HC Deb 27 February 1866 vol 181 cc1194-6

said, he would beg to ask Mr. Chancellor of the Exchequer, Whether his attention has been called to statements made in the London and China Telegraph of the 5th instant in reference to the Exchange question in Japan; and to ask him to produce a Copy of the Report made by Mr. Arbuthnot, of the Treasury, on the operation of the present system of appropriating the profits arising out of the Exchange; and whether any sums had been carried to the credit of the Public Accounts, out of the profit arising from the difference between the current value of the Japanese Ichibon and the rate at which it is supplied to the Naval, Military, and Civil Services?


said, in reply, that the literal answer to the noble Lord's question was very easily given. His attention had been called to the statement made in the London and China Telegraph upon this subject, and there was no objection whatever to produce the Report made by Mr. Arbuthnot; and, in point of fact, it was on those Reports that he (the Chancellor of the Exchequer) advised the House to rely mainly, in order to obtain a true knowledge of this very difficult and intricate subject. And lastly, he had to state that no sum had been carried to the credit of the public accounts, out of the profits arising from the difference between the current value of the Japanese Ichibon, and the rate at which it was supplied to the Naval, Military, and Civil Services. But he thought he ought to add some words of explanation, because otherwise the answer he had given would be hardly any answer, except to the noble Lord who had given his attention to the subject. By the tenth article of the Treaty with Japan there was a stipulation that all foreign coin should pass in that country at its corresponding weight in Japanese coin. Either from the orders of the Government or the prejudices of the people, it was found that the dollars in which our officers were paid did not obtain currency in Japan, and that they were totally unavailable as an instrument of ordinary exchange for the purpose of subsistence. On that discovery a communication took place with the Japanese Government, and an arrangement was made by that Government to the effect that the dollar should stand at a certain fixed value to the Ichibon. The effect of that exchange was of very considerable advantage to the Civil Service, because its fixed value was higher than the current rate of exchange. The principle of the exchange was that it should be at a rate simply that would cover the cost of coinage, and be equivalent to the weight of metal, so that in principle it was entirely in conformity with the article of the treaty on which the arrangement was framed. When this fact came to the knowledge of the Government at home the matter was examined into by the late Mr. Arbuthnot, of the Treasury, and he need not inform the House that he was a most valuable civil servant, and besides his other excellencies he was a perfect master of the currency question. Mr. Arbuthnot investigated the matter, and in consequence the Treasury made a communication to the Foreign Office to the effect that the practice ought to be abandoned, and it was abandoned accordingly. A great deal of correspondence, however, took place between Mr. Arbuthnot and Sir Rutherford Alcock before the conclusion was definitively arrived at, but when it was done the Foreign Office gave effect to it. However, when that was done it appeared that the Japanese Government decidedly objected to the alteration. They represented their objection to it strongly to Sir Rutherford Alcock, and he on his own responsibility altered the arrangement, in consequence of his entertaining so strong an impression of the impolicy of adhering to it. It became known in course of time at home that in October, 1864, Sir Rutherford Alcock had reverted to the old system of exchange. After he had done so the matter was again taken in hand by Mr. Arbuthnot, who at the time of his death was about to make another Report upon the subject. The Japanese merchants entertained two different views with regard to the subject—one party was favourable to it and the other was opposed to it; but it was impossible then to perfectly explain it. It appeared, however, there was no course open to Her Majesty's Government but either to continue matters as they were or to allow them to continue at the present rate of exchange, giving the credit of the exchange to the public accounts. There was this difficulty, however, in taking that course. They were informed that the scale of salaries was originally fixed in Japan somewhat low, considering the expense of living, and that there had since been a considerable rise in prices, so that although, this lucrative system of official exchange had an irregular and accidental origin, its practical effect had been to prevent a general demand for an increase of salary. Mr. Arbuthnot thought the proper course would be to establish a mint in Japan in concurrence with the authorities of that country. But that was not the work of a day.

Back to