If the wisdom and necessity of a loan of five millions had been assured, there are many directions in Korea in which such a sum could be most profitably spent. With the revenue of the Customs as the guarantee, there would have been no difficulty in securing more advantageous conditions than those of the contract. The terms were preposterous. Subsidiary proposals, as to which no conclusion was then reached, further demanded the lease of the Pyöng-yang coal-mines, the control of forty-four additional mines, the purchase of French mining plant, the engagement of French mining experts, and involved minor stipulations, which were in themselves objectionable to the Court, while giving to French interests in Korea an unwarranted and undesirable preponderance. The uses to which it was alleged that the loan would be put were precisely those which are actually most necessary. Unanimous support for the loan would have been won if there had been the slightest reason to hope for the faithful observance by the Court of its pledges. Unhappily, there is no prospect that any very appreciable proportion of the loan will be expended upon the objects on which such stress was laid, objects which are potent and vital factors in the economic development of the kingdom. The loan was handed over in bullion; in the ratio of one-third silver and two-thirds gold, ostensibly that a National bank may be inaugurated and the present nickel coinage replaced by gold and silver tokens. This is eminently laudable. If the small dimensions of the loan rendered such a thing feasible, the conversion of the national money would be of incalculable benefit to the financial credit of the Government and the country in general. But it must be remembered that one of the reasons for contracting the last Japanese loan was to provide a nickel coinage exchangeable at par with the Japanese and Mexican silver tokens. Unhappily, this same coinage is now at a discount of 120 per cent. for one hundred Japanese cents gold. Examination has proved that the intrinsic value of one dollar nickel of Korean five cent pieces—at that time the only unit struck—is only one-eighteenth of its face value as against the Japanese gold standards of currency. The balance was “squeezed.” It is likewise impossible to make provision for the legitimate and honourable expenditure of this new loan. Quite recently there has been a large issue of one-cent copper pieces. These coins sustain a better ratio to the yen than the nickel currency; as a matter of fact the intrinsic value of the copper coinage is so much greater than the nickel money that there is a standard of exchange between them. At present the nickel, compared with the copper, token is quoted at 12 per cent. discount. [Illustration: THE IMPERIAL LIBRARY, SEOUL] CHAPTER VIII Foreign action in Korea—Exhausted Exchequer—Taxes—Budgets—Debased currency—The Dai Ichi ginko—Dishonest officials