27. The legal tender of the Colony is now as follows:-
(a) Bank notes, the excess of which over the fiduciary issue is now backed by the Government certificates of indebtedness mentioned above.
(b) Government $1 notes, of which $1,280,000 were issued to prevent a shortage of currency at the beginning of the new system. These may ultimately be replaced by $1 bank notes.
(c) 10 cent and 5 cent cupro-nickel coins.
(d) 1 cent copper coins.
(e) The silver dollars and .800 fine silver sub-coin (10 cent and 5 cent pieces, and a few 50 and 20 cent pieces) which have either remained in circulation in the Colony or filter back into it from the mainland of China, are still legal tender in the Colony (sub-coin only up to an amount of $2).
28. Exchange fluctuated to an unusual extent throughout the year. Not since the calamitous collapse of 1920 has there been so wide a difference between high and low. During the first half of the year the course of exchange was generally upward from 1/8 in January to 2/6 in April. Thereafter rates declined steadily to 1/11 in September and fell rapidly towards the end of the year to the low level of 1/3¾. With little variation the official quotation has remained round about that rate up to the date of this Report. Continued silver purchases by America accounted for the early buoyancy. The later fall was due to Chinese speculation stimulated by uncertainty as to the outcome of political and economic difficulties in China and prevailing doubts as to the continuity of the silver-buying policy of the United States. The fall was later accelerated by rumours of projected stabilization of the dollar by the Government of China. Speculators bought sterling heavily and in the absence of market support the downward movement continued until the Government of China proclaimed on 3rd November the nationalization of silver throughout the country and announced a policy approximating to a managed currency at the then prevailing rate of 1/2¼, or about forty per cent below silver parity.
29. In this Colony the course of events in China was followed with increasing concern. Better support was forthcoming from the Banks and our rates therefore responded more slowly to the downward tendency. As a result the premium on the Hong Kong Dollar over the Chinese Dollar gradually rose to a maximum of 45 per cent in late October. This disability to local trade with China was ended by the decision of the Hong Kong Government on 5th December to manage the local dollar without undue fluctuations.
A 21
27. The legal tender of the Colony is now as follows:-
(a) Bank notes, the excess of which over the fiduciary issue is now backed by the Government certificates of indebtedness mentioned above.
(b) Government $1 notes, of which $1,280,000 were issued to prevent a shortage of currency at the beginning of the new system. These may ultimately be replaced by $1 bank notes.
(c) 10 cent and 5 cent cupro-nickel coins.
(d) 1 cent copper coins.
(e) The silver dollars and .800 fine silver sub-coin (10 cent and 5 cent pieces, and a few 50 and 20 cent pieces) which have either remained in circulation in the Colony or filter back into it from the mainland of China, are still legal tender in the Colony (sub- coin only up to an amount of $2).
28. Exchange fluctuated to an unusual extent throughout the year. Not since the calamitous collapse of 1920 has there been so wide a difference between high and low. During the first half of the year the course of exchange was generally upward from 1/8 in January to 2/6 in April. Thereafter rates declined steadily to 1/11 in September and fell rapidly towards the end of the year to the low level of 1/33. With little variation the official quotation has remained round about that rate up to the date of this Report. Continued silver purchases by America accounted for the early buoyancy. The later fall was due to Chinese speculation stimulated by uncertainty as to the outcome of political and economic difficulties in China and prevailing doubts as to the continuity of the silver-buying policy of the United States. The fall was later accelerated by rumours of projected stabilization of the dollar by the Government of China. Speculators bought sterling heavily and in the absence of market support the downward movement continued until the Govern- ment of China proclaimed on 3rd November the nationalization of silver throughout the country and announced a policy approxi- mating to a managed currency at the then prevailing rate of 1/24, or about forty per cent below silver parity.
29. In this Colony the course of events in China was followed with increasing concern. Better support was forthcoming from the Banks and our rates therefore responded more slowly to the downward tendency. As a result the premium on the Hong Kong Dollar over the Chinese Dollar gradually rose to a maximum of 45 per cent in late October. This disability to local trade with China was ended by the decision of the Hong Kong Government on 5th December to manage the local dollar without undue fluctuations.
No comments yet.
Private notes are available after approval.