CO129-381 - Governor Sir Lugard - 1911 [11-12] — Page 41

Kong has recently been so great that

the notes of the Banks, which are not

legal tender, have stood at a premium,

and as Their Lordships are aware the

Mercantile Bank of India are now being

allowed to issue notes so that the

demand may be more completely met,

5.

An issue of Government

notes is not in itself desirable at

present for the reasons given in the

letter from this Office of the 16th

2121/10

of February 1010. The olief reason

minst a doveimoms Note Isrue is

he possibility that China may with-

in a reasonable time have a currency

on gold, in which dase one

hose

Kong Hould have to follow suit, and

a Hot Issue night then have to be re-

deemed in gold or in specie of higher

gold value than that originally paid

for the notes. The experience of the

Straits Settlements is of importance

on this "oint.

77.

#courb roll

9700082

>>

DRAFT.

38

propose that the issue of Government

notes should be strictly confined to what

is necessary in coping with

الرحيم

problem

Treas.No.21016 4th Dec. '11

39070

0.0.bo Treas. 5th Oct.1910

29886

0.40 Treas.

26th Sep '11

of the redundent subsidiary silver coin,

and that notes should not be issued on the

demand of the public but simply to suit

the convenience and purposes of the Govern-

ment.

8. Mr.Harcourt wishes,noreover,

to interfere as little as possible with

the note issues of the Benks, especially

as the Mercantile Bank of India are now

erranging for an issue of notes, whilst

the Chartered Bank were given to under-

stand in 1910, in reply to an enquiry

that there is no prospect of a general

}

Government note issue in the near future.

9.

Hone of the Tanks her one.

2

issue notes of a less denomination than

5 dollars, with the exception of a eroi, 1

issue of one dollar notes by die

Bonk, which is limited to 206,000 Collarg

ghai

and which the Bark ere under an 'iation