CO129-390 - Acting Governor Claud Severn - 1912 [5-6] — Page 431

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8100 for issuing notes unlawfully, there are now in circulation more notes of that Bank than there were last year. Taking this

fact in conjunction with the representation by the Committee of the Chamber of Commerce referred to in paragraph 1, with the statement by the Chief Manager of the Hongkong and Shanghai Banking Corpora- -tion referred to in paragraph 3 and with the vital statistics quoted in paragraph 11 and assuming that the public are actuated by ordinary motives, it seems clear that the legal supply of gl currency is insufficient for the needs of the Community and that unless that supply is increased to meet the demand or unless un- -authorised notes are prohibited by law from circulation in the Colony, a course which I have at present under consideration, the public will continue for the sake of their portability to employ these unauthorised notes in spite of the fact that the Government

holds no security for their ultimate encashment.

13.

For the reasons set forth in the preceding paragraphs, I am of opinion that the Hongkong and Shanghai Bank- -ing Corporation should be permitted to increase their issue of 81 notes from 226,000 to 350,000 on the conditions now obtaining with regard to security and I have accordingly to request your

sanction to this proposal.

I have the honour to be,

Sir,

Your most obedient,

humble servant,

ClaudSevern

Officer Administering the Government.