as the monetary unit, the parity being fixed at one Hong Kong dollar to one shilling and three pence sterling. All the available stocks of silver bullion were taken over by the Government for the establishment of the Exchange Fund to regulate the exchange value of the Dollar.
During the Japanese Occupation (December 1941 - August 1945), Japanese Military notes were the only means of daily exchange locally. The issue of local currency was however resumed by the Hong Kong Government and the authorized local banks after the Liberation.
In 1960, the minting of the dollar regal coin was revived and the issue of the dollar note has since been discontinued. A Coinage Review Committee was set up by the Government to review the regal coinage issues in November 1973 and coins with denomination above the dollar were issued upon Government acceptance of its recommendations in 1975, one of which being the $5 coin issued in 1977, hence putting an end to the issue of the $5 banknotes by the authorized local banks as from 1976.
In 1972, when the sterling floated, the Hong Kong Dollar was temporarily tied to the U.S. Dollar until the value of the latter dropped below the exchange rate of US$1 to HK$5.085 in November 1974. The Hong Kong Dollar has since been allowed to float in the foreign exchange market. The exchange index for the Hong Kong Dollar against the baskets of international currencies had dropped drastically ever since 1982 and was barely retained on the range of 71 to 74 points in August 1983.
Rupee of the East India Company k
Spanish 8 Reales silver coin or Carolus dollar UTATOK · B.
THE COINAGE
T
here had been a great many varieties of coins in local circulation ever since the establishment of Hong Kong as a free trading port in 1841. However, coins specially issued for Hong Kong did not appear until 1863. They were the first issue of the regal coins of Hong Kong, that is coins bearing the portrait or Royal Cypher of the reigning monarch, minted by the Royal Mint London and comprised the silver ten cent, the bronze one cent and one mil, the last being one- tenth of a cent. The history of local coinage, therefore, extends back to only one hundred and twenty years.
The local coinage owed its every existence to the commerce- oriented decision and effort of Sir Hercules Robinson, Governor of Hong Kong (1859 65) who intended to achieve a government provision of a replacement currency for the then popular Mexican silver dollar which was the much sought after medium of exchange in the vast foreign trade of China, and the supply of which had proved to be insufficient and uncertain. He further conceived that “silver coinage minted in Hong Kong would become in a very short time the standard measure of value and instrument of commerce not only in Hong Kong where it would be so by law, but throughout all the open Ports in China".1 Such a constant supply of local currency in uniform design with constant silver contents would serve to supersede the system of payments by weight of silver, either in the form of defaced coins or ingots.
It was based on these lines of thinking that the Hong Kong Mint was consequently established at government expenses on a site in the presentday Causeway Bay in 1866. It started minting a total of five denomination silver regal coins of Hong Kong of one dollar, half- dollar, twenty, ten and five cents by converting silver bullion into coinage for the local banks and merchants upon payment of a mint charge or seignorage. In addition to minting of medallions for the Government which included the City Hall Medallion of 1867, the Mint also produced a variety of pattern silver coins for submission to the Manchu authorities with a view to secure a contract for minting silver coins for China.
The new Hong Kong silver coins had not been well received in the market because they all bear the portrait of the Queen and to deface them with markings for subsequent easy identification as generally practised on the Mexican dollars would constitute an offence. As for the bronze issues, the one mil coin which was intended to replace the Chinese cash coin had also proved unpopular. Because of its small size, it was considered by the local Chinese as not equivalent to the cash in metal content. The Chinese, being the majority of the local population, were at that time accustomed to the tradition of accepting silver by weight and fineness only. They also accepted the Chinese cash
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