After enumerating thus the advantages of the gold standard, Mr. Hu proposed that the coinage unit should be called "yuan" instead of the tael, with the weight of 27.072 grammes and 920 fine. Under such arrangement the coin would be something like the Mexican dollar. With this unit as the basis he proposed the minting of gold and copper coins, besides the yuan and the subsidiary silver coins. His arrangement was to have two gold coins one worth ten silver yuans and the other five silver yuans; there were to be fractional silver coins commencing from half a yuan, besides also silver coins of one and two yuans. The coinage of copper was certainly an essential part of the system. Mr. Hu recommended a total coinage, on the average, of two silver dollars per capita or approximately 800,000,000 yuan. At the beginning only a quarter of this total would be needed. And he also proposed that in 100 yuan there should be one gold coin of ten yuan and one of five yuan value; the remaining eighty-five yuan should be in silver and copper. It was understood, of course, that uniform methods and designs were to be used in the central and provincial mints. The success of a new system of coinage depended not only upon the minting of large amounts but also in the ability of the government to withdraw the large amount of coins and silver sycee from circulation. Mr. Hu proposed that during the first years the government should give full market value when taking back the old coins. But after ten or more years they ought to be demonetized. A large profit from coinage was also part of the plan of Mr. Hu. As the new yuan was to be 920 fine the remaining 80 parts became the nation's seigniorage. Thus out of a total coinage of 800,000,000 yuan the profit should be 64,000,000 with which the Government could not only pay its debts and cost of coinage, but also form a gold reserve. Such reform of the coinage would involve a large capital outlay, and Mr. Hu proposed the raising of a currency loan. Mr. Hu gave details as regards the easiest manner in which the new coin could be introduced. In order to insure confidence in the new system he proposed to deposit the borrowed gold among the various foreign banks; thereby foreign nations would know that China had gold in reserve.
The scheme above detailed is, to say the least, fantastic. The calculation of the profit on coinage, the amount of coin required and the manner of setting up a gold reserve were all based on data which had no existence. To coin gold and silver in accordance with the fixed ratio and to maintain the silver unit and subsidiary coins at a fixed gold value are as easy in China as for a man to reach Mars by means of a balloon. I will not waste time or space in discussing these proposals. Almost all the proposals of Chinese and Foreigners, up to the last scheme of Dr. Vissering, are however, modelled on this plan.
The Board of Revenue was evidently-impressed by these proposals and agreed to the accumulation of a gold reserve and coinage of gold. The Board brought out some curious arguments; that it was not to the advantage of China to use silver while other countries were using gold and that there was a large hoard of gold among the people and that this gold had hitherto been used solely in the arts because there was no use for it as currency. The Board also proposed that the money paid in for ranks, titles and offices should be paid one half in gold, and that this gold should form the nucleus of the supply for mintage. It is well known, however, that these efforts led to no practical result.