follow suit, and, as the fixed gold
value of the dollar would almost cer-
tainly be higher than its present ex-
change value, the Government of Hong
alam
Kong would be exposed to a farther unsecured
A
liability in respect of its notes.
This.contingency is at present remote
but should not be lost sight of.
5.
As at present advised his
Lordship therefore considers that the
circumstances do not warrant him in
agreeing to the proposal put forward
by Sir F.Lugard, though he is disposed
to think that the question might be
re-considered at a later date if circum
stances are more favourable and the
outlook more assuring.
6.
The Lords Commissioners how-
ever will have observed from the enclos-
ures to Sir F.Lagard's despatch that the
number of notes in circulation is con-
DRAFT.
(Mr Thomson's minute.
of 15.12.08 in.35645)
considerably less than is required
by the community; and that they
stand at 3 % premium over legal
tender. It will be seen that in
November 1908 the value of the
notes issued by the Banks in excess
of the value of their paid up
capital was 85,900,000. In view of
the fact that the two Banks which
have the privilege of issuing notes
are compelled to deposit with the
or bublin
Government dollars to the whole
value of the excess issue, it is
not possible to expect them to remedy
the situation by increasing an
unprofitable if not expensive excess
issue.
7. Lord Crewe has no doubt that
their Lordships will agree with him
in thinking that it is highly un-
desirable that the notes issued by
siderably
the