CONFIDENTIAL.
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Sir,
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(REGE 21 DEC 12)
GOVERNMENT HOUSE,
HONGKONG. 21st. November, 1912.
I have the honour to acknowledge the receipt of
1783 your Confidential Despatch of the 20th. of September on the subject
of the Subsidiary coinage of Hongkong.
33406
2.
You asked for my advice as to what was to be
done with the accumulation of Subsidiary coins in the hands of the Government and I replied in my telegram of the 22nd. of October that I recommended its sale as bullion. You approved this course and the coins that it was desired to sell have been shipped to England.
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3.
Ky reasons for my recommendation are that in my view and in that of my advisers it would be a retrograde step to pass the coins again into circulation; while the loss of interest renders it costly to hold them. By passing them into circulation this Government would incur the liability of incurring again and again the loss in discount should the coins find their way back into the Treasury while the liability of eventual redemption would continue.
4.
The policy of this Government up to the time when you sanctioned passing again into circulation the subsidiary coin received into the Treasury as revenue, was to withdraw such coins from circulation and to put pressure on the Chinese Government to restrict their issues of small silver coins from the Canton
Mint. Had this pressure been successfully applied it is not im- -probable
E RIGHT HONOURABLE
LEWIS HARCOURT, M.P.,
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&C.
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