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A MONETARY CRISIS AND THE CURRENCY QUESTION.
THE HONGKONG WEEKLY PRESS AND
of loss by depreciation. The capital raised in Europe for investment in railways or mines in the Middle Kingdom will afford no relief to the ordinary trading community, and with magnificent opportunities the mcr- chant may find himself unable to avail of them owing to the absence of financial facilities.
[August 27, 1898. military occupation. Meantime the Belgian contract for the construction of the Lu-Han Railway has received the Imperial sane- (Daily Press, 25th August.)
tion, which was given on the 12th instant, At the recent meeting of the Bank of
and the statement is made that the Russian Bombay the Chairman referred to the late
gauge has been decided upon as the standard financial crisis in India and the question of
for all China's future railways. The latter exchange. Such scarcity of money had
circumstance in itself is perhaps not one to been experienced in the open market, he The course of events is steadily teuding which much exception could be taken, but said, as to lead to as much as 18 per cent. in the direction of the adoption of a gold it is one link in a chain which shows how being paid on the security of gold and 24 standard throughout the Far East and the strongly Russia is laying the foundation for per cent. on silver, and influential native sooner the change is made in Hongkong the the control which she hopes in the future to firms had failed on account of their inabi- more profitable will it be for the colony. be able to exercise over China. At the lity to obtain cash on the ample securities If we could have bimetallism we would have same time it is reported that she still aims at they possessed. In an earlier part of his the most convenient and scientific form of securing command of the Customs service speech the Chairman suggested that a stable currency, but bimetallism being now out of when Sir ROBERT HART retires, it being currency, besides securing steadiness of ex- the question and our choice confined between alleged that she holds some written promise change, would impart confidence and induce silver and gold there ought to be no hesita- given by Lr HUNG-CHANG which entitles capital to flow into India from Europe for tion in deciding in favour of the latter. her to claim the reversion of the office of investment in safe securities at say five or Even if we had a sufficient influx of silver Inspector-General for a Russian nominee, six per cent. In Hongkong money has for to meet the requirements of the colony's this promise being anterior in date to the some time past been exceedingly tight and expanding trade, the choice should still be undertaking which China recently gave to there are indications that it is likely to be in favour of gold for although trade on a Great Britain on the subject. Reuter in- come still more so. The Banks are more silver basis may yield apparently large formed us the other day that the re- stringent than usual in making advances profits, men cannot grow richer by in- lations between Great Britain and Russia and in some cases higher interest is de- creasing the uominal amount and lower in China were strained, and the facts manded, and mortgagees also are giving the real value of the money in that the Powerful is not to be allowed to ing notice to their mortgagors that the which they do their busines, as Lord leave these waters to attend the festivities at
FARRER tersely put it in a rate will be raised upon the renewal
letter Batavia in connection with the coronation of mortgages. We are evidently entering to the Times the other day This is ex- of the Queen of Holland, that the paying upon a period of dear money, and the in- emplified in the case of the Hongkong and off of the Barfleur has been postponed, and dications are that it is not likely to be of Shanghai Bank, which, as shown in a recent that the Blenheim, instead of at once return- short duration. An advance to the extreme article, after a series of phenomenallying to England with the Barfleur's crew, is rates recently current in India is of course prosperous years is really worse off to the to be retained as an additional ship on the highly improbable, but a comparatively tune of a million sterling than it was seven station, indicate that the situation is re- small advance exercises a marked influence years ago.
garded as critical. We have of late become bn trade. The stock market is perhaps the
so accustomed to crises that we are, per most sensitive in responding to the fluctua-
haps, too readily disposed to think that each tions of the money market, and business in
one as it occurs will blow over as previous that department has for some time past
ones have done, but we seem to be drifting been almost a dead letters; but from Messrs.
to the point where we must either fight WM. G. HALE & Co.'s circular we learn
Russia or consent to recognise spheres of that the monetary stringency in Hongkong
influence. If Great Britain would consent is also making its influence felt in the rice
to recognise Russian influence as paramount market at Saigon.
