CO129-316 - Governor Sir Blake - 1903 [1-4] — Page 569

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were payment for almost all produce (silk, tea,

cassia etc ete) is made by the foreign merchants

in Canton to the native dealers by cheques drawn

on Hongkong.

These cheque are usually soldi at a premiumE

varying from 1% to 2%. The present price being

nearly 14%.

These cheques serve as remittances to Hong-

-Kong to be used chiefly in the purchase of

imports -- thus saving the risk and expense of a

constant trmsfer of coin or sycee between the

two ports.

It is obvious that the advantage to trade

which is now secured through the cheque system

would at once disappear if all accounts in Hong-

-kong were kept in sterling, a currency of which

the native dealer in China has no knowledge or

use.

I think the above tenis to prove that the

adoption of a Gold currency

ratio between silver and gold

a fixed

or

off a

must in the end

lead to a decentralization of trade, adversely

affecting the prosperity of Hongkong, business; -

which now centres here being transferred to

other ports. It may be argued that such a

transfer will not affect the volume or prosperity

of British trade with South China this may be

perfectly true but what we have now to consider

is the prosperity and advancement of Hongkong.

Decentralization of trade must in the long

rum result in a lessening of the population and

consequently to a decrease in the value of our