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LOCAI
Memorandum.
CURRENCY
588
Although I am in favour of a fixed exchange between gold and silver and a stable currency for Hong Kong, I do not how- ever think it is advisable to establish a currency upon a gold busis in this Colony so long as China remains a silver using country.
Geographically and commercially, Hong Kong is a part of China and may be taken to be one of its out-ports. It is a mis- take, therefore, in my opinion, to have a local currency hero diffezing materially from that of the mainland opposite.
Besides, the vast majority of the inhabitants of this Is- land and the whole of the labouring classes and small traders, with few exceptions, are Chinese, and they are accustomed to have their labour paid for in silver and copper coins and their business transacted through the same media. Both silver and copper coins in various amounts are daily brought into or takon away from the Colony by thousands of Chinese, but such an in- flux and outflow of coins of these metals would become impos- sible under a gold standard.
Furthe nuore, with the introduction of a gold standard, token silver and copper coins of a definite value with relation to gold would have to be minted, and if the value of the silver
or copper contained in such token coins were to fall below thoir face value, then counterfeit coins of both kinds would find their way into this Colony in large quantities and there are no means at present in this free port of checking their influx;
but, on the other hand, if the value of the metals constituting
token Buch coins were to get above their face value, then such coins, howevor numerous they might be, would quickly disappear from the Colony.
Again, it would be extremely inconvenient as well as un-
reasonable, to make it impossible for Chinese wage-earners of
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