CO129-331 - Public Offices - 1905 — Page 308

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"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