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In the Reply to this letter the following Number should be quoted.
620
15623
98
TREASURY CHAMBERS,
12 November 1898.
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Sir,
I am directed by the Lords Commissioners of Her Majesty's Treasury to acknowledge the receipt of Mr
Better Graham's letter of the 13th instant, relative to the sub- sidiary coinage of Hong Kong, and I am to request that you will lay before Mr Secretary Chamberlain the following observations on the subject.
#
The Colonial Treasurer is clearly under a mis- apprehension in stating that no harm would be done if "overwhelming quantities of subsidiary coin were returned into the colony. It is true, as he observes, that the Colonial Government are not under any obligation to redeem their token coins, any more than the British Govern ment are obliged to exchange shillings for gold: but, if the supply of subsidiary coins in the colony exceeded the demand, they would obviously be liable to considerable depreciation, the only limit being that their exchange value could never fall below their intrinsic value. a depreciation would discredit the issuing Government: and would inflict an unjustifiable loss on all holders of the subsidiary coins.
Such
On the whole, however, Their Lordships are dis- posed to agree with the Secretary of State that such a depreciation is not likely to occur. One of the most prominent features in the recent currency history of China
has
The Under Secretary of State,
Colonial Office.
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