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My Lords are of opinion, therefore, that for the present at any rate the Colony has no alternative to sub- mitting to the inconvenience of a depreciated subsidiary currency.
If the new policy of the Chinese Covernment is successful, the Hong Kong coins will probably fall almost immediately to slightly below bullion value and then rapidly disappear from circulation both on the mainland and in the Colony, until the problem is reduced to manageable dimensions.
If on the other hand it is unsuccessful, the measures to be taken will be dependent upon the course of events in China and cannot with advantage be determined until this becomes apparent.
In the meantime, My Lords do not think that any useful purpose would be served by offering advice to the Chinese Government as to the administration of their scheme of currency reform nor indeed are They in agreement with Sir F. May's view that the restoration to face value of the existing Chinese subsidiary currency must be effected before the new coins can be successfully brought into
circulation.
The law that base coin drives out good would of course operate in the manner he suggests if by law or usage the two varieties of subsidiary coin were to be admitted to
concurrent circulation at the same rating. As however the scheme provides for the reduction of the rating of the old currency from face value in the first instance to present exchange value, and ultimately to bare bullion value, it is clear that (unless the operation of the edict is defeated
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