1908-01-23 — Page 8

HONGKONG'S SUBSIDIARY.

CURRENCY

[Continued from page 5]

17

THE HONGKONG TELEGRAPH THURSDAY JANUARY 23 1908.

here, is not thy slightest fear of any grea expoft business so long as the discount, and tha qositi not arise' till it is at par, or at

bareform

aga of her own? It is in fact admitted that the danger list the other way, wir, of an influx of Hongkong -coins from China when their valas approaches par here? If the Hoogkong coles should rise above par The objection to relying on "Teserye la that, { they can be reduced in Value by issess from. | Government has a large quantity of colos the reserve" "Prohibition of export would be locked up wherest it might be reduced to difficult to enforce? The proposal to prohibit Eave a corresponding overdraft for, carry export is I presume meant to apply only altering on the ordinary buslors of the Colony, Hongkong coins reached pat? W

ACTION AB REGARDS CHINA The majority report appose any agreements with Peking or Canton (pate. 18) while the majority [minority-Ed, H.A.7.] report in strongly in favour of negotiation and() Circulation of prohibited cold-Para, thinks it would be affective.. Both in.

| 14 of the majority report an amplified, by soo- dependents are in favour of negotiation, Mrtion 3 (3) and section 6 (5) of the draft Bill, Armstrong qualifying this by urging that action appears to require some further explanation, should not be delayed pending the result of Persons. (under section 6) may legally import such efforts, and Mr. Osborne desiring a time specified quantities of "prohibited coins, and limit of six months. Although the majority presumably under the licences referred to in report is opposed to negotiation para. 32 of the action 6 (3) further quantities might be chairman's memo, on which the report ja based says that Goverment should take whatever tried. How then can the Police distri. steps are possible to urga Chius to reform herminate between the colpa circulated after legal

The enforcement of he prhibition would to largely a matter of experience, but th giving of towards to informbra as coajem- plated is a very

effective measure.

(i) Circulation of prohibited coins,-No difficulty arises as circulation is to be prohibite ed in foto

Coins imported under licence are only to be used for exchange purposes,"

Brand

The money changers will not do any more business perhaps that they have been doing.

for Government to discriminate them from other legitimate business in the Colony by put ting on a special ex

Arecommended by the majority

dux of Hoogkung subsidiary the Two Kwang Provinces may 2nd, in order to bring the coins up to par, withdrawal by Government would be decessary bolil the demand,” overtook the supply. Until a final decision ia arrived at the minority consider that the Government should continue to withdraw the coins received as revenue and retain them in the Colday."

D. R. LAW. A.-G. Voou J. R. M. SMITEI

MEMORANDUM REFERRED TO IN ANSWER TO QUESTION 70 1. io urging the fulfi nest of Art. 11. of the Mackay Treaty, we certainly understand it: to refer to all Provincial minte, paten

12. As tegards the' quertion of a new standard

Mails.

THE PENINSULAR ANDORIENTAL STEAM-NAVIGATION COMPANY.

STEAM FOR STRAITS, CEYLON, AUSTRALIA, INDIA, ADEN, EGYPT, MEDITERRANEAN"

PORTS, PLYMOUTH AND

LONDON,"

MESSAGERIES MARITIMES

FRENCH MAIL STEAMERSA

STEAMPOR SAIGON, SINGAPORE, BATAVIA

COLOMBO,

BOMBAY, DJIBOUTI, MARSEILLE

BAND

HAYRE, BORDEAUX, -MEDITERRA

BLACK SEA PORTS,

The 8:8. YARHA' Captain Sellier, will be despatched for MARSEILLES on TUESDAY. the h'

¡Currency, There is in any case a' majority Import, and those circulated after illegal im recently, but lo any case it would be Invidiou», (silver coin) it was suggested in the original (Through Bills af Ladioję, issued for:UATAVIA, February, 1908, at 1 Pably, y

favour of negotiation, on the litics I presunie of the minority 'report? The latter with Mr. "Osborne desire to defer any action for six montbe till the result is known. The majority with Mr. Armstrong would desire to take ac- tion independently of the negotiations. There is thus a majority of one for the latter course.

