24
of the Hang Kany Shanghai Bank
$45.000.000
all notes issued.
A stamp duty of 1% per annum is charged on
This duty has been waived in respect of a part of the issue It will be observed that the Banks are compelled to pay out silver for notes on
demand, but not to hand out notes for silver on demand.
Hong Kong is therefore, theoretically, on a
pure silver currency basis.
nothing of the kind.
Actually however it is
In the first place locally the Bank-note
commands, or until quite recently commanded, a premium over the metallic dollar in internal monetary transactions.
In the second place the exchange value of
the "Hong Kong dollar" in London, Shanghai and other financial centres is at present and for a long time
has been above the value in the same centre of the
silver content of the dollar itself, that is the Hong Kong dollar is at a premium.
These two premiums, the "note premium" and
the "exchange premium", which are really separate phenomena due to separate causes, have so far apparently been hopelessly confused (a fact which perhaps explains the general state of blur prevailing at present). Naturally they affect one another, and must bear some
relation to one another, but they are really separable and one might quite easily exist without the other.
Indeed
it is not clear that the former premium still exists; the latter certainly does.
As regards the relationship of coins and notes locally, as stated above, coin alone is technically legal
tender