THE HONGKONG TELEGRAPH THURSDAY JANUARY 23, 1908.
HONGKONG'S SUBSIDIARY
CURRENCY.
RECOMMENDATIONS
BY COMMITTEE OF INQUIRY,
GREAT DIVERGENCE OF OPINION.
MATTER TO BE DISCUSSED BY EXECUTIVE AND "LEGISLATIVE COUNCILS.
aldiary colonzo whatever (imitation or other), lagal tender in this Colony, axcept with a with the exception of the Chinese Caab, (which, | permit. however, might possibly be considered a standard, and set a subsidiary coin).
E
16. We approve of this course, (which, how ever, will be a failure unlest probibition is
30th October, 1907...
·J. Ac
The following Note is by the Hon. Mr. B. Osborne who had left the Colony before the third meeting
Tagren entirely with the Chairman's Memo». kamduing an being the only practical solution of the difficulty, and consider that the Colony should either protect its currency ér else re
Intimation.
THE
Chinese Government to giva affect, to Asticla fl of the Mackay Convention, In this con- nection it seems to me that a suggestion might" be made that when reforming the currency China should undertake to make all subsidialy... 15. It is understood that at present Govern- coloage minted of the same millenimal Sheniss ment is now withdrawing from circulation all is the dollar and of equal proportional weight, subsidiary coin received as revenue and that de, 10 tem-cent pieces must equal ons dollar the Secretary of State has been recommended la weight to order to abolish the disparity into permit the redemption at market value of a bullion or intrinsic value between the two, sum bat to exceed $1,000,000 yearly, This would do away with the existing discount," which naturally tends to approximate to the
valus." In order to encourage the Chinese Go- | resches par value, redemption should be stop. verament to do this it might be worth; whiletoped and a reserve of coin be kept in the Colony give an undertaking that if, and when China so as to prevent a shortage in the supply and adopted this proposal, any subsidiary British vold the possibility of the coinage being at a coinage issued in future should also be of the premium. As an additional precaution, the same fineness and propontiboate weight as the export of Bongkang coin might be prohibited. dollar. If China could go further, and agres Application for coin from such reserve should to re-miot, the subsidiary coinage already cir? be strictly kept down to a maximum for each inculated by her mints, we might undertake to da application
the same. The advantage thus made would be great, and assuming that not, more than 1 million dollars worth of Hongkong subsidiary coinage in stilt in circulation, the cost of redeeming and replacing it would not be as excessive price to pay for the benefit,
difference between the intrinsic, and the face enforced), provided that, when the coinage inquish it altogether, and do what Shanghai ROBINSON PIANO
melting, and subsidiary coins, should not be more than 2%-less than dollare? As a new Viceroy is expected whostly it is advisable that this Government should decide exactly what considers that it is practicable to urge. Enclosure 2.
At the meeting of the Degislative Council coinage le issued it must of course be of this alternoon the report of the Subsidiary trinsically loss value than bar silver to avoid Coin Committee was laid on the table as sessional paper No. of 1903. The minority report and minutes by the Governor were in corporated in the same paper. As this vexed question of the subsidiary coinage of the Colony is of general interest we reproduce in the presect issue.as much of the paper as will afford a clear conception of the difficulties sur rounding any scheme for the reform of the local subsidiary currency. The draft Will referied to in the majarity report (A) for want of space and time, has been omitted:-
THE GOVERNOR'S MI UTE.
OBJECT OF COMMITTER.
Argumenti :-That subsidiary coin is only a token and il made of the same proportionate
"Treasury,
Hongkong, 6th November, 1907. Sir,--As chairman of the committee appoint weight and fiveness as the standard it mighted to inquire into the matter of the condition be melted down at any tims according sa value | of the subsidiary coinage of the Colony 1 have
of, hullion fuctuated, and thus involve-great, the honour to transmit for consideration of the 1011 to Government. Per contra, Ít is urged overnment the following documents, vix :^^^. [that both the standard and subsidiary silver A.-Report of four members.
coins should have sufficient alloy to prevent their rising above bullion yalue.
