417
140.4 116/10.
Mr. Cox's letter of 8th. April, 1910,
paragraph 3. The whole basis of the scheme proposed is that it;
is alternative to prohibition of the circulation of Chinese
coins in Hongkong by any except a natural process of reducing
them to a discount which would automatically operate to
exclude them. The assumption, however, that the trade of
Hongkong with China would be dislocated by the exclusion of
Chinese coins is one with which (though I personally consider
that it deserves a limited consideration) an influential
and experienced group of merchants entirely dissent,
urging
that trade with China is conducted by means of bills of ex-
-change and notes, and not by subsidiary coinage. It can
hardly therefore be postulated as an axiom.
3.
Ibidem paragraph 4. I venture to
submit that the application of "Gresham's law" to the
circumstances of this Colony overlooks the vital fact that
the higher value coins are legal tender while the others
are not and that as soon as the difference in value between
the two sets of currency became applicable, the Chinese coins
would be refused only too gladly by the large firms whose
receipts are chiefly in Subsidiary Coins, e.g. the Tramway
and Star Ferry Companies.
A.