618
3. Before acting on this recommendation I discussed the matter with Mr. J. R. M. SMITH who thought that it might be possible to dispose of the coin more advantageously by sale to the Indian mints then buying silver and who at my request telegraphed to ascertain if these mints would buy. On the 28th May he advised me that the Indian Government had wired from Simla that they were not prepared to do this. The telegraphic correspondence with Your Lordship * Enclosure 1. and the Crown Agents of which en clair versions and paraphrases are enclosed then took place with the result that the following subsidiary coins were shipped to London per S.S. Preussen, on the 21st June:---
20 cent pieces,
10
31)
..$ 148,000
3,250,000
$3,398,000
leaving in the hands of the Colonial Government :--
10 cent pieces,
5
17
Copper cents,
.$100,000
1,67,102
76,920
$844,022
4. In the meantime the fall in the dollar value of British subsidiary coin following that of the Chinese coins was creating some dissatisfaction in the Colony and various wild suggestions for its rehabilitation were put forward. I enclose a Enclosure 2. copy of correspondence between Mr. E. OSBORNE, M.L.C., Secretary to the Star Ferry Company, Limited, and Mr. E. A. HEWETT, M.L.C., Chairman of the Com- mittee of the Hongkong Chamber of Commerce, in which the Chamber dealt dis- creetly with the suggestions that they should move the Government to legislate in the matter and that British coins should be rehabilitated and protected by making them legal tender up to any amount, to the exclusion of all other coins, and by Government pledging itself to redeem all its coins at par.
Enclosure 3.
*
5. I also annex a copy of a question on the subject put by Mr. OSBORNE to the Government at the meeting of the Legislative Council held on the 7th June and of the Treasurer's reply. Before causing this reply to be made I had con- sulted the Managers of the Hongkong and Shanghai Banking Corporation, the Chartered Bank of India, Australia and China, and the Mercantile Bank of India and had obtained from them the opinion. I had anticipated and the only one which it was possible for them to give.
6. This Government having decided to get rid of its stores of subsidiary coinage by returning them to England as bullion instead of selling them locally at the market rate of discount, and thus avoid any further action tending to depreciate the coins already in currency, I felt justified in suggesting to H. M. Chargé d'Affaires at Peking that should an opportunity offer he might approach the Wai Wu Pu with a view to instructions being issued to the Viceroy at Canton which would result in some restrictions being put on the issue of subsidiary coins +Enclosure 4. from the mint there. This I did in the letter of which a copy is annexed. To
this letter I have not yet received a reply.
* Note. The practical effect of making Hongkong subsidiary coin uulimited legal tender would be to dehase the currency, and to lower the monetary standard of value from the intrinsic value of the Dollar to that of the subsidiary coin.
The redemption of Hongkong subsidiary coiu at par would be an extremely costly opera- tion which would prove a heavy burden on present taxpayers, while it would benefit principally Chinese Money Changers in China and elsewhere.
† Not printed.