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PUBLIC RECORD OFFICE

Reference :-

TTIC.O.882

2 PUBLIC RECORD OFFICE, LONDON

ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC-| COPYRIGHT PHOTOGRAPH---NOT TO

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While the mil might for the present be adopted as the sole copper coin, it appears to us that it would be very injudicious to inaugurate any change by the introduction of a cent piece as the smallest coin forming a legal tender. Public convenience would in no for small pay- upon material degree be promoted by having the cent alone to fall back ments, and the great object of providing the thousands of the labouring Chinese in this Colony, who purchase their daily food for "cash," with a coin of this denomination and of fixed value, would be left entirely unfulfilled. The cent, however, would, no doubt, prove a useful coin; and we therefore recommend the simultaneous introduction of both, if possible, which we think might suffice for a reform of the copper currency. As it does not seem intended that the cent should be pierced with a hole (a great desideratum in Chinese payments), it might be necessary to make the relative quantity of cash coined materially larger than appears to have been contemplated, certainly five dollars' worth of cash, or even more, to one dollar's worth of cents. The main point to be guarded against is, that either description of copper coin should be of sufficient value to make it profitable either to export or melt them; and this the Mint authorities seem to be fully alive to.

With respect to the maximum amount of the legal tender of undefaced coin, we are of opinion that it might be reasonably fixed at two dollars' worth both for copper and silver change.

While a reform of the copper currency forms the first and most desirable object to be attained, and might be accomplished without the necessity of introducing new silver coins, we are of opinion that the immediate introduction of such a silver ten-cent piece as has been proposed by your Excellency would greatly tend to the general convenience and benefit. This, however, is only one instalment of what would be eventually required, and, if not inconsistent with the established practice in such matters, it might be well that any new Order in Council provided for the subsequent introduction of other silver coins, being We prefer the ten-cent piece at first, because it is a new coin, aliquot parts of a dollar. supplying an obvious deficiency in the circulation. It should be of less than its nominal value, so that there might be no objection to its coinage in England on the score of loss arising thereby, and in order that no inducement might exist to export or melt it.

The suggestion made by the Home Government that the silver small change of the Colony should not be supplied by the Royal Mint, but that (experimentally at all events a quantity of Spanish reals and double reals should be procured at Madrid, and exported to Hong Kong, we cannot but regard as singularly inapplicable to the circumstances of this Colony. The main object indeed is to render the currency simple and uniform, not to introduce fresh elements of diversity into it, while it is certain that the circumstance of these coins having an identical nominal and real value would lead to their being regarded as so much bullion, and gradually abstracted from their legitimate office of facilitating small local payments to that of supplementing large ones, and of exportation.

We hope the measures of currency reform which are now contemplated may eventually bring on the larger and more important question of providing a constant supply of one uniform and undefaced dollar, which shall be established as the standard of value in this place, and serve to supersede the present system of payments by weight in mixed and defaced silver. The attention of the Chamber will continue to be directed to this inte- resting subject, and at some future period they may solicit your Excellency's co-operation in devising practical measures to supply this great desideratum.

We have, &c. (Signed) J. MACANDREW,

C. W. MURRAY, W. WALKINSHAW, WALTER ORMISTON.

His Excellency

Sir Hercules G. R. Robinson, &c.

Enclosure No. 4 in No. 5.

LETTER from Mr. J. J. MACKENZIE to Sir Harcules RonsoN.

MY DEAR SIR HERCULES,

I GLADLY give my opinions in reply to the four queries put in your note of yesterday.

1. I am of opinion that the proposed system, by which the dollar and its parts would become the only legal tender in Hong Kong, would be scarcely recognized beyond the Government offices, if the issue of the subsidiary coins were limited to cent pieces. The cent would be too large for the daily domestic purposes of the Chinese, and they would attach no fixed idea of value to it in reference to their own cash, to which they would

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continue to give the preference, as would also the mixed population from other Eastern countries. The converse would hold good, I think, were cash or mil pieces alone issued in connexion with the dollar, as the fact of their being a legal tender should gradually ensure their use by Chinese, and they would be a great boon to all the poorer classes. To make the proposed change of general utility, however, the system ought to be completed by a simultaneous issue of cash, cents, and silver coins of 10 (and even) 5 centa' value.

2. Is partially answered in my reply to No. 1. In proportion as the new cash found favour with the Chinese, they would displace native cash, but for domestic purposes principally, I believe, at least for some time to come.

3. If the subsidiary coins representing fractional parts of a dollar, coined by the Spanish Government of equal fineness with the dollar itself, were introduced here, they would be treated as so much bullion, passing like dollars by weight of $10 tis. 7.1-7, and could not be kept in circulation as a currency, nor retained in the Colony. My opinion is, that special coins of inferior standard, and representing the desired fractions of a dollar, should be struck at the Mint.

4. It is a labour of love to a Chinaman to handle and to carry cash, and in trying to float the new mil pieces, I would not therefore advocate a too narrow limit in the amount above which they would not be a legal tender. In this view of the matter, I should not think $5 an excessive sum; but of course the other coins would have to be similarly treated. After the experiment had been fairly tested, if found inconvenient, the limit might be reduced.

Believe me, &c. Hong Kong,

(Signed)

May 15, 1862.

No. 6.

JÁS. J. MACKENZIE.

COFT of a LETTER from the Duxs of NEWCASTLE to the ACTING GOVERNOR of Howa Kone

Hong Kong, No. 13.

SIR,

Downing Street, 24th January 1868. I HAVE considered, in communication with the Lords Commissioners of Her Majesty's Treasury, the arrangements necessary for giving effect to the scheme already agreed to by Her Majesty's Government for the regulation of the currency of Hong Kong.

You are aware that an Order in Council and draft Proclamation were approved by Her Majesty in Council on the 5th day of August 1862, repealing all the previous Proclamations relating to the currency of Hong Kong, and declaring the dollar of Mexico, or other silver dollar of equivalent value, to be the only legal tender of payment in Hong Kong for sume exceeding two dollars; and authorising the issue from Her Majesty's Mint of token silver and copper coins, to represent in exchange the parts of a dollar.

This Proclamation was ordered to take effect from the date of its promulgation at Hong Kong.

After personal communication, however, with Sir H. Robinson on his arrival in this country, it was considered by Her Majesty's Government advisable that the public announcement of the new regulation should precede its actual operation, in order that the Government of Hong Kong might have the opportunity of preparing measures to give effect to the new monetary system under the authority of Her Majesty's Procla- mation. It was thought also that it would tend to facilitate the adoption of the measure, if the whole scheme, including a description of the new coins to be issued, were announced in one Proclamation.

With these views the promulgation of the Proclamation was suspended, and a further Order in Council was passed on the 9th instant, repealing the Proclamation of the 5th August 1862, and approving a new Proclamation for the regulation of the currency of Hong Kong on the principles which I have explained. I send herewith copies of these documents, and you will take measures for the publication of them at Hong Kong.

You will observe that the operation of Her Majesty's present Proclamation is jaspended until a day to be fixed by you, so as to afford time for the passing of the necessary local enactment referred to in Sir Hercules Robinson's Despatches, and for the transmission to the Colony of the coins described in the Proclamation, which are now, in course of preparation at Her Majesty's Mint.

You will also observe that the intention previously expressed of declaring the Mexican dollar to be the measure of value at Hong Kong has been adhered to.” When Mr H. Robinson recommended the adoption of the words of former Proclamations, vis. *tho

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