Note. Are the negotiations with Peking merely to urge the fulfilment of the vague undertaking contained in Art. 1. of the Mackay Treaty or does the committen suggest that we should urge that all Provincial Mints should "be under central control, their output limited, and their coinage uniform la weight, fineness, and face value. Or that a gold standard should

part? Cleatly the only resource available to a person who has legally imported "prohibited coins (vis, in quantities less than those pre- scribed or under licence) is to change it at once for legal tender, the object belog to create

|

The majority have no objection to the lofux of Hongkong colo lo any case,

minute (oth August) on subsidiary coinage, under enclosure a, to have subsidiary coins of the same millesimal fineness, as the doll rand of equal proportional weight, egu to ten-cent pieces must equal one dollar in weight, in order to abolish the disparity fa bullion or intrinsic value between the two."

To this we have to say that Having small coins of the same proper lionate weight and fineness to the standard coin is sound enough but we think needlessly The word "prohibition" as used in abe expensive. We suggest that they be of equa majority report means total prohibition of cirenents, but reduced in relative weight to an culation (after due notice) and in addition, to extent to cover minting chargessay-%. This being melted on the one hand and going to a import of alien colus,

heavy discount on the afber.

The whole report of the majority is modified by paragraph 17 which would allow prohibition a large demand for legal tender and so to roof circolation to be deferred for suct time as babilitate the Hongkong colosgel: "Will 'not Gaverament considered expedient. this mean a large profit to the money changer class? and (as above suggested) should not this be simultaneously met by a heavy tax, on this class? Would the committes agree that the prohibition of circulation should be tamporarily deferred in order to prevent (n) dislocation of ade; (8) hardship to igborant and poor per soos and undue, interference with the indivi-

T-WITHDRAWAL OF HONGKONG COINS

41:4- (FROM-CIRCULATION,

PERSIAN GULF, CONTINENTAL, AMERI CAN and SOUTH AFRICAN PORTS.)

THE

Steamship

"ARCADIA,"

Captain A. L. Valentini, carrying Hip Ma Jesty's Mails, will be despatched from thir. for BOMBAY, &c, on SATURDAY, the 13th January, at Noon, taking Passengers aud the Company's 3 Victoria, 7,000 tons, from Cargo for the above Ports, in connection wil Colombo, Passengers accommodation in whic vessel is secured before departure from Mook koog.

This Steamer connects at Colombo with the "Australian line,as, Australien bound for Mar- seilles vid tombay and Ades. N

Passage tickets and through Bills of Lading. hued for above perit, “vask

Cargs, als booked for principal places in

Next mailings will be as follows SS, OCEANIAN

SS ERNEST SIMONE. AJU SSSTONKIV

5th Feb. **** 3rd Mar, „17th Mar, TMILLET,"

Kahn, Bind January, 19c8) WAIT.

be urged, or any other proposals? i do not dual, and, (c) influx of Hongkong coin from assist such prohibition, partial 'probibllion of would be sufficient to prevent the small caja Silk and Valuables, all Cargo for France THE AMERICAN AND ORIENTAL LINE."

think that at this stage it would be useful or

China which, even if prohibited, would in such possible to second an officer to go to Paking circumstances be largely smuggled in... '

N.B-it is clear that such a Bill as proposed .......As regards Canton the proposals of the minority

report ure clear. In the minutes of meetings.could only be introduced simultaneously with other points were raised. Is it suggested that Ngulations which would indicate the extent to the Viceroy should be asked to withdraw any

which the powers conferred by the Bill were of the coins now in circulation? I assume not.

to be exeiced. It is therefore necessary in

Hongkong colon are not considered under

We would add that this is a question affect prohibition is present circumstances.

The majority consider that prohibition ising out only Hongkong but British interests lo necessary to give fall and proper effect to the the various treaty parts of Chins, and an policy of withdrawing Hongkong coins from exchange of views should first be sought so 19

to arrive at an unanimous representation. circulation, and that the prohibition of circula-

That naturally means protracted negotiations, the matter,

Should he (as suggested) to asked to coip and considering the proposals, to consider at the tion of alien coins is the fist important point on that account the mipority recommended'

issue dollar?

It

II,-PROHIBITION-IMPORT, EXPORT, AND

CIRCULATION.

