THE HONGKONG TELEGRAPH. MONDAY, NOVEMBER 16, 1931.
HONGKONG CURRENCY MISSION'S REPORT.
Remittance Business.
As to noles, only one of the three note-issuing banks has un- Jimited powers of expanding its circulation, viz., the Hongkong and Shanghai Bank, but it is under no
they
minimum fineness and of a specified minimum weight and on payment of a specified fee should be entitled to chtain legal tender, in the form of bank-notes. Government Control In orde to relieve the noto- issuing banks of the liability to receive and store an unlimited quantity of
of silver bullion, we rocom- mend further
(6) that Government should take charge of all the silver coin and bullon at present hold against the note issues, ex- cept for such amounts as the three banks concerned may require for current business, and give to the banks in lieu thereof vouchars undertak- ing to deliver silver on de- mand on the bank's certify- ing that notes for an equiva lent amount have been or are about to be withdrawn; and (6) that silver which in future may be tendered for cx- change into notes should be received by the Government (not the note-issuing bank), the tenderer to be entitled to receive notes of whichever bank he may prefer
(pro- vided that that bank's Issue has not reached ite maximum limit) and the bank to be given vouchers for the equivalent amount of silver.
Currency Board,
(Continued from Pago 1.) Idealer in South China, who owing]
to its imperfectly developed cur among the Chinese population of rency system would, with Hong Hongkong and the neighbouring kong on a gold basis, have no areas silver has been accepted for means for the purpose. On the generatione as the measure of other hand, while bulk fndent statutory obligation to do BO, value, so that what ita advocates business
and depot business An to
to coin, there is on almost describe Па stabilization would (including retail trade in Hong-
volume from
Chinese point of viow kong) would to some extentabla nhatacle to te the
at all times sufficiently be destabilization.""
facilitated, the wholesale trade to meet the public needs in the Nevertheless it cannot be would lose
its present facilities for cumbrousness of the legal tender denied that there are several argu- covering the gold-silver exchange dollar coin. To buy allver and
risk and would not be ments which have been or may,
not be able to find have it minted and imported sounds be adduced in favour of a gold
A substitute.
The trend of the quito a simple process, but it is standard for Hongkong, and which argument-in-this-section depends one-which-the-banks-refrain-from are not without validity Ho far upon the relative importance of putting into operation as long a ns they go.
these different kinds of business, possible, because they know that. and as It true, in the frat la show that the wholesale import and transport have been incurr
all the evidence goes to after henvy expenses for minting that the gold price of silver has fallon so low as to make its use ing business into South China le the coin will not be wanted by the as currency very inconvenient. of the mainstays of Hong. publio and further large charges There is no doubt as to the cum-kong'a prosperity we have no for storing and handling them will brousness of the large silver hesitation in deciding that on this have to be met. Moreover,
count the argument is strongly run the risk that they themselves dollar for daily private transac tions, and the cost to banks and
gainst stabilization.
may have to use the coins largely other institutions of "shroffing"
in their daily transactions Instead large quantities of coin and of
of bank-notes, and this would so ntoring aliver in the form of either (e) In relation to the remittance seriously dislocate business that coin bullion is an expensive item,business, much of Hongkong'e they would go to great lengths to It is, however, possible to get over attraction as a centre for receiving avoid the risk. these difficulties to n great extent, remittances from Chinese ra- and we think that this will be sidents overseas would disappear,
H.K, and 8.N. done if the plan which we recom
(d) The present easy
It should be recognized that the flow of mond is adopted.
capital between Hongkong and
Hongkong and Shanghai Bank | South China which is instrumentalns, except for a brief period some in financing primary production the valuable service, as the chief two years ago, always performed and small trades and industries in note-issuing bank of the Colony. South China would be seriously im- of providing the pubile with an peded.
The general tenor of the conclu-he fact that in that brief
dequate amount of currency. nions set out above in our opinion to the bank'n unwillingness in the future. Such a board would
But
gives substance to the that Hongkong is cennomically part surately with the amount of de-function of necumulating a sterling argument to expand its currency commen- also have the still more important of China and must remain silver standard so long as China the
onposite pouring from abroad into fund to provide for ultimate stabili
Colony. the Hongkongzation on a gold basis as will be dollar rose to about 20 per cent.explained in
Part Y below. We above silver parity, shows clearly therefore recommend the faultiness of the present (7) that a
Ilongkong Currency Board should be appointed. It would be in accordance with usual precedent that this Board should be set up in London and should be represented in the Colony by a Currency Officer, who might appropriately be the Colonial
H.K. and China,
It is true, again, that China is the only important country now left on a silver haals, while prac tically the whole of the rest of the world is, or in trying to place itself, on a gold basis; and that so long as Hongkong remains on Rilver, the ductuntions in the price of that metal in relation to gold, does. which have been and may continue to be frequent and rapid, result in disturbing #ucture
self Into that Dí
system.