The object of appointing a Committee is not
The proportionate weight and fineness in only to advise Government on the steps to be taken, but also to dispose of impracticable pro. India of silver coins less in value than the posals by painting out why they are impractic-supee is the same as the rupes, but on the abis, and so to put an end to controversy. by other hand it is argued that the rupee itself is the weight witaching to the opinion of to re no longer the standard and is now itself a presentative a body of public and expert subsidiary coin. opinion.
PRESENT PROPOSALS,
2. Some of the courses suggested, with the argdmenis advanced against them, ars, very briefly, as follows:-.
PROCEEDINGS.
1 ..
F. D. Lugaud.
4. The proceedings of the committee nend way I think, be private,—but their recommend ations should obviously be confidential polit Government has decided upon the course of (a). That Hongkong subsidiary cordage beaction it proposes to adopi. ing in excess of currency demands should be I will be for the committee to decide how gradually withdrawn: (a) By exporting all re-far they can make their meetings open to the ceived by Governmeal as revenue within the public without endangering free discussion limits of legal tender; (6) By purchasing and andinterchange of opinion. The object may exporting additional co na as revente permits, padians be attained by a précis, of the dis
Arguments:Assuming that Hongkong coins cussion of each day being communicated to are thus rehabilitated will this bacfit trade the Press Care will be taken to keep down even though benefits revenue (by decreasing coatinged expenses (reporting, typewriting, the discount on subsidiary cains received as eich) to the west practicable limit.. revenue) since
siace subsidiary Chinese coins. Now into the Colony and form à medium of ex
potli. August, 1957. change, even though not legal tender? Some' maintain that withdrawal would #imulate the influx of Chinese cofar and if these are debaɛ- - ed others hold that they would oust the better coinage. Others again think that as Hong kong coins would be worth more here than in Canton they would be attracted hers. If Hongkong coins were-rehabilitated the cong mic position of Hongkong mid-vit Canton would be improved, and debased cola might die daed date no subsidiary coins of any 'cease to be accepted?-or be heavily dis-kind can be accepted is the Government offices, all foreign, enterprises iseus ng similar slices R
counted.
(5.) That Hongkong subsidiary coins should *be made unlimited·legal tender and Govern.
mant should redeem at par. →
."
"Finclosure 1)
MR MANSFIELD'S SUGGESTIONS. 1. That either the Government of the Banks issue fractional botes of different sizes for 59, 2, 10, and cents in sufficient quantity for the requirements of the Colony. Such notes to be legatsender for any amount.
ין
2. That'a proclamation be made that from a
3. That the Government when that date expires undertake to repurchase for melting Hongkong subsidiary coinage at such premium Arguments:—A. Government pledge would. be, Decessary or the currency would fall to the over. intrinsic value as the Colony estimates intrinsic value of the subsidiary coins? Resuiran afford. It is believed that this will havo the effect of gradually drawing back to the would be that the dollar would be finally must-
Colony much of the Colonial coin on the ed and subsidiary 'coins would be sole cus
feares mainland and will have a tendency to rency? The pledge cannot. be given because further cepicciate the Canton coins which, there are insufficient dollars to redeem with suffering under so many disabilities, will be The Government liability would be unknown likely to leave the Colony. Once, the trams, and enormous ali. Hongkong coins in Can sampans, chairs, rickshas and the large shopa lon would be collected and seat hate? There is generally insist on all payments being in no obligation on Government to take so drastic
once relegated to the small Chinese shopt and
& step as it only imported coins in accordance notes, the debased Cunton currency will be at with the demand at the tique.
Draft Bill suggested in paragraph. 14 thereof.
c
C Notes on the Governor's minute of the 10th August, 19 7.5.
*
D.Repr. lg it. J'Armstrong. E-Nole by the Hon. Mr. E. Osborne who bad left the Colony before the third meeting,
F-Report by three members of the com mittec.
G.-Reporter's notes of proceedings at the three meetings held.. [Not printed]
I may add that it would only mean an inter. min.ble' controversy, if the signatories to Re port A were to reply to the comments of the signatories to Report F on the former.—I have, tic
M. THOMSON,..
Treasurer.
The Honourable'
&C.