The majority repori recommends prohibition, and assume from para. 14 that the draft Bill submited (which i hava not seen before) is The approximate form which they desire that the Legislature should take. Mr. Osborne agrees with them, but would defer action. for aix.mantha... Mr. Armstrong agrees to prohibit 'import (but anys nothing about export or circulation does he agree regarding these? axcept,under permit which in provided in tc. 6(3) of the draft Bill.

He'suggests a course, rff, licences to be granted on application without restriction with a view to proving that she import is not solely or chiefly from Canton, and that it is done by money changers and money lenders who do not affect trade. In the latter view Mr. Osborne concurred; Mr. Armstrong's rentedy apparently

is that Government abould fix a rate of ex- change and establish a Bureau, -This in effect in that he is opposed to prohibition and sides with the minority, which appears clear from his remarks on page 7 of meeting 3. His licence system really amounts only to registra tion of imports as in opium, &c. The votes on this subject are therefore 5 for and 4 against,

There is therefore a 'majority in favour of prohibition. (This was opposed emphatically in the minority report on the grounds that trade, would suffer, and, that Hongkong is too in timately associated with South China to render it possible for us to exclude Chinese coin, which would depreciate Chinese coins,)

Note. The practical dificulties in epforcing such legislation were hardly suficiently debat od. The proposal may be divided into 4 head", are all equally practicable and equally slut?. If not, which should be tried first, and with what initat modifications?

(á) Import of Chinese subsidiary coins-in what way do those members who described the

•provisions of sec. 6 as too drastic suggest that the restriction should bear less hardly, other wise than by reduction of proalties? Since the majority recommend this course what modifica tions or tentative measures would the signa tosies of the minority report suggest? To what faxfent do the majority consider that permits "should at first be issued?hould there be a licence fee? If it is true that Chinese subsidi, ary coins are largely imported by lenders or changers for discount profit would not a very heavy licence fee for import in bulk bo justified and useful? Would such a fee be sufficient je itself to check over large imports wilboat re tarting to prohibition at first?

!

*****(*) Import of coins which are legal tender.

Refusal to admit our own coins would seem to amount to repudiation, against which the Com- emiltes is unanimous (see note of minority on

same time the nature of the regulations which would give practical effect to it, and it is with this object that I have indicated what further and more precise information is required on this head. "

.

- İHİ,- WITHDRAWAL OF HONGKONG COINS * FROM CIRCULATION DY GOVERNMENT.

'It was stated by the chairman that I had urged this course, but reference to my memo. will, show that I expressed no view on the subject. It was on the other hand the accepted policy of the Government before my arrival, and it received the approval of the Secretary of 5 ato. It involves of course an annual ou lay of revenue. The majority report, approves this course, with however the very important proviso that "it will be a failure unless prohić biting is enforced, What does "prohibition" here connotedoes it mean prohibition of import only and of both Chinese and Hong kong coins, or the former only? In so important a proviso absolute clearners is essential. The minnrity apparently consider withdrawal by Government unnecessary?'and-conqider that it would simply causa Hongkong die to be re- placed by Chinese; in which view I. under- stand the majority to concur in view of the proviso referred to. Is the committee then unanimously opposed to the present policy of Government unless prohibition is enforced? It

The present policy of the Government may be continued but so cales sent home for melt- ing and sale till a final decision as to further

action has been arrived at,

J

No purchases of coles in the open market should be made in the meantime.

A. M. THOMSON. A. J. RAYMOND. ROBT. SHIVAR. WEI A YUK

THE MINORITYS REPLY The minority's reply to H. E.'s memo, ofoth November, 1907, is given in parallel columes. In reproducing the answers we are not repridl ing the Governor's questions which are given above, Reference is made to them in numerical order; the numbers preceding each of the following aasware correspondent to the respective paragraph of the Governor's questions:-

-This question to be replied to by the "Independents.”

2;—9ce memorandumyattached; 3.--Minority have nothing to say. 4-This is for the majority 10 say. The tincrity disagree "in fold with probibition at this stage.

5.-Sce above auswer. If the Government should decide to enforce prohibition we bas

is most important for the Goverment to believe only strong measures will make such a que clear on this point,

scheme effective, bauen our objection to it.

6-These questions to be replied to by the majority.

