July 27, 1907.)
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oin in the Hongkong and Shanghai Bank. Sir MATTHEW NATHAN had been advised about April 1906 to take no step in the direction of disposing of this coin “until the result of the next selling season had been ascertained." By May 15th the dis. count had gone up to over four per cent. (from one-half and one per cent.), and the Bank Manager reported that prospects were not improving. Owing to damaged crops, and the substitution in the two Kwang provinces of dollars for Chinese subsidiary, there was to be " no chance of Hongkong subsidiary coins being required in those provinces in the near future." India, re- ported to be buying silver, refused to buy any of this bullion from Hongkong, so ou June 21st the 8.8. Preussen took $3,398,000 worth to London, leaving only $344,022 in the hands of the Government, and $76,920 of this was in copper coins. The consignment to London consisted of twenty and ten-cent pieces only. We may point out at this stage the indication that the local Govern- ment was not particularly reluctant to send more of our subsidiary coins into the two Kwang, if the Chinese wanted them. Sir MATTHEW NATHAN alluded to the existence of " some discatisfaction in the Colony," and remarked that "various wild suggestions were put forward for the rehabilitation of the local currency. In this connection he submitted a copy of the Hon. Mr. E. OSBORNE'S suggestions to the Chamber of Commerce, which have already been made public, and received a very fair share of public approval, although the Chamber of Commerce received them unsympathetically,
or,
was;
"
CHINA OVERLAND TRADE REPORT.
should not fall to a discount of 10
per cent.
At
being 800. The millesi ual fineness of the dollar being 900, there seems no reason why both the Hongkong and Chinese subsidiary coins present the discount on the former is 6 to 6 per cent. and on the latter 74 to 71 per cent." ther production,-
Assuming that Hougkong suspends fur- promised, and that China's covenanted - policy it has since provision of a uniform national coinage is indefinitely postponed,— we fear is only too well warrauted-Sir -an assumption that MATTHEW NATHAN prognosticated three things as possible. We quote them in full. (i) The Canton mint may continue issuing fineness. new sabsidary coins of the present millesimal In this case the will fail to and poverishment of the people in the Kwang remain at a 10 per cent. discount to the im- Provinces whose hoardings consisting of, and tenth of their value. The decrease in baging earnings paid in, these cins will have lost a power of these people will con tinue injurious y kong subsidiary coins will remain at a slightly to affect the trade of Hongkong. The Hong- less discount in Hongkong, where the non acceptance of the Chinese Government and banks make these of slightly coins by the less value in the Colony. This difference will increase, if mercantile firms follow the sad some of themselves in declining to receiva example that has been set by the Government the Chinese coins. There will also be tendency for the Hongkong coins to return to the Colony. (ii) The Canton mints may cease issuing subsidiary coins. Those they have already issued and with them the Hongkong coins would tend gradually to recover their former dollar value as absorption took place and they became a subsidiary rather than a main currency. coins of lower millesimal fineness than the (iii) The Canton mint may issue subsidiary prezent ones
This would result in a further
as Sir MATTHEW NATHAN expressed it, they "dealt discreetly with the suggestions." The Governor noted that the practical effect of making Hoogkong subsidiary coin unlimited legal tender would be to debase the currency. and to lower the monetary standard of value from the intrinsic value of the dollar to that of the subsidiary coin." Whether this is a theorem or only a theory, it is not for us to say. The public is at the mercy of the experts, as Sir MATTHEW NATHAN doubtless would take
we fancy it â lot of demonstrating. La an accompanying footnote, Sir MATTHEW NATHAN was on surer ground; we Can adinit that the redenip- tion of Hongkong subsidiary coin at par would be an extremely costly operation," although there are some who think it need not necessarily « prove a heavy burden on present taxpayers." However, we have been recently favoured with correspondence from gentlemen who strongly MATTHEW's views as now published, and support Sir we have considerable respect for their opiu- ions. Redemption at par, the letter also noted, would "benefit principally Chinese money changers in China and elsewhere." The extent of that benefit depends, of course, upon how much of the local coinage remains in Chinese circulation. The replies to Mr. OSBORNT in the Legislative Council were båsed upon advice received from the managers of the Hongkong and Shanghai Bank, the Chartered Bank, and the Mer- cantile Bank. Sir MATTHEW NATHAN further did what he could to bring about the restriction of the Cantonese output of subsidiary coins, without, he admits, very apparent results. One statement made by Sr MATTHEW NATHAN to Lord ELGIN appears to indicate the existence of a popular error. He wrote:
•
the Canton
83me
51
be made to them as was made to the Star Ferry Company; and he again denied that Hongkong coins were of greater intrinsic value than the Cantonese coins. Hongkong coins, he said, had of late "been returning to the Colony in greater numbers than the banks can put on the market," and it was re-minting. This looks as if the Bank were dollars that the Chinese were melting and
