CO129-331 - Public Offices - 1905 — Page 295

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favour with the Chinese, and circulated freely with

them, and has recently commanded a premium of two

to three per cent over the Mexican Dollar. As these

two coins, the British Dollar and the Mexican Dollar,

have of late years contributed largely in meeting the

currency requirements for trade purposes, of China

generally, the great advantage of this extended cir-

culation of a British Dollar, from a political point

of view is obvious.

In May 1903 the Government of India represented

that the seigniorage charge of 1% for the coinage of

the British Dollar had proved inadequate and that 2%

would be a fair and reasonable rate to charge in

future. The increased cost, which would have been

involved by this additional 1%, proved prohibitive

as compared with the cheaper terms on which Mexican

Dollars could be obtained for China, and as the

Straits Settlements had by that time decided to adopt

a gold standard, and coin a silver dollar for them-

selves, the agreement was allowed to lapse and ex-

pired on 10th December 1903.

With the cessation of coinage of British Dollars

the demand for supplies of coins from Mexico naturally

increased but that country has recently legislated in

favour of a Gold Standard, and therefore that source

It has been pro-

of supply is no longer available.

posed however that they should make a special arrange-

ment to supply China with dollars coined from Silver

produced in Mexico.

From a political point of view this circulation

of a Mexican dollar in preference to a British Dollar

would be a retrograde step, and one to be deplored,

but failing a satisfactory arrangement with the Gov-

erment of India to revert to the original charge of

1% Seigniorage for coining British Dollars the Ex-

change Banks would be unwillingly compelled to make

arrangements with the Government of Mexico for the

coinage of a special trade dollar for China.

With