In writing this incmo, as also in the case of my former memo., I have carefully avoided the expression of my private views. My object in the former memo. was to lay before the com. mittee, as concisely as possible, a few of the theories advanced, in order that they might record their view on each. My object in the present memo, is to make it quite clear what the recommendations of the committee are, and to ask for a fuller expression of their views where they require amplification and pro- cision. I desire therefore that the committee. should meet once again, and formulate replies to the questions I have asked and I hope that those who dissent from the majority report wilt nevertheless be so good as to give their views on the paints raised. Later when the matter. is discus ed in Executive and defined in Legis. alive Council it will be time enough for me to express my personal views.

Ith November 1907..

F. D. LUGARD,

THE REPLY.

The reply of majority report signatories to His Excellency's memo, of the 16th November, Ipo7, reads:-

11. PROHIBITION-UPORT, EXPORT AND

CIRCULATION.

(a)'Impod of Chinesa subsidiary coins.

thereby,

7-Even if the statement is correct the:

minority consider that it would not be advisable to impose such a fee. Heavy licence feen would only be shifting the burden of one shoulder on to the other. Money changer would take advantage of it,

8-Yes the proposed time limit was aban doned;

9.-This is for the majority to say the minority had no hand in drafting the Bill. In our opinion coins that are legal tender cannot be prohibited unless we are prepared to face the stigma of repudiation. It would be difficult to prevent smuggling.

10.-This is a question for the majority to answer, The minority are of opinion that the export of legal tender coins should not be prohibited.

1.-The export of any farge amount in the ordinary course of trade seems now improbable and can therefore have file influence on re babilitation. ⠀

take place if by a rangement the discount on 12.-Admitted, "but such an infar would not both British and Canton subsidiary coins was gradually, and simultaneously reduced:

13.-Agreed.

14-For the majority to answer. 15.-Impossible.

sidiary coins would reduce the percentage of 16-A large demand for Hongkong sub, discount on these coips. if, by legislation,

separate" negotiationu as regards Canion. jú meet the immediate situation which is relative- ly a very small, malter, "

3. We do not suggest, making a point of the Viceroy withdrawing coloa(if he is willing to do it so much the better), but we think. be should be asked.ant 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 Pro- vincial dollar, as it would only make 'the gensial reformi scheme more difficult,

5. As regards China adopting a gold standard it will be time enough to conqjder. that, after she, has successfully réformed her copper and silver currency idio aouniform national coinage.

kad Tes for London (under arrangement will be transhipped at Colombo into the Mau steamer proceeding direct to Marseilles anr Lundon, other Cargo for London, &c. will be conveyed from Bombay by the R.M.S.Oriental dus in London on 7th March, 1908.

Parcels will be received at this Office unti 4 P.M. the day before sailing. The Costent and Value of nil Packages are required.

For father Particulars, apply to

E, A. HEWETT,

Superintendent. Hongkong, 11th January, 1908,

[7]

FOR BALTIM JRE AND NEW YORK (With liberty to call at Malabar Coast)..

THE Steamship

T"

Captain Thompson, will leave for the above "JESERIC,"

Pans, on or about SA TURDAY, 5th January,. 1908.

For Freight, apply to

ARNHULD, KARBERG & CO

Agents,

Hongkong, 211 December, 1907.

Intimations.

ACHEE & CO.

GENERAL HOUSEHOLD

that when China is prevailed upon to reform Note-In this connection we would remark her currency, this Colony will have to face te- demption or repudiation: In fact the Colony FRNITURE, wilf then also have to reform is currency for it cannot continue to maintain" its commercial ip- fance if deprived of handling the foreign trade and commerce of Southern China as it astured- ly would be if that trade was subject to another. exchange. It should not be forgotten that our present standard is an alien-coin-the Mexicay Dollar-and at present the Canton subsidiary coin in as good intrinsically as our own.

Hongkong, 10th December, 1997.