coins by withholding them from circulation; trying to reduce the discount on Hongkong and it seems clear that if the Hongkong public would boycott (refuse to accept) the Chinese coins, the discount would disappear ultogether. But a8 mentioned, many people have tried this and we have previously
change of some sort, as all transactions cau- dismally failed. We must have small
settlement system. Already there is much not be done on the chit and monthly iuconvenience owing to the comparative must be many people who on receiving a rarity of our own subsidiary, and there small Hongkong coiu segregate it and save accepts no other kind. The trams and it for future use at the Post Office, which ferries simply dare not refuse the Cantonese coins. If they did, many of us would have to walk or swim, or take ricsuas and sampaus. Dliar'
Our correspondent 'Chopped Hongkong Government had never deliler- recently reminded us that the ately undertaken
to supply China with
"
subsidiary currency, and suggested that the coins it issued went inland against its will. Of course we
but it did deliberately undertake such a contract, never intended to imply that
we hesitate to believe that it was reluctant to accept the profits incidental to the exodus. Sir MATTHEW NATHAN makes mention of "the profits the Colony has made from furnishing the Kwang Trovinces with token coins," and it is those profits which we have submitted ought to be set against the loss of the "extremely costly operation" which we (and the Hon. Mr. OSBORNE) recommended. When one rashly incurs heavy debts, it is always a costly operation to get
square." The analogs, we submit, is by no means unfair. The Government prepared the problem now awaiting solution. We did not. If the task of solving it presents difficulties, we cannot help it.
impoverishment of the Kwang Provinces for the temporary advantage of Treasury. The new coins, which, to secure their acceptance, would have the appearance 88 the old, would drag the The Hongkong coins with a vaine of the latter dowa with them. value interme- diate between that of the dollar and the Chinese coins would tend partly to disappear from circulation in China by being melted down to form the new issue as dollars are now being melted down to form the present issues, and for commodities in the same way as comm dities partly to constitute a third standard of value
to whether payments for them are made in are now beginning to have two prices according dollars or subsidiary coins. It would be as im. possible then to prevent the new issue from being generally current in dongkong as it is now to preveut the present issues being used in the majority of private transactions, and even rist at the present time would ensue, greater confusion and paralyzation of trade tuan Lord ELGIN asked Sir MATTHEW NATHAN Electric Traction Company of Hongkong to report on the matter of letter from the Ltd. [street trams]. The Secretary of that company, writing from London E.U. on Juue 19th 1906, had asked the Secretary for the Colonies to urge some action upon the Hougkong Government. The Tran Company's Directors held the opinion we held, and hold, that "it is far from desirable that British coins should be at a discount in a British colony," especially seeing that the allegation is that this discount is due to a decreased Chinese demand for them. It coins are as nearly pure as Hongkong coins, seems fairly obvious that if the Chinese it cannot at the same time be true that our coins are melted and re-minted by the Chinese, and that if Sir MATTHEW NATHAN's statement already quoted be correct, the different rates of discount must be arbitrary - sort of squ-eze. In 1905 the Street Tram Company claims to have lost £486 in this way, or nearly two per cent. of its year's takings. For the four months April 30th, 1906, the discount had risen to nearly four per cent of the takings. Sir MATTHEW NATHAN recommended that the same reply
}
'I may here mention that the millesimal fineness of the Chinese coins is practically the same as ours, the mean result of analyses of 23 of these coins made by two differen analysts being to show the presence of 80-08 parts of silver in 1,000 parts of metal, the fineness of Hongkong coins as laid down by proclamation'
落落
Yet on the point we have made so much
of, about the scarcity of local coius, it is only fair to say that Sir MATTHEW. NATHAN has a good com- ment. The public, he points out, can obtain as much Hongkong subsidiary coin- age at the bank as they desire. Suppɔse the alien coinage will be reduced, but what the public acta on this, no doubt in time
will be the immediate result? Will it not discount, and more losses? However, the mean a speedy and further increase of the following paragraph from Sir MATTHEW'S despatch appears to greatly weaken the position, and to show that the recommen- dations to the public are admittedly counsels of perfection. We are advised to attempt something impracticable, to roll the stone of Sisyphus, for what the Government cannot attempt the public can hardly do, paragraph: and for similar reasons, Here is the fatal
Of the two proposals of the Board the first, made illegal and abolished, is not practicable. namely, that the Chinese coinage should be
kong, and it is open to everyone to refuse to accept them but to make it punishable by law Chinese coins are not legal tender in Hong.
to possess such coins or to offer or accept pay- ments in them would fill the gaols of the Colony and at the same time would deal a serious if not mortal blow to the large trafic and petty trade which goes on between Hong- doubtless aware some 4,000 people daily come and go between the two places. For currency kong and Canton. As Your Lordship is
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