Note 29 — Chapter XVII

We need only give a single example of what we mean. If, in the matter of the reform of the currency, instead of authorizing trade-agencies, i.e. the foreign Exchange Banks, to make a loan to China, which is necessarily hedged round with conditions favourable to such trade-agencies, the Powers took the matter directly in their own hands; and selecting the Bank of China—the national fiscal agent—as the instrument of reform agreed to advance all the sums necessary, provided a Banking Law was passed by the Parliament of China of a satisfying nature, and the necessary guarantees were forthcoming, it would soon be possible to have a uniform National Currency which would be everywhere accepted and lead to a phenomenal trade expansion. It should be noted that China is still on a Copper Standard basis,—the people's buying and selling being conducted in multiples of copper cent-pieces of which there has been an immense over-issue, the latest figures showing that there are no less than 22,000,000,000 1-cent, ten cash pieces in circulation or 62 coins per head of population—roughly twenty-five millions sterling in value,—or 160,000 tons of copper! The number of silver dollars and subsidiary silver coins is not accurately known,—nor is the value of the silver bullion; but it certainly cannot greatly exceed this sum. In addition there is about £15,000,000 of paper money. A comprehensive scheme of reform, placed in the hands of the Bank of China, would require at least £15,000,000; but this sum would be sufficient to modernize the currency and establish a universal silver dollar standard.

The Bank of China requires at least 600 branches throughout the country to become a true fiscal agent. It has to-day one-tenth of this number.