CO129-390 - Acting Governor Claud Severn - 1912 [5-6] — Page 428

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and the reasons for this policy are presumably those given in para- -graph 5 of the Treasury letter to the Colonial Office dated 6th. October, 1873, included in the printed correspondence:-

"It is generally accepted that such notes must

"be held by the classes least educated, and therefore most liable "to panic, and that in the commercial interests of the community, *and of the Banks themselves, it is better not to incur the risk

*which small notes might entail. If it be thought worth while to "guard against such risk in the United Kingdom, it is presumably "more so in a settlement in which the mass of population is alien,

"and ignorent at all events of European usages".

That the above objections do not apply in the particular circums- -tances of this Colony I will now proceed to show.

6.

From enquiries made at the Hongkong Bank it appears that the $1 note is employed as a medium of exchange principally by the European members of the Community and by Chinese shop-keepers who cater for their wants. This information is corroborated by the Committee of the Chamber of Commerce who add that it is also largely used in payment of wages to the arti- -san class at the various docks, etc. who prefer payment in that

Sheele

and it form for the reason that it is more convenient than bui

may be added for the reason that it is convertible at a profit into subsidiary coinage. Both the Bank and the Committee agree in the opinion that few if any of these notes circulate outside the Colony.

7. The reasons why the note is not employed as a medium of exchange by the least educated classes of the Community are not far to seek. In the first place their wants are express- -ible in fractions rather than in multiples of the dollar. Second- -ly, this note has for a number of years commanded a premium over the subsidiary currency and the Chinese, who possess in a marked degree the faculty for seeing and taking advantage of a profit, consequently choose the cheaper currency. Finally according to the

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