CO129-365 - Governor Sir Lugard - 1910 [1-3] — Page 167

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3.

It appears very doubtful whether

it is possible to prevent the circulation

in Hong Kong of Chinese subsidiary coins:

and, even if it were possible, the dislo-

cation of the trade with the Chinese

provinces which would follow renders it

undesirable to make the attempt.

4.

Lord Crewe is inclined to

think that no effective action could

be taken to rehabilitate the Hong Kong

coinage in Hong Kong until Chinese coin

is excluded, since, if a margin of value

were established between the Hong Kong

and Chinese coins, it does not seem

Tw

likely that similar coins of the same

intrinsic value would for long circulate

at values differing in a fixed ratio,

the Chinese coins, being of lower value,

and

would tend to drive the Hong Kong coins out

of circulation; the Hong Kong coins would

then have to be redeemed or would eventual-

ly lose their higher value. Loreover the

establishment (even temporarily) of a

higher value for Hong Kong coins in the

Colony would attract the enormous masses

of Hong Kong coins now circulating in

China, and their importation would

either sweep away the increase of value

or would oblige the Government to con-

tinue their operations at a cost which

is quite beyond the present means of

the Colony. This last difficulty would

also arise if Chinese coins were exclud-

ed from Hong Kong.

5. Sir F. Lugard's proposal seems.

therefore, likely to be both expensive

and ineffectual and Lord Crewe cannot

suggest any alternative method of a

similar character; the mischief is on so

large a scale that the continuance of

the system of withdrawal of subsidiary

coins paid in to the Treasury is a use-

less expense The only way of proceed-

ing in this unfortunate matter is, ap-

parently, by co-operation with the

higher

Chinese