CO129-346 - Governor Sir Lugard - 1908 [1-3] — Page 282

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contribute to the revenue of the Colony in the shape of a

duty of 1 per centum per annum on the average value of the

circulation.

3.

In October last it was discovered

that the Banco Nacional Ultramarino was putting into circu-

-lation through an Agency in Hongkong notes payable on

demand at that Agency in contravention of Section 3 of

Ordinance No. 2 of 1895, and the Agents were accordingly

warned that their action was illegal. They replied that

they would desist from putting the notes into circulation,

but would continue to honour on presentation notes of the

Baneo Nacional Ultramarino which found their way into the

Colony.

4.

The Directors of the Bank in

complaining of this Government's action in the matter are

probably unaware of the existing regulations and of the

fact that the majority of the Banks in the Colony are

under a similar disability with themselves. It may be

pointed out that their circulation competes at a manifest

and unfair advantage with the authorised circulation, in

that it pays no duty, and that further this Government is

not in any case in a position to enforce those conditions

as to solvency which it insists upon in the case of the

authorized