Let us consider the position in China. There is no existing coin that is accepted in every part of China or that has a fixed relation to the subsidiary coins. The Mexican dollar has, as a coin, a larger range of popularity than other coins, but only in the ports. The fact is that even the silver coins vary in value, judged by the measure of copper coins. At present the copper coinage in this country stands practically by itself, frequently fluctuating in its ratio to silver coins, at the bidding of the law of supply and demand. Again, no coin has ever been looked upon with favour except for the amount of silver it contained; I might mention in this connection, the unfortunate fate of the Spanish and Japanese dollars, which were very popular for a while, after which they suddenly disappeared from circulation and got thrown into the melting-pot - because the intrinsic value was worth much more than the coin value. There is, therefore, no existing coin that can be given a fixed gold value. The primary steps in any reform must be to establish a coin which, with its auxiliaries, would prove readily acceptable in every part of China.
There are also other considerations which have to be taken into account. In contradistinction to the position in India the exports in this country are exclusively in the hands of the Chinese. The position of the trade is such that there is no meeting ground between exporter and importer, when the currency is on a gold basis, for what is good for the importer is not good for the exporter and vice versa. Even supposing a coin could be fortunately invented, which would prove acceptable in every part of the country, the whole point of the gold or gold exchange standard would rest in bringing about a depreciation of silver. In other words, such a standard would affect the exporter adversely. The importer, on the other hand, can do no business if the exporter is not able to sell his cargo. A mean has to be found that would prove of advantage to both the trades. Such a mean would certainly prove impossible of realization, if the gold standard were adopted in whatever form; for the first result of the adoption of such a standard by China would be a heavy fall in the price of silver.
As it would be difficult to introduce token coins into China, Dr. Vissering proposed to introduce his reform by the establishment of a bank unit or a theoretical unit with a fixed gold value. Such theoretical units exist in the English guinea and the yen under the present monetary regime in Japan - in the olden times there were theoretical units in the Dutch Bank Guilder and Banco-Mark of the Hamburger Giro Bank. Even to-day, practically all the official, trade, and Customs units of money in China are theoretical and have no coin to represent them. The tael itself has several variations, all of which are purely book monies. This is certainly satisfactory from a theoretical point of view; and if, as Dr. Vissering has proposed, the co-operation of the foreign exchange banks and the private Chinese banks and bankers for the introduction of the new gold unit into their book-keeipng is sought and obtained, there is certainly no doubt that the unit would have to be accepted as the money of account, while dealing with the banks. But what is there to prevent this new unit existing side by side with the Haikwan and other taels, without ousting them? At every port, every merchant who receives or dispatches goods has to pay his duties to the Customs in the Haikwan tael; and it is not generally known that when this new tael was introduced by the Customs, it was sincerely believed that it would unify the numerous currencies in the country. Or again, every province has to send its revenue and accounts to Peking in the Kup'ing tael, and this has been done for 200 years; still each province, as a matter of fact each city in every province, has its tael, i.e., its tael of account. I really cannot see how the adoption of the new bank unit along with the existing sycee, dollar, etc., is going to improve the currency position. Even when the next step, proposed by Dr. Vissering, of forming a central bank of issue and issuing bank-notes based on the gold unit is adopted, how would the position in the country change? The result is likely to be that this unit would become another money of account and the notes would circulate like the notes of any foreign bank or, possibly, would be just like treasury bills. It is not worth while going into the several steps which have been proposed by the learned doctor to introduce a gold exchange standard into China. I have stated enough to show that the basis on which his scheme rests is utterly unsound. Therefore, the only alternative basis on which any scheme for currency reform for China could rest is the silver standard.