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2. General ANSON's despatch transmitting the Ordinance is the reply to Sir MICHAEL HICKS BEACH'S despatch, the draft of which was submitted to the Lords Commissioners in the last paragraph of the letter from this Department of the 13th January, 1879, and of which their Lordships' approval was expressed in your letter of the 17th of September last (No. 7829).
3. From the last paragraph of the Attorney General's report upon the Ordinance, it would appear that the Administrator contemplated bringing the Ordinance into operation in Singapore, without further reference home, and as there was, their Lordships will remember, a question of making the concession granted by the Ordinance dependant on the withdrawal of the privilege enjoyed by the Bank of issuing One Dollar Notes in Hongkong, Lord KIMBERLEY immedia- tely on receiving General ANSON's despatch, addressed a telegram to the Governor directing him to postpone the Ordinance if it were not already in operation.
4. With regard to the question of the issue of $1 notes in Hongkong, I am to state that the suggestion of such an issue by the Hongkong Government which would of course entail the withdrawal of the privilege enjoyed by the Bank, in this respect, was brought under the consideration of that Government in pursuance of your letter of the 17th of September last already referred to, but that no reply has as yet been received to the proposal.
5. I am, however, to request that you will draw the attention of the Lords Commissioners to the correspondence noted in the margin which passed in 1876 and 1877 ending with your letter of the 1st of May, 1877, (No. 3990) on the subject of an application of the Hongkong and Shanghai Bank for a certain concession in regard to the amount of specie to be kept at their head office against their note issue, a concession which would, Lord KIMBERLEY understands, place that Bank in the same position as regards the point in question as the other Banks having a note issue in Hongkong.
6. In your letter of the 1st May, 1877, already mentioned, you stated that the Lords Commissioners did not consider it advisable to take up such a question as that raised in the petition of the Bank, pending the settlement of the question of a Government note issue, and, since then, nothing further has passed in the matter. It is presumed, however, that the Bank are as anxious as ever for a relaxation of the restrictions upon them in regard to the specie reserve, and looking to the possibility of making a concession to them in this direction, which would probably be a far greater compensation to them for the withdrawal of their $1 note issue, there would be the permission to establish a branch at Singapore. Lord KIMBERLEY would suggest that the latter concession, if not already given by the Administrator of the Straits Settlements, need not be postponed, till the matter of the Hongkong Government note issue is settled.
7. Lord KIMBERLEY would be glad to be favoured with the views of the Lords Commissioners in this matter at their Lordships' early convenience.
The Secretary to the Treasury.
R. H. MEADE.