The last point for consideration is the effect on the national indebtedness. It is a truism that the indebtedness of China to foreign countries is fairly heavy and the uncertainty of exchange makes any budget providing for interest payments extremely difficult. One effect of the adoption of the Shanghai tael will be that the Chinese Government will know how much it will have to pay month after month. As the general effect of the reform would be towards the increase of the gold value of silver, the total of payments to be made by China in silver would be reduced within a short interval after the adoption of the reform.

I believe I have dealt fully with the effect of the proposed change both on internal trade and currency as also on the international trade and China's obligations. How to bring about this reform with as little dislocation as possible is now the question; both Government and private banking in this country would have to play an important part in the carrying out of this reform; and as the banks themselves have to be reformed in order to be able to do themselves or the country any good, we now have to digress, and discuss the subject of banking reform in this country.