Enclosure 1.
Honourable Colonial Secretary,
I have consulted with the Chief Manager of the HongKong and Shanghai Bank on this subject. He states that:-
(a) Silver can often be obtained more cheaply in India than in London. The Bazaars frequently obtain an over supply and sell at panic prices.
(b) California silver is always obtainable in San Francisco at rates lower than those ruling in London. Through freight and insurance can be obtained at very low rates from San Francisco to India.
(c) Frequent delays in the supply of subsidiary coin occur under the present system owing to the mint at home not being able to execute our orders in accordance with the Schedule and from other causes.
(d) The actual profit would be small but it would be a profit.
I am of opinion that the system proposed would work better as we could obtain more regular supplies from the Calcutta mint and that is the Bank's interest in the matter. The Bank is not going to charge commission either on purchase of silver or on drafts to meet such purchase.
(Signed.) A.M. Thomson, Treasurer. 20-10-99.