CO129-374 - Public Offices & Others - 1910 — Page 40

desires me to offer the following ob-

servations. No weight need be attached,

in his opinion, to the distinction

drawn by the Chartered Bank between

the positions of the Governments of

that the bott

you Hong Kong and the Straits Settlements

He don not faite fullout

resument contained in

бъ

the letter from the Chartered to

Bank

for these sead destandigh

Some myun

at the

whim

was established

at Singapore.

As their Lordships are aware, the

latter Government issued currency

ག༽

noter imme

A

notes before the value of the dollar

was fixed in relation to gold and

before any steps towards that end were

even contemplated.

3.

But Lord Crewe feels that

the Government of Hong Kong espec-

-

ially at a time when the financial

situation is far from satisfactory -

would hardly be justified in under-

taking to issue notes either in place

1

of or as subsidiary to the notes is

to,

sued by the Chartered Bank and the

Hong Kong and Shanghai Bank.

The

price

And since investment fnd souvriting & local investments are

to

38

price of silver at the present is so

low that it seems probable that any

future change will have an upward

tendency. If, as proposed by

the Governor, 50 % of the fund held

against the notes is held in gold or

in gold securities, the Government may

witi be exposed to a heavy liability

which the investments will not cover.

Lord Crewe is unable to accept the

proposal put forward by Sir Paul

Chater that 50 % of the Reserve

fund

Fard should be invested in mortgages

in the Colony: the objections to such

a course are obvious, since at the

time when confidence is shaken and

a run on the notes occurs, local

investments would be almost unrealiz-

olysction, the issue 7 hoves by the bout would

catly & un progitabl costly undertaking

be

A h

able.

4. If, hereafter the currency

of China should be placed on a gold

standard, Hong Kong would no doubt

follow