CO129-409 - Governor Sir May - 1914 [1-3] — Page 502

I

form will in that in agued with the thy

thanking that the Mercantile sends a

deport securities & the extent of this whole

--

that they suffered no

bes

note essive nal hardship by this condition. I am not sme that the Manager not make out a case but they accepte; the teams which the wooll their attered wit the diffunct es to renst aclaim from the A.&.& S.

we bank, if he pit way now, that the of for

بیدار

8 system and he relaxed in farm. Of

$

them so far as their extended capital

is concerned.

However.

? Copy Kty & morte olson

R25/4/14 h.

nixt

The Mercantels nacks to the hut hi the Sail hoot as

• below

th. In the W. I. and

auditing in

Sir C. Fiddes

498

I quite agree that the Treas. should

be consulted. The decision to cease referring to

them as to Govt. Note Issues does not apply to Bank

Jeri Note Issues. It is desirable to have their views on

matters affecting our relations with Banks in the

Far East especially since one of the Banks, the

Chartered, operates under Instruments settled by the

Treasury.

I do not think the present request of the Bank

can be acceded to sre 19449/10). To grant it would

put the Mercantile Bank in a better position that

the H.K. and S. and the Chartered. Moreover the

the bits power of those Banks to issue Notes up to a certain

this Ave

amount against security of one third of the amount

in the hands of the Govt. is the survival of ald

arrangements that would not be tolerated now. Our

duty to the community requires us to take at least

as much precaution in the case of security of Bank

notes as we do in the case of Covt. Notes and in

the case of Govt. Notes the issue is fully covered

Of course it would be convenient for the Bank and

for Hong Kong itself if this Bank were able to in-

crease the circulating medium in times of tightness

and reduce it in times of redundancy

·

tion of safety is the dominating conson.

+

but the ques-