And
Д
The Government would no doubt Currency Board to take charge of
It convenient to appoint
the silver and to make any arrange- ments to receive and issue allver
Treasurer.
Note Issues.
Wo
E RADIO BROADCAST
EUROPEAN CONCERT
FROM STUDIO.
The radio programme to be broad- cast by 2. B. W. on a wavelength of 356 metres to-day is:
Chinese recorded 6.00-7.00 p.m. programme.
p.m.
pro
European 7.00-10.30 gramma.
quotations, mail 7.00-9.00 p.m. Programme of Vic tor records.
notice, etc.
7.00 p.m. Stock
7.65-7.40 p.m. Operatic, Madame Butterfly-Fantasio (Puccini). Victor Symphony Orchestra, 85780. Carmen-Selection (Bizet). Creatore and He Band. 86841-36842. Aida-Grand March and Finale
(Verdi), Aida-Introduction and Moorish
Ballot (Vordi).
Creatore's Band. 36780. 8.00 pm. (local time and weather report)
7.40-8.20 p.m. Gome from Musical Comody The Love Song
The Student Prince in Heidelborg. Honeymoon Lane.
Victor Light Opera Company. 36767. Oh, Kay!
The Ravelers (Mixed Chorus). 35811. Sunny. Cocoanuts.
Victor Light Opera, Company. 35760. The Yankee Princess. Blossom Time.
bare Nevina Muste.
Victor Light Opera Company. 35722. 8.20-0.00 p.m. A Selection of Ethel.
A Day in Venice.
Victor Salon Orchestra and Group. 9478. (a) A Shopherd's Talo (b) Lulinby. (a) Narcissus (5) Country Dance."
Victor Balon Orchestra. 9470, (a) My Desire (b) Mighty Lak'
a kose.
Olivo Kline and Lewis James. (a) At Twilight (b) Oh That We Two
Were Maying (0) At Rest Wilfred Glenn with the Victor Salon Group. 0480. (a) Little Bay Blua (b) The Nigh?
Hue a Thousand Eyes (0) The Woodpecker.
Victor Salon Group. (a) In Winter I Get Up at Night (b) Every Night (0) Boat Upon Mine Little Heart (d) a Lifo Lesson. Edna Kellogg with Victor Salon Orchestra. 9481,
Serious Disadvantage. Although from the point of view in the level of Hongkong's ex- changes with the gold world. On of the Government and of some At the time referred to, the non- the other hand, the establishment persons not engaged in trade it hote-issuing banks were at length of a gold standard in Hongkong seems that there would be certala forced to apply the exchange would cause similar fluctuations distinct advantages to be obtained corrective of Importing silver in ita exchanges with China, and from stabilization on a gold basis, dollar and in one way or another the question really resolves It and although certain trading in the position was cased but
the terests would benefit thereby, we Colony was thus loaded up with a determining, having regard to her special are unable to arrive at any other large quantity (it is sald as much economie and financial relations conclusion than that it would be as 800 tons) of unnecesary coin. with China, which is the more of serious and direct disadvantage We understand that the present The arrangements which important for Hongkong, that ex- to the business of Hongkong and Chief Manager of the Hongkong propose will act in any way int change should be kept steady with to large sections of the population. and Shanghal Bank has announced
pair the position of note issues. China or with the rest of the Consequently in the general in 18 the policy of the bank that it On the contrary they will have the (n) Barchetta (b) Serenade (c) world.
terests of the Colony--including will in future always apply an ex-added prestige, enjoyed by few
'Twas a Lover and His Lass. those of traders who, though they change corrective with the object banks, of issuing a note which In
Elliott Shaw with Victor Salon Orchestra. might reap immediate henefit from of preventing the dullur from
unlimited legal tender.
The Rosary this course, would probably
above find rising substantially
Secondly, they will be relieved Robert Simmons with Victor Salon theoretic upper bullion the results in the long run by no
Orchestra. 9482. means satisfactory--we recom-is, however, fundament point. it of all further anxiety regarding |
wrong the custody of the mutallic re- All records in the above European financial business, it is mainly amend that in the present circum-that the exchange should depend funds, and will be given an as-Messrs. Teang Fook Piano Co.
sorve in their bank-note security programmes are kindly supplied by
9.00-10.30 p.m. aurance that the part of their Concert.
European Studio reserves which consists of under- takings by the Currency Board to Songs.