The Colonial Secretary, BC.. Xc.
THE MAJORNÝ 'REFOR F. Ws the undersigned members of the com mittee have the honour to report as follows: |1. Subsidiary coinage is solely for the pur pose of the internal retail trade.and other smal transactions within the Colony,
2. It is true that in past years the Hongkong subsidiary coinage played a considerable part in the trade with Cantan, but judging from the trouble that has arisen in the last two years it would appear to have been an economic mis Jate to have directed it from its true purpose.... -3. just what quantity may from time to time be required is a matter of experience, but the chief test is the value of the coin in the open
market.
4. It may however be taken that 55 per berd is sufficient in a community whose standard coin is St and where the legal limit of tender is 52.
.
5. Taking roughly the population' of the
Colony at 400,00 it would, therefore, appear that a total of $1,000,000 at any one time is sufficient and assuming that the life of a coin is 20 years (which owing to past circumstances. cannot yet be verified) a supply of $to,oco a year would be ample under present circum- stance.
6. The issue outstanding during the last 40 years is $30,00,000 of which about $30,000,00
the coinage has been during the past two yeari
|
17. it is recommended that, whatever course of action be adopted by Government, due notice be given to all parties concerned except perhaps in the case of the import of alien coins, if any hardship arose in particular instances due consideration would be given to such,
18. It does not appear that there would be any advantage to the Colony to attempt to
to agreements on this question with the authorities either at Canton or Peking.
19. Until China has properly, initiated a cur rency in accordance with economic principles, ̧00 proper agreement is even possible and it is always probibile that if one were entered isto it would be evaded or abrogated according as profit therefrom might accrue to the authorities concerned.
10. The regulation of its subsidiary coinage is purely an internal affair of the Colony and it would appear to be, at least, undignified for this Government to rely on assistance from a Foreign Power to ensure its rehabilitation even if such assistance were practicable and forth. coming.
ว
3. Whatever the Government can do, how ever, to urge the inception of a proper currency in Chipa' should be done.
A. M. THOMSON, Chairman. ROUT. SHEWAN,
A. J. RAYMOND. WEI A YUK.
26th October, 1997.
REPLY OF THE 4 MEMBERS WHO SIGNED "A," (Notes on Governor's Minure of 20th August, 1957.}
l'ara 2,... (..) See Report A. (6) This would result in the exclusion of the
dollar and the acceptance of the debased coin-
age as the standard of the Colony at its true value say st per cent, discount.
M
(c.) Mr. Mansfield's proposals involves re. pudiation which cannot be recommended.
he note issue would involve great trouble. and expessa.
- If made unlimited legal tender the subsidiary colonge would become the standard of the Colony.
(d) See Report Ai.
(). The community has already been in formed by a public, notification as to the true value of Canton coio."
(f), he Canton mint may always be ready to issue whenever the price makes it profitable. The variation in the internal exchange of the
Colony makes it imperative for the Govern
ment to take, every practicable step towards rehabilitation. *
practically worth only its bullion value. The Para. 3. The standard in any country is
more allay therefore the lower the value of the standard,
|
Hankow and ether commercial centres do.
At the same time; 1 recognise that "if "the" Chinese Government will withdraw from cir culation some of the coins already in existence and promise to regulate ka future linnas so ás to maintain the value of its small coin, the difficulty solves itself without any action on our pail, and for that reason, I would support Mr. 'Law's resolusions provi led a time limit (1xy 6 months) be.added, at the expiration of which, if the Chinese have accomplished nothing, it in agreed that the Chairman's recommendations be adopted.
EDWARD OSBORNE,
- 14th October, 1997.
'THE MINORITY REPORT.' We the undersigned members of the 'com. mines appointed by His Excellency the Gäv- ernor to inquire into the causes of the. depreciation of the subsidiary coinage of the Colony and to advise as to what means can be taken, with dun regard to the interests of unde, to rehabilitate such coinage, while admitting that the amount of British subsidiary colo, as estimated by the chairman of the committee to exist in Hongkong, is probably sufficient for the requirements of the Colony cannot admit that it is desirable, in the first instance, to take any action that might result in the further depreciation of the subsidiary coinage of the Two Kwang provinces as these coins form the chief, if not the only, medium of payment by the consumer of goods bought and exponed from, Hongkong for use in these provinces.
