}
CURRENCY & BANKING-
Chapter 4.
The Currency
The unit of currency in the Colony is the Hong Kong dollar, the value of which in terms of sterling fluctuated considerably until the silver standard was abandoned in December, 1935. The Currency Ordinance, 1935, set up an Exchange Fund, and provided that the note-issuing banks should surrender to the fund all silver previously deposited against note issues, and should deposit full sterling cover for all note issues thereafter. Since 1935 the value of the Hong Kong dollar has been maintained at approximately one shilling and three pence, both before and after the Japanese occupation.
Note Issue and Banks.
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Notes of denominations from five dollars upwards are issued by the Hong Kong and Shanghai Banking Corporation, the Chartered Bank of India, Australia and China, and the Mercantile Bank of India. The Government issues notes of one dollar, ten cent, five cent and one cent denominations. Before the war there were in circulation nickel 10 cent and 5 cent coins and copper 1 cent coins but these all disappeared from circulation after the outbreak of the war. It is of interest that over 70 tons of these coins, many of them badly damaged by fire, have recently been recovered from Japan. It is not proposed to re-issue these old coins, but new 10 cent and 5 cent pieces in nickel brass have been ordered from the Royal Mint and will in all probability be placed in circulation in March 1949.
The Colony is included in the sterling area and the authorised banks for dealing in foreign exchange are, in addition to the three note-issuing banks mentioned above:
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