CO129-381 - Governor Sir Lugard - 1911 [11-12] — Page 495

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485

R20 JAN 12

CONFIDENTIAL.

Sir G. Fiddes

I doubt if China will be in a

position to proceed with the new currency

schemes for a long time to come. Her purchase

that

of bar silver for the purpose will not be

in the near future

urek

The suggestion that the Govt. of H. K.

should itself melt down the subsidiary coin

800

it purchases into bar silver o fine is

however a good one since it secures us

against improper use of the subsidiary coin

withdrawn.

I have had some conversations with Mr.

Armitage Smith as to our latest scheme. He is

himself converted, almost if not quite,

and promised to do his best with the greater

guns of the Treas., who are inclined to kick,

We are to have an early answer.

? Wait for it.

ALC

261.

Alome

Ithough China, my possibly customer for silver under

CM

402.1116/10

Sir.

GOVERNMENT HOUSE,

HONGKONG, 22nd. December, 1911.

In my Confidential Despatch of January 20th.. 1910, I had the honour to submit a proposal for dealing with the problem of rehabilitating the subsidiary silver coinage of this Colony which at the time was circulating at about 7 per centum discount and involved an annual loss to the Revenue of about

$70,000 per annum as well as great injury to trade.

2.

The basis of that proposal was that the Government should secretly buy up a very large quantity of coin at the prevailing discount, which in consequence would rapidly decrease, till the coins reached par. The coins purchased would be demonetized at no very great loss since the bulk would have been purchased at a high discount, and the sudden divergence between the Hongkong and Chinese coinage would compel all shop- -keepers and receivers of subsidiary coins to institute two scales of payment; one for payment in Hongkong and the other for payment in Chinese coins. Once this discrimination had been inaugurated it would continue, since British firms which receive large quantities of subsidiary coins such as the Tramway and Star Ferry would gladly avail themselves of this chance of reducing their losses. If the Hongkong coin should however tend to fall to a discount gradually by the influx of coin from China, the opera- -tion could be repeated. In view of the probability of the non-

-recognition

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फ

น

THE RIGHT HONOURABLE

LEWIS HARCOURT, M.P.,

&C..

&c.,

&c...