CO129-414 - Governor Sir May - 1914 [10-11] — Page 91

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well and I propose to continue it.

5.

The heavy discount on subsidiary coin is accounted

for by the large remittances to Chine which Chinese abroad have been making since the war began. The remittees in all cases demand notes of the banks of issue. These have consequently gone to a premium. Another reason is the super-abundance of Mexican Dollars in North China owing to coinage of large quantit- iss of Chinese Dollars. These Lexican Dollars are being shipped to Hongkong and Canton and the superfluity has induced a heavy discount. A third reason is the dullness of trade and especially the dislocation of trade in exports from China. The usual flow of coin to the interior has thus been arrested.

6.

It is not anticipated that the high discount now prevailing will long be maintained and as it is a pity not to avail of the present opportunity to increase purchases I tele- Grous graphed to you to-day as follows:-

"My confidential despatch of 9th Lay discount having "temporarily risen to over 15% may I double purchases of subsid- "iary coins. Despatch follows by mail".

I have the honour to be,

Sir,

Your most obedient,

humble servant,

Domag

Governor,&c.