CO129-391 - Acting Governor Claud Severn Governor Sir May - 1912 [7-8] — Page 152

COPY.

Enclosure 2.

147

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Canton, 20.7.12.

Canton Local Note Issue.

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The 72 guilds held a meeting yesterday, and it was made known that the Guilds had come to terms with the Governor, that the Government Note Issue would not exceed $21/22,000,000.

The Governor, it is said, informed them the total amount of notes in circulation at present is $18,000,000, but he desired to issue gradually a further 83/4,000,000. This latter amount should be sufficient to cover the balance of the expendi- -ture over receipts of the Province, for two months, after that period the Government hope to collect sufficient in taxes to cover

their expenditure.

Owing to the Governor having given his assurance as regards the total of the Note Issue, it was resolved by the 72 guilds, that the Canton and Hongkong merchants should be requested to form a Company with a Capital of $5,000,000, the idea being to purchase Canton Notes from the market, at market price, and depo- -sit them with the Provincial Treasury Bank, which Bank has agreed to receive and hold same as on Fixed Deposit on behalf of the Company, on the due dates of such deposits the Bank will pay, the Company Back the face value of the Notes in silver, plus interest.

If this scheme is carried out, it is hoped it will greatly improve the market value of the notes, it is also hoped that the discount being thus reduced the public in general will have more confidence in them.