CO882-(1-2) — Page 488

PUBLIC RECORD OFFICE

To Is To Le

Reference -

C.O.882

2 PUBLIC RECORD OFFICE, LONDON

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

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I have never yet seen any sufficient reason stated why the coins of the realm should have been demonetized in Ceylon.

The tendency in India, of which Ceylon may almost be said to form a part, is exactly in the opposite direction.

The desire there seems to be directed to the manner in which sovereigns and rupees can best be made concurrent legal tender!

The Americans, too,-whose system we are copying, though their currency is expressed in dollars and cents, find it convenient to have their eagles and half-cagles in gold.

I know it has been said that a sovereign admits of no practical sub-division into rupees; but the adoption of the decimal system removes all difficulties in that respect.

The term "double currency," to which objec- tions are commonly raised, is, moreover, totally inapplicable here.

The currency of the country would still be expressed and written solely in rupees and cents. But other coins previously current would not be deprived of their monetary character, and would still possess a legal purchasing power, proportioned to their intrinsic value, measured by the rupee.

Neither Ceylon nor Mauritius are manufacturers of the coin used in their daily transactions. They depend upon other countries for a supply, and to demonetize all except those of one foreign state appears to me to be incurring the risk of an excessive contraction of the currency, at some time or other, without the chance of obtaining any compensating advantage in any other direction.

From the proximity of Ceylon to India, and from the fact that rupees have long formed the bulk of the circulating medium there, that colony would be less exposed to inconvenience in this respect than Mauritius, where rupees are com- paratively little used. Yet I can see no sufficient reason why English sovereigns, in which Her Majesty has contracted to pay her troops should, on reaching those troops, in any part of the British dominions, cease to be a legal tender.

Further, I think it would be unadvisable to demonetize any of the coins which now circulate in Mauritius, and find favour with the inhabitants.

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If rated by the proposed new standard accord- ing to their intrinsic worth they can do no harm, and may prove to be of great convenience.

The subjoined Table will show what the currency would then consist of, and the relative value of the several coins of which it is composed, ex- pressed in rupees and cents.

The currency notes I should say it would be advisable to withdraw, and issue new rupee notes in their stead. ·

High legal authorities in this country are said to have given it as their opinion that they must be redeemed in gold; but it is just possible that their decision was due to the facts not having been placed fully before them. At any rate I observe that Ordinance 10 of 1864, distinctly states "that the Commissioners shall, when called upon, give in exchange for their notes coins legally current in the Colony under the law existing at the time of such demand." And as gold is by no means the only coin legally current,

it strikes me as possible that what those authorities really meant was that the notes, when tendered in sums exceeding forty shillings, were not redeemable in English silver.

On the face of the note itself the promise is to pay-"Five pounds or twenty-five dollars." The spirit of the obligation is no doubt that the note should be redeemable in current coins of intrinsic value, measured by the gold standard; and had the Commissioners conformed to the law, they would have received such coins only in exchange for their notes, and could have had no hesitation in paying them back again.

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The legal obligation of the Commissioners to the note holders is much the same, presume, as that of the pulic to the revenue collectors. What- ever description of coin can be demanded in pay. ment by the one can equally be claimed by the other, and the insistence upon their strict legal rights by both parties would result in the transfer of gold, or something equally valuable, from the coffers of the Commissioners to those of the Collectors. Only, that the process of paying away the gold on the one side, would be much more expeditious than that of receiving it back on the other, and might lead to the temporary