In the preceding chapters I have detailed the broad principles on which the reform of currency and banking in China should be undertaken. As far as possible, I have refrained from going deeply into the technical or mechanical details. That the importance of understanding the principles on which reform should be carried out has too often been ignored and that too much space and attention have been given to merely secondary details., in the several plans proposed till now, is too well known. I elected to follow a contrary plan. With most proposals, it had become a practice to make categorical affirmations; only Dr. Vissering has meagrely attempted to give some reasons for his affirmations, as also to point out briefly the developments in other countries. But even his proposals are vitiated by the fact of the a priori assumptions on his part that gold should be the standard of this country, in any case, and that a central bank is essential. No doubt he makes some attempt at a justification of his assumptions. But it would have been far more convincing had he attempted to investigate, before arriving at his conclusions. Once his assumptions are conceded, the working out of his plan is really praiseworthy, and evidence of the fact that he is a practical banker of repute. The same fault is inherent in the proposal of Professor Jenks, who also starts with assumption of the necessity of gold as a standard; Professor Jenks' proposals, however, were never seriously considered, for he had neither sufficient practical experience of banking nor a proper understanding of the history of currency and banking in China. Of all the Chinese proposals, Chang Chih-tung's was the only one which had a commonsense justification, for, although ignorant of the science of banking and of the history of currency, no one knew better the position and the needs of his country than Chang. But all schemes were too much engrossed merely on the size, weight and fineness of coins. Not one of these proposals mentioned, or ever took into consideration, the necessity of continuity in the economic life of the people, or the co-operation or consent of the people for the successful carrying out of reform. It is a truism that even the most autocratic of governments cannot enforce a reform vitally connected with the social and economic life of the people, without at least a partial consent of the latter. Edicts galore have been issued commanding the people to do all sorts of things, as for instance, when the Government in China tried to impose currency reform; and there has been practically no change as a result. Too violent a change in any direction is not conducive to economic or national welfare; and this point again has been ignored by all the previous proposals for reform. Above all, the worst kind of reform, especially for China, is one that goes against the traditions of the people and would have to be enforced; such reformation is neither practicable nor possible.

I have endeavoured to avoid these pitfalls in my proposals. I do not presume that my plan is ideal, or, could not be improved upon. I have carefully refrained from going into mechanical or technical details. Nor have I made any essential proposals with regard to the far distant future. Things are still in an unsettled condition in this country, and he would be a bold prophet who could predict an economic and political development, say, after the next twenty-five years. It may be, as Viceroy Chang hoped, or as has taken place in India recently, that the balance of trade in China becomes altogether too favourable to her, and that she has to receive instead of to pay out. It may be that an unexampled wave of industrialism sweeps over the country and changes the old course of the imports. It is not at all improbable that changes might take place that might facilitate the adoption of a gold standard. One thing, however is certain, i.e., that for the next one or two decades no change that takes place can make its effects felt, seriously enough to change the present economic situation.

My proposals are intended to suit the present situation, and the probable developments in the near future. One can hardly dispute the fact that the first essential of reform is the unification of the local currencies. Again, it can hardly be disputed that until this unification takes place there should be no disturbance in the shape of the introduction of a gold standard. It is also generally known that the average population in China is exceedingly poor and hardly sees even subsidiary silver coins; that, year after year, the Chinese continue to be unable to pay in produce fully for their purchases of manufactured goods; that under present conditions the national debt weighs as a heavy burden; that if the silver standard is adopted the old traditions should be conformed to, and that there could be no better unit than the Shanghai tael, with the cash as the thousandth part of it; that it would be easier to introduce it, if the existing economic institutions like the native banks are induced to co-operate with the Government; that it would be suicidical to take steps with a view to get rid of the foreigners or to try to do away with the influence of foreign banks, which have too strong a grip on the economic life of the country.

There is a general misconception that the heralding of currency reform should necessarily be preceded by a big foreign loan. Nothing is farther from the truth. There is no doubt that the Government should first mint a fairly large number of the standard units and put them into circulation. But as silver will be tendered to them for coinage as the reform proceeds - the essential condition of the programme being that the Government undertakes to give coins for whatever amounts of silver is tendered at the mints - there would be little need to buy and ship to China large amounts of silver. At the outset, however, some buying is necessary. As the reform of banking would proceed side by side with the introduction of the new coinage, the district banks controlling, with the Government, the amounts of both notes and coin issues, the regulation of currency in the country would proceed as smoothly as possible. Later on, of course, when the Government takes upon itself the regulation of foreign exchange, a foreign loan might be necessary in order to establish a gold reserve abroad - although the profits from subsidiary coinage and the ease of circulation of notes might permit of a portion of the silver reserves being held in gold. For the moment, however, the Government might begin with the introduction of the new standard and coinage, as well as the formation of district banks; the money necessary for this reform could hardly exceed 2,000,000; and considering the success of the recent internal loan it would indeed be surprising if the Government is not able to raise this money within the country itself.