Jerred to as silver
will
Since
Government's Position,
the prosperity of Hong- kong in dependent on its trade and question of how that business would be affected by
change- to a gold or sterling standard, over to a We regard this as one of the nost important factors to be consider. ed in solving what we have
I
stances Hongkong should remain Colony's currency on a silver basis.
value
of
the
on one person, and no less wrong that that person should he put in a position where he may constantly have to decide between the conflict-
Programme.
described as the first part of the mend present stabilization we having interests of the Colony and the provide bar silver chers) (n) Marin, Marl (Eduardo di
problem that has been put before
ከዞ,
Another
argument
often adduced in favour of stabilization is the ease it would give to the Government's finances. The fact
в
and
bank.
currency
ever
Capua).
Miss A. Silos (Soprano). Only a Year Ago (Fred G. Albers).
Mine A. Silos (Soprano) with Violin obbligato by Mr. J. Matias accompanied by Miss Luba Pocker. Songs.
be converted into undertakings by that Board to provide sterling at (b) the new rate of the dollar, should Hongkong containe
be stabilized in terms of sterling.
Thirdly, the Hongkong and Shanghai Bank will have an ae- aurance, which it does not at pre- sent pоeness, that whatever the dimensions to which its note issue expands it will not be involved
Bank Co-operation.
(a)
Out Where the Big Ships Go, (T, J. Hewitty.
(b)
Shipmates of Mine (Wilfred - Sanderson),
Mr. Derek Holmes (Baritone). Pianoforte Solos.
(a) Rustle of Spring (Sindings, (b) Marche Grotesque (Sinding).
Mr. J. Shard.
Vocal Quartet.
(a) The Long Day Closes
(A. Sullivan).
The present Currency System. With the decision not to recom. disposed of the first main part of our problem and we torn to the Main Proposals for Reform. second, namely, what if any re-i As it seems to be unquestionable forms in the existing currency that the Colony already system should be adopted.
more dollar coins than It can ever The notes of the Hongkong require for use in active circulation V.. langkong's currency being on banks, and particularly those of the we have sought for some automatle
Allver
standard necessarily
rily Hongkong and Shanghai Bank, cir- method of increasing the amount creates difficulties in the balancing culate widely throughout South of not of the yearly budget, owing to the China where they are regarded of notes in circulation when re-
quired. uncertainty of the dollar eive the most stable and desirable form It is obvious that there are two lents of the Government's sterling of currency. Indeed it was reways in which this might be pro-in loss by such expansion. charges, viz. the cost of supplies presented to use by credible wit-vided, either by a suitably regulated purchased in England, the sterling nesses that no less than two-thirds issue of Government currency debt obligations, and the payments of the outstanding issue of this notes, or by altering the present
We have therefore framed our; of pensions
salaries of Euro-
bank was held in China, and one conditions of issue of bank-notes. recommendations on the assump. pean officers. These are of course of hur Chinese witnesses express-
The first
step can be taken by the tion that the note-issuing banka real diffculties, and they would ed the view that it was known in Government nt its own discretion; will be prepared to fall in with
મો all be met by stabilization all the eighteen provinces of China, the second requires the willing co- the scheme which we propose. Important us they are, however, it In Shameen, the foreign concession operation of the note-Issuing banks. Should this unfortunately not be does not appear to us that they of Canton, it is the only currency We should recommend the first so, we think the only course would can be allowed to weigh as deter, ed.
alternative only of the banks re- be for the Currency Bourd to mining factors if the decision on
While Hongkong bank-notes are used that
lague currency notes, such notes the question of advantage or dis in great favour as the most stable have said at operation, AA wo
the bank-note is to be the sole, unlimited legal (a) advantage to the business of the form of silver currency in South the de facto currency of the Colony tender on the same conditions and Colony as a whole is in the China, it is difficult to say how the and of great part of South China, under the
aame opposite scale.
arrangement (b) British Dollar is regarded
which might and any step
Impair mutatis mutandis ns we have re- currency medium outside the limits the prestige of
note commended for the banks, of the Colony. It appears to be should tend that its prestige different but the general prin
avoided. Rather would The machinery would in circulation in same parts Reviewing what we have written China, especially in the north. In should be increased by making ciples would be the same, and we en the effects which the stablilzs other part it circulates merely as the sole unlimited legal tender In therefore do not think it necessary tion of the Hongkong currency bullion. In Canton it and the the Colony and limiting the legal to pursue the matter further. while China still remained on a subsidiary coln of Hongkong are status of the dollar coin.
The following questions lver basis would have on the freely accepted at an appropriate
Legal Tender.
detail artee in connexion business activities of premium over Canton money: Hongkong. we may sum up ea fol- lows!
Effects of Stabilization en Business.