in Manchuria Russia on her part would probably be found willing to recognise our influence in the Yangtsze Valley and the South. If on the other hand we try to baulk Russia in Manchuria we must expect the steady and consistent opposition of Russia to British influence and enterprise wherever she has the opportunity of making such opposition felt. According to the news brought
The recent unfortunate contraction in the bank note circulation, temporary though it be, has probably had its effect in hastening the impending crisis, but the fundamental cause seems to be that the business of the Far East, including the many industrial concerns recently floated, has } outgrown the resources of local capital, and that outside capital is deterred from flowing in this direction by the grave risk involved in the uncertainty of exchange. When Japan adopted the gold standard It was anticipated that her industrial enterprises would be severely handicapped in competition with those of China on account of the advantage cheap silver is supposed to confer on the latter, but on the other hand the principal reason advanced in favour of the adoption of the gold standard in Japan was that it would facilitate access to the money markets of Europe and induce an influx of capital into the country. There has hardly been time as yet for the effect of the change to make itself felt in the last named direction, and meanwhile the cotton mills are undoubtedly experiencing hard times, but in the long run it will be found that business in Japan, with the advantage of a stable currency, rests on a sounder basis than in China, where the fluctuations of exchange deter outside capital from invest- ment and expose us to rapidly recurring financial crises. It may seem anomalous to speak of capital being deterred from invest- ment in China at a time when many com- panies with large capitals are being formed in Europe for the exploitation of the coun- try's resources; but these companies have their capital in gold and whatever else they may invest it in we may be certain that it will not be in silver with its attendant risk
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RUSSIAN ACTIVITY AT NEW- CHWANG.
(Daily Press, 20th August.)
A curious report has been in circulation during the last two days to the effect that Russia had occupied Newchwang. The rumour probably had its origin in the fact that considerable quantities of land have recently been purchased at Newchwang on Russian account. The circumstance is men- tioned in the Shanghai papers received yesterday and no doubt information con- ceruing it had previously been received in certain quarters by telegraph. Some casual reference to these purchases has doubtless given rise to the extraordinary rumour men- tioned above. According to the China Gazette, | she indeed, the acquisition has been effected in without the formality of purchase. The to statement is made by our contemporary in the following terms:- News comes from Newchwang that the Russians, with their "usual foresight, have been acquiring large "tracts of land in the vicinity to make capital out of the proposed British railway enterprise in that region, as it seems that "land on the proposed route of the Russian railway has been purchased by the British, "who have demanded exorbitant prices for "the same. The Russians, by way of "checkmating their rivals, have commenced
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building in the north of Newchwang with- out the necessary formality of purchasing or leasing the land from the owners, 'practically grabbing the lots they re- quired, arguing that once they had built on the land the owners could not help "themselves and would be amenable to any "terms offered by the Russians. By these means they would hold the whip hand over the railway in Eastern China, which is to run from Petuna to Port Arthur via Kirin, Moukden, and Haicheng, with a branch from Port Arthur to Newchwang. "A very pretty scheme if it can be made the Russians desire." "to work out as This is unpleasant enough certainly, but it is very different thing from
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by yesterday's
seems to be now following Persia a similar line of policy that which has caused 80 much irritation of late in China. People talk glibly of war as the best solution of the question, and no doubt if it came to a war Russia's fleets would be swept from the seas, but the net result that would be secured would only be delay. New fleets would be built and in the meantime she would steadily creep onward by land, where we cannot reach her.
GREAT BRITAIN AND RUSSIA IN CHINA.
Daily Press, 22nd August.) The adoption of a friendly tone towards Great Britain by the Russian press, and the suggestion that the discussion of the China question should be removed from the heated atmosphere of Peking to London or St. Petersburg with a view of arriving at an agreement inspired by mutual concessions, may be taken as reflecting more or less accurately the attitude of the Russian Government. Nothing could be further from Russia's desire than an armed conflict with Great Britain, provided she can get what she wants by peaceful means. As to mutual concessions, when it comes to the apoint it will probably be found that
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