The trade of Hongkong is so closely con- nected with that of the Two Kwang provinces that any attempt to rehabilitate the Colony's subsidiary coinage by restricting or prohibiting under penalties the use of Canton coins in Hongkong, as provided for in the proposed Ordinança submitted by the chairman, would in the opinion of the undersigned, bring about a further depreciation of these coins and might lead to financial disabilitlen, if not to measurea of retaliation by The Canton authorities, ad- | ́versely affecting the trade of the Colony.
It is, therefore, advised by the undersigned that the Government of Hongkong should-
meat through the usual official channels the J. Impress on the Imperial Chinese Govern-
argent necessity of China reforming her Cur rency in terms of the Mackay Treaty,
2. Enter into negotiation with the Imperial Chinese Government through 4. B. M.'s Minis- ter at Peking with a view to arriving at an agreement whereby the Chinese Imperial
Government undertakes
(a) to discontinue the output of subsidiary coin from the Canton Mint until such time au both. Hongkong and Canton subsidiary coins reach par value, (which in opinion of the undersigned
CỌ, LD.
INVITE INSPECTION
NEW STOOK
Steinway,
Bechstein,
Russell,
Krauss,
Rombildt,
Werner. &c.
GRANDS & UPRIGHTS
BUILT UNDER OUR PERSONAL SUPERVISION
EMBODYING 30 YEARS' LOCAL
EXPERIENCE.
Hongkong, 5th December, 1907.
To Let.
TO LET.
· Central (formerly occupied by Messia. Shewan, Tomei & Co.)"
Apply to-
THE COMPRADORE DEPARTMENT, Jardine, Matheson & Co., Ltd., Connaught Road Central.
́Hongkong, 2:ad January, 1908.
TO LET.
Ersa
they will do very 1000 under these OFFICES at No. 14. Den Vœux Road circumstances); and (.) In consideration of the Hongkong Government agreeing" not to issue more subsidiary coln except for the Colony's own use, to only mint new subsidiary coine sufficient to meet the public demand so ès tô maintain, the face value of their coins at par. The undersigned further desire to recommend to the Government that the second proposal fully suggest that a capable official of the Colony be seconded without, delay to proceed. to Peking to furnish, H.B.M,'s Minister with detailed information during the negotiations,
In the event of the negotiations being with- out result the undersigned recommend that the Committee be called together again six months hence to further deliberate
were issued in the ten years prior to 1905, and is far above its ballion value and it must there. about be taken in band first, and they respect. OS. 46, & 8. LEIGHTON HILL
The rupee is supposed to be exchangeable in India at the rate of 15 to the . This price
fore be in these circumstances considered a
(c) That paper money should be issued in even from them would probably in time, dis- at a discount varying from 9 per cent. to 4 per sabsidiary coin,''or token.
accordance Mr. Mansfeld's proposals. En closure I.
Arguments:-That such a proposal could not be adopted until all Hongkong coins had been redeemed?
appear.
The inconvenience of the very small notes is acknowledged, but Japan has or had them to
*cent
!
9. There is no necessity to demonetise the
Re Enclosure 2 It is essential to a cure rency that the subsidiary coin cannot be of the same bullion value proportionately as the
subsidiary coinage in the true sense.
-A so-called subsidiary coioage of the same value as the standard would entail a large ini tial expense with constant recurrence, and is unnecessary if the present coinage is rehabili.
tated.
J
A. M. T...
existing currency as any scheme for the subsister to the proposal
It is perfectly certain that China would never titution of a new cofpage must necessarily prove more expensive than the rehabilitation of the present coinage unless, indeed, it is proposed to repudiate a proportion of the latter, a course which is most objectionable as tending to lower the credit and honour of the Colony.
ro. One of the circumstances of the present depressed condition of the subsidiary coin is,
Mint.
R. S,
A. J. R.
W. A YOUK
D.
