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ENCLOSURE
2.
COPY.
Sir,
C.0.
80
18538
REP
Like 16 AUG S
Hongkong & Shanghai Banking Corporation.
Hongkong, 11th. July, 1898.
Referring to recent correspondence on the subject
of our Note Issue in Hongkong and the Straits Settlements, the task of keeping within the limit assigned to us, has neen beyond our power of control from the beginning of the present year. Bank
notes have become so popular with the Chinese and they are so
convenient for purposes of transit that they absolutely decline to receive silver in payment of either Cheques, Compradores Orders, Drafts or Telegraphio Transfers, so much so that during the past
six months the exigencies of the position have forced upon us the
necessity of occasionally exceeding our issue in order to avoid
creating a crisis particularly before last China New Year, when
our disbursements were very heavy and the natives insisted upon
receiving notes.
You are aware that the Chartered Bank's circula-
-tion is very limited, and that they experience the same difficulty
that ve do in keeping within their limits so that no relief
can be experienced by means of their notes. The Only other Bank
The Honourable
T. Sercombe Smith,
Acting Colonial Secretary,
Hongkong.
of