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ment issue of notes, to invest any considerable portion of
the funds representing such notes, as in the event of
pressure on the Government for silver, the Banks would also
be pressed, and would probably be unable to purchase
Government drafts, even at more than ordinarily remunera-
tive rates. And that times of such pressure might be
apprehended is certain. The Committee learn that the Banks
here have to be constantly prepared for a drain of silver
to Canton and other Chinese ports setting in with great
rapidity. A sudden drain of this kind last year is said to
have amounted to $5,500,000 in four months. It would seem
to be undoubted that combinations to bring about a monetary
crisis are not unusual amongst native capitalists.
5. The proposal of the Directors of the Hongkong and
Shanghai Bank is that the Bank should issue as many one
Dollar notes as may be required, keeping the issue so made
entirely separate from the issues of notes of larger
denominations,
basis.
and making it upon an entirely metallic
That is to say, the Bank would ear-mark and deposit
in a separate vault, the keys of which would be kept by the
Colonial Treasurer, a special reserve of Mexican Dollars
equal to the full extent of its One Dollar Notes in circul-
ation. By the local Ordinance constituting the Bank (as
will be more fully shown below) this reserve would be, in
case of a suspension of payment, inalienable to any other
purpose than that of paying the Notes. It is evident that
this part of the Bank's proposal saves the Goverment the
expense of building a suitable vault and also of guarding
it.
6. The Committee understand that the Hongkong and
Shanghai Bank has a large stock of One Dollar notes in
hand, and that the staff necessary to conduct the issue is
already in existence.
"7. The Committee invited the attendance of the
Managers