CO129-365 - Governor Sir Lugard - 1910 [1-3] — Page 168

Chinese Government

Chinese coins being

allowed to circulate in Hong Kong and Hong

Kong subsidiary coins continuing to enjoy

the currency which they now possess in the

large area through which they circulate.

At the same time it seems desirable to

move the Foreign Office to bring the

strongest possible pressure on the

Chinese Covernment with a view to a sub-

stantial restriction in the issue of their

subsidiary coins in the interests of China

as well as of Hong Kong. Should the

Chinese Government refuse to assist His

Majesty's Government in this matter it ap-

pears to Lord Crewe that the coinage whether

Chinese or Colonial must continue to depre-

ciate until it reaches the intrinsic value of

the silver.

6.

A copy of another despatch from

the Governor on the subject of the accept-

ance of worn coins is also enclosed and I

am to ask for the favour of their Lordships'

observations thereon.

7. I

DRAFT.

7.

163

I am to add with regard to the

main matter that the Governor has been in-

tull

formed by telegraph that pending considera -

A

tion of the question with the Lords Commis-

sioners of the Treasury his scheme cannot

be approved.

8.

It is very regrettable that this

enormous supply of Hong Kong subsidiary

coin 800 fine should have been provided

for circulation in China without the pro-

vision of a reserve fund to guarantee the

face value. Profit on subsidiary coin is,

His Lordship understands, usually paid to

current revenue, and, where the issuing

Government has control over the currency

in the area to which the coin is limited,

the danger may be small. But when, as in

this case, the over-valued coin was sup-

plied for use in a Foreign country, as well

as in a British Colony, it was clearly

desirable to hold a portion of the profits

in reserve to provide for redemption.

I am, &c.

ABC