the loan to be issued in two or three series,

Securities of the loan: (1) Seigniorage profit; (2) profit from melting and refining of old copper cash; (3) customs surplus; and (4) salt surplus.

The whole proceeds of the loan to be paid in gold to the Chinese Government at London, Tokyo, &c. Chinese Government to deposit with great banks in Europe, America, and Japan the money so received, and/or the first-class foreign securities and/or short-term bills bought with such money, against which foreign drafts in gold will be drawn and internal loan bonds issued.

Chinese Government to establish a Monetary Bureau and appoint three foreigners: one as Adviser on Monetary Reform, one as technical officer ("Master Assayer"), and one as Inspector of the Chinese Government Gold Reserve abroad.

Enclosure 2 in No. 1,

Memorandum on General Outlines of Monetary Reform received from Minister of Finance.

MONETARY reform to be divided into three stages, viz. :—

First stage: Unification of the monetary system in silver basis.

Second stage: Redemption of depreciated paper.

Third stage: Adoption of gold exchange standard.

Third stage to be deferred till the end of the great war.

What is contemplated

*

1. Reform of the mints. Such measures as: decrease the number of mints;

render the mints not institutions for profit-making.

2. The mint to appoint one foreign technical officer ("Master Assayer ").

3. When Committee of Examination of Coins is established, foreigners may be

invited to become its honorary members.

4. To mint new coins-their form, weight, and fineness to be in strict conformity with the National Coinage Law promulgated in the 3rd year of the republic. The principle of free coinage to be adopted with regard to the principal money of 1 yuan.

[2752 c-2]