REPORT BY MR. J. ARMSTRONG, I think it is desirable to prohibit the import
permit from the Government. „
A copy of the chairman's repon, which has been supplied to us, is attached bearing our annotation.
D. H. LAW.
A. G. Woon.
J. R. M. SMITH..
Hongkong, 5th November, 1907,
*
MINUTE BY HIS EXCELLENCY THE GOVERNOR.
Hoo, Colonial Secretary.
+
Ás you will see from my Memo,, 1 desira the Committee to meat once again and give
7. From these facts it may be justly interred that there is in existence under present circum, as low a value as 10 sen. To obviate this in statices a laige ever-issue of Hongkong substandard coin otherwise it would cease to be a some degree the 5 cent notes might besidiary coinage. made very thin and be bound to little books 8. For reasons unnecessary to state in detail (d.) That importation and circulation of Chi of 20 like the rickaha tickets in Shangbai,it is obvi us that it is desirable to rehabilitate nese coins should be made illegal-side Straits After being torn out, however, the loose ones the currency of the Colony and it only remaior Ordinance.
should be redeemable at once at some special to consider the best practicable means for this Arguments:—That this would dislocate trade office. Arrangement should also be made that purpose. with China which is essential to Hongkong all dirty and ragged fractional notes passing That the Chinese might retaliate; that it would through the Government offices and Banks 'cause great discontent among the Chinese should be destroyed and new ones issued in here: would lead to an excessive number of their stead, prosecutions; that it would; constitute an arbi. i The argument that the Government is to trary interference with the sights of the indivi-blame for the excessive issue of subsidiary doal to part with his goods for whatever can colosge and cannot therefore in justice demo- sideration he likes; that though importation netize its issue, except by calling it in at par may be prohibited possession or circulation will not hold water. It implies that the Gov cannot be unless it is fraudulently tendered ernment knowingly and for the sake of profit » (e.g., debased or spurious coins) and that it flooded Hongkong and the maitland with sub-notoriously the excessive circulation is the
would amount to confiscation of private pro- sidiary coinage, but this was not the carc ro perty which is admissible only if the article is the waiter's own knowledge, and the fact will „deleterious to morals or dangerous (eg, 'quor, be borne out by the Treasury archives, before arms, oplum, &c.), Prohibition of importation the opening of the Chinese mints it was found in impracticable to a free port and without impossible to keep in Hongkong sufficient sub special and costly preventive services? sidiary coinage for local use, and the Home (e) That the remedy tier in hands of indivi- Government grudgingly supplied prhaps dusis, who should refuse Chinese coins or ac quarter of the amounty indented for, so that Argument: That a complete boycott is not which the public greatly restated. The ports feasible and if partial the rm -refesing drives of Shanghai, Foochow, Amoy, Swatow and custom to its rivals. In any case costom is many others would bave taken enormous. lost.
quantities of the coinage if the Banks could be desirable to exculde this alien coinage which It is proved without doubt that the bulk of (6) That nothing should be done, and that have obtained them from the Treasury. They is to a certain extent responsible for the de- the Chinese subsidiary colu now circulating in subsidiary coins will then depreciate to the met a very obvious want in China, which should pression in the market value of the Colony' the Colony has not been brought here for the extent of their difference in bullion valus from have been supplied long ago by that country.
purpose, of buying goods, but by speculators. the dollar and remain stationary? it will then It is estimated that some 43 million dollars no longer pay the Canton mint to coin themsworth of coins were issued, but it must be re-
who buy the coin in Canton at a discount with money they remit from here which they also minure is no follows- Argument --That depreciation is largely due membered that those are scattered over many
get at a discount and are able to circulate the to temporary causes which will right them thousands of square miles, and the writer does
coin here at a profit.. not believe that one-tenth of that amonst will premium were offered for them... ever return to Hong kong even though a good
[Endeture 2]
cept only at beavy discount,
ACTION OF CHINA
3. As the action of China is the originating cause of this difficulty, it would be well for the
A Committer to record, thair view as to, what
the Colony was always on short, commoni,
Colony of small colos struck at the Cantonation of Chinese subsidiary coin without
it. These dont really constitute a sub- Subsidiary, coin is used principally for in sidiary coinage as there is to legal standard internal circulation: it is only the medium of ex existence to which they are subsidiary, but are change for gods to a small extent sellers of simply as imitation of the currency of the silke in Canton Insist on payment being made Colony manufactured by a focal Government in Hongkong currency; if sellers of sugar, utterly ignorant of the first principles of etc, bere are willing to accept Chinese-sub political economy in regard to currency. The sidiary coin in payment, that is their affair, and "par", value of these coins is therefore simply their refusal to do so would in no way pre Judice our general business relations with 12. From a political point of view it would Canton,
and solely their value as bullion,
money..
