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at some future date such Chinese coins may oust the Hongkong coins renders it all the more necessary for this Government gradually to absorb what remains of its own issues.
I have not lost sight of the fact that it might be more advantageous to redeem a certain quantity of coin before prohibiting the circulation of Chinese coin. But I have arrived at the conclusion that apart from the reasons referred to in paragraph 8 of this Despatch prohibition should synchronise with the accelerated redemption advocated in Kr. Thomson's melio- -randum, for it may easily happen that prohibition alone may effect a more rapid rehabilitation than it is possible to fore- -cast and there is danger without it of redeeming more Hongkong coin than is really necessary at the present time.
3.
If this method of successfully financing the possible difficulties expected to arise during the process of re- -habilitation of the subsidiary coinage is adopted, there remains the question of prohibition of the circulation of foreign subsi- -diary coins without which complete rehabilitation would, in the opinion of this Government, prove to be a failure.
15 mm v 1/2
In my Confidential Despatch of the 2nd. of August I wrote that in view of the political situation in China and of the obligation which she is under to reform her currency,
I was not prepared to advise any active steps for the rehabilita- -tion of the subsidiary coin of the Colony.
At that time the Government of the Kwangtung Province was in a very critical financial condition and I did not
wish to take any step which might embarrass it further. I was
inclined rather to leave the question of the rehabilitation of the
Hongkong Subsidiary coin to be solved with the introduction of
currency reform in China.
Since then however the situation has altered.
On the one hand the Government of the Kwangtung, Province has
escaped the storm which threatened it, has obtained sanction for
a Provincial loan and will I assume now be assisted out of the
Sextuple Loan which has practically been concluded. On the other