"provide work for the mints for some years to come,
and they will from time to time have to undertake
fresh coinage from bullion in order to maintain
the volume of the rupee currency; and they therefore desire further to modify the Agreement so
as to provide explicitly that the coinage of rupees
shall, whenever necessary, have precedence over
the coinage of British dollars.
Should it be decided in accordance with the
recommendation of the Straits Currency Committee,
to issue a special dollar for use in that Colony,
it is probable that the new coin will be manufactured at the Indian mints. In that case priority
will be given to the Straits dollar as well as to
the rupee, over the British dollar".
We now wish to bring to your notice that, in
our opinion, this attitude on the part of the Government of India would not only result in great inconvenience to the trade of this Colony, but would be
almost certain to lead at times to serious contraction of currency, and on occasion might bring about
a grave financial crisis.
302
It is seldom possible to foresee actual requirements a long way ahead, and with the rupee and
the Straits new dollar having priority, it is readily conceivable that silver bullion deposited in the
Indian mints for coinage into British dollars might
be subject to indefinite delay at a time when coin
was urgently required in Hong Kong.
It is true the Mexican dollar is also legal
tender by weight of Taels 717 = 1,000 Hong Kong dollars, and it is quite possible it may be available
in sufficient quantity for some time, but its supply
is governed by the balance of trade in Mexico, and
experience has proved that it cannot be relied upon
with any degree of certainty.
Moreover the Government of Mexico are at present considering the
question of changing the basis of their currency,
and if this should be carried out the coinage of
the present Mexican dollar will cease, so that it
is not safe to depend on relief from that quarter.
In view of the fact that this Colony is entirely dependent on outside sources for its supply of
currency,
#
"provide work for the mints for some years to come,
"and they will from time to time have to undertake
"fresh coinage from bullion in order to maintain
"the volume of the rupee currency; and they there-
"fore desire further to modify the Agreement so
'as to provide explicitly that the coinage of rupees
"shall, whenever necessary, have precedence over
"the coinage of British dollars.
"Should it be decided in accordance with the
"recommendation of the Straits currency Committee,
"to issue a special dollar for use in that Colony,
"it is probable that the new coin will be manufac-
*tured at the Indian mints. In that case priority
"will be given to the Straits dollar as well as to
"the rupee, over the British dollar".
We now wish to bring to your notice that, in
our opinion, this attitude on the part of the Govern-
ment of India would not only result in great incon-
venience to the trade of this Colony, but would be
almost certain to lead at times to serious contrac-
tion of currency, and on occasion might bring about
a grave financial crisis.
302
It is seldom possible to foresee actual re-
quirements a long way ahead, and with the rupee and
the Straits new dollar having priority, it is read-
ily conceivable that silver bullion deposited in the
Indian mints for coinage into British dollars might
be subject to indefinite delay at a time when coin
was urgently required in HongKong.
It is true the Mexican dollar is also legal
tender by weight of Taels 717 = 1,000 HongKong dol-
lars, and it is quite possible it may be available
in sufficient quantity for some time, but its supply
is governed by the balance of trade in Mexico, and
experience has proved that it cannot be relied upon
with any degree of certainty.
Moreover the Gov-
ernment of Mexico are at present considering the
question of changing the basis of their currency,
and if this should be carried out the coinage of
the present Mexican dollar will cease, so that it
is not safe to depend on relief from that quarter.
In view of the fact that this Colony is entire-
ly dependent on outside sources for its supply of
currency,
It
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