CO129-468 - Governor Sir Stubbs - 1921 [6-8] — Page 533

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guaranteed by the Chamber of Commerce of the Chinese city

of Weihaiwei and of unregistered notes, the place of which

would then be taken to such an extent as is necessary for

trade purposes by additional issues of the notes guaranteed by the Port Edward Chamber.

43.

On the figures given above the total

circulation of notes guaranteed by the Chambers of Commerce

in Port Edward and Weihaiwei City amounts to $100,000 and

some 700,000 Tiao, equivalent to, say, $500,000. The

number of unregistered notes cannot be estimated but if we

place the total amount of notes which would be issued under

the guarantee of the Port Edward Chamber, if these notes alone were legal tender, at $700,000 we shall certainly

not be over-estimating the probable figures.

If these notes are recognised as legal tender,

the imposition of a stamp-tax on them will be a reasonable and proper measure. A tax of 1% on the face value would

bring in at least £7,000 a year with no expenses to set on the other side. It would perhaps be advisable to devote

half the proceeds of the tax to a reserve fund to meet the possibility of the Chamber's defaulting but even so there would remain a revenue of £3,500 plus the interest on the

reserve fund so created.

44.

I submit that the adoption of this course

would be profitable and practically safe, but if it is considered that the element of risk renders it undesirable I suggest, as an alternative, which would be more expensive to introduce but much more profitable eventually, that the Government of Weihaiwei should itself undertake the issue of one dollar and, if they are considered to be necessary, one tiao notes, prohibiting the use of shop-

notes of all kinds.

It is probable that an issue of this nature would take the place not only of the shop-notes but of a considerable proportion of the silver dollars now in

circulation