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SUPPLEMENT TO THE HONGKONG WEEKLY PRESS AND
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and individual, in this Colony, whether the banker, trader, clerk, or artisan, are se affected by the acute phase of the currency question as we experience it to our cost to-day that we cannot afford to publicly neglect it, and the chairman was absolutely unjustified in as suming as he did that public discussion would be desultory and show no appreciable result, and might create a bad impression. He was un- fortunate in assuming that this Chamber would so shirk its responsibility, which in this Colony is greater than in many others, as our sufferings are more intense, and he was not justified in thinking that such a discussion would be valueless. It is, I admit, not within our province to settle the vexed and complex question of currency; that duty, I agree with the chairman, is one for experts, and I for one do not envy them their responsible task. Nor do I suppose that this Chamber will accept "the out and dried scheme of any single member brought forward to-day, even if I were to bring a scheme which I have formulated. But, contrary to the chairman, I think it is an imperative duty of this Chamber to publicly discuss this question, which from its acute and far reaching im portance is one which most of us will shrink from discussing unless we feel that we bring to bear upon it sober reflections and lessons derived from our local business-experience. Then, from the numerous careful opinions given by men who look at the metter from various attitudes, some information may be evolved which may justify this Chamber in forming a resolution, to strengthen a general movement among other communities afflicted like ourselves with an unstable currency, and which may also prove of use to those experts into whose hands the settlement of the question may nltimately full. We have no right to shirk what is manifestly our duty, and I fail to see how the serious discussion of such a vital question is likely to work harm to our interests. To sit idle and adopt the Micawber policy of "waiting for some- thing to turn up." or for outside events arising from the activity of others to shape our destiny. is a selfish, timid policy and one unworthy of the reputation of this otherwise vigorous com. munity. I mention this at some length because `we have already been taunted with displaying our impotence, an imputation which we must one and all resent. Before proceeding to speak generally on the subject of our local currency, I would like to refer to the points raised in the report of the discussion of the committee of the Chamber, The first is that "the positions occupied by Singapore and Hongkong are different, which rencers combined action impossible in the direction of procuring relief from the in- stability of silver." Now, with regard to this they have not stated in what respect
I positions
different. contend that. in the main, our positions are alike. If they allege that Singapore is a producing country inasmuch as she produces three quart- ers of the world's supply of tin, and there- fore a gold standard is desirable for that port, my reply is that these tin-mine owners them selves have petitioned the Governor against adopting
standard gold 3
any way disturbing the status quo. So it can- not be argued that because Singapore produces tin, her position is different from ours, and that it may be advisable to have a gold standard there and not here. The tin-mine owners do not want it. If the Commission recommended the adoption of a gold standard, it must be on other grounds, and what ever these grounds may be, they cannot fail to apply equally well to Hongkong. Secondly" That we are not to attempt a divorce from the currency of Chiua." I would ask what is the currency of China ? Can any one enlighten us? Lord Charles Beresford, in his book The Break-up of China, pointed ont that China has many currencies, there being in fact five different currencies between Tientsin and Peking, В distance of but 80 miles. Such a currency, he said, "hinders trade and is troublesome to everyone." No one present will be found, I trust, to endorse such a prolixity in mediums of exchange. China wo know to be a silver-using country, but her real universal coinage is copper cash, which has various provincial values, and is subject to mangf auctuations. China accepts Mexican, British and Spanish dollars at different rates, valued by silver weights, and there is also an in-
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[February 23, 1903-
fluite variety of silver standards, for every pro- | ratherthan bona-fide traders. Now topanu
Now the report of the meeting of the co vincial city has a tael value of its own. to a nation in the unhappy possession of such an mittee, it must, I think, be accepted that in alternating currency, to whom the intrinsic disenssing the currency of Hongkong it is note the following facts:~ value of gold is rapidly becoming known, it is necessary to difficult to conceive that any serions diffl-(a) Hongkong is a non-producing commercial culty would arise if a Hongkong gold standard port. (b) It is a commercial medium between were added. The trade between Japan and the world and China. (c) Trade with Hong- China is valuable and annually increasing, but kong means virtually the trade of the world the Japanese, although they realised that with China. (d) Over 90 per cent of the Was and would world's monetary standard is gold and Chins's their principal consumer
is silver. (e) A gold or silver currency in be China, did not hesitate to establish a gold currency. In his excellent speech on Hongkong can therefore have no effect either Saturday last, at the meeting of the share-good or bad on the trade of the world with holders in the H. & 8. Bank, Mr. Shewan con- Chins Having these facts before us, let as tributed his testimony to the Chinese adaptabi- | now deal with the currency question direct and lity of character in stating “The Chinese have ask: While currency in Hongkong whether again proved their capabilities as business men, in silver or gold cannot affect the trade of the and have mostly settled sterling exchange at the world with Chins, how then will it affect time they ordered their goods, thus ensuring merchants in Hongkong, and if so what class of merchants? There is no question that purely themselves against loss on a falling silver mar.
