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Hong Kong Annual Administration Reports, 1841-1941
REPORTS EXHIBITING THE PRESENT STATE
in amount, because the latter must always be proportioned to the number and magnitude of the transactions on which the tax falls.
49. Unavoidable delays, as your Grace is aware, prevented the Stamp Ordinance from coming into operation till the 10th instant, and, judging from the present receipts, I think an increase to the revenue from $100,000 to $120,000 may be expected from that source. I understand, however, that so large an amount is not anticipated by those whose opinions on such a subject should have weight.
50. I have, however, entered so fully and so frequently into all details connected with the financial position of the Colony and the Stamp Ordinance, that, with the above remarks, I pass to another subject of great interest, and which it would be impossible to omit from a review of the year 1866. Few incidents indeed connected with Hong Kong during the past year attracted more attention than the opening of the Mint; a scheme originally devised with a view to increasing the colonial revenue by profits expected from the coinage of dollars and other money for circulation principally in China. The establishment was formally opened by myself on the 7th of May of last year, but its success has unfortunately not as yet answered the expectations of its projectors.
51. In my Despatch No. 172 of the 15th December last, I had the honour to lay before the Secretary of State the report of a commission of inquiry into the Mint, and also a return of the true cost of the Mint up to that time, in buildings, machinery, &c., &c., as well as loss of interest on capital sunk, an account of the items of which had been very carefully revised by the Auditor General, and the total even then amounted to $450,000. This has been since increased, including all expenditure here and in Europe on account of the Mint, to not less than $520,000.
52. Against that expenditure the only profits received from the Mint have been $18,823, as explained in my Despatch No. 373 of last month. A portion of those profits consists only of the credit taken by the Mint for alloy as silver in the subsidiary coins struck for Government, although a large portion of that coinage still lies unavailable in the Treasury, in consequence of the unexpected difficulty of getting rid of it. It is quite true, as remarked by me in my Despatch of last December, that if subsidiary coins be made with only 80 per cent. of silver instead of 90, as in the case of dollars, we should get 100 instead of 90 dollars for 80 parts silver, but till we can induce the public to take them, not merely is no profit made, but a loss of interest is incurred on the silver employed.
53. As the seignorage charged has been reduced one half since the 12th of December last year, and is now only one instead of two per cent., a figure so low that it would require an annual coinage of upwards of 13 millions of dollars merely to pay the Mint's current expenses when in full work, with so small a seignorage it would seem that every reasonable encouragement has been given to the public to send in bullion for minting. The Chinese Government has also declared the Hong Kong dollar a legal tender in payment of all Government dues, but, nevertheless, the Mexican dollar still commands a premium over the Hong Kong dollar, whilst the price of silver has ruled so high for a long period, that, with the exception of a temporary profit made recently under favourable circumstances, by minting Japanese itchiboos, there has been scarcely a possibility of the public profitably using the Mint.
54. No doubt there were several radical errors committed by the projectors of the Mint, who, it must be remembered, had not the aid of actual experience as to the working of the project to guide them, and therefore any comments which I may now make, or which I have ever made, cannot be supposed to reflect in the least on those who were probably more competent than myself to form an opinion based on the information then before them.
55. It would appear, however, that the occasional extra value formerly placed by the Chinese in some districts on certain coins like the Carolus dollar, which rose to a premium at one time of more than 12 per cent., led to inferences not justified by the facts. The Chinese at the opening of trade in new districts naturally distrusted strange coins offered by foreigners, and were ready to give more for those previously known to them. The knowledge, however, which experience conferred, gradually put an end to all fanciful distinctions between coins, leaving only that which arose from the difference of their supposed intrinsic worth, or their general recognition for trading purposes. It would also seem that the projectors of the Mint overlooked the fact that the ancient usages of the Chinese empire necessarily prevent, in the long run, a preference for one