(1) Hongkong, considered mere-
ly as a port and as the principali
Defects.
of We recommend
We have now to draw attention storehouse for goods in transalt to to certain fundamental defects in and from South China, would not the currency system. The first la be likely to be affected adversely that the form of currency which is the only unlimited legal tonder,
(2)
The
ил
so long as trade continued to run the ailver dollar, ie entirely in its present channels.
special position which suitable for that purpose. Hongkong
A concrete example will illustrate at present occupies for the Chinese cattler and capitalist this.. The weight of the legal ten as a place of law and order and der currency which the seller of a
These than are our recomman-
dations!--
(1) that the legal tender status of the dollar coin be Bmited to $10.
be
(b)
Little Tommy Went a-fishing (J. Macy).
The B's. Songs-Selected, "-
Madame Alice Hamilton (Contralto) accompanied by Miss Luba Pocker. Violin Solon.
Canto Amoroso (Love Song) (Sammartini-Elman). Menuet from Petite Suite (Debussy-Dushkin).
Mr. J. Matins accompanied by Miss Luba Packer. Songs.
(a) Ultima cancion (R. Bunyi). (b) La Forza del Destino (Arla)
(G. Verdi), Mias Angolta. Bilos (Soprano) accompanied by Miss L. Pecker.
Songs.
of
with
the operation of the new schomes:
1. The silver content of new theoretical unit.
(4)
the
(b)
2. The weight and fineneas of the silver bar in which it is to be embodied.
Rolling the Log (Bartle and Eramott Adams),
Harlequin (Wilfred Sanderson), Mr. Derek Holmes (Baritone). Planoforte Solos.
(a) Gavotte (Gazdiner).
(b) 2nd. Mazurka (Godard),
(b)
Mrs. J. Shand.
(2) that the notes of the present
note-issuing banks be mado 3. The place or places at which the aole unlimited legal the
Vocal Quartet Board should hold and be ready to deliver and accept de- () Ore in the Billy Night livery of bar silver.
(arr. R. Baldwin). Johnny Bands 3. Coleman).
The 4 B's. Songs-Selected.
Madame Alice Hamilton (Con- tralto) accompanied by las Luba Pecker. Violin Solos,
tender, except of course by the banks themselves in pay ment of notes tendered for redemption With a
a limit imposed on the legal
4. The minimum transaction to be permitted.
charged by the Board.
5. The commissions.
to be
for
a city of refuge would to a large motor-car costing any $4,000 (at tender status of the dollar coin extent be lost.
the present rate of exchange, about some other means of providing
of the bank-note the convertibility
of 1925, Bank of England notes aro not as before the war into
would undoubtedly ip-builders round this defect; It has, however, convert but into gold bullion
: Recommendatione.
1. 374.4 gratas of fine silver.
Currency Board.
2. Decision to be left to the
and
8. Hongkong Shanghai and London.
possibly
(3) As a producing centre, it £200) could demand, would be
has to be found. Here an analogy Our recommendations briefly are might lose to neighbouring allver little over two hundredweight. centren much of the business It is true that the issue of bank-with the position in England will as follows
help us. By the Gold Standard Act which it at present transacta, but notes has to a large extent got on the other hand
benefit in so crented others. far as the change would enable The chief one is that while there then to tender for and carry out large long-term contracta on a basis of equality with their com- petitors in gold-using countries.
Loss of Exchange Business. (4) As a Anancial and trading contre, the effects on Hongkong
would be as follows:
is an automatic contraction of the n presentation of a minimum volume of the currency as soon as quantity of bank-notes, and wo re- its exchange value drops to the commend lower bullion point (that is, the point at which it pays to export silver dollars for sale as bullion) there is no satisfactory automatic method of expanding the currency when the exchange value of the
(a) In relation to importa into dollar rises. South China, the onus of covering the heavy gold-allvor exchange
• risks involved would be trans-
Expansion of Issue.
The expansion may take the ferred from the importing mer form of an increase in the olume of chant in Hongkong, who has ample form of an increase in the volume facilities for doing this, to the of notes or of coin.
4. For the redemption of notos, the nearest equivalent of
one
or evon
(3) that the notes of the Hong-standard silver bar; for the issue
banks be mado con
of new notes, $20,000 tible, on presentation of a silver be minimum, into
more.
Preparations for Ultimate Stabilization.
bullion.
6. A maximum of 5 per cent. Bullion Exchange.
on the issue of now notes against miner com- The lower bullion point is thus sliver and certain provided. In order to establish an missions. effective upper bullion point, the absence of which has been the root cause of the premium on Hong- kong currency, we recommend.
()that any person on tendering silver bulien of a specified
We now come to the third main part of our problem, namely, what stope should be taken
(Continued on Page 0.)
to
(a) Valse Triate (Bibellus). (b) Spanish Dance No. 8 (Barasate). Mr. J. Matias accompanied by Misa Luba Pecker. 16.30 p.m. Rugby Mid-Day Press News.
10.38 p.m.
Close Down.
Coming shortly to the CENTRAL
The greatest picture over made.
ANN HARDING
fu
“HOLIDAY”
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