PUBLIC RECORD OFFICE
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Reference :-
C.O. 882
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ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC- COPYRIGHT PHOTOGRAPH-NOT TO
PUBLIC RECORD OFFICE, LONDON
.to
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payments, and not secured by any deposit, and the re t on account of the standing loan of 100,0007., bearing interest, and secured by deposit. The rate of interest on the loan was fixed in the agreement at 1 per cent. The Governor was not instructed to demand any particular rate, but he considered that the private correspondence between Mr. Blyth and Lord Grey, which the Bank directors showed him, contemplated the rate of 14 per cent. agreed to. The Government was bound, by a somewhat obscure provision in the Agreement, to maintain at
a sufficient amount the floating balance, free of interest;
the Bank, on the other hand, being bound
to refund monthly into the Treasury all balance in excess of 20,0001, or pay the Government 5 per cent. interest on such excess. The whole agreement was terminable by either party at three months'
notice.
The arrangements thus made in 1849, by agree- ment with the Bank and by Ordinance, with some alterations, or rather interpretations, afterwards
adopted to meet defects (as will be presently de- scribed), remain in force at the present time. The first issue of notes in 1849 amounted to about 66,0001. only, being the amount of the coin in the Local Treasury, available for transfer to the Com- missioners. This issue was handed over to the Bank an already stated, partly as floating balance, partly as standing loan, and the Bank soon threw it into circulation. Further issues were from time to time made by the Commissioners, partly to the Bank directly, against such specie, as it was convenient for it to exchange for notes; partly to the Treasurer against former or fresh investments in England of former or fresh surplus revenue; the Treasurer re- issuing these notes to the Bank as standing loan.
The last return shows a total circulation in the hands of the Bank and public, on the 30th Septem- ber, 1854, of 166,032., represented by
£
(1) Specie in the Commissioners' chest. 92,932 (2) Investments in Stock
73,100
£166,032
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amount of 100,0004, secured by a like amount of Indian stock, deposited by the Bank with the repre- sentatives of the Mauritius Government. The floating balance in the Bank on the 30th September, 1854, was 20,9414, at about which sum it has been the practice, and appears to be the local under- standing (as it was Lord Grey's instruction), to main- tain it. There was besides at the same date (as there has been all along to much the same amount),
a specie balance of 15,0131, retained by Govern- ment in the vault; but part of this is base or obso- lete money.
The scheme had no sooner begun to work, than various defects and anomalies began to be brought
to notice, partly in the scheme itself as framed by the Home or Local Government, and partly in the pre-existing system of metallic currency with which it was connected.
In the first place it was observed that the Cur- rency Commissioners issued notes in some instances against bills on England obtained from the Bank or Commissariat. Lord Grey's instructions of March 22, 1849, authorised issues not exclu- sively against specie, but also against the Exchequer Bills then standing to the credit of the Mauritius Government. The Local Government, to cover
this object, gave the Commissioners power, in the Ordnance of 1849, to issue against either specie or securities. This power, and the way it was used, was disapproved of in 1850 by Lord Grey and the Treasury; and the Commissioners were instructed to issue against specie only, afterwards investing the authorised proportion of one-half of such issue if thought proper. The Ordinance, however, was allowed to stand, and still remains unamended ; Lord Grey anticipating thas other amendments to meet other defects under his consideration would be necessary.
Secondly. It was found that the notes were gra- dually returned to the Commissioners for payment, without any couster-presentation of specie to be sxokuzgad paper. The note circulation w
judling away.
To meet this indwond the Bunk to
thus
The loan to the Bank stands at the fall sanctioned