Evening star. [volume] (Washington, D.C.) 1854-1972, 1898-02-08
CURRENCY OF CHINA
Mexican Dollars Used in Business
Transactions.
At 4 PREMIUM RECKONED IN TAELS
Former Consul at Ningpo Claims
Former Consul at Ningpo Claims
Loss in Exchange.
MIR. TRACEW ELLIS VIEW

Controller Tracewell of the treasury has
been called upon to render an opinion as to
what reimbursement a United States con-
sui in China is entitled to for his actual
loss in discounting his drafts on the treas
ury. In the course of the opinion the con-
troller finds 1t necessary to discuss Chinese
money and its value compared with our
money, and the value of the Mexican dol.
lar, which circulates to a large extent in
China.
John Fowler, late United States consul at
Ningpo, China, had applied for revision
of the settlement made by the auditor for
the State Department February 8, 1897, of
his accounts for loss by exchange for the
period from July 1, 1904, to June 80, 1896.
In these accounts the auditor charged the
consul with $224.92 as overcharge on loss
by exchange; with $561 gain by exchange,
and credited him with 80 cents under
change, making a net difference of $229. SO.
The decision says
Mexican Dollars Valued In Taels.
THE consul at Ningpo received payment
in Mexican dollars when discounting his
drafts. China has no money excepting the
copper coin called the cash. about 1000
to one United States dollar. Mexican dol
in all business transaction. The Chinese
'taeP is a weight of silver, and is not
coin. There is the Shanghai tae the Annoy
tael, the Canton tael, etc, the value of
thirteen or more being quoted by the di
rector of the United States mint.
The consul claims that when he draws
draft for 800 and receives therefor $50
Mexican dollars his loss is $40 in United
States gold If the Mexican dollar is at the
time quoted at fifty by the director of the
mint. 1t is admitted that this calculation
would be correct if the consul were in Mex
leo. But in China the Mexican dollar is at
a premium as compared with the money of
account of that country,
IF, in this example, the commercial value
in Shanghai of Mexican dollar as COM
pared to the Shanghai tael. is 10. then the
consul received for his draft the equivalent
Of 135 taels. If that tael was then worth
20 cents in United States gold u. s. mint
estimate), the consul received 155 10 or
S94oO. His loss was, therefore, $3.50 and
not $40.
The difference arises from the fact that
the Mexican dollar is at a premium IN
China; that is, it is worth more than It's
bullion value. If the bullion value of the
tael is 40 cents in United States gold and
the Mexican dollar at the Shanghai bank is
worth 20 as compared to the tael 1t fol-
lows that the Mexican dollar is. at that
place, really worth 521. cents in United
States gold. instead of 80 cents its bullion
value at the market rate of silver TO
charge the consul with that value instead
OF the bullion value gives to him the real
VaIue or United States gold in Mexican dol
lars at Shanghai
Gold Without Value in China.
I'm the present case the difficulty is that
United States gold does not circulate in
China, and has no comm ercial value there
In the absence of such commercial value
the estimated value furnished by the
director of the mint must govern in fixing
the real value of the foreign money as
compared to United States gold and, as
heretofore stated, the directors estimate
OF the value of tael "a weight of silyer)
must necessarily be very accurate for IT
is an estimate of its value, according to
the silver bullion market of the world
~ IS not denied by the consul that the
Shanghai tael is in fact worth the amount
stated by the director of the mint The
bankers in the Chinese ports certify the
relative value of the Mexican dollars AMI
the taelS. Having thus the commercial
value of the Mexican in taels its value in
United States gold is easily ascertained
Auditor Holcor1b, in writing to this con-
SUI SAID: While what is commonly known
as lne intrinsic value of the Mexican is
the same in China as in Mexico, the COM
merclal value is not ne cessarily the same
ana, as a matter of fact, is not the same,
nor IS its commercial value the same ali
over China, but varies in different parts.
me tael is not money in circulation but
IL is a money of accorrt, and q standard
money of account, by which the CONNER
c1al value of other money, Mexican for
instance, in use in China can be establish
ed. 1t is necessary to have a standard or
yard stick, If you please, by which to
r easure the f1uctuating commercial value
of the Mexican dollar. and it appears that
the tael is the standard which will ac-
complish the object desired 1t is a money
Of China, and has an intrinsic value com
pared with the gold dollar Of the United
States which is now given in the treasury
valuation, and 1t also has relative com
mercial value to Mexican dollars which
Is known to and can be given by banks
and bankers. If, therefore, you will make
your transactions in Mexicans, and give
their relative value to the tael, by certifi-
cate of your banker, it will be all that is
desired
The Auditor Sustained.
1.-THE accounts rendered by the consul
show a loss by exchange of large amounts,
frequently as much as 16 per cent of the
face of the draft The auditors method of
calculation indicates that the rate is less
than per cent. 1t does not seem reason
able that the rate of exchange between the
principal ports of China and the United
States should be as high as 16 per cent
Mr.. Fowler appears to have negotiated his
drafts on the most favorable terms anu is
entitled to be reimbursed for the actual
loss and expense incurred. AS the money
OF the United States is not in use in China
the conS,- cannot directly state his loss in
that money. In connection with his banker
he certifies the number of Mexican dollars
actually received for draft and the cur
rent commercial value of such dollars in
taels. The so-called intrinsic or real value
of the tael is then ascertained from the
most reliable authority-the estimate of the
director of the mint-and the difference is
the loss by exchange.
II am clearly Of the opinion that the
method Of calculation adopted by the au-
ditor in this case allows the consul reim-
bursement for his actual loss. The settle
ment will therefore be affirmed"
The Military Academy Bill Passed.
The House passed the Military Academy
appropriation bill yesterday with only one
unimportant amendment. The debate on
the measure was desuitory and touched a