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14
a rather remarkable repudiation on the part of
Government of its own legal tender currency. The
natural result of this odd Hong Kong arrangement was
that a premium of something like 15 was established
in favour of notes. Recently, the banks and the
Government seemed to have come together and made up
their minds that the preference for notes over silver
ought to come to an end, and consequently the
"Commercial Convention" was cancelled, with the
result that the premium on notes rapidly disappeared.
For some little time there was apparently an
opportunity to make money by buying silver, taking it
to the mint, or one of the Indian mints, for coinage
into silver dollars, and shipping the dollars to
Hong Kong.
in this now.
But I doubt whether there is much money
We understand that large orders were
placed for the minting of Hong Kong dollars, and will
certainly go on being executed for a month or two.
These orders are said to have been placed mainly by
foreign firms. The Manager of the Chartered Bank
of India told us that he had done some of this
business himself. The other principal elements in
the situation are the very low price of silver, which
is now the lowest on record, but has probably not
reached bottom, and the adoption of a gold basis
currency in Saigon.
Chinese Maritime Customs have
also recently started collecting customs duties on a
gold basis. I am not sure about details of this,
but my impression is that in the case of specific
duties they are not accepting silver at its face
value