50
provisional Government at Canton is aggravating the situation by issuing large quantities of small silver coins from the Mint there.
-
No. 50.
Copy of despatch from Secretary of State for Colonies to the Treasury.
I have, &c.,
No. 26277/1912.
F. H. MAY,
Governor, &e.
DOWNING STREET,
28th August, 1912.
113
No. 43.
The Right Honourable
LEWIS HARCOURT, M.P.,
&c.,
&c.,
&c.
No. 49.
Copy of despatch from the Treasury to Secretary of State for Colonies.
No. 1068/12.
TREASURY CHAMBERS,
10th August, 1912.
SIR, The Lords Commissioners of His Majesty's Treasury have carefully considered Sir H. W. Just's letter of the 13th January last (41096/1911) and its enclosures relative to the redundancy of Hongkong subsidiary coin, and They now direct me to make the follow- ing reply.
The difficulties of the situation are so great that in Their Lordships' opinion they admit of no solution less drastic than that agreed upon in September last; in view however of the objections urged by Sir F. Lugard My Lords agree with the Secretary of State that it would be inexpelient to attempt to proceed with the scheme against the opinion of the Colony, and its initiation must, at any rate for the present, be abandoned.
Their Lordships further agree with Mr. Secretary Harcourt that the scheme proposed by Sir F. Lugard cannot be carried out with any prospect of success except at a cost beyond the means of the Colony.
There remains the scheme now suggested by the Secretary of State, viz., that an attempt should be made to deal with the problem by the issue-restricted to suit the con- venience and purposes of Government-of Government notes of unlimited legal tender in place of redundant subsidiary coins.
In regard to this I am to say that, having very carefully considered the arguments adduced in favour of this scheme, My Lords are of opinion that it would be sanguine to anticipate that an issue restricted within the limits which prudence would suggest in this case will be sufficient to make (except in the distant future) any appreciable effect on the redundancy of subsidiary coin, regard being had to the smallness of the sums which are likely to be available for investment after covering the issue with standard dollars to the extent of two-thirds.
In these circumstances and in view of the general objections to a Government note issue at the present time-indicated in paragraph 6 of the letter under reply-My Lords are disposed to think that the proposed scheme would introduce a fresh complication and risk into the situation without sufficient compensating advantages, and They would depre- cate its introduction accordingly.
your
Sra, I am directed by Mr. Secretary Harcourt to acknowledge the receipt of letters No. 1068 and No. 15880* of the 10th instant, with regard to the issue of one dollar No. 49. notes in Hongkong.
2. Mr. Harcourt will now consult the Governor of Hongkong before making further observations on his proposal to issue Government notes of low denomination in exchange for subsidiary coin.
But in the meantime, as it is clear that there is a demand for an increase
in the number of one dollar notes in the Colony, he recommends to the Lords Commissioners of the Treasury that the Hongkong and Shanghai Banking Corporation should be permitted to increase their issue of one dollar notes from 226,000 to 350,000, on the conditions now obtaining with regard to these notes, including the obligation of unconditional withdrawal from circulation should the Government of the Colony decide to issue small notes of lower denomination than five dollars.
3. The Government would of course treat the Bank with consideration should it be decided ultimately to issue Government notes of small denomination at no great interval after authorizing this increase of the Bank's issue. The total amount of the increase, 124,000 dollars, is no very serious matter.
4. I am to request the favour of an early reply to this letter.
THE SECRETARY TO THE TREASURY.
I am, &c.,
H. J. READ,
for the Under Secretary of State.
No. 51.
Copy of despatch from the Treasury to the Secretary of State for Colonies. No. 17595/12.
TREASURY CHAMBERS,
2nd September, 1912.
SIB,-As recommended by Mr. Secretary Harcourt in Mr. Read's letter of the 28th No. 50. ultimo (25277/1912) the Lords Commissioners of His Majesty's Treasury sanction the proposal that the Hongkong and Shanghai Banking Corporation should be permitted to increase their issue of one dollar notes from 226.000 to 350,000 on the conditions now obtaining with regard to these notes, including the obligation of unconditional withdrawal from circulation should the Government of the Colony decide to issue small notes of lower denomination than five dollars.
I am, &e..
THE UNDER SECRETARY OF STATE,
COLONIAL OFFICE.
I ain, &c.,
ROBERT CHALMERS.
* Not printed.
THE UNDER SECRETARY OF STATE,
COLONIAL OFFICE.
* Not printed.
ROBERT CHALMERS.