CO129-409 - Governor Sir May - 1914 [1-3] — Page 503

9 copy to Treas. for obsons, saying that

the S. of S. is not inclined view the request

of the Bank with favour.

kra

No 82

Dupl

C. O. 55361

REC

GOVERNMENT HOUSE.

HONGKONG. 17th. March, 1914.

499

i

1714

!

Г

Let not gri

In Frears

ang

fortheir drum sample?

Dr. alovel

245.5.14

Lead:

55.14

In reply to Sir J. Anderson's marginal query above

it will be seen from p. 3 of the Treas. letter 19449/10

that the H.K. and S. Bank can only issue notes against

one third security to the extent of 10 million dol-

*

lars their original capital) and have to cover ful-

ly notes in excess. The Chartered can only issue notes

against one third security up to 8 million dollars,

though their original capital is £2,000,000 and

they havni power to increase it. In asking therefore

for power to issue notes to the full amount of their

mbremmtile

capital against one third security the Bank are ask-

A

Treas

19449

Sir,

I have the honour to forward for your considera- -tion a copy of a letter addressed to the Colonial Treasurer by Mr. Linton, Manager of the local branch of the Mercantile Bank of India, relative to the disabilities of that Bank in the matter of its Note Issue in comparison with the Chartered Bank of India, Australia and China and the Hongkong and Shanghai Banking Corpora- -tion.

2.

The great utility of notes to the trade of Hongkong is beyond question. The unwieldy silver dollar, which constitutes the sole legal tender, lies under the disadvantage that the shroffing and moving from place to place involves time, trouble, and expense, while the notes which are admitted to circulation are so convenient and therefore so greatly appreciated,

especially by the Chinese who are accustomed to conduct large transactions in terms of ready money, that they continually tend to rise to a premium.

3.

The question of a Government lote Issue has

been discussed at length and it was finally abandoned, and in my opinion rightly abandoned, under instructions contained in Lord Crowe's Despatch No. 208 of the 22nd. July, 1910. I concur general- 0-ly in Mr. Linton's remarks on this subject. In times of stringency

the issuing Banks give out their notes against bills and remittancer. at a rate of exchange which they themselves fix, and when money

is

ing for more favourable terms

though the Bank and

THE RIGHT HONOURABLE

the Gov. too don't realize it.

KVC 6.0.14]

LEVIS HARCOURT, M.P.,

&C..

&C...

•