15-
9. The immediate issue of $74,000 by the Bank of One Dollar Notes would doubtless stop the present gap, but at the end of 12 months there would be another failure in the local currency and another demand on the part of the Bank for increased supply, and so it would go on from year to year to the great profit of the Bank and without advantage to the Government, upon which pressure is put on the plea that the object sought is the relief of local wants, though in truth the benefit desired is an increase of exclusive Banking facilities in China generally.
10. I would submit with Mr. AUSTIN, that it might be preferable for the Government to derive some advantage from the opportunity thrown in its way of satisfying a large and increasing local demand, instead of strengthening the hands of one particular Bank.
11. I am aware, however, that although the principle of the issue of Notes by the Government is supported by such high authorities as Mr. GLADSTONE and Sir ROBERT PEEL, very careful consideration must nevertheless be first given to the local conditions of the Colony before so novel a step could be adopted, and I merely refer to Mr. AUSTIN's suggestion as one that may possibly, on investigation,
be found to contain the elements of success.
The Right Honourable
THE EARL OF CARNARVON,
&c.,
&c.,
&c.
I have, &c.,
A. E. KENNEDY.
Governor Sir A. E. Kennedy to the Earl of Carnarvon.
GOVERNMENT HOUSE, HONGKONG, 23rd March, 1876.
MY LORD,
With reference to despatches of 10th June 1875, and of 1st February, 1876, referring to the issue of One Dollar Bank Notes in this Colony, and to Your Lordship's despatch No. 21 of 31st March, 1875, on the same subject, I have the honour to transmit for Your Lordship's consideration copy of a letter addressed to the Governor by Mr. NELSON, local Manager of the Chartered Mercantile Bank, stating it to be his intention to recommend the Chief Manager of the Bank in London to apply to the Lords Commissioners of the Treasury for a similar privilege to that accorded to the Hongkong and Shanghai Bank.
The Right Honourable
THE EARL OF Carnarvon,
&C.,
&c.,
&c.
I have, &c., -
A. E. KENNEDY.