:
550
7116
10
Do
Treas
39040
1914 a sum of $136,000 is provided to meet the cost of melting down eight lakhs.
9.
It will be seen that subsidiary coins are being very rapidly taken out of circulation, but I submit that still more should be done to accelerate a final and complete rehabilitation. It is in my opinion highly desirable that this Government should seize the opportunity to stimulate the growing sense of confidence among the public, and I consider that this purpose would best be accomplished if the Government were itself to go into the market and offer to purchase coins at the prevail- -ing rate of discount.
10.
A similar course was advocated by Sir F. Lugard in paragraphs 10 and 11 of his Confidential Despatch of the 20th. January, 1910, but in the circumstances then obtaining it did not meet with approval; for the reason mainly which is given in paragraph 4 of the Colonial Office letter to the Treasury of the 8th. April, 1910, forming one of the enclosures in your Confidential Despatch of the 13th. January, 1911, that it was
To considered that no effective action could be taken to rehabilitate
the Hongkong coinage in Hongkong until Chinese coin was excluded.
With exclusion now in force this objection
11.
is removed, and I would ask permission to use $500,000 out of the Colony's balances as a capital sun for the purpose of redeeming subsidiary coin by purchase at a discount, the loss on each trans- -action being charged to the head "Miscellaneous Services: Loss on subsidiary coins". It is not impossible that if the Government
were to come forward as a purchaser in any considerable sum, tile
coin would fortnwith go to the neighbourhood of par, in which
event no heavy expenditure would be necessary; but in any event
purchase at a discount is a cheaper method of redeeming the coin than the system of collection at par, and it has the further great advantage that it will accelerate the final ending of a state of affairs which has for so long formed a just ground of complaint
among the whole community.
12.