CO129-346 - Governor Sir Lugard - 1908 [1-3] — Page 283

Gov 1658.06

authorized Banks of issue.

5.

The Directors further point to

the facilities afforded by their note issue to the trade

between Hongkong and Macao; but it may be objected on the

230

one hand that Bills of Exchange rather than notes payable

on demand are the proper medium of exchange between the

two Colonies, and on the other that, admitting the utility

of notes in facilitating the transaction of business, the

existing authorized circulation is amply sufficient to

meet the demand. In this connection I may refer you to the

third paragraph of Sir Matthew Nathan's Confidential Des-

-patch of the 14th. December, 1906.

6.

In addition to the notes of this

Bank, notes issued by the Canton Authorities have recently

been circulated in the Colony in considerable numbers,

one dollar

the Chinese notes being at a discount by reason of the fact

that they are redeemable in subsidiary coin. I am advised

that, as these notes are not payable to the bearer on

demand in the Colony, they do not fall within the purview

of Ordinance No. 2 of 1895, and that if their circulation

is to be stopped it will be necessary to introduce legisla-

-tion.

7.

The matter is one of considerable

difficulty