Houd
Conta
proportion was employed in making payments to the Civil, Military, and Naval Establishments, which were originally fixed in sterling, and upon this there was a loss at the rate already mentioned.
Some of the other complications to which this anomalous state of things gives rise, are explained in Deputy Commissary-General Power's letter dated the 24th of March last. Although sovereigns are a legal tender, they are practically excluded, by the higher value of the dollar, from the ordinary circulation of the colony,* and only a certain limited stock is kept on hand by the money-dealers, to be employed in making payments to the Government. While their legal value, as fixed by the Order in Council, is 4 dollars 80 cents, sovereigns may be purchased at from 4 dollars to 4 dollars 40 cents; and persons who have payments to make to the Government are therefore under a strong temptation, first, to exchange their dollars for sovereigns, and then to pay in the sovereigns, gaining the difference. To dispose of the sovereigns which in this manner find their way into the Treasury Chest, is a constant cause of embarrassment. Nobody is willing to receive what is certain to be attended with loss in disposing of it, and hence arises a state of dispute and evasion between the financial officers of the Government and the other classes of public servants, which is full of public and private inconvenience. A still graver evil is alluded to by Mr. Power, in the words, "It sometimes affords shelter, under the letter of the law, to transactions of a very questionable nature, which it is difficult to trace and expose." The meaning of this is, that some public accountants receive the Government dues in dollars, which they afterwards exchange for sovereigns, and make their payments into the Chest in the last-mentioned coin, pocketing the difference.
No sufficient reason exists for disturbing the basis upon which the monetary system of Hong Kong has been placed in common with that of the other British colonies; but the value at which dollars and other foreign silver coins are rated, in reference to the sovereign, ought to be re-adjusted in conformity with the experience which has been acquired, and the altered state of circumstances which has arisen since 1844.
With these introductory remarks, I will transfer this important subject to Mr. Arbuthnot, than whom no one is better qualified to give the Government sound advice upon it.
C. E. TREVELYAN.
Treasury, June 8, 1858.
(Signed)
No. 2.
3
40,000 ounces of Mexican dollars purchased in this country at 614d. per ounce, remitted to the Chest at Hong Kong, and brought to account at 4s. 2d. per dollar, amounted
to about
Cost of the dollars, at 61d. per ounce
Difference
To which should be added, freight
Making the loss about
104
£
9,597
10,250
653
230
£ 883
Mexican dollars at 614d. per ounce, are equal to about 48. 5d. per dollar, but in making the remittance a charge is incurred for freight and shipping, equal to about 24 per cent., and the probable risk or insurance, which, for Hong Kong, may be taken at about 14 per cent., together, say 4 per cent.; thus the remittance above mentioned may be considered to have cost about 4s. 74d. per dollar.
1857-58.
Amount of dollars, at 4s. 2d. each, raised at Hong Kong, by the sale of bills on the
Government of India, about
Amount to be repaid to the East India Company on account of the above bills, about
Difference
Which is equal to an exchange at the rate of about 4s. 10. per dollar.
Amount of dollars, at 4s. 2d. each, raised by the sale at Hong Kong of bills on Her
Majesty's Treasury, about Sterling amount of bills drawn
Difference.
Which is equal to an exchange at the rate of about 48. 94d. per dollar.
919,000 ounces of Mexican dollars, purchased in this country at rates varying from 602. to 61. per ounce, remitted to the Chest at Iong Kong, and brought to account at 4s. 2. per dollar, amounted to about
('ost of the dollars, at au average price of about 61, d. per ounce.
Difference
To which should be added, freight
Making the loss about
£
47,080
55,208
£ 8,128
216,268 249,022
£ 32,754
220,287
232,539
12,252
5,232
£ 17,484
!!
Mexican dollars, purchased at an average rate of 613d. per ounce, are equal to about 4s. 5d. per dollar; to which adding, as in 1856-57, 4 per cent. for freight and insurance, say 21d., the cost would be about 4s. 73d, per dollar.
Transactions for the supply of the Treasury Chest at Hong Kong.
No. 3.
Deputy Commissary-General Power to the Secretary to the Treasury.
Commissariat, China, Canton, March 24, 1858.
I HAVE the honour to transmit, for the information of the Right Honourable the Lords Commissioners of Her Majesty's Treasury, copies of correspondence with the Superintendency of Trade relative to the payment of sovereigns for that service from the Commissariat Treasury Chest, on warrant of his Excellency Sir John Bowring, by which it will be perceived that, at his Excellency's request, these coirs have been exchanged for the dollars current in China," to prevent inconveni- ence to the service, and "heavy loss to Her Majesty's servants or the public."
1856-57.
¡
Sir,
£
Amount of dollars, at 4s. 2d. each, raised by the sale of bills on the Government of India,
about Cost of the above bille, as repaid to the East India Company in this country, about
Difference
170,815
189,718
£ 18,903
about
L
Average rate of exchange on the above transactions, about 4s. 7 d. per dollar. Amount of dollars, at 4s. 2d. each, raised by the sale of bills on Her Majesty's Treasury, Sterling amount of the bills drawn
35,750
40,000
Difference
£
4,250-
Rate of exchange on this transaction, about 48 7d. per dollar.
* No sovereigns have been raised or remitted for the supply of the Chest at Hong Kong since September 1856, and none have been received into the Chest except from persons who had payment& to make to the Government.
I conceive it to be my duty to bring to their Lordships' notice the difficulty there is in disposing of these coins in the Colony, and the loss that, in one shape or other, the Government incurs by their being current.
The value of the sovereign, compared with the dollar, as fixed by Royal proclamation, is 4 dollars 80 cents, but its actual commercial value rarely exceeds 4 dollars 40 cents, is very frequently as low as 4 dollars 20 cents, and can sometimes not command more than 4 dollars-a loss of from 8 to 16 per cent.
With this loss, every one is naturally anxious to avoid receiving sovereigns, and they are equally desirous to dispose of them at a rate so favourable as 4 dollars 80 cents; so that although, for a long period, no sovereigns have been received by the Commissariat by negotiations or by transmission, yet there appears always to be a sufficient supply kept on hand for payments for Government service, such as postages, Ordnance rents, taxes, superannuation remittances, income tax, &e., and which ultimately find their way through the various public departments into the Commissariat Treasury Chest.
It is very difficult, on the other hand, to dispose of these coins, as in all contracts and agree- In purchases in ments, either for stores or labour, payment in dollars is specifically bargained for.