:
C
70
7
Hongkong & Shanghai Pkg Burpen: London.
-2-
nothing in such a transaction to make it attractive even were it
not dangerous. At beat it would mean a small immediate profit
and leave me without any means of replacing the coin in case of
necessity. The dollars would melt in Shanghai at Tls.71 per
quantity $100 and to import ́any/from Shanghai could probably not be done
under 75 and it is doubtful if any large amount of Mex. dollars
could be secured in any case. British and Mexican dollars are
the only coins legal tender here. The former can only be ob-
tained by minting in India (heavy shipping expenses and 2%
seignorage) and the latter are getting scarce, so the Colony
might be left without any means of obtaining currency.
The contention that the Authorities cannot ask the U.S.
to supply silver to China so long as we have a Reserve of $150
lace against our Note issue is truly Judicrous. There is no
real surplus mf stock of coin here in fact our holdings should
be higher than they are all things considered. Shanghai must
look elsewhere than to Hongkong for silver. I hope you will do
your beat to remove the false idea that we have too much silver
coin in the Colony as nothing could induce me to ship away any
coin under existing conditions; to do so would be pure madness.
It is very satisfactory to note that in case of necessity
any temporary increase in the circulation can be covered by
securities in London so long as we have say $100 lacs deposited
with the Government. Although agreed to by the Home Authorities
it might be necessary to have the ordinance altered as at present
it calls for dollar for dollar in the case of excess issue, i.e.
/when