1
COPY.
Enclosure 1.
502
The Mercantile Bank of India, Limited, Hongkong, 14th. January, 1914.
The Honourable
The Colonial Treasurer.
Hongkong.
I
Sir,
12361
I APR
•
With reference to my interview with you of a few days ago on the subject of the amelioration of the conditions under which this Bank is permitted to issue Notes in the Colony and your request that I state in writing the reasons why such amelioration should be granted, I have now the honour to address you with that object.
The present conditions are, that for every dollar we issue in Notes, the full equivalent shall be under the control of the Government, either in securities in London or coin in the Colony.
It is obvious that there can be little gain to this Bank under such arduous terms, and we are moreover placed at a disadvantage in relation to the other British Banks, the Hong- -kong and Shanghai Banking Corporation being allowed to issue notes to the full extent of its capital, on the deposit of a third part of that amount with Government,
The terms granted to the Chartered Bank of India, Australia and China are not disclosed, but we have reason to believe they are better than ours, and we would ask to be placed on equal terms with the above two Institutions.
The utility of the lotes of the Banks of Issue is beyond
all question, used as they are universally and more often than
not, standing at a premium over the standard dollar. We find
a very large demand for lotes and the small amount we are able to
issue under ourprese
resent circumstances as readily absorbed.
If permitted on more liberal lines, our love Issue would
be of service to the community in lessening the produm on Notes
or