CO129-414 - Governor Sir May - 1914 [10-11] — Page 90

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NO CONFIDENTIAL.

Sir,

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GOVERNMENT HOUSE.

HONGKONG. 30th October, 1914.

q602 With reference to your confidential despatch of the

5th of June, I have the honour to report as follows.

2.

As a beginning two tenders to supply 10 cent pieces

to the face value of £50,000 over a period of one month at 8%

discount were accepted on the 22nd of July and 31st July respective-

ly. Other tenders were at a rate of discount which was considered

too low.

3.

Immediately on the outbreak of war the rate of dis-

count on these coins fell to 24% and in consequence I permitted the

cancellation of the two tenders which had been accepted.

On August the 7th the rate of discount rose to 5% and

continued to rise till on the 26th of the month it had reached 120%.

On the 28th of September I authorised the Superintendent of Imports

and Exports, who has large dealings in subsidiary coin through the

sale of opium, to purchase 10 cent pieces through his shroffs, who

are in touch with Money-changers' shops where they originally came

from, in quantities not exceeding $50,000 per week. These shroffs

are paid .25% commission including all charges.

4.

Purchases began on the 30th September and up to the

23rd October had reached 180,304 worth of coins at rates of dis- count varying, with the exception of one small lot of $5,000 at 11.67%. between 12% and 14.10% discount. Purchases are being con-

tinued

at rates as high as 16.1% discount. The system has worked

THE RIGHT HONOURABLE

LEWIS HARCOURT, M.P.,

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