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38
is
There is a good deal of difference of opinion as to what amount of currency needed in the Colony. With an unlimited Government note issue, fully secured by Silver deposits, such notes would be as much in demand as the present ones, but the time would come when it would be found that the note issue was redundant. By an unlimited note issue the actual needs of the Colony would be ascertained and if the note issuing banks are not then prepared to, or are not sufficiently strong to have a secured note issue to the required amount. then the facility would have to be granted to other banks to issue notes, or if this is not thought advisable the Gov- ernment's note issue could remain a permanency.
In any case when the required amount is arrived at there would be no reason for Government to waive the one per cent tax on any of the notes in circulation.
This suggestion is made on the assumption that the local banks are serious when they say they want to see the value of the Hong Kong Dollar down to parity. Since they declared in favour of parity the stumbling block has been the drop in the price of Silver. Had Silver gone the other way local exchange would not have followed, and the neighbourhood of parity would have been seen, but speculators and banks, having advices that Silver was weak, made heavy purchases, and the liquidation at every profitable opportunity, of these additional items, by re-sale to any bank offer- ing to purchase, has given an extra, but fictitious strength to the market. One or two of the banks are of the opinion that this position will gradually be worked off, but the difficulty is to know how long it will take, as there seems to be no end to it. So unless we are content to accept the prospects of continued business inactivity in the Colony, something more than the policy of "laissez faire" must be adopted, and adopted quickly.
39
VII.
Date.
Price of Ready
Bank's Sterling
Laying down Cost of Brit. $
Bar Silver
1929.
Pence.
Selling Rate. (Market).
taking ready Bar Silver price London.
Premium
on
Notes.
October
23 3/16
1/11 9/16
1/8. 595
14.409
23 5/16
1/11 9/16
1/8. 706
13. 795
23 1/4
1/11 1/2
1/8. 651
13.796
23
1/11
1/8. 540
11.977
23 1/8
1/9 3/4
1/8. 540
5.891
Sunday.
7
23 1/8
1/9 1/2
1/8. 540
4.674
23 1/16
1/9 1/2
1/8. 481
4. 96
22 15/16
1/9 5/16
1/8. 373
4.611
10
22 15/16
Holiday.
1/8. 373
23 1/16
1/9 9/16
1/8. 484
5.265
12
22 15/16
1/9 7/16
1/8. 373
5. 225
Sunday.
14
23 1/8
Holiday.
1/8. 540
15
23 1/16
1/9 1/2
1/8. 484
4. 96
16
23 3 16
1/9 1/2
1/8. 595
4.394
17
23 1/8
1/9 9/16
1/8. 540
4. 978
18
23
1/9 7/16
1/8.429
4.937
19
23 1/16
1/9 7/16
1/8. 484
4.655
Sunday.
21
22 15 16
1/9 3/8
1/8. 373
4.918
22
22 15/16
1/9 7/16
1/8. 373
5.225
23
22 15/16
1/9 1/4
1/8. 373
4.305
24
23
1/9 3/8
1/8. 429
4.631
25
23
1/9 7/16
1/8. 429
4.937
26
23 1,8
1/9 1 2
1/8. 540
4.674
Sunday.
28
23
1/9 7/16
1/8. 129
4.936
29
22 15/16
1/9 3/8
1/8. 373
4.918
30
22 15/16
1/9 3/8
1/8. 373
4.918
31
22 7/8
1/9 5/16
1/8. 318
4. 895
H. & S. B. C.
Note Circulation:
20th September...... $45,932,000
31st October
49,573,000
Chartered Bk.
$14,837,000 15,286,000
"
94