Jagul
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the
cas
fairly
be much dat hu fosition is due to the inaction of the Bank self.
s!
say what the emergency really was, and what it
really comes down to is that the Chartered
Bank are left rather at the mercy of the Hong
Kong and Shanghai Bank. They cannot increase
their own note issue, and they can only get notes from the Hong Kong and Shanghai Bank on such terms as the latter may choose to dictate. This is no doubt a regrettable state of affairs, but I do not think it would justify such illegal action as authorising the Bank to exceed the
limits of its note issue.
The Chartered Bank note issue is at
present secured by coin and securities of which
one-third at least must be actual silver (this
last condition exists in virtue of an undertaking
given by the Bank, and is not at present included
in their Charter though it is proposed to include
it in the new consolidating Charter). There is the Hong Kong Government tax of 1% on the value
of their note issue. The Bank contemplated that
the increased issue would continue to be subject
to the same conditions - i.e. deposit of one-
third in silver and payment of the 1% tax. The
Hong Kong and Shanghai Bank have been let off
the 1% tax for any part of their issue in excess
of $45,000,000. On the other hand, they have
to deposit silver coin or bullion to the full
amount of any extra notes that they issue.
Supposing that we allow the Chartered Bank to
exceed its present issue limit, either now or
hereafter, there is a possibility that it may
be represented that the Banks are not treated
on