Sessional_Paper_1908 — Page 119

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Memorandum referred to in answer to Question 2.

1. In urging the fulfilment of Art. II of the Mackay treaty, we certainly understand it to refer to all Provincial mints.

2. As regards the question of a new Standard (Silver Coin) it was suggested in the original minute (20th August) on Sub. Coinage, under enclosure 2, to have Sub. Coins

"of the same millesimal fineness as the dollar and of equal proportional weight, eg., 10 ten cent pieces must equal one dollar in weight, in order to abolish the disparity in bullion or intrinsic value between the two

•f

To this we have to say that

Having small coins of the same proportionate weight and fineness to the Standard coin is sound enough but we think needlessly expensive. We suggest that they be of equal fineness but reduced in relative weight to an extent to cover minting charges say -%. This would be sufficient to prevent the small coin being melted on the one hand and going to a heavy discount on the other.

We would add that this is a question affecting not only Hongkong but British interests in the various treaty ports of China, and an exchange of views should first be sought so as to arrive at an unanimous representation.

That naturally means protracted negotiations. On that account the Minority recom- mended separate negotiations as regards Canton to meet the immediate situation which is relatively a very small matter.

3. We do not suggest making a point of the Viceroy withdrawing coins (if he is will- ing to do it so much the better) but we think he should be asked not to issue the stock, if any, held in the Provincial Treasury until they are at par.

4. We do not suggest the coinage of a Provincial dollar, as it would only make the general reform scheme more difficult.

5. As regards China adopting a Gold Standard it will be time enough to consider that after she has successfully reformed her Copper and Silver Currency into an uniform national coinage.

Note. In this connection we would remark that when China is prevailed upon to reform her currency this Colony will have to face redemption or repudiation. In fact the Colony will then also have to reform its currency for it cannot continue to maintain its commercial influence if deprived of handling the foreign trade and commerce of Southern China as it assuredly would be if that trade was subject to another exchange. It should not be forgotten that our present standard is an alien-coin-the Mexican Dollar-and at present the Canton Sub. Coin is as good intrinsically as our own.

Hongkong, 10th December, 1907.