PUBLIC RECORD OFFICE
Reference :-
C.O. 882
PUBLIC RECORD OFFICE, LONDON
ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC-
COPYRIGHT PHOTOGRAPH-NOT TO
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sovereigns in Mauritius up to the present time, under the operation of the Order in Council of 1852.
It is under these circumstances that the present Treasury letters from Mr. Wilson are received.
is
The Treasury propose to be content with the existing practical settlement of the question of the metallic currency, leaving the Order in Council of February 1843 unamended. Perhaps the Treasury, while the substitution of British money for rupees still so recent, are not yet prepared to say whether it will be best to adhere to the old Treasury plan of a combination of British and other coins circu- lating at fixed rates, or adopt the plan of a single legal tender, such as Lord Grey preferred; or perhaps they feel the difficulty of assigning any particular value to coins in the present transition state of the relative value of the precious metals. Silver coins, at the present prices of the two metals, being so much undervalued in the Order in Council of 1843, and no other gold coin besides the sove- reign appearing to find its way to the island, the practical effect of the Order in Council, as it stands, obviously is to make British money the sole legal tender, excluding the rupee from Government trans- actions, and leaving the public, if they think proper to use it, to do so at such rate as they may recog- nise.
The anomalies and objections arising from the expression of the Government notes in rupees, and all other difficulties and objections connected with the notes, the Treasury propose to remove by putting an end to the rystems of Government paper currency altogether-acting upon the general views of prefer- ence for private issues, which were set forth in the Treasury letter on Prince Edward Island currency, dated 13th January, 1854 (No. 5 of Appendix 6, in Printed Journal of House of Assembly of Prince Edward Island, 1854), and thereupon adopted by the Duke of Newcastle and the Prince Edward Island Executive and Legislature.
Two other defects, besides those above mentioned, in the existing system of paper ourrency; have been under reføvenes to the Treasury, in the papers noOW
mowered by Mr. Wilson's letter, viL :——
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1. The limited extent to which it is possible to enlarge the issues, under the present Currency Ordinance, and regulations laid down from this
country.
2. The unprofitable character of the scheme to Government, iu a pecuniary point of view, under the present agreement with the Commercial Bank.
The Governor at one time recommended, as a remedy for the former of these two defects, that the loan to the Bank should be increased considerably above the amount of 100,0001, to which it is restricted by the instructions at present in force; but latterly he has proposed meeting both defects, by availing himself of the assistance of the branch of the Oriental Bank recently established in Mauritius. This Bank obtained a Royal Charter in 1851, which gave them leave to establish a branch in Mauritius, under Treasury warrant, with or without power to issue notes, as such warrant or the Local Legislature might determine. In 1852, the warrant for the establishment of the branch at Mauritius was granted, but without any power to issue notes, In 1853, the branch being set at work, its manager opened nego- tiations with the Local Government, with a view to obtain a share of the money business of the Govern- ment, hitherto confined to the Commercial Bank, and further offered to relieve the Government, upon certain terms, of the entire business of issuing notes. The Commercial Bank, of comme alarmed; (the existing arrangement, which is very profitable them, being terminable at three months' - nosies), mede counter-propositions and algime. The Gevar nor (whose reperts in axhmitting these rival offers were somewhat obesure) appears to have thought that the management of the note niponjatigny had better be given to one Bank, and all other Govern- ment business to the other. The question was left
by this department for the ousidartilán of the Treasury, with the other polots of referenes now replied to by Mr. Wilion. The Treasury - would empowżę.
the
RUBLIC RECORD OFFICE Reference—
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The Governor would be left by the Treasury to divide the Government business between the Banks as he may be able.
Whether the Treasury have stated at the true sum the profit of the Government paper-currency it is not easy to say, but the profit is no doubt low. The main expense of the system, as originally set up, consisted in the large salary of Mr. Macaulay, the Manager, sent out from home. But he resigned at a very early period, and his place was not filled up; the Commissioners of Currency, who all of them had other paid offices, performing the currency duties unpaid. But notwithstanding this absence of ex- pense for management, the undertaking has remained very unprofitable, in consequence of the limited extent of the note circulation, the liberal terms granted to the Bank, and the heavy proportion of specie, viz., one-half of the total issue, which the Commissioners are bound to keep in their chest. Indeed, the effect of winding up the system, as pro- posed by the Treasury, would immediately be to improve very considerably the financial condition of the Colony. The entire note circulation being represented by specie or investments held by the Commissioners, the one will suffice to withdraw the other, and there will remain the loan of 100,0001. to the Bank, upon which sum, when repaid, there will be no claim, and which will consequently be available for public works, or any other purpose of the Local Government. At the same time, the Government would receive some compensation for the annual interest lost upon the investments and the loan, for it would at once save the expense upon of the currency establishment, and realise the pro- posed stamp duties.
March 1855.