CO129-394 - Governor Sir May & Public Offices - 1912 [12] — Page 153

151.

prove a serious menace to trade if it attains to any large pro- -portions, and enquiries tend to show that the circulation has in- -creased considerably of late. I have accordingly to request that this Government may be permitted to take powers, to be exercised not necessarily forthwith but if and when circumstances shall render it expedient, to prohibit the circulation of all unauthoris- -ed note issues. An additional reason for prohibiting these notes is to be found in the proposal to redeem Hongkong Subsidiary Coins partly by means of a Government Note Issue. This subject forms the , subject of a.separate Despatch.

7.

I enclose a draft bill which is framed to

provide the necessary powers of prohibition and at the same time

to permit the restricted use of foreign notes brought into the

Colony in the ordinary course of business. The bill, which will,

I am advised, have the cordial, if unexpressed, support of the Chinese business community, is intended to operate only against the Canton notes and against those of the Banco Nacional Ultramarino,

the reasons for the prohibition of which were fully given by Sir

F. Lugard. It is difficult to estimate the extent of the circula- -tion of these Portuguese notes in the Colony but the local Agents of the bank report that they exchange monthly for authorised issues.

notes of the average value of $28,000.

8.

It is possible of course that the legislation

I recommend may be resented by a section of the Chinese population. It is in view of that possibility that I do not propose to pass the legislation unless (a) the circulation of Chinese notes tends

to increase (b) you approve a Government lote Issue in comection

with the very necessary rehabilitation of the Subsidiery Coinage.

I have the honour to be, Sir,

he

Your most obedient,

humble servant,

Arneag

Governor,&c..