MR. ARMSTRONG'S REPLY. Following in Me. Armstrong's reply to Memo on report of Subsidiary Coin Committee:-))

Although I am not opposed to negotiation with Peking, either is regards the Mackay Treaty, the control of the Provincial Mints. Gold: standard and the withdrawal of Chinese nor do 1 think it will result in anything and if subsidiary coins, I do not think it necessary,

we are to delay action until we get anything like a definite answer to any of these points, it may be years before anything is done. The Chinese Government in Canton will doubtless coin dollars whether we ask them to do so or

not. If they do noi, we can supply them with all they want,

i

The extent to which permits should be issued must be left entirely with the Government. I should say that if a Chinese Bank or money changer wanted a permit to import $10,000 every week, it should be refused, unless the applicant can show a valid reason for requiring to import such a large amount. There should ba no licence fee, the poor man who, we will sy, comes into the Colony with $100 in sub-

much more by such fee than the big man who sidiary coins to buy goods with will sufer

himself, by the discount. ruling between this Imports in bulk as a speculation, sod

recoups

and Canton, ~ ́A large fes might check to some extent the ovar-larga imports, but it would also siợp people from buying goods here.

To prohibit the expart of Hongkong subsidi. * I ́act against\repudiation now or five years hence. (What are "these words"?};;

could the wood

sa subsidiary coin in this Colony should be I do not propose that the circulation of Chin- stopped, if the importation in bulk is restricted the coins will go out of circulation of their own

My suggestion that there should be Govern ment Exchange Burcan to buy the coin at a rate fixed by them, was only in caus circulation was próhibited.

para of majority report). Some members The majority consider that permits should be suggested a five years period of grace after insusi only to the extent necessary for cary which there should be repudiation. Jandering on legitimate exchange business in the stand this proposal was abandoned by uil? Colony ; that there should be no, licence fer: we made our coins, more valuable than they coin' linot necessary, nor desirable, dor. rent be remembered that we have made and that no such fee would be justifiable in Canton ones a large percentage of inme bald profit of two millions ou putting theen coins asmuch as it would be tax on legitima'en China might come back to Hongkong unless into circulation. In view of these remarks are business, which would be deranged unduly their import was prohibited, and this would the committee prepared to withdraw theas words from the draft Bill? Of course, restric.

mesa repudiation which Committee are (b) Import of coins which are legal tender.animously opposed to.. (the course anggealed tions on import of Hongkong colas could be No repudiation of, our coinage can be enter by the minority is to bring about a gradual and temporary withdrawn if more such coins were rained

simpltaneous reduction of the discount on both required in order to replace the Chinese coini ousted from circulation as Messrs Shewan the report should be modified, Lui the Bill only

Anything in the draft Bill inconsistent with Hongkong and Caston subsidiary coins

17.-Not necessarily so as competition and Armstrong point out, it is the principle gives powers which may or may not be exer- could to a certain extent be relied upon. It would be useless for the Government to contaided in the words which give power to gised.

18-The minority, white disagreeing with withdraw any more of their subsidiary coin probibit import of legal tender to which I refer. The report does not advise that prohibition prohibition of import, and circalation, woold without making some restriction as to the im Since it apponis to Le at variance with the of import of our own coin should be imposed remark that, to render the first effective, the portation of Chinese subsidiary coin, the more unanimous view regarding repudiation record at all events in the present circumstances, of second must be intro isced stabitansourly, the Government withdraw the more room there ed by tbe committemme

the case, but if the words in the Bill are after sufficient noilce has been given to his for Chiasse coins to come in, () Export of legal tender coins.--Are the thought objectionable they can be deleted public that both import and circulation aie to majority unanimous in thinking probibition, of

The report says that the majority to in (e) Export of calas which are legal tender be prohibited: To at once prohibit the mport favour of prohibition." There is a legitimate such coins to be expedient or necessary? ba“ | The' is a maiter similar to the above. No re- of Canton subsidiary colas and to temporarily boriders fa' Chinese subsidiary coin in this cept as a measure of reciprocity in case the commendation is made in the report to pro- | defer prohibition of their circalation would giv Two Kwang provinces undertook', to prohibit hibit export in, present circumstances :: it was big holders of these coins' an oppo

Colony pot laiended for local circulation which export of their coinage which would be im daly advised that power might be taken to do - unload their stock to those "ignorant and

"total probibition would dislocate possible and chimerical? The object being 10 such in case it might be considered orcestary persons" sho rehabilt to our colongo, decrease by exports is the fature

Pets

part - tö à be tüp

stion would be advantageous, and it is highly-The mafority do not, advise any, agic

Improbable that expert to any large, extent) with the Government of the Two Kwang in the would take place as in former years now hatay, is they collider the di that China is dooded with, a' sudsidiary cola the Hongkong Governme

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