76
2.
An authorisation was issued
Banks to open for domestic banking. permitting the opening and operation of accounts in Hong Kong dollars with effect from the 17th October, 1945. Withdrawals from such accounts were no longer subject to control and the Banks were permitted to make fresh advances. They are in fact being encouraged to assist the two Land Investment Companies who require funds for the reconstruction of buildings, but to show a preference for the reconditioning of residential accommodation rather than office premises. Old Accounts remain unaffected. They are still blocked and cannot be operated. The new measure has resulted in a moderate increase in deposits and for the first few days notes have been returned to the banks totalling an average of perhaps $200,000 a day. This has unfortunately not helped the note position to any appreciable extent as a large proportion of hoarded notes have been returned which were unfit for reissue.
Currency Situation:
The number of new notes issued up to the 12th October was as
follows:
Note Issue:
H.K. Government Notes
H.S.B.C. Notes
3,000,000.00
Chartered Bank Notes
Mercantile Bank Notes
Chungking Shipment (Counted & issued to date)
Yokohama Specie Bank
Total Notes issued as at 12.10.45
5,750,000.00 1,000,000.00
255,000.00 10,005,000.00
8,007,609.28
4,012,319.70 $22,024,928,98
I think it may now be said that the note issue has been successfully launched though the stocks available are only just sufficient to meet current demands and there is a particular shortage of $5.00 and $10.00 notes. It is hoped however, that further consignments of the notes, which are now on their way, will soon arrive. The counting of the Hong Kong Notes from Chungking is proceeding somewhat slowly as the consignment contains a number of "duress" notes and forgeries. It also contains a very high proportion of notes of the higher denominations for which there is little demand. Arrangements have been made for a responsible European officer to be present while the examination is taking place.
The yen has to all intents and purposes ceased to be current though a few individuals who contracted obligations in yen are endeavouring to accumulate the necessary quantities to effect repayment in that currency.
Yen notes are being used as gambling counters and even the small Chinese shop keepers have given up quoting prioes in yen and are quoting in Hong Kong dollars. In the New Territories yen are still occasionally used for transactions of a trivial nature as the new ourrency is only now penetrating to the more remote areas in sufficient quantity. This position will not persist and it is considered that it would be unwise to revive interest in the yen by publishing any official notice regarding its demonetization. It appears to be in every way preferable to let it die a natural death.
The position in regard to the Chinese National Dollar is still a potential danger. This currency has now fallen to about 1000 to HK$9.60 and with widely differing rates prevailing in other parts of China, the situation offers very tempting opportunities to speculators. So far as can be judged, however, Hong Kong dollars have not yet been exported for speculative purposes on any scale. A ban on export is not practicable as nothing must be done which would discourage the entry of foodstuffs from the surrounding districts, but the export of Hong Kong dollars by service personnel leaving for other areas has been prohibited.
The/