CO129-364 - Public Offices & Others - 1909 — Page 94

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The Under Secretary of State

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would involve consequences affecting the trade and the

revenue of the Colony, so serious and so far reaching that we

cannot comtemplate the idea of its adoption, while China

remains on a silver basis.

So long as the silver currency, received in Exchange

for notes issued, is retained in Hongkong, and is not allowed

to accumulate in excess of the trade requirements of the Colony

the risk to the Government would be confined to the

expenditure on the printing of the Notes, and the annual cost

of maintaining a Treasury as well as the Staff competent

to deal with the Note issue and its Reserves. But if

employment for any portion of the Note Issue Silver Reserve

is sought for, by investing in gold securities, the risk of

loss by exchange in the conversion of the silver coin into

gold and in the remitting of the proceeds to and from

countries on a Gold or Gold Standard basis will have to be

considered. Such risk cannot be estimated and the possible

loss cannot be insured against.

Apart from the employment of a portion of the Silver

Reserve by conversion of the Silver coins into gold and

afterwards into Gold Securities, there is no source of income

available to meet the heavy annual expenditure, which the

proposed Note Issue would involve, and, which it appears to

us would unavoidably entail a charge upon the already

contracted if not strained revenue of the Colony.

We would again point out the fact that the Monetary position in Hongkong is totally different to the Monetary position in the Straits Settlements. The Currency and legal tender in the latter Colony consists of the Straits Dollar which has a fixed gold value, and its mintage is absolutely controlled by the Straite Government. The Currency and legal tender in the Colony of Hongkong consists of Mexican Dollars,

and

ritish Dollars, by weight 717 Canton Taels per $1,000

and