46684
SIR,
24
BRITISH GUIANA.
No. 16.
THE GOVERNOR to THE SECRETARY OF STATE.
(Confidential.)
(Received 26th November, 1914.)
[Copy to Treasury, 1st January, 1915. L.F.] [Answered by No. 18.]
Government House, Georgetown, Demerara,
5th November, 1914. As on the outbreak of war there appeared to be a likelihood of great scarcity of currency, owing to the disposition evinced by the population to hoard coin, and very large withdrawals have since been made from the Government Savings Bank from a curious rumour that the Government was going to use the Savings Banks moneys for the purposes of the war, I deemed it desirable to print, secretly, a supply of Government notes of small value ($1 and $2) to the face value of $50,000, for issue as legal tender in the event of necessity. I am glad to say that $25,000 at confidence appears to be restored, and both banks now inform me that the drain
$1. on their resources has ceased and business is normal. $13,500 at
$2.
2. The notes printed are lying in the Treasury safe unsigned. It also appears that the present local circulation of notes of the Royal Bank of Canada is about $250,000, and of the Colonial Bank nearly the same amount, while the maximum authorized issue of these two companies is $500,000 and $360,000 respectively.
3. In the event of necessity arising, I proposed to quickly pass an Ordinance authorizing the issue of Government currency notes, and making them legal tender, and, should this not have sufficiently alleviated the situation, which I considered extremely unlikely, to proceed further and to make the notes of the two banks also legal tender, subject to a coin reserve of $1 for every $3 of the note currency. I proposed also to maintain a coin reserve against Government currency notes issued at the same proportion.
4. I know that these are not proposals which would meet with your approval in ordinary times.
5. A motion was moved in the Combined Court by one of the elective members, at the meeting held on the 7th September, in favour of the immediate issue of Government notes as legal tender. The Government opposed this resolution on the ground that there was no present necessity or financial stringency to render this necessary, and after I had explained this the motion was withdrawn.
25
BRITISH GUIANA.
2. It appears that the extra charges on account of war risk and insurance have been reduced by one-half since the time I first addressed you, and that the banks are now purchasing gold on practically the same terms. as those offered by the Bank of England.
3. In these circumstances, I do not propose to take any further action in the matter, unless more onerous terms should again be imposed by, the local banks.
4. I have the honour to request that you will convey the thanks of this Govern- ment to the Lords Commissioners of His Majesty's Treasury and to the Bank of England for the assistance they have offered in this matter.
I have, &c.,
WALTER EGERTON.
46684
No. 18.
THE SECRETARY OF STATE to THE GOVERNOR. [Copy to Treasury, 1st January, 1915. L.F.]
SIR,
Governor.
(Confidential.)
Downing Street, 23rd December, 1914. I HAVE the honour to acknowledge receipt of your Confidential despatch of the 5th November, in which you report upon the steps which you propose to take in the event of its becoming necessary to issue Government notes or to make the notes of the Royal Bank of Canada and of the Colonial Bank legal tender.
2. I observe that in either case you propose to maintain a coin reserve against any notes so issued of one dollar for every three dollars of note currency. I consider that, if the note issue by the Government is intended to be permanent, the Ordinance authorizing the issue should provide that the coin reserve should be at least half the value of the notes issued. A provision may, however, be added to the Ordinance giving the Governor, with the approval of the Secretary of State. power to suspend this requirement temporarily. Subject to this I approve the proposals set out in your despatch.
3. I also enclose a copy of Jamaica Law No. 36 of 1914, for your informa- tion, in case it may become at any time necessary for you to pass legislation on the subject.
I have, &c.,
L. HARCOURT.
I have, &c.,
WALTER EGERTON,
Governor.
1075
PUBLIC RECORD OFFICE
Reference :-
EPERE CO. 885
24 PUBLIC RECORD OFFICE, LONDON
ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC- COPYRIGHT PHOTOGRAPH—NOT TO
49130
SIR,
No. 17.
THE GOVERNOR to THE SECRETARY OF STATE. (Received 9th December, 1914.)
(Confidential.)
Government House, Georgetown, Demerara, 12th November, 1914. WITH reference to your despatch Confidential, of the 23rd September last,* communicating to me the arrangements which you had been good enough to make with the Bank of England regarding the purchase of gold produced in the Colony, I have the honour to state that the knowledge that this Government had addressed you on the subject, and that the Bank of England was prepared to assist in the matter, has caused the local banks to very greatly reduce their charges, and that the producers are now disposing of their gold to the local banks in the same way as they did before the war.
* No. 11A.
SIR,
(No. 505.)
No. 19.
THE GOVERNOR to THE SECRETARY OF STATE. (Received 7th January, 1915.)
Government House, Georgetown, Demerara, 14th December, 1914. WITH reference to the correspondence noted in the margin, I have the honour to state that the following motion was intro- duced by the Government in the Combined Court on the 23rd November, viz. :—
From Secretary of State, No, 280, of 22nd
September, 1914.†
From Secretary of State, No. 309, of 19th
October, 1914.‡
From Secretary of State, No. 809, of 19th
October, 1914.
"That the Court authorizes the Govern- ment to guarantee an advance of $75,000, to be made by the Royal Bank of Canada, to the local manager of the Consolidated Balata Company, with interest thereon, and other terms as set out in the attached draft agreement, to be used as set out in the schedule below; the security for the guarantee to be not less than 1 lb. of balata for every 15 cents advanced.
* No. 16.
+ 84481: not printed.
88272: not printed. § 37888: not printed. Not forwarded to Colonial Office.