unaffected by the ket." What better proof could we have than this commission agents are on this point? I am firmly of opinion that give currency in Hongkong whether it be silver him time and the Chinaman will adapt himself|| or gold. But those who deal in imports and ex- most firmly to a fixed standard. Then we have ports largely on their own account suffer most a third "lion in the path' in the theory that from a currency that is subject to exchange if our dollars are demonetised and the currency fluctuations. It may be said that as in almost placed on a gold basis there will be a fearful bill to all business undertakings there is a certain amount of risk taken by the merchant, which meet in disposing of our demonetised currency." I must say that we should not be frightened either ends in gain or loss to him, and the like with such objections, for on inspection such consideration for risk and its attendant result also guide his exchange opera- figurative animals may perhaps liken themselves should unto the fabulous quadruped that paraded in the tions. This kind of argument will no doubt lion's skin. It seems to me that with the rio hold good if the parallel drawn between the two distinct lines of business, viz., commodity lent fluctuations in exchange that we are now individually experiencing the evils of a demone and exchange, exhibits the same degree of risk tised dollar. I would have preferred that, in both; but on close examination it will be seen that the laws of chance do not equally instead of the committee endeavouring to frighten ns with such a monster, they had govern the two. When gold and silver circulated side by side at a fixed rate, the fluctuation in left the solution to experts who may have to deal with it later. As a matter of fact we may exchange was infinitesimal, and hardly in turn to India where the same difficulty existed fluenced the gold value of goods when converted Merchandise was then regulated and was overcome. Fourthly,-"That change into sily r from or divorce from China's currency would by the laws of supply and demand. All the risk a merchant had to take was within the result in the trade of Hongkong passing to This is an
Now that a compass of reasonable calculation. Canton or elsewhere in China." assumption on which the committee might have chasm between the two masses of the world's
Why should
currency has been created by the demonetisa- afforded more precise inforination the adoption of a stable currency for Hongkong tion of silver, an arbitrary rate takes the mean the loss of our trade? Is it likely that place of the fixed one and throws all cal- It may, bowever, still & Chinaman who has liced and traded in Hong-culations overboard.
be urged that Hongkog still prospers. koug, and made his wealth here, free from the
If Hongkong can be said to harassing restrictions of his own government, will Quite so! risk the loss of bis liberty, security of property, still prosper under such adverse conditions and the untold advantages to an Asiatio which surely it must have a considerable amount a British Crown colony provides, to depart of vitality to keep it alive, and how much more would the line of its prosperity be Canton. And if so for what? Will the foreign
extended if the disturbing olements in its merchant in our midst, who, with his numerous
trade were removed from its onward course! treaty-port branches, has for obvious reasons
And what is causing more disturbance than made Hongkong his entrepôt and base, fold bis commercial tent and silently slip away to the degraded silver currency? Would it not Kiaochau, Kwangchauwan, Macao, or any other be more compatible with reason if we adopt a monetary standard that will keep us in close place which may rejoice in the possession of un- limited silver? Is it likely that the 18 million touch with the world and save us from being tons of shipping. valued at £5,000,000. tossed about by fluctuations which the rejected lower metal is b.and to produce? It is argued | passing through our harbour annually will be
diverted to the Shameen? That our mail liners that a gold standard in Hongkong may drive and ocean-going leviathans will find more hospit-business away from here and shift the centre of able and prosperous anchorages off the band at trade to somewhere else. This is a thing that is much easier said than done. It must not be Canton, and our wharves, godowns, docks and refineries remain ghostly deserted ruins ? Is overlooked, as I have already pointed out, that all this and other havoc to be wrought by a Hongkong enjoys numerous advantages which stable versus a fluctuating exchange? I think have got to be weighed and considered before not! We, in all our prosperity, are experiencing one ventures upon such an assumption. It has the evils of a silver currency, but we have yet gained a world wide reputation as being the to learn where the trade of a colony or country mart for outh China; and its goodwill is has been jeopardised by the adoption of a stable already so firmly established in the com- mercial world as a centre of trade that trivial system of currency.
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Who can assure that silver will not go even lower and considerations cannot easily obliterate it. cause more distress. The heavy fluctuations The main objection to the adoption of a gold in silver may benefit some of our Banks, who standard is based on the assumption that China . profit by such--and this is an element of gam- might find it more suitable for her to order bling-but to a merchant these are disstrous, as her goods direct from the outside world with- prices do not respond at once to the fluctuations, out the medium of Hongkong, and thus save the process of double exchange. At first one especially in a fall. If one has goods costing at exchange 1s. 7d. and exchange rose to 18. 11d. the would think that this would be the ultimate Chinese customer wants the advantage of the result, but a close investigation reveals, how- rise, or else he will order anew at the higher ever, that redrawing from Hongkong to the rate of 1s. 1ld. In fact, although we are using adjacent ports adds so little to the cost of silver es a medium, everything is valued, con-imported goods that long established. mer- sciously or unconsciously, in gold; wherever there are foreign influences, and the trade of silver- using China is almost all with gold countries. Hongkong is simply the head or the tail of gold- using countries and everything is expressed in term of gold, whether it be import or export The present state of silver, with its fluctuations, tends to degenerate us into .commission agents
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cantile houses can well afford to overlook these little considerations when placed side side by with the advantages derived from a magnificent port as Hongkong.. such It may be remarked in passing that Shangbai * as a commercial contro trades as a medium between the outside world and north China in
Hongkong in the south.-- 1 the same way 88:
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