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Chartered Bank of India, Australia & China,
Hongkong, 23rd March, 1903.
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His Excellency
Sir Henry A. Blake, G-CM-G.
Sir,
!
With reference to your request to have my views regarding the establishment of a currency upon a gold basis in this Colony, I have the honour to reply briefly as follows:
The subject is one of very peculiar difficulty in so far as this Colony is concerned, the scheme presenting greater difficulties! here than in most countries where it has been discussed, owing to our geographical position, the nature and extent of our trade and the pe- culiar economical conditions attaching to this small and absolutely unproductive island. A gold currency founded on an actual gold cir- culating medium is practically impossible, as the gold would quickly disappear from circulation, the Chinese nearly always being buyers of gold coin at a considerable premium here. A paper currency founded of a gold reserve would present a similar difficulty, as the Notes would) require to be made payable on demand and would not remain in circula- tion when gold was wanted. A silver currency maintained at a ficti- tious rate by the limited extent to which it would be procurable by raj stricted coinage or otherwise, does not seem to be advisable on econom grounds. Such a coinage would be confined to this Island by means of its enhanced value here as compared with its actual or metallic value as silver bullion, and could not therefore be shipped to Canton or elsej where if the state of trade required it. It would also mean the rais- ing of the cost of labour, &c. and handicapping industries here as compared with similar industries on the Chinese mainland.
The
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