CO129-331 - Public Offices - 1905 — Page 289

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12. $

at the end of 1903. They offered however to continue coining at

a seigniorage of 2 per cent, subject to the reservation that

rupee coinage requirements must come first, and at our request

to a like reservation in favour of the S.S. dollar.

We told the 1.0. when they informed us of the proposed in-

crease of rate that we saw no objection, but we asked that our

heavy initial supply of S.S. dollars might be done at 12 per

cent. For further supplies of that dollar we agreed to 2 per

cent if necessary. 1.0. agreed to lý % for the initial supply.

I think it is clear that 2 per cent is a reasonable charge.

The old H.K. mint charged 2 per cent and it did not pay. The

at least Home Mint would charge 2 per cent ( see Mint memorandum attached t

to 696/94 ) and to this would have to be added 1 per cent for

freight and insurance to the East... As regards freight and in-

surance however it may be remarked that London is the best market

to buy silver in and that freight and insurance have equally to

be paid on bullion sent to the East for coinage

Mint charged 2.1 per cent on the coinage of rupees when the

free coinage of rupees was permitted.

...

The Indian

I do not believe for a moment that a Mint at H.K. would pay

its way with a less seigniorage than 2 per cent, and even with

that charge it would be necessary that the Banks should agree to

take a large minimum yearly. The expenses of coining the dollar

in India must be much less than in H.K., since the Mints there

are in existence and have to be kept going in any case.

As to difficulties in supply, from the last letter in the

print attached to this paper you will see that the Indian Govt.

estimate that they can supply 50 million dollars yearly. Sure-