CO882-(1-2) — Page 313

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CONFIDENTIAL.

Mauritius Currency. 1855.

PUBLIC RECORD OFFICE

Reference :-

TELEC.O. 882

1

PUBLIC RECORD OFFICE, LONDON

ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC.

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THE system of Government paper currency to which the Treasury propose to put an end, originated in an application made to Lord Grey, towards the end of 1847, by the leading firms connected with Mauritius in this country, that measures might be adopted by Government to mitigate the conse- quences apprehended from the failure; in the com- mercial crisis of that period, of some of the principal capitalists-Reid, Irving, and Co., amongst them- by whose means the trade and cultivation of the island had been carried on.

Lord Grey upon this application directed the Governor to make advances to the planters out of the Government balances, at so much a ton, on the security of shipments of sugar, and to combine with this measure the introduction of a system of Government paper currency. (Lord Grey's despatch No. 210 of the 25th October, 1847, page 255 of Parliamentary Papers, 4th February, 1848).

At this time almost the entire circulation of the island consisted of coin, there being no Government paper, and only a very small issue from the Banks, of which there were two, the Mauritius and the Commercial, both possessing charters which gave them the right of issue. Lord Grey held that the soundest and most profitable system of currency for communities generally was for the Government to undertake the imue of notes itself, to the exclusion of all private parties, through Commissioners bound to conduct the issues according to certain rules and to retain a certain reserve of specie to pay the notes on demand, these at the same time to be made legal tender; and that the introduction of much a

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