In the reply to this Letter the following Number should be quoted.
510 C 19449
TREASURY CHAMBERS,
discussion of this matter in 1898-8. But I quite
agree that it would be much better to make them deposit
t
securities to the extent of the whole of their note
issue,
and there is no real hardship since they draw
the interest on the securities deposited. Moreover It
is in accordance with the arrangement for the exten-
sion of the ordinary issue of the H.K. and S. Bank
in 1907.
As to the alternative of an Ord. or
an 0. in C.
The chartered Bank
I think we must proceed by Ord.
bas of course its Charter, but the other Bank issuing
other
notes in H.K., the E.K. and S. Bank, is regulated
by Ord. Moreover, as the concession is to be subjet
to future Ordd. of H.K. ( 394 last par. of this lett
ter ) it would be inconvenient to have an O. of the
K. in Council, modified by subsequent H.K.Ordd.,
t
for the regulation of the note issue.
? now send corresp. to 0.A.C.j, say we concur
including b Trim.
2. Sefr
it will be best to proceed by Ord., and ask, if
in the conclusions of the Treas. and consider that
But do not
out copy
$31.
he has no objection to raise, that an Ord. may be drafted
and sent home for conson.
ASC 16-
Sie IHssword
I so proceed for
C 18.VIT
ช
Yes the 710.7 Th
3523
10
sir,
Rrg 27 JUN 10!
25th
June 1910.
The Lords Commissioners of His Majesty's Treasury
have given very careful consideration to your letter of the
po 16th February last (Z121/1910), recommending the abandon-
ment for the present of the scheme for introducing a
Government Note Issue in Hong Kong and the grant instead of Note Issue privileges to the Mercantile Bank of India
Limited.
In reply, I am directed to say that while My Lords retain the very strong preference expressed in the Treasury letter of the 21st September 1894 for Government
10%ver private issues, They are on the whole disposed to Bene
concur in the Earl of Crewe's conclusion that in the special circumstances of the present time the establishment of a Government issue is not an undertaking upon which it would be prudent for the Colony to embark.
They must not, however, be understood as accept- ing the view that the difficulty of finding suitable silver investments for the Note Guarantee Fund is itself an insuperable objection. They agree that the suggestion that this fund should be invested in mortgages in the Colony or other lccal securities is inadmissible, but the disadvantage of investment in gold securities can easily be exaggerated, and provided that the investment proportion is not placed
Under Secretary of State,
Colonial Office.
unduly
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