letter officially. I took the opportunity to privately draw Mr. Playfair's attention to the fact that his notes would not be accepted by the Government without the sanction of the Secretary of State.
3.
In a second semi-official note of 22nd ultimo I informed Mr. Playfair that the power of his Bank to issue notes appeared to me to be very doubtful, as he had obtained neither a Charter (as in the case of the Chartered Bank of India, Australia, and China) nor permissive enactment (as in the case of the Hong Kong and Shanghai Bank).
In his reply Mr. Playfair informed me that his Bank had been careful to obtain the best legal opinions at home before going into the matter at all.
4. I beg to report that the Bank is issuing notes, that I understand that its capital is not paid up and that I believe the issuing of notes to be unauthorized, irregular and improper.
5. I do not know whether any local machinery exists for preventing such issue, but, if the Attorney General knows of none, I submit that the matter should be reported by telegraph to the Secretary of State for the information of the Lords of the Treasury, as it is most undesirable that the public should entertain, for a moment longer than can be helped, the belief that the new notes may be freely accepted.
Page 390
Page 391