5
!
19049
247
improbable that the discount on Hongkong and Canton small silver
coins would by this time have disappeared.
252
Failing success in its negotiations with the
Chinese Government, this Government has never lost sight of the
fact that prohibition of the circulation in the Colony of the
Canton coins would be necessary. Without such prohibition it was
obvious that in the face of continued issues of Chinese coins and
their influx into the Colony the withdrawal of Hongkong coins would be a useless expense as you have described it.
5.
Negotiations with the Chinese Government have
absolutely failed and there seems no immediate prospect of their
taking steps for the reform of their currency. This Government is
therefore forced to rely on its own measures to retrieve the
difficult situation into which it has drifted through want of fore-
-thought in the past.
6.
The crux of the problem of rehabilitation is
the uncertainty of the amount of Hongkong subsidiary coin put into
circulation and still in existence. In my Confidential Despatch of
the 27th. of April, 1907, I estimated the amount at $20,000,000.
That was a mere guess. There are no ascertainable facts to base an
estimate on. The best opinion now is that my estimate was far too high. With a view to gaining more accurate information I caused
the Treasurer to issue to the local Banks and Money Changers a
circular, copy enclosed, enquiring what amount of Hongkong sub- -sidiary coin would be offered to Government within the next 2
months if it decided to buy up all the available subsidiary coin
in the Colony.
7.
The result is that the European Banks offered 830,000 only at 5 per centum discount. These Banks hold a total of only $925,000 of which $850,000 is for sale at par only while 845,000 is kept for their own current use. None of the Chinese Banks or lioney Changers made any offer, from which it is inferred that they hold no great stock but carry on exchange business chief- -ly from the coins coming in and going out from day to day.
In