13. Also, from the retail point of view at all events, there can be no objection; to its ex- clusion or commercial grounds provided that a supply of Hongkong coinage is maintained, and there is no evidence to show that any los
damage would occur, to intercational trade op account of such exclusion.“.../
14. Taking this last point first it is advised
• course of action it is desirable'and practicable EXTRACT FROM MEMO, BY SIR F. LUGARD, that an Ordinance be put into force giving the to orgu, pu Peking, not being contrary to the
"(JUNE, (1997.).
Governor-in Council the powers already con interests of that Government-vide Minute at. It is clearly of Importance as regards the | ferred on the Governor in Council of the Simits. argument-there at our le 1 be fature, that continual efforts should be made. Seillements, with a view to the probibition of madoned by Sli, X. Jackson.". IF a new by HMB/s Minister at Peking to suge the ↑ the Import and circúlgil all aliga job
somewhat fuller explanation on points raised. My questions are clear and preciso, and I hope the chairman will confins discussion to them and take them serisiim, and that the minority will record their view even where they do pot agree with the majority. When I have the committed's reply to this mans. which 1 think can be quickly answered! will consider the question in Executive Council. The me- mo, should be printed and distributed, so that each member may consider the points and come to the meeting with pls views clear on each issue.
10th November, 1907,
F. D. L.
ROAD, Apply to--
HONGKONG AND KOWLOON LAND AND.LOAN CO. LD., No. 8, Quaca's Road West Hongkong, 14th January, 1908. [126
A
TO LET.
HOUSE in KNUTSFORD TERRACE.
KOWLOON. Apply to
THE HONGKONG LAND INVEST. MENT & AGENCY CO., LD. Hongkong, 1st December, 1907.
TO LET.
NO. 5 MORRISON HILL.
•
ONE FOUR-ROOMED HOUSE, Prava Bast, near East Point.
Apply to
JARDINE, MATHESON & Co., Ln.' Hongkong, 19th Octóber, 1907, -
160
TO LET.
[«ROOMED' HOUSES in GAP ROAD Best the Race Coursa within easy, access to the Lower Laval Tramway. Rent very moderate, FLATS for Eur openni is WILD DELL
BUILDINGS, No. 147, Wanchal Road,
Apply to
PERCY SMITH & SETH
· Hongkong, 16th December, 1907)
TO LET.
The memo. referred to in the foregoing OFFICES on TOP FLOOR, No. 3, Comi
"Haught Road, facing the Cricket
Grosed,
* HATHERLEIGH, Conduit Road
A HOUSE in' CLIFTON GARDENI, CZ)
duit RoadA MARIA BARGA) OFFICES in YORK BUILDING GODOWNS. in PRAYA EAST, BLUE
BUILDINGS, and No. 368. Das VIUK. Roan gest to the Hongkong Hoisk YLATS In MORETON TERRACK
The papers submitted consist of recommend. stions by four members (which I'will call, the i While I agree to the proposal to approach majority report), of a second set of recommend the Chinese Government either direct or ions (the minority report) and separate sotes through our Miglster in Peking, I think it masi by two members (the independents};!! I will desirable that the Government should act in. take the principal recommendatiove and en- dependently and at once, as madosbtedly jima deavour to show where divergence of concensus will be lost in approaching the officials in of opioicu was expressed, and in what particu. | Apply tomm Pekipper S
Code | lan Gövèmment would desire fuller informa- #THE I therefore recommend that the Government tion, prohibit the importation of all coins not being
Page 5Page 6
No comments yet.
Private notes are available after approval.