CO129-381 - Governor Sir Lugard - 1911 [11-12] — Page 43

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price received from the sale of subsi-

diary obins, after payment of expenses

of the note issue, would be invested by

the Crown Agents in London, part of it

possily in silver securities, if suit-

able silver securities can be found.

Pro-

fits on investments would be added to the

investment portion of the Note Cuarentee

fund.

10.

The Government should also sell

from time to time the stock of subsidiary

silver coin which they accumulate from

Myments mad by the public. They should

blen mub notes into circul ion equal to

the value of the subsidiary coin, sinus

A

She current depreciation of that coin

(which loss should be met from Revenue),

and buck the notes to the extent of two-

thirds with standard dollers received

from the scle of the subsidiary coin as

bullion. The revsinder of what they

Inceive from the acle of the subsidiary

coin should be invested as above,

DRAFT.

/

13.

In course of time, when the

success of the Government Note Issue is

assured, the specie reserve beld in

standard dollars could be

reduced to on:

half, and the investments increased ac-

cordingly, so as to hasten the complete

covering of the issue by security in cash

or investments. This will be the more

desirable as it may be anticipated that,

as the operation progresses, the discount

on the subsidiary coin will diminish and

the Goverment will therefore have to pay

higher price to the Barke for them.

14. When the subsidiary coins rise

to par the issue of Govermaent notes will

be discontinued. If it falls pin, the

issue of notes can be resumed. The To-

cess of reducing the redundancy of the

supply of subsidiary coin ri'l therefore

Largsty

be automatic.

15.

There can be little doubt

that after the scheme is introduced dere

will soon be a marked difference between

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