Gov 1658.06
authorized Banks of issue.
5.
The Directors further point to
the facilities afforded by their note issue to the trade
between Hongkong and Macao; but it may be objected on the
230
one hand that Bills of Exchange rather than notes payable
on demand are the proper medium of exchange between the
two Colonies, and on the other that, admitting the utility
of notes in facilitating the transaction of business, the
existing authorized circulation is amply sufficient to
meet the demand. In this connection I may refer you to the
third paragraph of Sir Matthew Nathan's Confidential Des-
-patch of the 14th. December, 1906.
6.
In addition to the notes of this
Bank, notes issued by the Canton Authorities have recently
been circulated in the Colony in considerable numbers,
one dollar
the Chinese notes being at a discount by reason of the fact
that they are redeemable in subsidiary coin. I am advised
that, as these notes are not payable to the bearer on
demand in the Colony, they do not fall within the purview
of Ordinance No. 2 of 1895, and that if their circulation
is to be stopped it will be necessary to introduce legisla-
-tion.
7.
The matter is one of considerable
difficulty